Eye surgery centers have grown like mushrooms in the past decade, but they've tended to host a limited repertoire of cases: just cataracts, no retinal surgery. Retina procedures are longer and more complicated, require extra training and are mostly performed in hospital ORs by an estimated 1,300 retina-only surgeons.

But that's changing. Thanks to sweeping developments in ASC reimbursements and clinical technology, which stand to improve retina surgeons' earning power and efficiency, more and more retina specialists are making the move to ASCs. And for cataract-only ASCs, an influx of retina surgeons raises the possibility of additional case volume and full-service status, which can attract more patients and offer entry into more insurance panels.

First steps
Surgeons at Texas Retina Associates, a 16-physician, 13-office practice headquartered in Dallas, have taken a step into ASC ownership. The group teamed up with nine other ophthalmologists, including several cataract surgeons, to buy an existing four-OR eye surgery center. They began hosting retina cases in April 2008. Some of the practice's other retina surgeons are now planning a second ASC location, according to Jeff Brockette, chief executive officer of Texas Retina.

He predicts that over the next few years, many retina surgeons will join the exodus from hospitals. "Retina surgery is going from being the stepchild in an ASC to being an efficient, revenue-producing procedure for an ASC," he says. As evidence, he cites discussions among managers of retina practices at recent association meetings. Surgery centers are "a hot issue," he says. "Everyone is looking to convince their surgeon to participate in an ASC."

While Mr. Brockette's surgeons jumped at the chance of reopening an eye surgery center with retina, for most retina surgeons, taking their cases to ASCs may be a longer process. Mr. Brockette reports that many in the specialty are still getting used to the idea and some may choose to remain in hospitals. But some powerful forces at work may make ASCs an increasingly attractive option for them.

Rising rates
Until Medicare's 2008 payment revisions, its ASC reimbursements for retina surgery were discouraging. When Leo T. Neu, III, MD, FACS, moved his retina cases from a hospital to the Mattax-Neu-Prater Eye Center in Springfield, Mo., in 2000, he "did it out of convenience," he says. "I did not make money on it."

Payment reports from 2005 show that Medicare paid far less generously for retina than cataract surgery, even though retina surgery takes longer and is more resource-intensive. In 2005, an ASC received $973 for a cataract procedure but only $612 for vitrectomy, a common retina procedure. And both payments were well below the hospital outpatient department rates of $1,329 and $1,706, respectively.

However, under Medicare's new reimbursement rates for ASCs, which began their four-year phase-in last January, the low-paid procedures are finally getting a boost. While cataract surgery did not gain much from the changes, retina procedures are scheduled to rise more than 100 percent, on average, over four years. For example, the average payment for a standard pars plana vitrectomy, the most common retina procedure, rose 36 percent in 2008 to $857. By 2011, when the changes will be fully implemented, it will have risen 145 percent to $1,540.

Smaller incisions
The other big boost for retina surgery in ASCs is the slow but steady acceptance of micro-incision surgery, a sutureless approach that reduces surgical times. According to Eddie F. Kadrmas, MD, PhD, a retina surgeon at Plymouth, Mass.-based Post, O'Connor & Kadrmas Eye Centers, complex procedures that once took as long as eight hours now can be done in a quarter of that time, thanks to micro-incision techniques. He adds that less complex retina cases are completed in as little as 30 minutes, or in the time of only about three cataract cases.

As a result of the technical and reimbursement advances, long-held assumptions that retina surgery is financially risky for ASCs are falling away. Pravin U. Dugel, MD, of Retinal Consultants of Arizona, a multi-office practice, estimates that under the new reimbursement system, retina surgery at the ASC he's partnered in "becomes unprofitable only when the average case takes two hours or longer."

Because there are few benchmarks available on how to become more efficient at retina surgery in ASCs, Dr. Dugel and his staff have been gradually creating their own. He says his facility has been steadily reducing turnover times. Their average turnover time fell from 14 minutes in 2006 to 12 minutes in 2007, and they are aiming toward a goal of seven minutes.

