Refractive ‘bracket creep’ makes billing for presbyopia services complex

The main issues that must be considered are bundling, restrictions on the charge that may be billed to Medicare patients and patient inducement.

Issue: March 15, 2005

ByAlan E. Reider, JD, MPH

William F. Maloney, MD’s article “Cataract surgeons recalibrate to treat presbyopia as vital issues loom” in the November 15, 2004, issue of Ocular Surgery News highlighted several vital issues related to the treatment of presbyopia in conjunction with cataract surgery. He noted that, over time, cataract surgeons continually have improved the refractive aspects of cataract surgery, thereby creating “an inflationary ‘bracket creep’ of refractive expectations,” all of which have been performed at no additional charge and, consequently, no reimbursement for the additional service. Dr. Maloney’s article focused only on the surgeon’s fee and did not address the related and complex issue of reimbursement for premium IOLs used for the correction of presbyopia. This article similarly addresses only the issue of the surgeon’s fee.

Dr. Maloney observed that cataract surgery effectively has become a refractive procedure, a development that creates a reimbursement dilemma for cataract surgeons. He said he believes that the cataract and refractive components of surgery should have been decoupled at the outset; instead, the opposite occurred. As a result, Dr. Maloney focused on a much bigger question: Will this trend continue, where new developments for the treatment of presbyopia also will become bundled into the payment for cataract surgery? This question highlights the complexity and confusion that surrounds Medicare billing issues. This article will attempt to provide some clarity and guidance for the surgeons who expect to treat presbyopia in cataract patients.

Legal issues

The laws that apply to this issue are confusing and, in some respects, contradictory. Essentially, there are three principal considerations that must be addressed: bundling, restrictions on the charge that may be billed to Medicare patients and patient inducement. Each of theses issues is discussed below.

Bundling

For many years, to the consternation of physicians, the Medicare program has “bundled” certain services with others. Oftentimes, bundling has resulted in a reduction in the total amount of reimbursement. Physicians who resist the bundling directive and “unbundle services,” thereby billing for more than one service, risk not only the denial of the claim submitted but the potential to be charged with filing false claims.

Ophthalmology has had more than its fair share of bundling. Perhaps the most relevant example for the purpose of this discussion is the bundling of the subtotal anterior vitrectomy into the codes for cataract surgery. Despite the bundle, the reimbursement level for cataract surgery remained the same. In addition, over the past several years, reimbursement for cataract surgery has decreased. Yet performance of a vitrectomy is now part of the global fee for cataract surgery.

With this history, there is a logical concern that treatment of presbyopia could go the way of the vitrectomy and be added to the list of bundled services. As discussed below, however, this should not happen.

Guidelines for physicians who want to offer
presbyopia correction to Medicare patients

Correction of presbyopia
Physicians may charge patients a separate fee for the correction of presbyopia.
Diagnostic tests for presbyopic correction
Physicians may charge patients for the preoperative diagnostic tests performed in connection with the correction of presbyopia but only if those services are not related to the performance of traditional cataract surgery and IOL implant or other covered procedure being performed.
Identifiable amount
Physicians should charge patients a separately identifiable amount for the correction of presbyopia rather than a global fee combined with the cataract surgery.
Because correction of presbyopia is a noncovered service under Medicare, physicians are not obligated to provide patients with an Advance Beneficiary Notice advising them that Medicare will not pay for their service. Nevertheless, physicians may wish to provide patients with a notice explaining that the service is noncovered under Medicare and that the patient is solely responsible for payment.

For patients who have a supplemental insurer that may cover refractive procedures but requires a denial from Medicare, a claim may be filed using the -GY modifier to indicate to Medicare that this claim should be denied.
Reasonable charge
Physicians should be cautious to avoid the allegation that the charge for the correction of presbyopia is inflated to subsidize the underpayment for cataract surgery. While the Medicare program does not limit what a physician may charge for a noncovered service, the Medicare program wants to be certain that physicians are not overcharging patients for noncovered services to subsidize the Medicare fee schedule. Furthermore, physicians who charge unreasonably high amounts for noncovered services could face allegations of unethical conduct under their state licensing laws. While physicians must set their own fees, one guideline to consider is that in the rare instance when Medicare recognizes the medical necessity of surgical correction of astigmatism, the current reimbursement is approximately $450.
Free service option prohibited
Physicians who choose not to charge patients an additional amount for the correction of presbyopia may do so, but they are prohibited from offering the free service as an inducement to perform the cataract surgery. In such cases, physicians should advise patients of the availability of this additional procedure only after the patient has agreed to have cataract surgery.

Source: Reider AE

Charge limitations

Physicians who accept assignment agree to accept as payment in full the amount that Medicare determines to be the reasonable charge. Even those physicians who do not accept assignment are bound under other provisions of the Medicare statute and may not bill patients an amount in excess of the “limiting charge.” Violation of either of these provisions may subject a physician to civil money penalties under the statute.

