In recent years, more ophthalmic surgery centers have been adding or considering adding retinal surgeries to their case mixes, increasing the curiosity about their profitability as outpatient procedures.
While there are hundreds of ophthalmic ASCs, only a small minority of them perform retinal surgery. An even smaller number have been developed for retina alone. According to John Pinto, founder of the ophthalmic management consulting firm J. Pinto & Associates, the reason for this is clear.
"It's very difficult to provide ASC-based retinal surgery at a profit due to practical, time-related constraints," he says, noting the length of many retinal cases, the expensive equipment required and current reimbursement rates. "To make it work, you need a schedule that lets you cluster cases to a greater extent, a great volume of cases, and an extremely fast and resourceful surgeon."
Many posterior segment surgeons are becoming more comfortable performing the surgery with new technology, better surgical skills and regional anesthesia. Such procedures as scleral buckles and vitrectomies are, as a result, taking less OR time. Those factors, combined with a surgeon's ability to evaluate case costs and increase efficiency, are the keys when considering adding retina.
The advantages of doing retina at your ASC are readily apparent. First, there's familiarity. "We're geared for eye surgery. That's all we do," says Scott Bridgeman, CEO of Eye-Q Vision Care in Fresno, Calif. His center added retina after expanding from one to two ORs in 2003. "We feel we can have better outcomes here because we control the environment. The surgeons know the staff and they know the equipment."
A second advantage is control over scheduling and its result on starting times, flexibility and efficiency. "It's so much easier to do retina in ASCs, as you're not competing with gall bladders and orthopedic cases," says Leo T. Neu III, MD, of Mattax Neu Prater Eye Center in Springfield, Mo. Dr. Neu brought his retinal practice from the hospital to a facility he and his partners bought five years ago. "A physician could probably cut his case time by one-third, or even by half, and that's not just the surgery time, but also the time it takes to set up and get things the way you want them."
Negotiating Carve Outs: The Key to Profitable Retina
If you add a retina service and your major payer only reimburses for one procedure, you need to get creative in your contract to make this sub-specialty work. For me, regardless of whether payers reimburse one or multiple procedures, the key to doing retina profitably is negotiating carve outs. For example, I've negotiated a $1,500 flat fee for many of my retina procedures. This amount covers our expenses and assures a reasonable profit. In my area, most retinal procedures are in payment groupers 7 ($992) and 5 ($715). As you know, retina often involves multiple procedures, so I'd only be getting 50 percent ($357.50) of the second procedure for a total of $1,349.50. When viewed in these terms, our $1,500 flat fee is more than reasonable.
Here are some other areas you'll need to manage in order to make retina profitable.
- Andrea M. Hyatt, CASC
Ms. Hyatt ("[email protected]")) is the administrator at Dulaney Eye Institute in Towson, Md.
Know your surgeon
If you're considering bringing retina to your ASC, the first step is to evaluate the economic feasibility of doing so. Estimate the expected revenue based on a six-month retrospective review of the surgeon's practice, looking at the number of cases by CPT code, the number of secondary procedures by CPT code and the payer mix.
"We were fortunate in that we did have some experience with this surgeon," says Mr. Bridgeman. "Our retina surgeon had three years doing surgery outside the facility. It gave us a really good idea of how many surgeries she could do. We didn't have to estimate, we knew her track record."
If you're bringing a new retinal surgeon on board, you'll want to assess him carefully, says Dr. Neu. "You want a surgeon that has an ASC mindset, who's going to be very efficient," he says. "If you can find out what their average time for a vitrectomy or a scleral buckle is, that'll go a long way toward finding out whether you want that surgeon in your OR. How long it takes them to perform their cases is almost as important as how much equipment they want."
Be aware that you'll have to be choosy about which procedures can be done. "Pick cases that aren't going to take three hours, but ones that can be done in 30 minutes to 40 minutes," says Dr. Neu. "And I don't put anybody to sleep. There's no general anesthesia in our OR." If you're not using regional blocks or monitored anesthesia care, you'll need more time and staff for recovery and safety, he says. "Then you'll lose your advantage."
Experts say the best candidates are macular diseases such as epiretinal membrane, macular hole and macular edema, and non-clearing vitreous hemorrhage, primary scleral buckling and straightforward diabetic retinopathy cases.
