# Medicare Costs for Neovascular Age-Related Macular Degeneration, 1994–2007

## Purpose

To assess changes in Medicare payments for neovascular age-related macular degeneration (AMD) since introduction of anti–vascular endothelial growth factor (VEGF) therapies.

## Design

Retrospective, longitudinal cohort study.

## Methods

Using the Medicare 5% sample, beneficiaries with new diagnoses of neovascular AMD in 1994 (N = 2497), 2000 (N = 3927), and 2006 (N = 6041) were identified using International Classification of Diseases (ICD-9-CM). The total first-year health care and eye care costs were calculated for each beneficiary. Propensity score matching was used to match individuals in the 2000 and 2006 cohorts with the 1994 cohort on age, sex, race, Charlson Comorbidity Index, and low vision/blindness.

The number of beneficiaries newly diagnosed with neovascular AMD more than doubled between the 1994 and 2006 cohorts. Overall yearly Part B payments per beneficiary increased significantly from $3567 for the 1994 to$5991 for the 2006 cohort ( P < .01) in constant 2008 dollars. Payments for eye care alone doubled from $1504 for the 1994 cohort to$3263 for the 2006 cohort ( P < .01). Most of the increase in payments for eye care in 2006 reflected payments for anti-VEGF injections, which were $1609 over 1 year. Mean annual numbers of visits and imaging studies also increased significantly between the 1994 and 2006 cohort. Results were similar in the matched sample. ## Conclusions The introduction of anti-VEGF intravitreal injections has offered remarkable clinical benefits for patients with neovascular AMD, but these benefits have come at the cost of an increased financial burden of providing care for these patients. The introduction of anti–vascular endothelial growth factor (VEGF) treatments has revolutionized care of age-related macular degeneration (AMD). AMD is the leading cause of blindness in elderly individuals in the developed world and the third-leading cause of blindness worldwide. Loss of vision from neovascular AMD in particular results in profound reductions in vision-specific quality of life. Three intravitreal anti-VEGF medications are widely used for treatment of the neovascular form of AMD: ranibizumab (Lucentis; Genentech, South San Francisco, California, USA), bevacizumab (Avastin; Genentech), and pegaptanib (Macugen; OSI-Eyetech, New York, New York, USA). Randomized clinical trials and retrospective studies have shown that ranibizumab and bevacizumab dramatically improve the visual prognosis of neovascular AMD, but the costs of treating patients with these medications are high given the price of these treatments and the need for repeated injections. The affected population is large; 1.22 million persons are estimated to have neovascular AMD in the United States alone, and the number of people with AMD is expected to increase by 50% by 2020. Hence, one may predict that providing care for the increasing numbers of patients with neovascular AMD is likely to become considerably more expensive. Moreover, with patients returning for as frequent as monthly injections, there are also likely to be associated increases in numbers of office visits and examinations and in ancillary testing. Costs and cost-effectiveness of treatments for AMD have been investigated in several studies, most of which have extrapolated data from clinical trials to estimate the costs for each kind of treatment. Smiddy found costs of anti-VEGF treatment per line of vision per year ranging from$84 for as-needed use of bevacizumab to $766 for protocol-style use of ranibizumab. Gower and associates found that ranibizumab was the most effective but also the most costly treatment for neovascular AMD, with estimated 2-year total medical costs of$54 100 for treatment with monthly ranibizumab. Brown and associates estimated that ranibizumab therapy conferred 1.039 quality-adjusted life-years (QALY), or a 15.8% improvement in quality of life over a 12-year period (the mean life expectancy for a patient with neovascular AMD), with a cost of $50 691 per QALY. Coleman and Yu evaluated Medicare payments for non-neovascular and neovascular AMD for 1995-1999. Their study compared payments on behalf of beneficiaries with AMD to a control group with minimal eye disease, finding a significantly higher median payment of$2371 over 5 years for patients with neovascular AMD vs $1569 for non-neovascular AMD vs$1428 for the control group. The time period studied, however, preceded use of photodynamic therapy and anti-VEGF therapies, which have considerably changed the management of AMD over the last decade. Brechner and associates looked specifically at the costs of anti-VEGF injections in the Medicare population in 2008, and they found that the total cost of bevacizumab injections was $20 290 252 and the total cost of ranibizumab injections was$536 642 693, though they did not look at other associated costs of care for neovascular AMD. The overall annual cost of AMD care in the United States was estimated at $575 million in 2004 prior to the widespread use of anti-VEGF intravitreal injections, and was projected to increase to$845 million over the following 15 years simply because of growth in the number of elderly persons even without any change in available treatments.

This study examines total health- and eye-related Medicare payments on behalf of beneficiaries diagnosed with neovascular AMD in a nationally representative cohort of US elderly persons at 3 different time points: 1994, 2000, and 2006.

## Methods

We used Medicare 5% Part B claims and enrollment files to identify a nationally representative sample of Medicare beneficiaries aged 68–95 with a new diagnosis of neovascular AMD (International Classification of Diseases, 9th Revision, Clinical Modification [ICD-9-CM], 362.52, 362.42, and 362.43). The data contained information on demographic characteristics, beneficiaries’ zip code of residence, ICD-9-CM diagnosis and procedure codes (Current Procedural Terminology, CPT-4; Healthcare Common Procedure Coding System, HCPCS), physician specialty (US Centers for Medicare and Medicaid Services, CMS), and provider zip codes.

We selected beneficiaries first diagnosed with neovascular AMD in 1994, 2000, and 2006. We used a 3-year look-back period (1991-1993, 1997-1999, 2003-2005, respectively) to ensure that they had at least 1 eye care visit, resided in the United States, had not previously received this diagnosis, and were not in an HMO for more than a year.

For the 3 cohorts, first-year eye payments after first diagnosis of wet AMD were calculated for each Medicare beneficiary from Part B claims submitted by an ophthalmologist or optometrist. Total first-year payments for eye care retrieved from the claims data for each beneficiary were grouped into anti-VEGF injections, fluorescein angiography (FA) imaging, optical coherence tomography (OCT) imaging, other imaging, laser photocoagulation, photodynamic therapy (PDT), pars plana vitrectomy (PPV), cataract, cornea, glaucoma, visit costs, and other eye-related payments. We also calculated Part B payments from claims submitted by other providers for comparison. We adjusted the payments to 2008 dollars for general increases in medical prices using the medical component of the Consumer Price Index.

Using propensity score matching, we accounted for changes in payments attributable to changes in mix of beneficiaries diagnosed with neovascular AMD by matching the 2006 and 2000 cohorts to the 1994 cohort. Variables used in matching were age, race, sex, Charlson Comorbidity Index scores (a measure of general health), and low vision/blindness. The propensity score is the probability of having been first diagnosed with neovascular AMD in 1994 conditional on observed covariates. Matching on propensity scores reduces selection bias between individuals in the different cohorts. To capture the differences between the cohorts (1994, 2000, and 2006) we modeled the probability Y of cohort 1994 being present in cohort 2000 or 2006 as

Y2000=β1+β2I(1994|2000)andY2006=β1+β2I(1994|2006)
Y 2000 = β 1 + β 2 I ( 1994 | 2000 ) a n d Y 2006 = β 1 + β 2 I ( 1994 | 2006 )