CMS evaluating coverage options for accommodative IOLs

The current situation is a Catch-22, with Medicare beneficiaries who want the Crystalens IOL unable to obtain it even by paying out of pocket.

A push by the ophthalmic industry to set a higher price for IOLs that address presbyopia has led to discussions within the Centers for Medicare and Medicaid Services over how to treat this new class of lenses. The CMS must decide how to approach a device that is indicated for both cataract and refractive purposes. The decision may change the way the CMS pays for some health care services, experts say.

Since 2000, the CMS has paid extra for certain new-technology IOLs, such as the Advanced Medical Optics Array multifocal IOL. For devices that qualify as new-technology IOLs, ASCs and hospital outpatient departments receive an extra $50 of reimbursement. But the IOL industry is interested in the CMS allowing patients to pay privately for the presbyopic component of an accommodative or pseudoaccommodative IOL, so that companies can charge a more market-determined price for their innovative devices.

As a result, the CMS is faced with the question of how to treat a device that falls under both cataract surgery, a covered service, and refractive surgery, a noncovered service.

The CMS is “clearly struggling with competing policy issues,” said Alan E. Reider, JD, the Regulatory/Legislative Affairs Section Editor for Ocular Surgery News.

For now, the dilemma specifically concerns the eyeonics Crystalens, the only accommodative IOL so far to achieve U.S. regulatory approval. The IOL is available to patients younger than Medicare age, but access to the IOL for Medicare beneficiaries is on hold until the CMS determines how to treat it, Mr. Reider said.

“The government is struggling as to how to deal with it,” he said. “One option is to find that accommodating lenses should fit into a category of a covered service, namely an IOL, and if it qualifies as a new technology IOL, it would be granted an additional $50. The manufacturer said that’s inadequate and has [chosen not] to file an application for that [new technology IOL status].

Andy Corley, the chief executive officer of eyeonics, confirmed in an e-mail to Ocular Surgery News that “eyeonics is not considering (or interested in) pursuing the $50 add-on fee.”

Mr. Reider continued, “Unless Medicare formally takes a different position, that option is now in effect. As a result, Medicare is taking the position that this IOL is a covered service, which means that patients can’t pay for it out of pocket. So it’s sort of a Catch-22 right now. … It’s a problem because Medicare is saying a patient can’t purchase something the patient is willing to purchase.”

While the eyeonics device is currently the only IOL in this situation, other lenses that address presbyopia are heading for approval in the near future, which may add to the pressure on the CMS to reach a reimbursement solution.

Several solutions have been proposed, including allowing patients to pay the difference between the manufacturer’s charge for the IOL and what CMS will cover, increasing the reimbursement for the IOL, or allowing physicians to set a separate fee for the lens.

No decision has yet been made by the CMS. A CMS spokeswoman said the agency is still reviewing the issue and “it would be premature to discuss specifics at this time.” She offered no prediction regarding when the issue would be resolved.

Paying the difference

A private-pay option is the solution favored by some in the IOL industry. The concept has been compared to balance billing as used with private insurers, but there are important differences. In balance billing, physicians set their own price for a service. If the carrier pays less than the physician’s price, the difference is billed to the patient.

Balance billing is illegal in cases billed to Medicare in which the physician accepts assigment, so manufacturers are quick to point out that this is not what is being proposed for accommodative IOLs. Under the proposed scenario, Medicare would pay what it pays for cataract surgery with IOL, and beneficiaries would pay the difference between what Medicare pays and the market price of the presbyopic treatment.

“Historically, the concept of balance billing has been to allow physicians to charge a higher amount for a covered service, but in this case, the concept is to charge the patient an additional amount for the noncovered portion of the service,” Mr. Reider said.

In Mr. Corley’s words, “It is eyeonics’ position that the patient has the right to the covered service portion of the offering but can choose to upgrade the service for the noncovered presbyopic treatment.”

In this model, the physician would not set the fee for an accommodative IOL. Rather, patients would pay for the presbyopic treatment out of pocket if they choose to have the lens implanted, Mr. Corley said. He said his company does not want Medicare to pay more than the established rate for cataract surgery, nor does it want the CMS to prevent beneficiaries from obtaining the IOL if they want it.

“We’re not asking for any more money or any new policy. We’re just asking [CMS] to simply allow patients who choose Crystalens to pay for the procedure upgrade,” he told OSN. “We’re advocating that Medicare cover the service component of cataract, and the patient cover the presbyopic component of the treatment if they choose to do so.”

Until the CMS reaches a decision, most surgeons are refraining from implanting the Crystalens in Medicare beneficiaries.

Manufacturers want change

In addition to eyeonics, a number of companies have accommodative or pseudoaccommodative IOLs in development. Alcon is developing the ReStor apodized diffractive IOL, which the company said it expects to be approved later this year. Bausch & Lomb is developing the Sarafarazi dual-optic accommodative IOL. AMO, which already has the Array multifocal and Tecnis multifocal IOLs in its product line, is also developing the FocusIOL and the FlexOptic accommodating IOLs. Visiogen is developing the Synchrony accommodating IOL, which the company said may be approved in 2007 or 2008.