Procedures that involve intraocular gases, silicone oil or Perfluoron (which aren't reimbursed by Medicare) or diabetic traction retinal detachments wouldn't be practical or profitable in an ASC setting.
Mr. Bridgeman admits that, given current reimbursement rates, the retinal procedures his center performs break even on the facility fee, profiting only on the physician's fee. Dr. Neu, however, counters that this is not an intractable situation. "I make a profit on the facility fee," he says. "That's primarily due to the selection of cases."
While disposable surgical supplies are a set price, he explains, the hourly wages of nurses and surgical techs are the variable. "Their clock is going on, but Medicare and the other payers are only going to pay you a certain amount," says Dr. Neu.
Equipment and instrument costs
A facility must also estimate the expenses that adding posterior segment surgery would incur. Assuming your facility is already hosting anterior segment cases, you can adapt some aspects of the environment to the new specialty. The microscope is one piece of equipment that crosses over. Both Bausch & Lomb and Alcon offer microsurgical units that have both anterior and posterior capabilities. Otherwise, a vitrectomy machine can cost about $60,000; or you can add a posterior module to a phacoemulsifier for about $15,000.
Other equipment, however, is unique to posterior procedures. A refurbished argon laser may cost $30,000. A set of retinal instruments costs between $5,000 and $15,000, depending on the surgeon's preference. The cost of surgical supplies will vary from $200 to $500, depending on the procedure. Evaluating the willingness of payers to carve out reimbursement for supplies is an important consideration (see "Negotiating Carve Outs: The Key to Profitable Retina" on page 46).
Staffing and scheduling
How you pay your staff - whether it's a fixed 40-hour week plus benefits, or variable part-time without - will influence the profitability of adding volume to your schedule, especially since there may be a need to extend your facility's operating hours.
Many facilities that are successful in posterior segment surgery are open in the early evening to accommodate urgent cases. This requires hiring additional staff or paying overtime. As a result, facilities with fixed staff expenses and under-utilized schedules will benefit the most.
Scottsdale Eye Surgery Center in Scottsdale, Ariz., has been doing posterior segment surgery since the early 1990s. Initially, the two-OR facility stayed open until 9:30 p.m. Two thriving retinal groups used the evening hours extensively. The staff members who worked over shift (and sometimes until midnight) were paid a shift differential and overtime after shift as an incentive.
In time, more ophthalmic surgery centers in the area added posterior surgery and evening hours, diluting the market. More and more often, Scottsdale Eye found its evenings staffed but caseless. Re-evaluating the situation, the center reduced its evening hours; it now closes at 7:30 p.m. This lets it do one or two after-office-hours cases, and emergency cases as needed. In scheduling, always consider posterior segment surgery as an adjunct to cataract surgery. Never let retina displace the more lucrative high-volume procedures.
Learn and review
Preparing your clinical staff for retina shouldn't pose much of a challenge. "If the staff is doing cataracts, they'll be able to do retina in the ASC, too," says Dr. Neu. "There are slightly more complex instruments and machinery they have to operate, but once they learn how to do it, it's not going to be that difficult."
Ensure that your staff is knowledgeable regarding systemic disease as it pertains to surgical procedures. Many posterior segment surgeries address complications of diabetes. As always, since patients will be discharged on the day of surgery, clear post-operative instructions are essential and follow-up phone calls are mandatory to insure compliance. Likewise, in the business office, contracting and coding posterior procedures may prove slightly more complex than other procedures.
Multiple procedures are especially important to keep in mind. Many ophthalmic surgery centers are used to billing only the primary surgical code for a cataract procedure, but a significant amount of revenue can be earned from billing secondary and additional procedures.
Coding involves nuances of its own. While a surgeon will code 67038 (vitrectomy with epiretinal membrane stripping) followed by 67040 (endolaser panretinal photocoagulation) to bill the highest reimbursed code first, a facility is reimbursed more for 67040 than it is for 67038, and must bill in the reverse order.
Clinically and clerically, a site visit to a facility that has been successfully performing posterior surgery may prove educational. Perhaps the most important step is to re-evaluate your decisions after implementation. Are you able to recognize financial success? Are you able to provide excellent patient care, as evidenced by patient outcomes and satisfaction surveys from both patients and surgeons?