The Business of Refractive Laser Assisted Cataract Surgery
The Business of Refractive Laser Assisted Cataract Surgery
Most ophthalmology practices accept Medicare and other private insurances. As such, these practices are subject to the laws of Medicare and the contracts established with private insurers. In the USA, the Center for Medicare Services (CMS) has allowed additional billing for refractive components of cataract surgery aimed at the reduction of spectacle dependence including limbal relaxing incisions, presbyopia correcting IOLs, and toric IOLs. Recent rulings from CMS have given guidance about billing of Medicare patients for ReLACS. In summary, the ruling states that an extra charge for the imaging component can be assessed to the patient if an astigmatism correcting lens or a presbyopia correcting lens is being placed. Also, an extra charge for the laser itself may be assessed to the patient if using the laser itself to create arcuate incisions. Most interpretations of this ruling indicate that an extra fee cannot be charged for the use of the femtosecond laser or its imaging component in conjunction with cataract surgery if a monofocal lens is placed without simultaneously correcting astigmatism.
Practices that opt out of Medicare and other insurance contracts largely free themselves from the rules and policies that govern payer reimbursed cataract surgery and ReLACS. This may allow practices to be more efficient and spend less time, effort, and expense complying with the regulatory oversight and standards applied by Medicare and insurers. The boutique approach also sets the table for market-driven pricing. Many practices adopt fees similar to refractive lens exchange pricing with similar global periods. However, the patient becomes responsible for the entirety of the fee, including both the cataract surgery and the refractive component of the procedure. In addition, these practices may not enjoy the volume associated with larger group carriers and Medicare.
Teaching institutions carry a mission of training the next generation of ophthalmologists, and as such, often try to adopt technology for the benefit of their trainees. One challenge in this setting is that patients may not want to pay extra for surgery performed by trainees, even under supervision. However, the university brand and quality of faculty may help overcome concerns about trainees providing ReLACS. Teaching institutions are often the recipient of public grants and private donations that can help decrease the costs of acquiring and implementing a femtosecond laser cataract surgery program. Some institutions may consider acquiring technology at a fiscal loss to improve resident training.
Veterans administration hospitals are funded by the federal government and some have recently purchased femtosecond lasers for cataract surgery. These services are usually provided without additional charge to the veteran receiving care. Because the veterans administration hospitals often pay for spectacles after cataract surgery, the veterans administration system may realize cost savings by decreasing spectacle dependence in veterans. The veterans administration may also be a good source for nonindustry sponsored data regarding safety, efficacy, and overall costs of incorporating ReLACS into an ophthalmology practice.
Community-based hospitals charge higher facility fees to Medicare than ambulatory surgery centers. As such, some community hospitals have chosen to purchase femtosecond lasers and absorb the extra capital costs and usage fees in order to offer ReLACS to all patients without additional charge for the femtosecond laser. Other community-based hospitals purchase a laser and charge a fee to surgeons for use, providing access to surgeons with our significant capital costs to the surgeon.
Practice Models
There Are Five Distinct Practice Models Incorporating ReLACS.
Medicare and Out-of-Pocket Cash
Most ophthalmology practices accept Medicare and other private insurances. As such, these practices are subject to the laws of Medicare and the contracts established with private insurers. In the USA, the Center for Medicare Services (CMS) has allowed additional billing for refractive components of cataract surgery aimed at the reduction of spectacle dependence including limbal relaxing incisions, presbyopia correcting IOLs, and toric IOLs. Recent rulings from CMS have given guidance about billing of Medicare patients for ReLACS. In summary, the ruling states that an extra charge for the imaging component can be assessed to the patient if an astigmatism correcting lens or a presbyopia correcting lens is being placed. Also, an extra charge for the laser itself may be assessed to the patient if using the laser itself to create arcuate incisions. Most interpretations of this ruling indicate that an extra fee cannot be charged for the use of the femtosecond laser or its imaging component in conjunction with cataract surgery if a monofocal lens is placed without simultaneously correcting astigmatism.
Boutique Practice (No Insurance Accepted)
Practices that opt out of Medicare and other insurance contracts largely free themselves from the rules and policies that govern payer reimbursed cataract surgery and ReLACS. This may allow practices to be more efficient and spend less time, effort, and expense complying with the regulatory oversight and standards applied by Medicare and insurers. The boutique approach also sets the table for market-driven pricing. Many practices adopt fees similar to refractive lens exchange pricing with similar global periods. However, the patient becomes responsible for the entirety of the fee, including both the cataract surgery and the refractive component of the procedure. In addition, these practices may not enjoy the volume associated with larger group carriers and Medicare.
Teaching Institutions
Teaching institutions carry a mission of training the next generation of ophthalmologists, and as such, often try to adopt technology for the benefit of their trainees. One challenge in this setting is that patients may not want to pay extra for surgery performed by trainees, even under supervision. However, the university brand and quality of faculty may help overcome concerns about trainees providing ReLACS. Teaching institutions are often the recipient of public grants and private donations that can help decrease the costs of acquiring and implementing a femtosecond laser cataract surgery program. Some institutions may consider acquiring technology at a fiscal loss to improve resident training.
Veterans Administration Hospitals
Veterans administration hospitals are funded by the federal government and some have recently purchased femtosecond lasers for cataract surgery. These services are usually provided without additional charge to the veteran receiving care. Because the veterans administration hospitals often pay for spectacles after cataract surgery, the veterans administration system may realize cost savings by decreasing spectacle dependence in veterans. The veterans administration may also be a good source for nonindustry sponsored data regarding safety, efficacy, and overall costs of incorporating ReLACS into an ophthalmology practice.
Community-based Hospitals
Community-based hospitals charge higher facility fees to Medicare than ambulatory surgery centers. As such, some community hospitals have chosen to purchase femtosecond lasers and absorb the extra capital costs and usage fees in order to offer ReLACS to all patients without additional charge for the femtosecond laser. Other community-based hospitals purchase a laser and charge a fee to surgeons for use, providing access to surgeons with our significant capital costs to the surgeon.
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