A Cost and Policy Analysis Comparing Immediate Sequential Cataract Surgery and Delayed Sequential Cataract Surgery From the Physician Perspective in the United States

Importance  A cost analysis was performed to evaluate the effect on physicians in the United States of a transition from delayed sequential cataract surgery to immediate sequential cataract surgery. Financial and efficiency impacts of this change were evaluated to determine whether efficiency gains could offset potential reduced revenue.

Observations  A cost analysis using Medicare cataract surgery volume estimates, Medicare 2012 physician cataract surgery reimbursement schedules, and estimates of potential additional office visit revenue comparing immediate sequential cataract surgery with delayed sequential cataract surgery for a single specialty ophthalmology practice in West Tennessee. This model should give an indication of the effect on physicians on a national basis. A single specialty ophthalmology practice in West Tennessee was found to have a cataract surgery revenue loss of $126 000, increased revenue from office visits of $34 449 to $106 271 (minimum and maximum offset methods), and a net loss of $19 900 to $91 700 (base case) with the conversion to immediate sequential cataract surgery.

Conclusions and Relevance  Physicians likely stand to lose financially, and this loss cannot be offset by increased patient visits under the current reimbursement system. This may result in physician resistance to converting to immediate sequential cataract surgery, gaming, and supplier-induced demand.

Improvements in cataract surgery have led to the controversial subject of whether both eyes’ cataract surgeries should be performed in the same surgical visit but as separate, independent procedures with one immediately after the other, immediate sequential cataract surgery (ISCS). The current standard of care in the United States is delayed sequential cataract surgery (DSCS), performing each eye’s surgery independently with a period of days to months between the 2 eyes’ surgeries. There is a scarcity of economic analyses that compare ISCS with DSCS, and the only US-based analysis was a cost-minimization analysis from the payer and patient perspectives, which found that the likely combined Medicare and patient cost reduction would be $783 million with a switch from DSCS to ISCS.¹ Same–surgical setting second-eye cataract surgery reimbursements vary greatly from country to country: ranging from 50% to 85% of the first-eye fee for different Canadian provinces, 50% of the first-eye fee for Medicare, and 80% of the first-eye fee in the United Kingdom.²

To my knowledge, no studies have evaluated the effect of transitioning from DSCS to ISCS on physician practices. This article will use the same cost-minimization analysis model that was used for the payer and patient perspectives but will try to fill in this gap by performing a US-based analysis from the physician perspective.¹

Statistical analysis and spreadsheets were analyzed using Microsoft Excel 2007. The single specialty ophthalmology private practice (Eye Clinic) and the ambulatory surgery center (ASC) consented to the use of their data in this analysis. These entities provide care to a mixed small city and rural area in West Tennessee.

The ASC’s 2011 Medicare Cataract Surgery volume was 1598. The proportion of complex cataract surgery (Current Procedural Terminology code 66982) was 9.3%. A demographic study of surgical patients from the previous model found that 70.9% of patients were having cataract surgery performed on both eyes and 31% of patients were comanaged with optometrists.¹ The number of patients who could undergo ISCS at the 25%, 50%, and 75% eligibility levels was obtained from the payer and patient cost-minimization model.¹ The surgical and postoperative visit regimens for ISCS and DSCS (both non-comanaged and comanaged) are shown in the eFigure in the Supplement.

Physician cataract surgery revenue comparing DSCS with ISCS was calculated using the ASC 2011 Medicare cataract surgery volume data and the West TN 2012 Medicare physician cataract surgery reimbursement rate of $698.61. An adjustment was made for comanaged cases by subtracting 20% of the fee for cataract surgery per Medicare guidelines. The physician revenue included both the payer and patient portions.

Postoperative visit differences between DSCS and ISCS were adjusted for the non-comanaged and comanaged care percentages. Additional office revenue that could be generated from the potential additional patient visits that resulted from transitioning to ISCS was calculated using minimum and maximum revenue methods. The minimum revenue method used 4 commonly utilized 2012 Eye Clinic office examination code (92004, 92002, 92012, and 92014) revenues and volumes from the 2 largest payers, Blue Cross Blue Shield of Tennessee and Medicare. The maximum office revenue method used the total revenue per patient visit, a figure that includes all payers’ medical office visits, in-office testing, surgical revenue, refraction fees, and optical revenue.