The Medicare program does not govern the charge that may be set for a noncovered service. When a physician provides a covered service with a noncovered service, however, there may be a tendency to set the fee for the noncovered service at a level that covers not only the noncovered service but also an amount to subsidize what the physician views as inadequate reimbursement for the covered service. This conduct creates potential risks with respect to the charge limits imposed under the reassignment rules, as well as under the limiting charge rules.

Patient inducement

As part of the Health Insurance Portability and Accountability Act of 1996 (commonly known as HIPAA), the enforcement provisions of the Social Security Act were amended to add a new form of prohibited conduct: providing anything of value to a Medicare patient that likely would influence that patient to receive a service from a particular provider, practitioner or supplier. The Congressional Report discussing this statutory provision noted specifically that provision of free services could trigger the application of the statute, although Congress also noted that the statute was not designed to prevent the provision of services in the context of free health fairs where screening services are provided or the provision of items of nominal value. A violation of the statute could result in the imposition of a civil money penalty of up to $10,000 per violation.

It would not be a major leap to apply the statute to the provision of refractive procedures at no charge to the patient. We are aware that physicians have been performing astigmatic keratotomy to correct astigmatism without charging the beneficiary or the Medicare program. Performance of these services as an incidental benefit to the surgery should not present legal problems, provided the patient has been advised of this option before the surgery (in order to assure that an appropriate informed consent is obtained) but after the patient has selected the surgeon. We are aware, however, that some surgeons have promoted the fact that they provide these services at no charge as a way to encourage the patient to select them for the provision of cataract surgery. In our view, this could trigger the application of the patient inducement prohibition.

Now, let us consider the application of these laws to correction of presbyopia in connection with the provision of cataract surgery.

Application of these laws to correction of presbyopia in connection with the provision of cataract surgery

Bundling

From a legal perspective, the major concern is whether performing a service for the correction of presbyopia may be bundled into the cataract surgery procedure, therefore prohibiting a surgeon from billing the patient a separate amount. Dr. Maloney accurately noted that physicians have steadily incorporated “increasingly refined refractive improvement” into cataract surgery, making it “arguably the most accurate means to correct a large refractive error.” With this foundation, can presbyopia correction be far behind?

The simple answer is that it should not, and if physicians follow appropriate guidelines, it will not. Despite the Medicare program’s tendency to incorporate more services into the description of a covered benefit, those bundles are limited to covered services. Last year, in response to concerns about physicians charging patients additional amounts for what is commonly known as “concierge services,” the Office of the Inspector General issued an alert, warning physicians of potential liabilities for charging Medicare patients for services that are already covered by Medicare. The OIG identified items such as “coordination of care with other providers,” “a comprehensive assessment and plan for optimum health” and “extra time spent on patient care.” While these were marketed as “noncovered services,” the OIG disagreed and stated that these were components of covered services, which meant that physicians were prohibited from charging additional amounts to patients. Significantly, however, the OIG alert contained the following statement: “Medicare participating providers can charge Medicare beneficiaries extra for items and services that are not covered by Medicare.” Unlike the concierge services described above, as a refractive procedure, there is no question that correction of presbyopia is not covered by the Medicare program. Therefore, the government acknowledges clearly that physicians may charge patients for these services.

A more difficult question arises, however, in connection with certain diagnostic or preoperative evaluation tests, such as corneal topography, wavefront analysis, ocular dominance tests and pupillometry, that may be necessary to perform in anticipation of the correction of presbyopia. To the extent that these services are performed solely for the purpose of performing the presbyopia correction, they are noncovered and should be separately billable to the patient. However, any tests, such as preop refraction, that are part of the recognized bundle of services performed with traditional cataract surgery are covered and may not be billed separately, even if they are also used in connection with presbyopia correction.

Charge limitations

When performing noncovered services in conjunction with an otherwise covered service, physicians must be cautious to avoid allegations that the amount charged for the noncovered service is not inflated and designed, in part, to supplement the reimbursement for the covered service. Reimbursement for the covered cataract surgery procedure is still subject to the assignment rule or, for those physicians who do not accept assignment, to the limiting charge rule. Therefore, it is important to be certain that the amounts charged for the services are clear and maintained separately.

Patient inducement

Because correction of presbyopia is a noncovered service and is separately billable to patients, physicians should be cautious to avoid the risk of violating the patient inducement prohibition by offering these services at no extra charge in connection with cataract surgery. If a physician is not comfortable charging for these procedures and wants to offer them at no charge to his or her patient, such an offer should be made only after the patient has agreed to go forward with cataract surgery. This should minimize the risk of an allegation that the promise of free services was designed to induce the patient to select the physician to perform cataract or other covered service.

Summary

In summary, the correction of presbyopia is a noncovered service under Medicare, as well as under most third-party payer programs. Physicians are free to bill patients for these services; in fact, physicians are prohibited from offering those services for free as an inducement to perform cataract surgery or other covered procedures. The sidebar on this page features some guidelines to help physicians who want to offer the correction of presbyopia to their Medicare patients.

For Your Information:

Alan E. Reider, JD, and Allison Weber Shuren, MSN, 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.