August 06, 2012
11 min read

Higher visual expectations push cataract surgeons to use more uncovered tests, services

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Improved IOL technology, refinements in surgical instrumentation and higher patient expectations have led to a fusion of good clinical outcomes and good refractive outcomes in the minds of many ophthalmologists.

This leaves surgeons to ask: “Does better cataract surgery support and deserve a higher professional fee, and who will pay for it?”

Because existing regulations are not always clear about what new technologies are reimbursed by third-party payers, surgeons find it difficult to get a straight answer.

According to Kevin J. Corcoran, COE, CPC, FNAO, an OSN Practice Management Board Member and a coding and reimbursement consultant, Medicare will pay for cataract surgery when medically necessary but not for refractive services. If the surgeon aims for emmetropia as part of the IOL computation and surgical plan for cataract surgery, that also falls within the global surgical package for the procedure and is covered. However, if there are supplemental items and services to evaluate and treat refractive error, those are not covered.

Corcoran said Medicare policy for cataract covers a comprehensive eye exam, an A-scan and, occasionally, a B-scan before surgery. Medicare also pays for procedures to treat complications of surgery, although those are uncommon with a procedure that is usually successful. However, diagnostic tests to assess refractive error are not covered by Medicare. For example, corneal topography for regular astigmatism, wavefront aberrometry for higher-order aberrations and manifest refraction are all noncovered services.

Kevin J. Corcoran, COE, CPC, FNAO 

Medicare policy for cataract covers a comprehensive eye exam, an A-scan, and, occasionally a B-scan preoperatively, according to Kevin J. Corcoran, COE, CPC, FNAO.

Image: Corcoran KJ

Corcoran emphasized the difference between billing for outcomes and billing for tasks. A good outcome, such as emmetropia, following routine cataract surgery does not justify an extra charge to a beneficiary. A noncovered task, such as measuring refractive error or performing limbal relaxing incisions to correct astigmatism, does merit an extra charge as long as the beneficiary is agreeable.

A surgeon who performs excellent biometry (a covered service), careful cataract surgery (covered) and fastidious attention to IOL power calculation (covered) may not make an extra charge to the beneficiary, although the outcome is excellent, he said. Only the added steps (tasks) of corneal topography, limbal relaxing incisions, LASIK, refraction or wavefront aberrometry merit a charge, if the beneficiary permits, as noncovered services, and then only if the surgeon performs these services.

Riva Lee Asbell, OSN Practice Management Board Member and a coding expert, succinctly summarized it: Anything that deals with refractive surgery or services is statutorily excluded from the program.

Riva Lee Asbell 

Riva Lee Asbell

If a service is medically necessary, there may be exceptions. For example, corneal topography may be covered for keratoconus but not for a cataract diagnosis, Asbell said.

Technology and medical advances have created more ways to help patients, and those patients understandably want those services covered. Unfortunately, patients might not receive all the new technology without some out-of-pocket expense.

Surgeons’ point of view

“Ten to 15 years ago there was only one way to go with cataract surgery. You could choose your spherical outcome. Now we have choices about what procedures we perform, and we need to begin with our understanding of the patient,” John A. Hovanesian, MD, FACS, OSN Cataract Surgery Section Editor, said.

John A. Hovanesian, MD, FACS 

John A. Hovanesian

“If the patient doesn’t pay us out of pocket, then we don’t have coverage for certain tests like topography and other tests that are essential if we want to correct their astigmatism,” he said. “So while the patient going through non-premium cataract surgery wants the best results that they can get and we want to deliver that result, we’re limited in what we can deliver because insurance doesn’t cover the cost of testing that’s required to fully understand their refractive state and give them the desired refractive outcome.”

David R. Hardten, MD, OSN Cornea/External Disease Section Editor, said medically indicated or medically necessary procedures are billed through Medicare. Whatever is related to refractive surgical purposes is covered through insurance or direct patient billing. For example, relaxing incisions and astigmatic keratotomy, and the topography that is required to figure out where to place relaxing incisions, are paid for by the patient.

“It’s pretty clear what things Medicare will pay for and won’t pay for,” Hardten said.

Garnering reimbursement

To collect more than what Medicare will pay, Hardten said his practice offers pre-arranged packages that give patients a variety of options. These set-price options outline specific refractive targets and cover whatever procedures the surgeon thinks is necessary to get to that target.

The packages include touch-up PRK or LASIK if the surgeon does not achieve the target with the IOL. The patient could pay a la carte for tests, although the patient is offered a package of typical tests and procedures that are often used to obtain specific refractive outcomes that typically would cost less than if he or she paid for the tests and surgeries on an a la carte basis.

