Practice Management Considerations of Refractive Cataract Surgery

Chapter 6

Kevin J. Corcoran, COE, CPC, CPMA, FNAO

The goal of cataract surgery is to improve vision by removing the lenticular opacity that scatters light. Coincidentally, with precise biometry and sophisticated intraocular lens (IOL) calculations, pre-existing myopia or hyperopia can be reduced or eliminated. As the surgical technique and planning has improved, patients and surgeons have established 2 concurrent goals: remediate cataract and simultaneously minimize residual refractive errors after cataract surgery, and obtain the best possible uncorrected visual acuity or the desired ametropia as planned for in pseudophakic monovision. This approach has been termed refractive cataract surgery, recognizing the twin objectives.


From the perspective of the Medicare program as well as other third-party payers, the improved refractive outcomes have been taken for granted as a byproduct of the evolution of the cataract procedure. Better results have not generated higher payment rates to surgeons. Instead, better results have led to higher volumes of procedures, which, in turn, reduce payment per procedure but increase total revenue for busier surgeons.

Refractive cataract surgery gained momentum and recognition from the understanding that astigmatism and presbyopia are not so easily dealt with in IOL calculations, but that ancillary diagnostic testing, corneal refractive procedures, and/or premium IOLs were needed to ameliorate them.1 These additional items and services are not required in cataract surgery—they are optional. Indeed, Medicare established in 1990 that beneficiaries are entitled to “one pair of conventional eyeglasses or contact lenses furnished subsequent to each cataract surgery with insertion of an intraocular lens,”2 which addresses all postoperative refractive errors other than egregious IOL miscalculations. Under a number of Medicare rules,3,4 sometimes imitated by other third-party payers, patients desiring a greater degree of spectacle independence may elect these additional items and services and pay for them out of pocket, because they are performed solely for refractive purposes and are not reasonable and necessary for the diagnosis or treatment of illness or injury or to improve the functioning of a malformed body member.”5


Many patients ask, “Do you perform cataract surgery using a laser?” Surgeons carefully explain the difference between primary cataracts and secondary cataracts, the myths about cataract, and the surgical procedures involved. While lasers have been used for posterior capsulotomy to soften cataracts and speed up emulsification,6 phacoemulsification remains the favored technique in the developed world. Several femtosecond lasers have been developed for use in refractive cataract surgery (eg, Catalys [Abbott Medical Optics], LenSx [Alcon], VICTUS [Bausch & Lomb]), with the goal of improving surgical precision and patient outcomes.7 Like phacoemulsification before it, the femtosecond laser represents another technological advancement, but one with a high price tag; a kind of golden scalpel. Femtosecond lasers have 4 capabilities: 1) create a self-sealing, stepped corneal incision for the insertion of surgical instruments into the anterior chamber, 2) perform precise capsulorrhexis, 3) fragment the crystalline lens to facilitate removal, and 4) make corneal relaxing incisions to ameliorate clinically significant regular astigmatism. Of these capabilities, only the last one can be separately charged to the beneficiary as a noncovered procedure, while the others are part of the covered cataract surgery.8,9


In the context of practice management, covered services are subject to strict limitations on balance billing, while noncovered services are the beneficiary’s financial responsibility (Table 6-1). Balance billing is the practice of asking a beneficiary to pay the difference between the actual charge and the assigned benefit amount for covered services that the provider has contractually accepted as payment in full.10 It does not refer to the collection of copayments and deductibles. At the very least, the provider who balance-bills patients may breach his or her pre-existing agreement with the payer, which could result in termination of his or her provider agreement and/or other contractual remedies, such as monetary penalties. Some state insurance laws or consumer protection laws also might be implicated. Despite the prohibitions against balance billing, third-party payers generally agree that enrollees may be billed for noncovered services. Consequently, it is necessary to clearly define and separate covered from noncovered services and to obtain the patient’s voluntary acceptance of financial responsibility for the latter (Table 6-2).

