Reimbursement outlook good for 2004, consultant says

KOLOA, Hawaii — As 2004 begins, the reimbursement news for ophthalmology is mostly good, according to a practice consultant speaking here during Hawaii 2004: The Royal Hawaiian Eye Meeting.

With a strong growth in procedure volume, a modest increase in surgical fees for the year instead of the predicted cut, and the recent expansion of the Medicare program, 2004 should be a strong year for ophthalmology, said Kevin J. Corcoran, COE, CPC, FNAO.

“You can go home from here with a smile on your face,” he told attendees here at Hawaii 2004: the Royal Hawaiian Eye Meeting.

Citing data for recent years from the Center for Medicare and Medicaid Services, Mr. Corcoran said procedure volume has been growing in ophthalmology. While cataract surgery and YAG capsulotomy saw moderate growth from 2001 to 2002 of 10% and 9%, respectively, other procedures saw larger jumps. Notably, retina surgery and glaucoma laser procedures both increased almost 30% during that time, and scanning laser procedures grew by a remarkable 64%.

The downside of the rapid growth in scanning laser billing, Mr. Corcoran noted, is that Medicare has responded by adjusting downward the reimbursement for the procedure by 31% in the 2004 Medicare fee schedule.

“You don’t have growth in utilization like that without someone taking notice,” he said.

There was also notable growth in use of laser trabeculoplasty, which Mr. Corcoran said might be attributed to a rise in use of selective laser trabeculoplasty, or SLT.

He noted that the top two procedures in ophthalmology are still cataract surgery and YAG capsulotomy, but that interestingly two retina procedures, panretinal photocoagulation and photodynamic therapy, are now among the top 10 ophthalmic procedures.

Regarding Medicare payment levels, Mr. Corcoran said this year’s fee schedule update is doubly good news. First, he said, there was an increase of 1.5% instead of the predicted 4% cut. Second, the boost was implemented promptly. Last year’s update was not finalized until March due to delays, but this year’s increase became effective January 1.

Reimbursement for procedures performed in ASCs is up 1.5%, Mr. Corcoran said. And ASC procedure volume grew 38% from 2000 to 2002, he said, making ASCs the fastest growing segment of Medicare, ahead of office and hospital based services. Most of the $400 million in growth in ASC payments under Medicare is attributed to cataract surgery, Mr. Corcoran said.

This good news about growth in ASC use is balanced by some bad news, however. ASC payments are under the microscope at the moment, Mr. Corcoran said, and a cut of about 1% in reimbursement is to be expected this year. Payment rates are likely to be frozen through 2009 at that level, he said, and the Government Accounting Office is expected to compare the cost structure for ASC payments to that for hospital outpatient departments, which might result in a restructuring.

In Medicare coding news, with the recent increase in interest in pachymetry, the procedure has now been given its own level 1 code (76514), Mr. Corcoran said, and use of the “emerging technology” code (0025T) for pachymetry has been discontinued.

He warned the audience not to get too excited about this development, however, because the current reimbursement for pachymetry is only $12.32.