Hospitals and ASCs billed 3.4 million cataract procedures to Medicare last year, making cataract surgery the No. 1-ranked surgical procedure paid for by Part B Medicare.
But as you know, CPT 66984 is a double-edged sword: hugely popular, hardly profitable. The facility fees hospitals ($1,253) and ASCs ($973) can bill Medicare for the surgery with IOL make it increasingly difficult to turn a profit with supplies, technology and equipment costing more, volume (for some) slipping, and reimbursements frozen until 2009.
To help you combat the forces shrinking your profits, we surveyed 57 administrators for ways to cut costs and improve efficiency. Here are the best 12 tips.
Be up front with surgeons
Obviously, if you keep expenses in check, you'll keep costs down - but that's easier said than done. Survey respondents recommend doing plenty of research before buying. What kind of outlay are you facing? Who can give you the best deal? Will all your surgeons use the equipment or supplies? You need to know so you can counter requests to add expenses.
"I let our surgeons know if something they wish to purchase is expensive or is an item the others would not use; we will ask them to rethink the item," says Lisa Evans, RN, BSN, CNOR, the director of Oak Park Surgery Center in Arroyo Grande, Calif.
One hospital perioperative supervisor suggests averaging out case cost by physician "so that more pressure is brought to bear on the most costly."
When Christy Therrien, RN, became the administrator of Brookside Surgery Center in Battle Creek, Mich., costs needed cutting quickly and dramatically. Because one company provided all the cataract supplies, she started by looking at the competition. Her surgeons wanted to keep the phacoemulsification machines on hand, so she had to keep buying the first company's cassettes and tubing specific to the technology. But she changed everything else, including the supplier of IOLs, viscoelastic and customized packs (and their contents). The savings: at least $75 per case.
"They were paying $134 a lens and $65 for viscoelastic per case," says Ms. Therrien. "We now pay $114 per case for the lens and visco, because I got everyone off the more expensive viscoelastic. Had we gotten all our surgeons to switch to silicone lenses, we could have saved $124 per case."
She presented case costs and savings for 1,200 cases per year, and the physician-owners approved. "It's been almost two years since we switched," says Ms. Therrien, "and everything has stayed level with costs." They also standardized packs and started buying and picking surgeons' extras separately.
Sometimes, consolidating companies can be the answer, especially when buying in bulk.
"For supplies such as needles, syringes and other disposables, we went through one company," says Linda Phillips, RN, the administrator at Castleman Medical Center in Southfield, Mich. "I order once a week instead of every day, and I'm better able to evaluate cost per item. I also network with other wholesalers or medical companies, then give their estimates to my sales reps and tell them they have to beat these prices, or I'm leaving."
Streamline pre-op processes
There are practical ways to streamline pre-op processes. First, you don't need to undress patients; this especially slows down elderly patients, says Janice Manning, RN, CNOR, the OR manager at Nash Day Hospital in Rocky Mount, N.C. A clothed patient shouldn't pose an infection threat as long as you use a cover gown, says Outpatient Surgery Infection Prevention columnist Dan Mayworm. He recommends you monitor post-op infection rates as a precaution and discontinue the practice if you see a spike.
In addition, says Ms. Manning, dilating patients' eyes with pledgets soaked in a cocktail is faster and more convenient than inserting eyedrops every few minutes.
"We also changed our preadmission-testing process," says Anna Segner, MBA, the director of surgical services at Sewickley Valley Hospital. "For topical anesthesia cases, we now require just a 'release for surgery' by the patient's PCP."
One surgical services coordinator suggests convertible mobile surgical platforms, as she's found they streamline patient flow.
Convert to sedation and topical anesthesia
"With just 1mg versed in pre-op and some topical tetracaine in the eye, patients will be up and out 15 minutes post-op," says Ms. Therrien. "Not only are you saving on retrobulbar needles, which are about $6 each, but the cost of minutes in the OR kind of includes post-op time, so you can save several dollars a minute there, too."
The benefit of such a system, says Ms. Manning, is that patients are no longer taken to the PACU - they go directly to a post-op room, decreasing their stay by 30 minutes.
Reduce turnover time
"At $10 or $11 per minute for the OR, every minute you save [in turnover] saves you per case," says Ms. Therrien.
If you have the luxury of letting your surgeon use two rooms, you can assign someone to work clean-up/set-up for the day. While the surgeon operates in one room, the tech picks up and sets up the other room, then switches rooms when the surgeon is done. That way, you can schedule surgeons for block time; Ms. Phillips recommends slating one for the morning and one for the afternoon.
"My surgeons love it," says Ms. Phillips. "They're spoiled now. We were going to do one doc in each OR [after adding the second OR], but they like block time too much for that."