Why retina needs cataracts
While rising reimbursement rates may help lure retina surgeons into ASCs, declining professional fees may help push them out of hospitals, predicts Dr. Neu. He reports that Medicare's professional fee for a vitrectomy with epiretinal membrane peeling, to name one example, fell by 24 percent this year, while its ASC facility fee for the same procedure rose 47 percent.

Dr. Dugel advises retina surgeons who are surveying their prospects to choose retina-only, or at least eye-only, ASCs due to the case-flow efficiency they offer over multi-specialty centers.

Partnering with an ASC and a group of cataract surgeons can also spread out costs. A one-OR eye surgery center typically costs about $1.5 million to $2 million, equipment included. At $180,000 to $240,000, retina's necessary capital equipment can cost twice as much as cataract equipment — plus, a complete backup system is recommended.

But, Dr. Dugel warns, retina surgeons seeking to team up with cataract surgeons must be sensitive to potentially thorny referral relationships. Since cataract surgeons, as general ophthalmologists, refer patients to retina surgeons, partnering with one ophthalmology practice poses the risk of alienating some of the others. If that presents a possible hardship, "you should not get involved in an ASC," says Dr. Dugel. He adds, however, that those facing such difficulties might consider partnering with hospital joint-venture ASCs, since a center's affiliation with a hospital at which many of the ophthalmologists operate can make it "neutral territory."

On the other hand, David G. Miller, MD, of Retina Associates of Cleveland, a multi-office practice, says his co-ownership of a surgery center didn't alienate referring ophthalmologists, but actually attracted them. His close referral relationships made him a natural organizer for the ASC project, he says. "It was easy for me to be the liaison because I work with these guys all the time, more than they do with each other," he says.

Dr. Miller and many other retina surgeons who use ASCs still use a hospital OR for cases requiring expensive ancillary items like silicone oil, which Medicare covers in hospitals but not in ASCs. In contrast, however, Dr. Dugel ceased all surgery in the hospital, making up for the lost surgeries with greater overall efficiency on the ones he does in his ASC.

Why cataracts need retina
Just as retina surgeons have incentives for partnering with cataract surgeons, so do cataract ASCs see their own benefits in attracting retina cases.

The chief reason is simply to boost case volume. With an estimated 800 to 1,000 cataract surgery centers nationwide, "most general ophthalmologists who could start an ASC have already done so," says Paul N. Arnold, MD, FACS, a Mountain Home, Ark., cataract surgeon and the author of The ABCs of ASCs. Some of those centers may be finding it difficult to schedule enough cases to turn a profit.

Another reason is for the ASC to gain entry into more insurance networks. "Once you have retina surgery, you become something, you are now a full-service ASC, which is what insurance companies prefer," says Alex Stockdale, MBA, the CEO of Tennessee-based Southeastern Retina Associates, PC, administrator of Tennessee Valley Eye Surgery Center in Knoxville and chief financial officer of Johnson City Eye Surgery Center.

However, Mr. Stockdale says, cataract ASCs also face challenges with retina surgery: more costly equipment, more intense cases, more training for staff and the possibility of retina partners who don't have "an ASC mentality." Indeed, Dr. Neu reports a wide variation in the speed of retina surgeons, who might take anywhere from 40 minutes to three hours to complete identical cases. "The slow physician can operate in the hospital," he says.

To ensure that a retina surgeon is fast enough for your facility, Mr. Stockdale recommends asking the candidate for his hospital surgery records. "We'd like to see their time in the OR, the typical procedures they do, the equipment they use and the cost per case," he says. "We'd want to know how often they use expensive items like silicone oil. It's OK if it's 25 percent of the time, but not 100 percent."

Others may be less concerned about inviting slow or resource-intensive surgeons into their ORs. "If you're making a judgment on somebody that is purely based on speed, to me, that is absolutely unacceptable, because it de-emphasizes quality," says Dr. Dugel. He agrees that supplies such as silicone oil don't need to be used 100 percent of the time, but adds that scrimping on them can reduce the quality of care and may not save much money in the long view, when supplies are compared to the rest of an ASC's overhead costs.

Dr. Dugel says it may take time for many retina surgeons to weigh the options and join ASCs, but he sees the trend continuing. Medicare's ASC payment changes are, after all, still in the early half of their phase-in. "This is just the beginning," he says.