Disclosures: White reports he is a consultant to Allergan, Bausch + Lomb, Bruder, EyePoint, Eyevance, Johnson & Johnson, Kala, Novartis, Ocular Therapeutix, Omeros, Rendia, Sight Sciences, Sun and TearLab; is a speaker for Allergan, Eyevance, Kala, Novartis, Omeros and Sun; and has ownership in Ocular Science.
May 16, 2021
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BLOG: LipiFlow on the brink, part 2: What to do now

Disclosures: White reports he is a consultant to Allergan, Bausch + Lomb, Bruder, EyePoint, Eyevance, Johnson & Johnson, Kala, Novartis, Ocular Therapeutix, Omeros, Rendia, Sight Sciences, Sun and TearLab; is a speaker for Allergan, Eyevance, Kala, Novartis, Omeros and Sun; and has ownership in Ocular Science.
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Sometime last year, several Medicare Administrative Contractors, the companies that administer Medicare benefits, randomly and arbitrarily declared that LipiFlow was a “covered procedure” with a per-eye payment of $38.

Darrell E. White

This was “discovered” by eye doctors who filed claims with their local MACs, claims that had been automatically rejected since LipiFlow entered the market. TearScience applied for and received a treatment code for potential insurance payment for LipiFlow at some time during early post-approval days. Neither TearScience nor Johnson & Johnson Vision*, which would go on to acquire the company, ever actually requested that any insurance company, including Medicare, assign a reimbursement amount to that code.

Why now? Why all of a sudden did several MACs assign and remit a payment for LipiFlow? We may never learn the answer to that “why” question. Along the same line, I think we all want to know when J&J (and a couple of other companies) first heard about this. Honestly, at this stage of the game, I think the “who knew what and when did they know it” isn’t going to be a helpful pursuit. There’s way too much to be done to waste time and energy on a line of inquiry that won’t change anything going forward.

What are we supposed to do? Two “parties” are involved here, doctors who perform in-office dry eye disease procedures and the companies that make and sell the instruments (and supplies) we use. There is already a “playbook” for this exact problem. Let’s start from the doc side.** If the MAC in your region has not published a fee schedule for the LipiFlow code, your life has not changed a bit. Simply carry on. This is where we find ourselves in my practice. We will continue with LipiFlow as a cash-charge procedure as we have always done.

As soon as you become aware that your MAC is “covering” LipiFlow, things change. If you accept Medicare payments for any service, you cannot charge more than the published fee for another covered service. If we are put in that position, the choice is clear: accept $38 per eye as payment in full, or put our LipiFlow in a closet and stop doing it for anyone. If you don’t offer it to Medicare patients, I’m not sure you can offer it to anyone. We will mothball our unit. Alternatively, you can purchase an iLux unit from Alcon. Like intense pulsed light, there is no code associated with this procedure; it is, and will continue to be, cash-pay only.

Note to Alcon: Due to the MAC nonsense, the sun is shining on iLux, a very nice little device. Folks won’t care if you make a little hay while that sun shines, although they will likely remember how you wield your scythe while you do.

What then? The Avedro experience with cross-linking (CXL) is instructive. When an unsupportable payment amount was declared by Medicare (less than the cost of riboflavin), most docs doing CXL mothballed their units and declined to offer the procedure. Avedro immediately began an intense months-long campaign to convince CMS (and the MACs) to increase the fees to cover costs associated with the procedure, overhead, and the doctors’ time and effort. This is what J&J and any other company with a “coded” procedure need to do right now. If you are asked to provide help (talk to a medical director, for example), you should say “yes.”

Avedro went one better. Any doctor who did CXL for less than the per procedure costs was “made whole” on those costs (only) as part of future purchases. Nothing prevents J&J from following the Avedro/CXL playbook except the challenges inherent in making a lawyer-driven, aircraft carrier-sized organization get moving. Still, I’m optimistic. Dr. Raj Rajpal was the chief medical officer for Avedro during their time in the crucible; he is now chief medical officer of J&J Vision. Raj gets it. I have faith in Raj and will help where I can. Let’s also take a step back and recognize that the annual revenue J&J gets from LipiFlow barely covers their monthly cost of TP. Thus, their efforts already exceed what one might expect on behalf of such a tiny part of their portfolio.

In the end, you will have to decide what works for you and your practice. We will not work below cost. The sooner J&J, other affected companies and the MACs fix this, the fewer patients who will suffer.

*I should specifically note that I am a paid consultant for J&J and Sight Sciences. I have no relationship with Alcon.

**This is not legal advice, only what I will be doing. If you wish to have real, live, honest-to-goodness legal advice, either contact your own attorney or reach out to the Corcoran Consulting Group.