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Challenges When Coding for the Femtosecond Laser

By: RIVA LEE ASBELL
Ophthalmology Management August 1, 2012
ASC Compliance & Coding

Challenges When Coding for the Femtosecond Laser

By Riva Lee Asbell

Many ASCs are being approached to purchase a femtosecond laser to be used mainly for cataract surgery and, to a lesser extent, in keratoplasty surgery. The final decision should take into consideration both compliance issues and a financial model (See Changes in Technology on page 25 for additional information).

The New Codes in 2012

+ 0289T Corneal incisions in the donor cornea created using a laser, in preparation for penetrating or lamellar keratoplasty (list separately in addition to code for primary procedure)

(Use 0289T in conjunction with 65710, 65730, 65750, 65755)f

+ 0290T Corneal incisions in the recipient cornea created using a laser, in preparation for penetrating or lamellar keratoplasty (list separately in addition to code for primary procedure)

(Use 0290T in conjunction with 65710, 65730, 65750, 65755)f

These codes were developed for the femtosecond laser incisions, based on the incisions being performed in the laser suite and the keratoplasty procedures being performed in the operating room of a hospital or ASC. They are add-on codes (noted by the + sign before the code) signifying the codes cannot be used independently. Since these are Category III codes, Medicare reimbursement, as well as the coverage itself, is at the discretion of the MAC (Medicare Administrative Contractor).

When Medicare doesn't cover a given procedure, the physician and the facility may bill the patient for that procedure. Thus, these two codes may be billed to the patient as noncovered procedures.

TIPS: • The codes are classified as Category III codes, which means that most Medicare Contractors/Carriers will not pay for the facility fee for these procedures, nor will most private payors
• A fee doesn't appear on the Medicare ASC fee schedule nor the MACs' physician fee schedules
• The codes are for keratoplasty only and not cataract surgery

Use of Femtosecond Laser in Cataract Surgery

The American Academy of Ophthalmology and the American Society of Cataract and Refractive Surgery has issued guidelines for both physicians and facilities regarding when a patient may be billed. (See link in box below.) Essentially, a patient may only be billed for services that are not covered by Medicare and, in this context, would therefore be refractive.

TIPS • The surgeon and the facility may bill the patient for refractive lens exchange and for the Astigmatic Keratotomy (AK) performed in conjunction with medically necessary cataract surgery
• Neither the surgeon nor the facility may bill the patient for cataract surgery incisions or other parts of the procedure related to medically necessary cataract surgery
• The global surgery package for Medicare includes incisions and closure and that's why femtosecond laser-assisted cataract surgery is not paid by Medicare and cannot be billed to the patient. ◊

View the AAO's Guidelines for Billing Medicare Beneficiaries When Using the Femtosecond Laser at www.aao.org/outofcs/wre/FS_Laser_Guideline_Doc_01_30_12.pdf

Changes in Technology
By Bruce Maller, founder and president of BSM Consulting

Over the next 10 years, cataract surgeons are likely to have an expanding array of lens options and equipment, such as the femtosecond laser. Technological advances are designed to help you provide better outcomes for your patients.
In the case of premium lenses, the approval cycle has slowed, and according to industry trade journals, there are at least nine new lenses in development.1
For many practitioners, the professional “up charge” for premium lens technology has provided a nice boost in practice income. For the ASC owner, there isn't much incremental margin on the facility side, since the patient is generally charged a small premium over and above the cost of the lens.
It's too early to tell whether the adoption of femtosecond laser technology will offer a similar return on the facility or practice side. Based on my observations, most ophthalmologists are cautious but intrigued by this new technology. The majority of physicians are adopting a wait-and-see approach. At present, there are two manufacturers with approval to market the laser platform.
Regardless of the available femtosecond laser technology platforms, surgeons and facilities will need to assess whether they can formulate a business/pricing model that will work for their business and their patients (Figure 1).2

References
1. Market Scope, Ophthalmic Market Perspectives.
2. Maller, B. Five Market Drivers to Watch. Ophthalmology Management. Feb. 1, 2012. Accessed
www.ophthalmologymanagement.com/articleviewer.aspx?arti cleID=106717 June 12, 2012.

Figure 1. This break-even analysis shows what an ASC must do to meet the cost of investing $500,000 in a new laser. Use this and other interactive practice management tools at the BSM Café (www.bsmcafe.com).
Figure 1. Assessing the Economic Viability of the Femtosecond Laser2
Assumptions
Laser Acquisition Costs
Cost of Laser and Other Related Equipment$550,000
Build Out Cost (if applicable)35,000
Total Capital Cost $585,000
Amoritization Period
(number of months for financing the laser)		60
Annual interest rate6%
Monthly Loan Payment$11,310
OR if Leasing, Complete Below
Monthly Lease Payment (1)
Variable Costs per Procedure
Per Use Fee/Disposables$450
Other Supply Costs (if applicable)25
Other Variable Expenses (surgeon specific)50
Total Variable Costs per Procedure$525
Fixed Costs
Annual Debt Service $135,716
Annual Laser Maintenance Cost40,000
Incremental Annual Rent10,000
Incremental Annual Staffing Costs14,000
Other Incremental Costs10,000
Total Annual Fixed Costs$209,716

Patient Fee Per Procedure
Enter the “upcharge” fee to the patient for use of the laser. Different Scenarios can be analyzed by entering various fee amounts in the shaded cells below.
Model 1Model 2Model 3
Patient Fee per Procedure$750$850$950
Total Variable Costs per Procedure$525$525$525
Gross Margin per Procedure$225$325$425
Total Annual Fixed Costs$209,716$209,716$209,716
Annual Break-Even Procedure Volume
Total Annual Procedure Volume to Achieve Break-Even932645493

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