As I See It

The Law of Unintended Consequences

By Paul S. Koch, MD, Editor Emeritus

The latest from the Centers for Medicare and Medicaid Services (CMS) braces us for a 3% overall reduction in ophthalmology payments in 2013, led by a 13.5% reduction in fees for cataract surgery. Before you grab a calculator, that means reducing our fee from an average of $704 to $610, depending on what part of the country your practice in. Medicare pays only 80% of that, so they’re on the hook for $488 per eye.

Those of us who lived through the original Medicare cuts thought the agency would never reduce the fee below $1,500. Then, just like those celebrities who said they would leave the country if the other guy won the election, but of course never do, many surgeons said they would stop operating if the reimbursement for cataract surgery ever fell under $1,000. It did. They didn’t. Years later, with overhead exploding, administrative burdens piling up and compliance costs growing, we face losing 13 cents on the dollar and higher taxes, giving back more of the 87 cents left over.

No Credit and No Dinner

Unfortunately, we cannot argue that it’s an arbitrary cut. It was based on a survey conducted (at CMS’ request) by both the American Academy of Ophthalmology and the American Society of Cataract and Refractive Surgery that showed a decrease in surgery time and a reduction in postoperative visits since the last time it was measured. (See “Report from AAO,” page 16.) Based on that new data, the surgical fee was adjusted downward to reflect the less time and effort the average surgeon spends on cataract surgery. We get no extra credit for responsibility or improved outcomes.

To put this in some perspective, we are being asked to put our skills on the line for not a lot more than the cost of a trio of brand-name eyedrops we use for the surgery. Medicare will pay three times as much as our cataract fee for each and every vial of ranibizumab we use. Years ago I wrote an essay proposing that one day the cost of the expensive injections would drain the Medicare budget so severely that we would see a transfer of money away from the providers and to the drug companies. They could at least buy us dinner first. Oh wait, they can’t!

So what does this mean for eye surgeons? Some run very efficiently with well-oiled systems. They will try to pump more patients into their flow. Others will look toward recouping the money through performing refractive tests or procedures. Surgeons who do not have a system for using alternate optic IOLs will develop one and learn to use torics and multifocals. Others will decide to skip some or all of the operations they perform and spend more time in the office. Some, like me, will sell and merge practices looking for economies of scale.

The Less Stressful Path

I know several excellent surgeons who only operate on a moderate density cataract behind a wide pupil. They feel dense cataracts and small pupils are too much work for what they are paid and refer those out to colleagues in the area. They still do the biometry and pick up the 20% co-management fee. They stay in the office and come out ahead financially and with less stress.

Possibly others will take up this path, and more surgeons will decide to pass on the tough cases. It’s difficult for the lower-volume surgeon to make the argument to struggle through a tough case when a more peaceful life and perhaps greater income could be gained by avoiding the operating room. Who would have thought this only a few years ago?

It will be interesting to see what happens next. Our regulators probably assume that they’ll pay less and nothing will change for the patient, but the Law of Unintended Consequences suggests patients will have fewer options and higher costs. OM

Paul S. Koch, MD is editor emeritus of Ophthalmology Management and the medical director of Koch Eye Associates in Warwick, RI. His e-mail is paulkoch@kocheye.com.