Table 6-1

Reimbursement Grid


Table 6-2

Covered and Non-Covered Services


aNCD 10.1 A-scan or Optical Coherence Biometry (either one but not both).11

bTesting for refractive errors including refraction (sphere, cylinder, add, prism) are noncovered services in Medicare. Beneficiaries with supplemental insurance that includes a vision benefit may have separate coverage.12

cRegular astigmatism is not a covered indication for Medicare; irregular astigmatism is a covered indication, as may occur after corneal trauma. Corneal pathology, such as keratoconus, may be covered.13

dNCD 80.8 states: “When a presurgical examination for cataract surgery is performed and the conditions of this section are met, if the only visual problem is cataracts, endothelial cell photography is covered as part of the presurgical comprehensive eye examination or combination brief/intermediate examination provided prior to cataract surgery, and not in addition to it.”14

eProphylactic testing (eg, screening with scanning computerized ophthalmic diagnostic imaging) is not a Medicare benefit, unless specifically authorized by Congress.

fLaser capsulorrhexis and lens fragmentation are an integral part of cataract surgery, so there is no merit for a separate charge.

gNCD 80.7 states: “The use of radial keratotomy and/or keratoplasty for the purpose of refractive error compensation is considered a substitute or alternative to eyeglasses or contact lenses, which are specifically excluded by §1862(a)(7) of the Act (except in certain cases in connection with cataract surgery). In addition, many in the medical community consider such procedures cosmetic surgery, which is excluded by section §1862(a)(10) of the Act. Therefore, radial keratotomy and keratoplasty to treat refractive defects are not covered.” 15


One very helpful concept that has been well established in other aspects of reimbursement is the notion of a deluxe item, which incorporates both covered and noncovered elements (eg, wheelchairs, hearing aids). Within ophthalmology, the classic example is eyeglass frames. The payer establishes a preset covered amount for eyeglass frames and permits the optician to accept payment from the beneficiary for any additional amount to upgrade the frame. It is important to note that this billing method is not balance billing, and that the mechanism for claim submission includes 2 distinct lines on the claim form to discriminate between the covered and noncovered elements.

For example, your pseudophakic patient orders a $300 frame. Medicare allows $60 for a standard frame (Healthcare Common Procedure Coding System [HCPCS] V2020). The beneficiary agrees to pay $240 for a deluxe frame (HCPCS V2025)—the difference between $300 and $60. As with eyeglasses, Medicare and some third-party payers have applied the deluxe concept to specifically designated IOLs, permitting providers (ie, hospitals and ambulatory surgery centers [ASCs]) to collect an extra fee from beneficiaries for the noncovered aspect of an otherwise covered IOL. To assist with bookkeeping, the Centers for Medicare and Medicaid Services (CMS) created 2 HCPCS codes to identify the noncovered or deluxe portion of a presbyopia-correcting IOL and an astigmatism-correcting IOL. Respectively, they are V2788 and V2787. Hospitals and ASCs use them on claim forms to identify the noncovered part of the premium IOL. Commonly, these premium IOLs cost significantly more than conventional IOLs. Since reimbursement for a conventional IOL is included in the facility fee for the hospital outpatient department (HOPD) or ASC, we must estimate its value. As a useful point of reference, the January 2016 CMS Durable Medical Equipment, Prosthetics, Orthotics, and Supplies fee schedule allows $113.04 for a posterior chamber IOL (HCPCS V2632).16 Alternately, the average purchase price of a conventional IOL in the HOPD or ASC is a reasonable value. For example, if the premium IOL is valued at $950, including shipping, handling, and applicable taxes, and a conventional IOL is valued at $113, then the noncovered portion payable by the beneficiary is $837.

The purchaser of the premium IOL is almost always the HOPD or ASC, because it is supplied in the facility, and the conventional portion of the IOL is billed and paid to the facility. The exception is in-office cataract surgery.