Bausch & Lomb, Alcon and AMO have dealt with the CMS regarding a policy on accommodative IOLs as members of the Industry Coalition for the Advancement of Restorative Eyecare (ICARE).

Eyeonics is not a member of the ICARE group, Mr. Corley said.

Blake Michaels, director of marketing for cataract products at Bausch & Lomb, said the solution goes beyond simply passing the difference of the IOL on to a patient who can afford it. He said one possible solution is to follow a practice called a “pass-through,” which is used by hospitals to obtain a higher reimbursement from Medicare.

“You can pass through in a hospital environment and get a higher reimbursement if you could get Medicare to start paying higher amounts for an IOL,” Mr. Michaels said.

Brette McClellan, director of health policy and government relations at Alcon, said the company would like to either see a patient-sharing model or a new technology payment model for accommodating IOLs.

“We are studying different approaches that might enable Medicare beneficiaries to have access to the lens. … We anticipate that most patients under the age of 65 will not face substantial access barriers. While the Medicare outcome is unfolding, surgeons will be able to provide this technology to the sizeable segment of non-Medicare patients,” she said.

Without a change in CMS policy, the industry is limited regarding how much it can charge for an IOL, Mr. Michaels said. The private-pay concept would allow the industry to base prices on what the market will tolerate. That way, companies could recover the costs of their IOL investments in an era when IOL reimbursement has declined.

Politically, however, there is fear of creating a divide among Medicare beneficiaries, if some received the upgraded IOL and some did not, he said. Additionally, the current political climate is one of budget cuts. Having the CMS pay more per IOL for even a portion of the estimated 2.5 million cataract procedures done annually is not feasible, he said.

Organizations weigh in

Whatever policy the CMS decides upon, it will change how Medicare provides some services to beneficiaries, said William L. Rich III, MD, a spokesman for the American Academy of Ophthalmology.

“One school of thought says, let’s protect the beneficiary and get them the most benefit from the money that people put into Medicare. Therefore, this is a new-technology lens, and if you want to use it, it’s the cost of the lens plus $75 for the new technology lens. The other school of thought would say, let’s limit the long-term costs of Medicare but not thwart innovation. Let’s pay for part of the lens and let the facility charge whatever they want for the remainder,” he said.

Dr. Rich said there are three possible scenarios the CMS could consider: Patients could pay for the difference between the reimbursement and the price of the IOL as set by the company; Medicare could cover the lens under a restrictive low fee; or Medicare could not cover the lens and allow physicians to set their own fee and bill the patients.

As of now, the AAO has declared no formal opinion on the issue, and it has advised members of their legal responsibilities, Dr. Rich said.

“We’re leaving this argument up to the device manufacturers and a very high level of CMS because it’s really a philosophical decision that breaks precedent,” Dr. Rich said. “We’ve talked indirectly with some people at CMS who wanted information on it, but we’ve given no formal opinion on it.”

The American Society of Cataract and Refractive Surgery has advocated that Medicare should cover the lens like any other IOL and allow patients to pay the difference, said John Ciccone, director of communications for ASCRS.

“ASCRS has taken the position that Medicare patients should have access to refractive and accommodating IOLs following cataract surgery, and they should be allowed to pay the difference between what Medicare would normally reimburse for a conventional IOL and the cost of the accommodating or refractive lens,” Mr. Ciccone said.

For Your Information:

• Alan E. Reider, JD, can be reached at Arent Fox PLLC, 1050 Connecticut Ave, NW, Washington, DC 20036; 202-857-6462; fax: 202-857-6395; e-mail: ReiderA@ArentFox.com. Andy Corley, chief executive officer of eyeonics, can be reached at eyeonics, 6 Journey, Suite 125, Aliso Viejo, CA 92656; 949-916-9352; fax: 949-916-9359. Blake Michaels, director of marketing for cataract products at Bausch & Lomb, can be reached at B&L Vision Care, P.O. Box 450, Rochester, NY 14603-0450; 585-338-6000/800-553-5340; fax: 585-338-6896. Brette McClellan, director of health policy and government relations at Alcon, can be reached at Alcon Laboratories, 6201 South Freeway, Fort Worth, TX 76134; 800-757-9195. William L. Rich III, MD, can be reached at the American Academy of Ophthalmology, Governmental Affairs Division, 1101 Vermont Ave., NW, Ste 700, Washington, DC 2005-3570; 202-737-6662; fax: 202-737-7061. John Ciccone, director of communications for ASCRS, can be reached at 4000 Legato Rd., #850, Fairfax, VA 22033; 703-591-2220; fax: 703-591-0614; e-mail: jciccone@ascrs.org.

• Jeanne Michelle Gonzalez is an OSN Staff Writer who covers all aspects of ophthalmology, specializing in practice management, regulatory and legislative issues. She focuses geographically on Latin America.