If you view retina surgery as costly, time-intensive and unprofitable, you might be surprised to learn that many factors now make posterior segment procedures attractive for outpatient facilities, most notably the substantial per-procedure rate increases retina stands to gain under Medicare's proposed ASC payment regulation.

$834 increase for CPT 67036
If the proposed payment system is adopted as-is, the ASC facility fee for pars plana vitrectomy, CPT 67036, would rise from $630 to $1,464, a 132 percent increase of $834. Other commonly performed retinal procedures would enjoy percentage increases in facility reimbursements of around 47 percent to 104 percent. The new payment system's two-year phase-in period would result in a reduction of the 2009 reimbursement level to about $1,047, thus deferring a significant portion of the economic benefit for one year. The system will be phased in over two years to mitigate the negative impact on facilities performing a significant number of procedures for which the revised fee will be less than the current fee (see "Is That All There Is?" on page 36).

While reaction to the proposal from ophthalmic advocacy groups has been relatively negative - the 2008 cataract facility fee would be $954 and the YAG payment would be $259 - the impact on reimbursement rates for the most frequently performed retina procedures would be dramatic.

While this evolving situation makes the adoption of a new line of service a daunting decision, the publication of the proposed rule, along with proposed legislation regarding covered services and annual updates, has most likely defined the upper and lower limits of the ultimate structure that will be adopted.

Considerations beyond reimbursement levels
Regardless of the outcome of Medicare payment reform, several other factors should influence your decision to add retina surgery to your case mix. You should consider adding retina when

• OR time is regularly available during the desired hours of operation;
• your facility already owns some of the equipment needed for retina procedures;
• the retina surgeon(s) anticipate sufficient case volume to justify the investment required;
• facility staff already have or are willing and qualified to obtain the appropriate training for retina cases;
• your anesthesia provider is willing and qualified to provide the care required for retina patients;
• rigorous analysis indicates that the addition of the service is financially feasible; and
• the retina surgeon(s) have experience working in an ASC or have a strong desire to successfully transition from an HOPD to an ASC environment.

If you're missing one or more of these elements, diversifying into posterior segment care may not be the best move for you.

Creating the scenario for success
To help you decide whether to make the move, consider the following benchmarks and advice for creating the scenario most likely to bring success.

• OR time availability. Surgeon speed is a critically important variable that lets retina cases be performed profitably and lets you commit adequate and predictable block time to the surgeon. As an initial benchmark, surgeons should anticipate routinely completing the most commonly performed procedures in 30 to 90 minutes of intraoperative time. Surgeons whose case times regularly approach or exceed two hours aren't likely to succeed in an ASC environment.

Recent innovations in the technology, including smaller gauge instrumentation, have reduced case times significantly for some surgeons; however, the gains come with increased costs for these materials. As more manufacturers introduce competing products, expect the cost of these items to decline, making their use more feasible in the ASC environment.

Another aspect of time availability that I frequently encounter is the belief by ASC managers that they simply don't have available time for additional cases. Try this simple technique to evaluate your utilization. Multiply the number of ORs in your center by 2,080 and then divide that result by the number of incisional surgical cases that were performed in the prior year. This quotient is the average number of OR hours spent per surgical case in the year analyzed. Next, compare this average to the average case times of your most frequently performed procedures. You're very likely to discover that you do have time for additional cases. If so, re-evaluate your current block schedule. You may be "leaking" some very valuable OR time.

• Equipment and supplies. Retina cases are, comparatively speaking, significantly more expensive than most other eye procedures. Obviously, if your facility currently owns some of the major items (such as an ophthalmic microscope), the entry costs are substantially reduced. Check with the retina surgeons you're recruiting to identify current equipment they can use or you can modify to suit their needs.

Some retina surgeons may own specialized equipment, such as a portable argon laser, that they're willing to lease to your center. This will let you defer or avoid acquisition. Plus, you can trade in your backup phacoemulsifiers for a used or demo vitrector with a light source. Certain models of these devices function quite well for phaco and can be used as backups for your cataract surgeons.

Other costs to consider include a cryotherapy unit and various handheld instruments. Retina instruments tend to be significantly more expensive than their anterior segment counterparts, so obtain a complete inventory of the surgical trays and supplies that you'll need and ask your vendors to price them out to support your financial feasibility analysis.

• Case volume and financial feasibility. While the case volume required to ensure the financial feasibility of adding retina procedures will vary between facilities, as an adjunct to an existing anterior segment practice usually 10 to 15 cases monthly will support the program. Implementing a retina program in the absence of any other ophthalmic surgery would obviously require a substantially higher surgical volume, probably in the range of 25 to 30 cases per month, depending on the case mix, equipment required by the surgeon and supply costs per case. Under the current reimbursement structure, a retina-only center is only feasible in a very rare set of circumstances. Depending on building costs, equipment selections, and labor and supply costs, it would likely require a minimum of 700 to 900 cases annually to support such a facility.

You can facilitate the transitioning of retina procedures to the ASC environment by choosing less complex cases such as vitreous hemorrhages, macular holes, membrane removals and simple retinal detachments. Also, you'll typically want to avoid cases that need to be performed under general anesthesia; those that require silicone oil and certain other high-cost supplies that are not reimbursed in the ASC; and extremely sick patients with significant co-morbidities.

• Staffing. Surgery is a team sport, and retina surgery requires a team with great expertise. Since these surgical cases are typically more complex than cataract and cornea procedures, I recommend that the training and actual surgical cases be concentrated on a core group of nurses and technicians. Where cross-training is a mantra, this advice may seem counter-intuitive; however, the acuity of these cases usually justifies this approach.

From a cost-of-care perspective, the impact of staff labor costs is often over-estimated in evaluating the financial feasibility of certain procedures. In projecting profitability by case, you should include only the truly variable costs - for example, staff that would otherwise be told to clock out and go home should be included. Only rarely do these costs exceed $100 per hour per OR for ophthalmic cases.

• Surgeon characteristics and the "ASC mentality." A surgeon's willingness to simplify his approach and process in order to move cases from the hospital to the ASC is the attitude that I have named "the ASC mentality." Surgeons with this mentality are willing to
• use the existing OR ophthalmic microscope, often without modification;
• retrofit an argon laser to perform indirect panretinal and focal photocoagulation (alternatively, it may be possible to acquire a refurbished unit or, as noted, lease this device from the retina surgeon)
• limit their case mix to the most commonly performed procedures, thereby simplifying the surgical tray and adding only four or five specialty instruments not already included on the basic anterior segment tray; and
• carefully review the costs and benefits of equipment and instrument purchases, and avoid costly items that will only be used for a handful of cases each year (surgeons should have appropriate arrangements with a hospital to handle off-hours, emergency care and cases not appropriate for an ASC).

My clients who have successfully incorporated retina surgery demonstrate case costs from less than $200 (for a retinal detachment repair with a scleral buckle without vitrectomy) to a little more than $450 (for a retinal detachment repair with vitrectomy and endolaser photocoagulation). These figures reflect supplies and disposables only and exclude labor costs.

Next steps
In anticipation of the revision of the ASC payment system by CMS, facilities considering adding retinal procedures should initiate conversations with prospective surgeons and begin data collection in earnest. If you've dismissed retina cases in the past, it's time to take another look. The smart money is betting that these cases will continue their migration to ASCs. Make sure your facility is properly positioned to capture your share of the market.