A base case gain/loss was calculated by comparing DSCS with ISCS at the 75% ISCS eligible patient level with a 31% comanagement rate. Sensitivity analysis was performed showing the effect of different comanagement rates and the effect of different patient ISCS eligibility levels.

The number of patients at each ISCS eligibility level are shown in Table 1. The base case cataract surgery revenue comparison resulted in a $126 144.51 loss of revenue with ISCS (Table 2). This revenue loss was then adjusted for any additional revenue obtainable from the difference in postoperative care regimens. The difference in postoperative visit sequences (excluding operative day visits) obtained from the eFigure in the Supplement was combined with the ISCS and DSCS cataract surgery number data to calculate the total number of office visits required for DSCS and ISCS for the base case (eTable 1 in the Supplement). The postoperative visits results for each ISCS eligibility level are compared in eTable 2 in the Supplement. The base case resulted in ISCS allowing 654 extra short physician office visits per year. In this model, 2 short visits equaled 1 long visit.

The 654 extra available office visits from converting to ISCS were used to calculate additional potential income by 2 methods. The minimal reimbursement method found that the average revenue was $89.86 for a long visit and $60.42 for a short visit (eTable 3 in the Supplement). The maximal reimbursement method found total revenue per patient visit of $216.66.

The base case results for the minimal and maximal additional ISCS revenue offsets and the final gain/loss with a conversion to ISCS are shown in Table 2. Different ISCS level sensitivity analysis results are shown in Table 3. All scenarios showed that physicians lost revenue with a conversion to ISCS.

This study found that the loss of physician revenue from cataract surgery with ISCS cannot be fully offset by increased efficiency and increased revenue from providing more patient care. This model had numerous limitations, which are discussed in the previously published payer and patient cost-minimization analysis study.¹ Limitations pertaining to the physician model will be discussed here. Comanagement rates will vary significantly depending on physician practice patterns; however, sensitivity analysis found that the comanagement rate had minimal effect. The number of decreased postoperative visits with ISCS could vary depending on physician practice patterns. Multiple international studies support that ISCS decreases the number of postoperative visits.^2-4 Postoperative examinations, whether for one eye or both eyes, should have a minimal time difference as most of the time is spent talking to the patient and getting the patient positioned for the examination.⁵

Limitations of the minimum revenue method included its failure to incorporate other payers’ data and other areas of revenue. A limitation of the maximal revenue method was that it risks counting on increased surgical cases and optical sales that may not be obtainable. Both methods do not account for the possibility that to generate more patient visits physicians may need to see patients with lower reimbursement schedules and that there must be an unmet eye care need in the community.

A strength is that Medicare regionally adjusts their fee schedule to take into account physician practice expense differences, resulting in transferability to other regions of the country.

A transition to ISCS would likely be beneficial for Medicare, who would pay less per patient cataract surgery, which is significant given that the population older than 65 years is predicted to reach 88.5 million by 2050.⁶ Physicians will probably earn less with ISCS and could resist the change by “gaming” the system. Potential ways would be to have very strict inclusion criteria for ISCS or to present ISCS in a manner that nudges patients not to choose ISCS. There is also a risk of supplier-induced demand as physicians try to make up lost revenue. Physicians may also resist ISCS because of the rare risks of bilateral simultaneous endophthalmitis and toxic anterior segment syndrome and the loss of the ability to adjust the second eye’s intraocular lens power. Another risk is that physicians could reduce the surgical portion of their practice, potentially negatively impacting patient access to cataract surgery.

Submitted for Publication: May 31, 2014; final revision received June 21, 2014; accepted June 24, 2014.

Corresponding Author: Sean T. Neel, MD, MSc, Eye Clinic PC, 668 Skyline Dr, Jackson, TN 38305 (sneel@eyeclinicpc.com).

Published Online: September 18, 2014. doi:10.1001/jamaophthalmol.2014.3335.

Conflict of Interest Disclosures: The author has completed and submitted the ICMJE Form for Disclosure of Potential Conflicts of Interest and none were reported.

Additional Contributions: This article is an extensively revised and rewritten portion of an unpublished master’s thesis at London School of Economics and Political Science to fulfill the MSc in Health Economics, Policy, and Management degree requirements. Raymond Kee, BS, administrator, Eye Clinic PC, helped collect physician practice data on office visit reimbursement rates. Neal Rager, BS, MBA, administrator, Physician Surgery Center, helped collect surgical center data on number of Medicare cataract surgeries performed. Neither received financial compensation.