Cataract surgeries could plummet as physicians gripe over HCFA proposal
Outpatient facilities may be hurt by changes in physician payments
A controversial proposal to reshuffle the way Medicare pays office-based surgeons for their expenses could end up spelling disaster for some hospitals and ambulatory surgery centers (ASCs). Groups of physicians, including ophthalmologists who are irate over the plan, are expected to slice into the number of procedures they ordinarily perform.
Topping the list is likely to be one of outpatient surgery’s biggest money-makers: cataract extractions. Facilities that handle large volumes of cataract surgeries face the possibility that surgeons will curtail or postpone significant numbers of these operations.
Physician-owned and single-specialty clinics run the greatest risk of reductions, according to some surgeons. Small and rural hospitals with high Medicare patient rolls also could see big differences. In all cases, total cataract reimbursements may fall by an unspecified amount, according to industry analysts.
And that’s not all: Cataracts won’t be the only procedure significantly affected, predicts Bergein F. Overholt, MD, president of the American Association of Ambulatory Care Centers in Chicago. Colonoscopy is another example, he says. The HCFA data indicate this procedure would have a 48% reduction in the professional fee.
"I think the HCFA goal is obviously to reduce the costs, but they’re proposing reimbursement mechanisms that encourage performance in a lower-quality setting. And that simply is wrong," Overholt says. As an example, he says most ASC staff are certified in advanced cardiac life support while most physician office staff are not.
Facilities may have to promote themselves aggressively to medical groups that do large numbers of cataract surgeries or boost other service lines to compensate for the expected shortfall, experts say.
Another recommendation is for hospitals and ASCs to create formal partnerships and joint ventures with ophthalmology groups to shore up sagging business. "Physicians have become quite entrepreneurial about surviving the new payment environment. They’ll find a way," says Beverly Philip, MD, director of day surgery at Brigham & Women’s Hospital in Boston.
Facilities that do a high cataract business may have to affiliate closely with these providers to prevent losing ground, Philip adds.
The reason for the projected declines stems from a plan to redistribute Medicare payments for the technical component of surgeons’ fees. The Health Care Financing Administration in Baltimore says it wants to reallocate physician payments to cover their overhead costs more fairly. The change was mandated by a 1994 amendment to the Social Security Act passed in 1992.
The proposed resource-based adjustments will increase payments for many office-based procedures, including simple skin debridements and diagnostic colonoscopies. In turn, the expense portion of the surgeon’s fees would drop considerably when these same procedures are performed at a licensed outpatient facility. This drop in fees will occur because HCFA already covers the technical component in the facility’s fees. (For a comparison of the way the proposal would affect selected procedures, see chart, p. 107.)
In-office payments concern physicians
But physicians aren’t incensed over the proposed reductions in the out-of-office payments. Their complaints center on the meager rate increases for the in-office payments, especially those intended to cover the cost of expensive technologies such as YAG and argon gas lasers.
According to estimates from the American Academy of Ophthalmology in San Francisco, physician payment differentials for technology, for example, would range from $8 to $15.
"No one in his or her right mind is going to do the surgery in the office when all it’s going to make is a couple of dollars difference," says William L. Rich, III, MD, a general ophthalmologist with Northern Virginia Ophthalmology Associates, a five-member single specialty practice in Falls Church.
The logical response would be to refer patients out and perform the procedure at a hospital or ASC. But ironically, that may not occur, say observers.
Thanks to the big cuts proposed in the out- of-office expense payments (see above chart), physicians may delay the procedure or decline to do it at all. They could decide to delay unless the patient insists or is adversely affected by the postponement, says David J. McIntyre, MD, medical director and principal of McIntyre Eye Clinic and Surgery Center in Bellevue, WA.
Many facilities can’t afford such delays. Here are the reasons:
• Although Medicare payments to ASCs have been inching up in recent years, the reimbursements generally have been marginal, even with tight reins on costs, says McIntyre. Hospitals have fared slightly better due to the way HCFA pays them, using the Medicare cost-reporting technique. But payments have been shrinking over time. Meanwhile, hospitals are steadily losing market share to ASCs.
• The HCFA plan comes at a time when outpatient facilities are struggling with major changes in the way Medicare wants to pay facilities for the technical component of services.
Most of the industry is bracing for the eventual implementation of an outpatient prospective payment system, either under ambulatory patient groups or a similar methodology.
• Commercial payers also are pushing total cataract payments downward. Recent trends indicate that managed care plans are artificially depressing patient volume and imposing barriers to cataract surgeries.
For its part, HCFA predicts little or no effect on facilities or beneficiaries. The number of office-based cataract operations currently performed is statistically too small to make a big difference, the agency contends. "HCFA is correct in saying that," Rich says. "Currently, most cataract surgeries are performed in either a hospital or ASC."
But fewer surgeons are likely to stay in the cataract surgery market. And the few who do will attempt to make up the financial loss by pushing for patient volume. They’ll also look for the "most efficient and convenient way to do these procedures," predicts Philip of Brigham and Women’s.
James Brocato, vice president of managed care for NovaMed Eyecare Management, a practice management company in Chicago, agrees. "Those doing faster procedures probably will continue to do the procedures because it can be affordable. Your time and costs of doing the procedure are greatly reduced." Hospitals that don’t do a high cataract business or have poor turnover times could lose these physicians to ASCs, he says.
"Providers should press HCFA through the public-comment process to kill this initiative," Rich says.
Philip says the cataract surgery business at Brigham and Women’s ranks fifth in financial importance. Thus her facility like other large medical centers isn’t likely to feel much heat from the HCFA plan.
"As a hospital, our primary role is in acute care. We get the really sick ones because that’s what we do," she explains, adding that cataract surgery is still largely an elective procedure.
But as a research facility, the hospital could lose other important opportunities. "The potential loss of cataract patients could have an inhibiting effect on future medical research and newer, less expensive technologies," she concludes.
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