Ophthalmology has come a long way toward making the ambulatory surgery center (ASC) the preferred and predominant location for eye surgery. When I commenced my engagement representing the Outpatient Ophthalmic Surgery Society (OOSS) 29 years ago, there were fewer ASCs of any kind in the country than the number represented in our Webinar. Today, there are about 900-1,000 ASCs dedicated exclusively to ophthalmic surgery. Why the monumental growth in these centers? Advances in surgical technique and administration of anesthesia and innovations in equipment and instrumentation have made procedures safe and cost-effective in the ASC, while today’s Medicare ASC payment system provides a profitable model for delivering high-quality care, including vitreoretinal (VR) services.

Increasing Payment Rates

Until 5 years ago, very few ASCs were performing vitreoretinal services. Medicare didn’t provide a facility fee for a number of the highest-volume VR codes based on the bureaucrats’ opinion that some of these procedures couldn’t be safely performed in the ASC. Those services that were reimbursed by Medicare — 67036 (removal of retina fluid), 67040 (vitrectomy) and 67108 (repair of a detached retina) — carried rates between $850 and $950. Very few facilities could afford to offer VR surgery at these rates. In 2008, CMS commenced the phase-in of a new ASC payment system that linked ASC rates to those paid to hospital outpatient departments (HOPD). Vitreoretinal services typically receive rates of about $1630, which is 70% to 100% higher than 5 years ago.

Dramatically higher payment rates have afforded ASCs an incentive to seek out VR surgeons and their patients. Medicare data reflect that in the 4 years ending with 2011, VR case volume in ASCs increased by about 29%.¹ Surgery centers’ market share versus the HOPD increased by 30% over this same 4-year period, or about 10% per year.¹ With the transition to these higher rates having reached a high point in 2012, it appears that this growth in volume may be accelerating. In a survey of ophthalmic ASCs conducted by OOSS, more than 60% of facilities reported that they either offer vitreoretinal services today or plan to add these cases in the near future.²

Vitreoretinal services can be a lucrative new service offering for the ophthalmic — and even the multi-specialty — ASC. Going forward, ASC payment rates should continue to expand modestly as hospital rates increase and facilities receive annual cost-of-living adjustments.

Areas to Watch

Is there a downside from a reimbursement and regulatory perspective to performing VR cases in the ASC? For those doctors deciding whether to join an ASC as a surgeon with privileges, as well as those who are thinking about taking an ownership interest in an existing center or developing a new ASC, there are several areas to consider.

Potential Cutbacks: With a massive federal deficit, it’s conceivable that Congress could make across-the-board cutbacks to annual updates for all providers. The Medicare Payment Advisory Commission (MedPAC) is, for example, considering a proposal that would substantially reduce hospital rates for procedures commonly performed in physicians’ offices, including YAG, Argon, and other low-intensity services. Just as ASC rates have risen with the tide of increased hospital payments, ASCs could suffer reductions if hospitals face Medicare cutbacks.

Potential Ban on Self-referral: Another important regulatory consideration is the possibility that policymakers will act to prohibit doctors from referring patients to their own ASCs. Congressman Pete Stark, the author of legislation banning self-referral, was defeated in his 2012 Congressional race. More importantly, policymakers recognize that ASCs offer enhanced access to surgical care for Medicare beneficiaries at significantly lower cost to the Medicare program and the patient. I believe that OOSS and the ASC community will continue to prevail in preserving the right of surgeons to own and refer their patients to centers in which they have an ownership interest.

Complex Medicare conditions for coverage: If one presently owns or manages an ASC, the addition of VR services should not adversely impact the facility’s ability to continue to comply with Medicare’s ASC certification requirements. However, if as a cataract or VR surgeon one is contemplating the development of a new facility, it’s critical to fully understand the requirements governing infection control, quality assurance,patient rights, governance, staffing, life safety and medical records, to name a few.

Quality Reporting Requirements: Recent regulations mandate that all ASCs report on a half-dozen quality measures for each procedure performed in the ASC. These measures include: patient falls; wrong-side/wrong-site/ wrong-implant; patient burns; patient transfers to hospitals; and, timing of administration of IV prophylactic antibiotics. (Yes, you have to report on IV prophylactic antibiotics even though ophthalmic ASCs never use them.) Failure to report will result in 2% reductions in the subsequent year’s annual payment update.) Given the high volume of ophthalmic procedures performed in ASCs (about 40% of all services performed in ASCs across the country are ophthalmic), it’s reasonable to expect that an ophthalmic-specific quality measure will ultimately be adopted by CMS. The OOSS, working with the AAO and ASCRS, will be integrally involved in the development of such a measure.

These issues shape the regulatory agenda of the OOSS. We will continue efforts to level the playing field between the payment rates of hospitals and ASCs. We will press for appropriate changes in the new Medicare ASC quality reporting program. The OOSS will be zealous in preserving the right of eye surgeons to own and operate in their ASCs.

While all providers face economic and regulatory challenges, the reality is that Medicare has doubled ASC facility reimbursement for VR services over the past several years. The future looks very promising with respect to successfully integrating VR services into the ophthalmic ASC. ■