ASC Payment Reform Would Benefit Retina Surgeons
Proposed Legislation Would Mean Sharply
C. SHEPPARD, CPA, COE
Recent legislation introduced into the US House and Senate would establish a new
payment system for ambulatory surgical centers (ASCs) and reform the process that
CMS uses to determine Medicare ASC reimbursement rates.
The bills, S. 1884, introduced by Sen. Michael Crapo (R-Idaho)
and H.R. 4042, introduced by Rep. Wally Herger (R-Calif), if enacted in their entirety,
would substantially enhance the profitability of the most commonly performed posterior-segment
procedures when performed in an ASC.
The proposed legislation would modify the current reimbursement
system to require that, by Jan. 1, 2008:
►ASCs would be permitted to receive Medicare
facility payment for any surgical services, except those considered to pose a significant
risk to patient safety or that would require an overnight stay. Commonly performed
retinal laser procedures would be among those newly included.
►ASCs would be paid 75% of the Hospital
Outpatient Department (HOPD) fee schedule amount for each covered service.
►ASCs would be eligible to receive pass-through
payments currently made to HOPDs for the cost of certain drugs and medical devices.
►Annual payment updates and other relevant
adjustments made for HOPDs would henceforth also apply to ASCs.
OF COMMONLY PERFORMED RETINA PROCEDURES
Medicare Facility Rates -
Calendar Year 2006
detachment, scleral buckling
Medicare Fee Schedules, National Average Rates
While the passage of this legislation is not likely in the current
session, the basic structure of the bills represent several years of negotiations
between the agency, industry representatives, and other stakeholders in the process.
Many industry observers believe that reforms closely reflective of this structure
will ultimately be enacted to comply with the Jan. 1, 2008 timeline mandated by
If enacted, the impact on reimbursement rates for the most frequently
performed retinal procedures would be dramatic. For example, the ASC facility fee
for Pars Plana Vitrectomy, CPT 67036, would increase from $630 to $1,644, a percentage
increase of more than 160%. Other commonly performed retinal procedures would enjoy
percentage increases in facility reimbursements of approximately 65% to 129%.
For many years, posterior segment surgeons have been discouraged
or excluded from participation in ASC ownership by the perception that retina surgery
is not profitable in the ASC setting. The legislation currently being considered
could more than level the playing field and elevate posterior-segment surgeons to
a prominent position in the development of new ASCs.
Stephen C. Sheppard, CPA, COE, is a managing principal
with Medical Consulting Group, LLC, an ophthalmic consulting firm with offices in
Springfield, Mo and Fayetteville, Ark.
Not Intended for AMD
Cautions on Off-Label use of Cancer Drug.
In an effort to help their patients who have wet AMD and are not responding to other
therapies, some retina specialists are turning to off-label use of Avastin, Genentech's
systemic anti-VEGF drug for colorectal cancer, and are injecting small amounts of
it intravitreally to treat AMD. Genentech's AMD drug Lucentis, which is not yet
FDA-approved, is a related VEGF-inhibitor, and some retina specialists see Avastin
as a useful proxy for Lucentis, at least until Lucentis
Meanwhile, Genentech is cautioning that Avastin was developed
as a systemic cancer therapy and is not intended as a locally delivered ophthalmic
drug. For example, Genentech notes that Avastin has a half-life that is 100 times
longer than Lucentis, meaning that Avastin can stay in the body for weeks with the
potential for unwanted side effects. Also, Avastin is produced under different manufacturing
standards than those required for an ophthalmic drug. As a systemic drug, it is
allowed to contain more particulate matter than an ophthalmic drug.
"We understand that the doctors using Avastin for AMD are doing
it with noble intent, which is to help patients who are going blind as we speak,"
Charles Johnson, MB, ChB, Genentech's vice president of biotherapeutics, told Retinal
Physician. "However, there have been no safety and toxicity studies conducted
on Avastin as an ophthalmic drug. We are well aware of the unmet need and are
beginning a new phase 3 Lucentis dosing study (SAILOR) which will enroll 5,000 patients.
This study is an avenue for more patients to have access to Lucentis now."
Dr. Johnson notes that the off-label intravitreal use of Avastin
has increased "because of advice generated by the retinal community." He cites Philip
Rosenfeld, MD, of Bascom Palmer in Miami as the first to use Avastin off-label to
"The retinal community is a close-knit, well-informed group that
has excellent communication and is motivated to do the best they can for their patients,"
says Dr. Johnson.
When a retina specialist asks Genentech about using Avastin for
AMD, the company responds with a package of relevant published data.
"We make educational material available to the doctors but we
don't take a position," says Dr. Johnson.
