Medical Device Daily Washington Editor

WASHINGTON – The Centers for Medicare & Medicaid Services (CMS; Baltimore) has seen its way clear to changing its payment rules for presbyopia-correcting intraocular lenses (IOLs).

Prior to its announcement earlier this week, CMS would cover IOLs during standard cataract surgery, but did not give beneficiaries the option of choosing to pay for the more expensive presbyopia-correcting lenses out of pocket. Out-of-pocket payment would have to cover both the surgery and the lens, outside Medicare coverage.

Under the new payment rule, beneficiaries would pay for the more advanced lenses, in addition to “associated services that exceed the charge for insertion of a conventional IOL following cataract surgery,” the agency said.

The new ruling is also a boon for device companies with products in this rapidly growing sector.

“Medicare patients will now have access to technology only available previously to non-Medicare patients,” Andy Corley, CEO of Eyeonics (Aliso Viejo, California), told Medical Device Daily.

But he added the downside: “This is a typical case of Medicare reimbursement rules not keeping pace with technological innovation.”

Corley said his company, along with various others in the sector, had lobbied for roughly five years to get CMS to change its rule.

Presbyopia is an age-related condition in which the crystalline lens of the eye loses its flexibility and becomes cloudy, making it harder to see items up close. It is often the first sign of a cataract.

Physicians usually prescribe reading glasses, bifocals, trifocals, or contact lenses to treat the condition.

Presbyopia-correcting IOLs such as Eyeonics’ Crystalens not only replace lenses clouded by cataracts but allow the eye to focus on near, intermediate, and far vision, minimizing the need for corrective lenses.

Corley said the news will “greatly expand” his products penetration of a market where he estimated roughly 2.2 million cataract surgeries performed annually.

According to Joanne Wuensch, a device analyst for Harris Nesbitt (New York), the number of cataract procedures performed each year in the U.S. is closer to 3 million, and prior to Tuesday’s decision only 10% to 20% would have been private-pay candidates for presbyopic lenses.

Other companies currently vying for a share of the IOL pie include Advanced Medical Optics (AMO, Santa Ana, California), Alcon (Fort Worth, Texas) and Bausch & Lomb (Rochester, New York).

AMO recently received FDA approval for its second-generation multifocal lens called Re-Zoom, which will likely supplant the company’s older, less-efficacious, first-generation silicone Array lens. Alcon, perhaps the industry’s largest player, recently launched its new ReSTOR multifocal IOL.

Presbyopia gradually affects almost all people over 40, and according to the American Optometric Association (St. Louis), roughly 90 million people in the U.S. have presbyopia or will develop it by 2014.

Program provides uninsured reimbursement

CMS also unveiled a new program to provide $1 billion over the next four years to help hospitals, certain physicians and ambulance providers recoup the costs of providing care to qualified individuals who are uninsured or cannot afford emergency care.

The funding comes from a section of the Medicare Modernization Act specifically focusing on undocumented aliens in the U.S.

Each state will receive funding based formulas established in the law, and payments will be made directly to hospitals, physicians, and ambulance providers, including Indian Health Service facilities and Indian tribes and tribal organizations, “as long as they did not receive payment from any other source such as the person treated or an insurance company,” CMS said.

The agency will make payments to eligible providers for some or all of their unreimbursed costs of providing emergency healthcare care services required under Emergency Medical Treatment and Labor Act (EMTALA) and related hospital inpatient, outpatient, and ambulance services.

Under EMTALA, hospitals with emergency department are required to treat and stabilize patients who present with medical needs, regardless of their ability to pay. The cost of this care often strains hospital budgets and can threaten a facility’s ability to keep its emergency department open.

The majority of the funding – nearly 70% – will be distributed among healthcare providers based on a state’s percentage of undocumented aliens. Remaining funds will go to providers in the six states with the largest number of arrests of undocumented aliens. Payments will be adjusted if the bills exceed a state’s allocated funding.

States receiving the highest amounts in the current fiscal year are: California, $70.8 million; Texas, $46 million; Arizona, $45 million; and New York, $12.25 million.

According to the American Hospital Association (Chicago), the move not only protects patients without health insurance – such as illegal immigrants – but also helps to keep facilities in those communities in business to treat patients who can pay.

“I don’t know if it will completely change their financial picture, but for those hospitals on the border, this is going to make a difference in ensuring they are there to treat the patients, not just the undocumented ones, but all the patients living in those communities,” Don May, AHA’s vice president told the Associated Press.