CMS proposed fee schedule amounts to less than 1% increase for ophthalmology

WASHINGTON — The new Medicare Physician Fee Schedule includes only a 0.5% increase for ophthalmology despite an expected 1.5% across-the-board increase for all physicians, according to a press release from the American Academy of Ophthalmology.

The proposed fee schedule for 2005 reflects the Centers for Medicare and Medicaid Services’ “decision to re-price several pieces of ophthalmic equipment and remove from the practice expenses of several codes the cost of either a screening or examination lane where both are listed and only one is used,” according to the AAO.

New methodology used to allocate relative value units (RVUs) for professional liability also resulted in cuts to ophthalmology, the AAO said. Because ophthalmology traditionally has lower liability insurance costs than some other specialties, the CMS reallocated some of ophthalmology’s funds to specialties with higher malpractice costs.

“Many of our codes increased, but some codes experienced losses from CMS’s practice expense refinements. Our loss of dollars from the pool of professional liability RVUs resulted in our total reimbursement increase being at less than 1%,” said William Rich III, MD, the AAO’s secretary for federal affairs.

A change in the way physicians are paid for drugs is also affecting ophthalmology, the AAO release noted. As of the first quarter 2004, the average sale price of a drug is being used to calculate physician payments, rather than the inflated average wholesale price. This has affected a wide range of drugs delivered in physician offices, including a 3% cut in the reimbursement for Visudyne (verteporfin for injection, Novartis) for the treatment of age-related macular degeneration.

The proposed rule would increase payment rates to hospitals for screening examinations that are already covered by Medicare, including an increase for glaucoma screening of 10.4%.