An Advance Beneficiary Notice of Noncoverage (ABN; form CMS-R-131) is a written notice a health care provider gives to a Part B Medicare beneficiary when the provider believes that Medicare will not pay for items or services. An ABN cannot be used for a Part C Medicare beneficiary; follow the Medicare Advantage Organization’s instructions for predetermination of benefits.17 By signing an ABN, the Medicare beneficiary acknowledges that he or she has been advised that Medicare will not pay and agrees to be responsible for payment, either personally or through another insurance plan. For an ABN to have any utility, it must be signed before providing the item or service.

An ABN is voluntary for items or services that are statutorily excluded from coverage or fails to meet a technical benefit requirement by Medicare.18,19,20

The format of an ABN cannot be modified to any significant degree. You must add your name, address, and telephone number to the header. You may add your logo and other information if you wish. The “Items or Services,” “Reason Medicare May Not Pay,” and “Estimated Cost” boxes are customizable so you can add preprinted lists of common items and services or denial reasons. Anything you add in the boxes must be high-contrast ink on a pale background. Blue or black ink on white paper is preferred. You may not make any other alterations to the form. It must be one page, single-sided.

You must complete your portion of the form before asking the beneficiary to sign. Fill in the beneficiary’s name and identification number (but not the health insurance claim number) at the top of the form. Complete the “Items or Services” box, describing what you propose to provide. Use simple language the beneficiary can understand. You may add current procedural terminology or HCPCS codes, but codes alone are not sufficient without a description. Complete the “Reason Medicare May Not Pay” box with the reason(s) you expect a denial. The reason(s) must be specific to the particular patient; general statements such as “medically unnecessary” are not acceptable. The “Estimated Cost” field is required.

The beneficiary must personally choose from Option 1, 2, or 3. The patient must sign and date the form; an unsigned or undated form is not valid. Once the patient has signed the completed form, he or she must receive a legible copy. The same guidelines apply to the copy as to the original—blue or black ink on white paper is preferred; a photocopy is fine. You keep the original in your files.

If the beneficiary chooses Option 1, you must file a claim and append an appropriate modifier to the reported item(s) or service(s). In CMS Transmittal R1921CP, effective April 1, 2010, 2 modifiers were updated to distinguish between voluntary and required use of liability notices. This change addresses the fact that most beneficiaries will elect Option 1 in the hope that Medicare might pay, despite your assurances to the contrary.

Modifier GA was redefined as “Waiver of Liability Statement Issued as Required by Payer Policy.” For example, screening for potential disease, such as macular degeneration or epiretinal membrane, using scanning computerized ophthalmic diagnostic imaging of the retina is not covered because prophylactic testing is not a Medicare benefit unless specifically authorized by Congress. In contrast, testing patients with a history of macular degeneration or other retinal pathology is a covered service. When coverage is uncertain, you ask the patient to sign an ABN and submit your claim with modifier GA, allowing the payer to decide if the test is covered.

Modifier GX is defined as “Notice of Liability Issued, Voluntary Under Payer Policy.” For example, in conjunction with covered cataract surgery, the patient elects a refractive procedure such as limbal relaxing incisions to correct pre-existing astigmatism. If the patient selects Option 1, append modifiers GX and GY to that claim, as those services are noncovered. Modifier GY is defined as “Item or Service Statutorily Excluded or Does Not Meet the Definition of Any Medicare Benefit.”

Option 2 applies to situations in which Medicare is precluded from paying for the item or service and the beneficiary does not dispute the point. Do not file a claim; do post the item or service in your computer system with modifier GY.

Table 6-3

Hierarchy of Options


Abbreviations: A-C, astigmatism-correcting; P-C, presbyopia-correcting.

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Apr 7, 2019 | Posted by in OPHTHALMOLOGY | Comments Off on Practice Management Considerations of Refractive Cataract Surgery

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