Simple modifications let you use such a plan even if you have just one OR available.
At the Roanoke Valley Center for Sight in Salem, Va., turnover times are under four minutes thanks to the use of two RN/scrub tech teams assigned to alternating cases. John Wood, MD, the center's medical director, says this system let Roanoke Valley do 4,000 cases last year: While team No. 1 is in the OR, the scrub tech for team No. 2 sets up the instruments, and gowns and gloves in a sterile preparation area. At the end of the case, the RN in team No. 1 takes the patient to recovery while scrub tech No. 1 takes instruments to be cleaned and sterilized. Team No. 2's RN wheels the next patient into the OR as scrub tech No. 2 enters the OR from the sterile area.
"By hiring just one scrub tech to concentrate on room turnover, we got turnover time down from 20 minutes to five," says Ms. Therrien. "Basically they start picking up the room as the surgeon is finishing up. If that saves $150 in OR time, per case, that more than pays the tech's salary."
Subtract professional staff
A big way to save: more technicians, fewer professional staff. There are lots of tasks both nurses and techs can do, such as tear-down and set-up, blood pressure and patient instructions.
"We found that increasing the number of techs decreased costs and let us move patients more rapidly," says Ms. Phillips. "And if you have a doctor who is fast, having the techs there to give instructions makes the patients feel as though they've gotten more one-on-one time."
Heather A. Huffman, RN, CNOR, the administrative director of the Surgical Eye Center of Morgantown in West Virginia, suggests that you use more part-time than full-time staff (to save on benefits) and a working supervisor instead of a separate, full-time administrator (to save on an extra staff position).
Take advantage of creative financing
Pay only for what you use: Use cost-per-case financing and lenses on consignment.
"We financed our phaco unit with no down payment; they just added a finance charge to each case," says Ms. Phillips. "It reflects volume and income. It took us four years to pay it off, but it never seemed like we had this huge payment."
With lenses on consignment, the company gives you many of each type it makes, and you bill as you use them. That way, you don't pay up front, and, says Sandy Fida, BS, RN, CNOR, dir-ector of surgical services at the Montgomery Hospital Medical Center in Norristown, Pa., you can better control inventory.
Contract for anesthesia providers
Instead of hiring anesthesia providers directly, hire independent contractors.
"I don't have to pay them anything because they bill separately," says Ms. Phillips. "It saves on my billing and overhead on staffing."
If you switch to contracted anesthesia, make sure you don't double-bill for anesthesia.
Hire a materials manager
The "single best thing" Shirley Ramey, RN, the nurse manager at the ASC of Burley in Idaho, did is let "her materials manager spend many hours on the phone with different reps, negotiating the best possible cost on our custom eye packs."
Devoting one person even part-time can mean big savings.
"Our materials manager reviews the pricing for all disposable supplies," says Ken Summerhays, RN, the director of nursing at Coral Desert Surgery Center in St. George, Utah. "If she runs across a special on an item we know we will use, she will take advantage of the price break."
Contract with a turnkey service
There are two companies that will provide equipment (and upkeep) lenses, supplies, a technician, then charge you for their services - and all that legwork can mean savings.
Kathy Wright, RN, the performance improvement coordinator at Florence Surgery Center in Florence, Ala., saved a bundle by contracting with Vantage Technologies (www.vantage-technology.com): "We no longer keep cataract supplies in our inventory - they get doctors the supplies they request," she says. "We saved over $80,000 in a year."
Midwest Surgical Services (www.ms-services.com) provides the same services.
Perform formal evaluations
Assess current practices according to your needs: quarterly, yearly, any time you're buying new equipment.
"We recently addressed this as a Six Sigma project," says Ms. Segner of her attempt to cut cataract case costs at the Heritage Valley Surgery Center in Moon Township, Pa. "We looked at preference cards and made surgeons part of the process. We went to reprocessing phaco tips, which will save us money. And we started investigating all denials."
One single-specialty administrator reccommends constantly evaluating actual cost per case of disposables to determine the most cost-effective alternative, such as changing meds or to a cheaper supply item.
Make patients pay
You can offset declines with for-profit, value-added services, such as phakic or refractive IOLs.
"Give your patients estimates well in advance and have them sign a waiver saying that, if their insurance does not cover these lenses that might be considered cosmetic, they will pay," says Ruth G. May, RN, CASC, the director of ambulatory surgical services at Indian Wells Valley Surgery Center in Ridgecrest, Calif. "Obviously, these are all private insurance companies, as Medicare will not pay for the lenses and won't let us bill the patient when it pays for the cataract surgery."
Medicare patients must pay for surgery and the IOL in these cases.
Hopefully, you can apply some of these tips to your facility and restore lost profits to the most frequently performed surgery in the nation.