“Again, Medicare won’t reimburse for a refractive outcome and what’s required to get to it, so the surgeon winds up charging and collecting from the patient for those other tests and surgical procedures used to obtain a specific, targeted, precise refractive outcome,” Hardten said.

David R. Hardten, MD 

David R. Hardten

Medicare does cover a general range of refractive targeting, in what Hardten terms “mostly distance,” that is based on keratometry and A-scan measurements. But the expectations for the “mostly distance” target would be that the patient would still likely wear glasses for distance and near postoperatively.

The issue becomes even more important when addressing astigmatism, Hardten said. For example, corneal topography is required to identify what kind of astigmatism the patient has to determine how to best correct the astigmatism. Corneal topography is a better tool to assess whether the patient has regular or irregular astigmatism than a keratometry reading, he said, and if the surgeon anticipates needing to perform astigmatic keratometry, he needs to perform pachymetry to decide how deep to make incisions with the diamond blade or femtosecond laser.

“In every single case we could make the argument that these additional services provide information to help reduce potential complications,” Hardten said.

One way to create such packages is to see how frequently a certain procedure must be performed and then amortize the cost across every procedure.

For example, Hardten said he knows that he might need to perform an IOL exchange 5% of the time for residual refractive error or for subtle glare or halo that is not medically indicated and therefore would not be charged to the insurance company. If, for example, an IOL exchange procedure costs $5,000 and is used in 5% of the patients purchasing a package, 5% of the $5,000 — $250 — would be allocated in each of the packages to cover the potential for an IOL exchange that is not covered by insurance.

Another example of how the package price is determined that he cited is that the average patient might need four refractions, with some needing 10 and others needing only one. Knowing that four is his average and that he would normally have charged $50 for a refraction for the eye, he allocates $200 of the package price for refractions.

“Another example is that possibly 20% of people will need PRK or LASIK afterward. You also would build that into the fee. It’s like a miniature insurance package. If you decide not to take the insurance and you end up +1 D or –1 D, then you pay full price for PRK or LASIK afterward,” Hardten said.

“In general, patients prefer a package where they know what the cost will be to have a best effort at obtaining a specific outcome, rather than not knowing if they will need to pay for each test or surgery along the way,” he said.

Asbell suggested that, when creating these packages, a dollar amount should be set for each test in case the patient requests a refund. This addresses when the patient undergoes tests but eventually decides against the premium IOL.

“You need a negotiating point to start with when that happens,” she said. “And it happens.”

Practical practice management

Corcoran advised how to obtain compensation by billing the patient.

“We can charge for noncovered tasks but not improving outcomes for covered services,” Corcoran said. “If I make a list of tasks and give the patient the option of paying for them, he or she can say ‘yes’ or ‘no.’ You can’t compel patients to buy these additional services. You can give them the option, but you cannot compel them, as part of cataract surgery, to pay for anything extra.”

Hovanesian said he assesses his patients’ refractive goals during the workup: Do they want to wear glasses? Do they want better distance vision or intermediate vision? What activities do they enjoy? Are they ready for cataract surgery?

He will then list a few recommendations so that patients can choose the best option and price range. If the cost for a refractive IOL is too high, he offers advanced monovision as an option, which allows patients to have distance and intermediate vision and the ability to drive at night and to use a computer.

“You have to let patients know they have the option to go through the traditional cataract option with no refractive surgery,” Hovanesian said. “It’s really important that we make these things available to patients but not push them. We’re not selling them something.”

This allows the surgeon to be compensated by directly billing the patient for procedures that Medicare will not cover.

“The professional charges need to be reasonable and defensible,” Corcoran said. “The physician must be able to justify the charges to the patient.”

To record that the surgeon did not compel the patient to purchase a plan, Corcoran suggested using an Advanced Beneficiary Notice to inform the patient: “You might want something. You might need it. Your doctor might tell you that you really need it. But Medicare isn’t going to pay for it. It costs $X. Check yes or no.”

The single biggest problem in refractive cataract surgery is buyer’s remorse, Corcoran said. Postoperatively, patients may demand a refund of their payment for noncovered services, in the hope that Medicare might pay for those services.

The last paragraph of the Advanced Beneficiary Notice should state that the physician and the facility may not require the beneficiary to select a presbyopia-correcting IOL. It is an option.

“Advanced Beneficiary Notices are very powerful tools to prevent miscommunication and misunderstanding. Otherwise, patients will say that no one told them they had to pay for some things and ask for their money back,” Corcoran said.

The future

This issue may become less important in the future, Hovanesian said. As baby boomers mature into the typical cataract population, they will seek refractive lensectomies for subclinical cataracts and drive the market and Medicare through sheer numbers.

