Publication Exclusive: Some ophthalmologists opt out of CMS reimbursement system, exclusively accept private pay

Faced with declining reimbursements, administrative burdens and legal concerns, some ophthalmologists have chosen to opt out of Medicare and private insurance and only accept private pay. Others receive reimbursement for basic procedures and charge patients for refractive services. Participating in Medicare as a non-covered entity under HIPAA is also an option.

Jason P. Brinton, MD, said that the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) includes a provision so that physicians who choose to opt out of Medicare only have to do so once.

Jason P. Brinton

“New legislation has simplified the opt-out process and made it less onerous for physicians seeking to depend less on Medicare,” Brinton, an OSN Refractive Surgery Board Member, said.

Luke Rebenitsch, MD, who has never enrolled in Medicare,said, “It’s becoming easier. In the past, if you opted out, you opted out for 2 years. Now, with the recent law passed, it’s not for 2 years, but it can be for an extended period of time until such time as you decide not to opt out. It’s becoming a lot easier for physicians who wish to opt out without having to worry about an administrative headache every couple of years.”

According to Jason P. Brinton, MD, the proliferation of high-deductible health plans and the potential loss of patient privacy associated with billing and audits extend the appeal of private-pay medicine.

Physicians who opt out of third-party reimbursement do not necessarily lose patients over time, according to Brinton.

“The notion that physicians must contract with Medicare for practice success is a canard. Those of us who work in private-pay ophthalmology have found that many patients prefer to receive care in an office that is independent from insurance companies. The advent of health savings accounts, the proliferation of high-deductible health plans and the potential loss of patient privacy associated with billing and audits have further extended the appeal of private-pay medicine to a broader demographic,” he said.

However, opting out of Medicare is not a viable option for most ophthalmologists, according to John B. Pinto, OSN Practice Management Section Editor.

“To the typical practice, it’s about 60% of cash flow, so unless you’re one of those few luminaries in ophthalmology who work in a market where you’ve developed over many years a reputation as the only go-to guy and you have kind of a concierge business that comes to you that way, or you’re a refractive surgeon purely, it’s really difficult to opt out of Medicare as an ophthalmologist,” Pinto said. “Financially, it just doesn’t work at all. There are so many providers willing to work with the system.”

Other specialties, such as orthopedics, depend less on Medicare reimbursement, Pinto said.

“They’re in a position to be able to say, ‘I just don’t think I’m going to be a Medicare provider. I’m going to taper the number of Medicare patients that I accept,’” he said.

Private-pay scenarios

When he began his practice, Brinton chose a private-pay model rather than enrolling in Medicare or contracting with insurance companies.

“We wanted the relationship between our patients and our practice to be as straightforward, open and transparent as possible. The private-pay environment lent itself to the personal level of care we were looking for and came with a greater measure of professional autonomy. For example, we could invest in a new technology without concern for whether CMS would approve it for reimbursement. Medicare calls us providers rather than physicians or doctors. I didn’t want to be a provider; I wanted to be a physician,” Brinton said. “Any time a third party is involved, you have to balance your time and effort to serve two different customers.”

Lance Kugler, MD, said his practice specializes in refractive cataract surgery in a combined third-party and private-pay setting, a typical arrangement for that niche in the refractive subspecialty.

“We certainly are looking very hard at opting out as an option and looking forward toward a time when we will do that, but we aren’t there yet,” Kugler said. “We are a refractive surgery practice, primarily. We also do refractive cataract surgery but very little standard cataract surgery. When we do have a reimbursed cataract surgery, we are also providing refractive services to that patient as well. So, we have a mix of private-pay and third-party payers for our cataract procedures.”

The practice provides premium IOLs, lens-based or surgical astigmatism management, and other services in order to attain desired refractive outcomes, Kugler said.

Rebenitsch performs LASIK, PRK, refractive lens exchange and Kamra inlay (AcuFocus) implantation. His practice considered a hybrid reimbursement and private-pay model but decided against it.

“We’ve debated going to the hybrid system,” Rebenitsch said. “The reason we don’t is that we estimated that our overhead was increased 20% to 30% by just having a billing department. Then we found that it’s easier for patients. For those who want to have their insurance pay for part of it, we refer out to excellent surgeons throughout the community.”

Rebenitsch said his patients sign a contract and pay a single fee for all services, including refractive enhancements.

“We don’t have to worry about whether the patients will be getting a bill in the future. It’s an upfront cost,” Rebenitsch said. “To patients, it’s much more of a palatable pricing to them. They know exactly what they’re getting from the get-go. It has really increased our word-of-mouth referrals.”

Click here to read the full cover story published in Ocular Surgery News U.S. Edition, February 10, 2016.