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The ASC Insider

Intravitreal Injections: A Heavy Financial Load for Retina Practices to Bear

There have been many changes affecting the financial climate of retina practices in recent years. For example, we've seen changes in reimbursements, the increased use of disposable instruments and the development of systems that increase surgical efficiency. But none of these changes has affected practice cash flow as significantly as the increased use of intravitreal injections.

“We've moved from using a small amount of the code 67028 for intravitreal injections to an explosive amount,” says Mark Levitan, MD, a retina specialist at Austin Retina Associates. “Some of these medications can cost in excess of $2000 and some patients need anywhere from 6 to 12 injections in a single year. This results in a huge amount of cash outlay.”

Cash Flow Issues

The problem, explains Dr. Levitan, is the process by which these drugs are reimbursed. “A diagnosis of exudative age-related macular degeneration will be reimbursed for intravitreal anti-VEGF medication by Medicare; however, Medicare pays for 80% of the allowed amount leaving the patient responsible for the 20% copay. That's a considerable amount for a drug that costs $2,000 per injection. If the patient has a secondary insurance policy, that policy may have its own deductible and its own particular rules for reimbursing certain medications.”

The cash flow problem occurs when practices pay for a drug well in advance of actually dispensing the medication. The practice must then wait for Medicare to reimburse them for the drug. “We have to wait for the secondary insurance or the patient's 20% of the bill as well,” says Dr. Levitan. “In the meantime, we have to do our accounting. The drug companies may allow us 60- or 90-day terms, but we might not receive our reimbursements in time to make those payments. This represents a cash flow crunch for us, because in order to readily provide the best care for our patients, we must keep several hundred thousand dollars' worth of inventory on hand.”

Austin Retina Associates has five retina physicians who combined may do over 200 injections per week. “Certainly the drug companies have delayed payment terms, but this is different from what we're used to. The accounts receivable, a promise of payment, skyrocket,” explains Levitan.

The bigger problem occurs when a patient isn't a traditional Medicare patient. “When you work with private insurance or Medicare HMO plans, they may have different rules when it comes to injectables including different deductibles. In our office, we constantly check for changes by calling insurance companies and evaluating different copays,” says Dr. Levitan.

Since private insurers can have different deductibles and rules of coverage, Dr. Levitan's practice has a designated staff member who works with the insurance companies and obtains authorization for all injections. “This is especially essential when dealing with private insurance companies or Medicare Advantage plans because they can change their rules without warning,” says Dr. Levitan. “Our staff member deals with the specifics. We speak to the payer directly when necessary; we have to be persistent and diligent. For example, it may be a $2000 drug and at the most a 6% above cost reimbursement for us. If there's even one incident of an insurer challenging the medical necessity of one injection, then that's a huge instant financial loss to the practice that can not be made up.”

Patient Time

Dr. Levitan explains that patients are used to copays being more straightforward. While patients may have disliked traditional copays, they still understood them. When it comes to intravitreal injections, they may be confused. “These are great medications with incredible value to our patients’ quality of life, but they come at a great financial expense,” he says. “In many cases, our office is the first encounter a patient has when an expense isn't that clear cut.”

“Drug companies have assistance programs in place for patients,” explains Dr. Levitan. “Patients can obtain financial assistance, but it's not in real time. An application must be filled out and it takes time — sometimes a few months — before the program kicks in. Some patients don't want to give out their personal information over the phone to someone they've never encountered. They're nervous about providing social security numbers and income specifics. The assistance is offered with good intention, but that's all we can count on – their intention. My patients are also troubled by the idea of such a huge medical bill.”

Dr. Levitan says that if a patient is totally self pay and must go through assistance, there's a chance the patient may not come back. “While this is a rare occurrence, this is not elective surgery and they can't wait months before starting the injections.”

Again, Dr. Levitan explains, the problem is with the private carriers and Medicare Advantage plans where it's harder to discuss the issue with anyone. “Private insurance companies can change their indication list and reimbursement rates with less restrictions than the traditional Medicare plans. They still have their goal to decrease costs,” he says.

Medicare has very specific diagnoses that they cover and they are very clear about their coverage. “The difficulty occurs when a certain medication will work, but it is not for a listed diagnosis that they'll reimburse. If you're dealing with Medicare then you can work with the medical director and have a conversation about expanding coverage. If they know you to be an honest broker and come to them with valid information, they do want to help,” explains Dr. Levitan.

Patient Waivers

“Sometimes it's very difficult to collect from a patient that does not realize an immediate benefit from their procedure. Medicare requires that patients sign a waiver saying that if Medicare doesn't make the payment, the patient is still responsible for it. It's not thousands of dollars one time but several times as this is an ongoing chronic disease,” says Levitan. “Even though patients sign waivers, we do our best to ensure it won't come to that. It's an uncomfortable situation for the practice. If 2 to 3 months later we have final insurance denial and we remind the patient about the waiver – remember this is a $2000 plus treatment – we put ourselves and our patients in a very difficult position.”

Dr. Levitan explains that there has been a paradigm shift in the doctors’ offices in terms of pro bono work. “We still do pro bono work all the time. It's typically been our time that we give at no extra cost. Now it's different with these intravitreal drug treatments. We're facing debts in unreimbursed medications that still need to be paid for. But we do what we need to do — that's just part of being a doctor.”