“With time, I believe that payers, including Medicare, will tighten up the requirements and probably elevate the threshold that must be met before cataract surgery is considered a covered service,” Hovanesian said. “This will probably shift a lot of our patients who currently are undergoing surgery as a traditional cataract procedure covered by third-party insurance into a … fully self-paid category that will essentially be what we previously called refractive lensectomy.” – by Ryan DuBosar

For more information:
  • Riva Lee Asbell can be reached at Riva Lee Asbell Associates, 333 Las Olas Way #2706, Fort Lauderdale, FL 33301; 954-761-1498; email:
  • Kevin J. Corcoran, COE, CPC, FNAO, can be reached at Corcoran Consulting Group, 560 E. Hospitality Lane, Suite 360, San Bernardino, CA 92408; 800-399-6565; fax: 909-890-1333; email:
  • David R. Hardten, MD, can be reached at Minnesota Eye Consultants, 710 E. 24th St., Suite 100, Minneapolis, MN 55404; 612-813-3600; email:
  • John A. Hovanesian, MD, FACS, can be reached at Harvard Eye Associates, 24401 Calle De La Louisa, Suite 300, Laguna Hills, CA 92653; 949-951-2020; fax: 949-380-7856; email:
  • Disclosure: No products or companies are mentioned that would require financial disclosure.


What is the role of Medicare in guiding physicians about what is proper in seeking reimbursement for cataract procedures?


Better to opt out of Medicare system

Because our practice was focused on refractive surgery, the Durrie Vision practice started opting out of Medicare in 2005. Now that all of our doctors are entirely outside the Medicare system, we have found several advantages for our patients in our diagnostic workup.

Daniel S. Durrie, MD 

Daniel S. Durrie

We do an inordinate number of tests preoperatively. We do all the standard tests, including topography, pachymetry and wavefront analysis. We also take endothelial photographs. We take photographs of the lids and lashes. And we evaluate patients with Scheimpflug images and optical coherence tomographies of the retina. We get all this information to make sure that this eye is perfectly healthy and that we do not miss anything such as an epiretinal membrane or somebody who has early macular degeneration.

All we do is decide how much we are going to charge the patient and the market rate. It is way below what would have been charged for all of those tests. If we look at what Medicare or insurance would be billed for all the tests that we would do on a workup exam, it would be $400 to $500 per eye. We charge the patient $150. That is below our costs, but we are doing it to make sure before we do elective refractive surgery that patients are healthy and they are going to get the best results. Nobody complains about our fees.

We are seeing new tests being developed, such as the Visiometrics OQAS optical quality measurement device, which we are finding is good for screening for dry eyes and lens opacities. Those are the things that we decided we are going to add routinely to all our exams. We look at it as a capital investment to get the best quality refractive surgery results. We do the same workup on our refractive lens patients as we do on our corneal patients.

One of the distinct advantages to not being within the Medicare system is that you do not have to look at all these code rules that dictate that you can only do this test once a year or you cannot do that test without a particular diagnosis. All those rules go away when the patient is not in the Medicare system.

We do have patients who are in Medicare and just pay our fee. We have all patients who come to see us sign a waiver that they will not charge Medicare for any of our services. Any office that is thinking of doing this should get a legal opinion.

Daniel S. Durrie, MD, is OSN Refractive Surgery Section Editor. Disclosure: Durrie has no relevant financial disclosures.



Medicare has not kept up with technology advances

It would be wonderful if Medicare would tell us what is the letter of the law and we did not have to rely on legal interpretations that are occasionally at odds. These are, at best, opinions without a definitive answer from Medicare on exactly what would be included for refractive cataract surgery or excluded from refractive cataract surgery as a covered service.

Michael X. Repka, MD 

Michael X. Repka

In the absence of guidelines from the Centers for Medicare and Medicaid Services, and there is no information that we are going to see guidelines any time soon, the ophthalmologist is left relying on legal opinion and expert opinion, which is what the AAO/ASCRS consensus guidelines were based on. There are differing opinions as well, some more rigorous, some less rigorous, regarding the threshold to which the testing should be carried out and whether it is covered or not. At least for cataract surgery, the testing has to benefit the patient in terms of refractive outcomes to be excluded from coverage and is therefore a premium service. If the clinician can show that the service meets the refractive benefit threshold for their patient, then that would be something that should be excluded.

The best advice for the practicing ophthalmic surgeon is to pay attention to what is being said and written and do not settle for one opinion if it sounds too favorable. Be cautious of what you are doing. There are simply many unknowns remaining.

Payment does not mean you are correct. Payment only means the automated systems worked. We are at risk for a problem coming up later during a chart or claims audit.

Michael X. Repka, MD, is medical director of Governmental Affairs, American Academy of Ophthalmology. Disclosure: No products or companies are mentioned that would require financial disclosure.