Dr. Johnson says physicians should report any adverse events they
encounter while using Avastin for AMD. Thus far, he is not aware of any adverse
events being reported.
While the use of Avastin by retina specialists has been a thorny
issue for Genentech, Dr. Johnson says he believes that "current use of Avastin is
driven by the extent and immediacy of the unmet need and hopefully Lucentis will
go some way to addressing that need." FDA approval for Lucentis could come sometime
B & L in new partnerships. Bausch & Lomb has entered into two new partnerships
that put the company squarely in the widely watched race to develop better treatments
for wet AMD.
B & L has signed a definitive agreement for an exclusive worldwide
license from Cephalon, Inc. of Frazer, Pa. to develop, market, and sell ophthalmic
products containing compounds that inhibit angiogenesis.
"We are interested in evaluating the therapeutic potential of
small-molecule angiogenesis inhibitors for the treatment of a variety of blinding
conditions that either cause or result from the abnormal growth of blood vessels
within the eye. These diseases include the wet form of age-related macular degeneration
and diabetic macular edema.," said Praveen Tyle, PhD, Bausch & Lomb chief scientific
officer and senior vice president, Global Research & Development.
"What is exciting is that preclinical data suggest these compounds
may demonstrate a novel method of action by both stopping the abnormal growth of
new blood vessels and by shrinking existing abnormal vessels. In addition, the small
molecular size of these compounds makes them candidates for sustained release using
our patented drug-delivery technology," Dr. Tyle said.
In another new partnership, Bausch & Lomb and PTC Therapeutics,
Inc., a privately held biopharmaceutical company, announced an exclusive option
agreement for B & L to license selected PTC compounds as development candidates
for therapeutic use in ophthalmology. PTC's antiangiogenesis program was developed
through PTC's proprietary GEMS (Gene Expression Modulation by Small Molecules) technology.
"Our research collaboration with PTC Therapeutics provides Bausch
& Lomb with access to a broad range of compounds from PTC's antiangiogenesis
program that are potential candidates for development," said Dr. Tyle. "PTC has
identified a number of promising small-molecule compounds that show antiangiogenic
activity. The goal of our collaboration is to apply our research expertise to develop
these compounds as unique therapies for diseases of ocular neovascularization including
Retaane trial. Alcon, Inc. said 24-month data from its comparative study of Retaane
15 mg vs. Visudyne photodynamic therapy (PDT) in the treatment of wet AMD confirm
the long-term safety of Retaane suspension. Safety information from this study showed
that no clinically relevant safety issues were observed due to the drug or the posterior
juxtascleral depot procedure during entire course of the study.
In addition to the safety data, the company said 2-year data continued
to show that Retaane suspension is clinically equivalent to PDT with Visudyne. Moreover,
the mean visual acuity for both treatment groups was clinically stable from month
12 to month 24.
"We believe this data indicates that Retaane suspension has the
potential to play a unique role in the chronic treatment of wet AMD," said Stella
Robertson, PhD, vice president, ophthalmic development. "We continue to have discussions
with the FDA and other regulatory agencies around the world to gain approval of
Cataract after vitrectomy. Othera Pharmaceuticals, Inc., said it has initiated a
phase 2 clinical trial of its lead compound, a topically administered eye drop,
OT-551. The 12-month, double-masked, randomized study is designed to evaluate the
ability of OT-551 to prevent or arrest the progression of cataracts in patients
who have undergone vitrectomy. Othera says OT-551 has been shown to be a potent
catalytic antioxidant, and recently completed a phase 1 safety and comfort study
in healthy volunteers.
"It is generally accepted in the ophthalmology community that
a link exists between vitrectomy surgery and subsequent cataract formation," said
Leonard Parver, MD, Othera's medical director and a practicing retinal surgeon.
"Removal of the vitreous from the back of the eye exposes the lens to oxygen-free
radicals, and in the great majority of the cases where the patients have their natural
lenses, vision-impairing opacities will form within 9 to 12 months."
Neurotech drug in trials. Neurotech, a biotechnology company that is developing
therapeutics for chronic retinal diseases, says that its lead product, NT-501, is
now in clinical development for the treatment of retinal degeneration, including
retinitis pigmentosa (RP) and geographic atrophy, a serious condition associated
with atrophic (dry) macular degeneration.
Neurotech provides not only the therapeutic (NT-501), but
the technology for its utilization as well. The NT-501 therapy employs Neurotech's
unique Encapsulated Cell Technology (ECT) that allows for the sustained, long-term
delivery of ciliary neurotrophic factor to the back of the eye. By using the tiny
ECT implant, this approach avoids injecting therapeutic agents directly into the
eye, particularly if regular administration is required. The surgical procedure
is performed as an outpatient procedure in only 25 minutes.
Neurotech will soon begin phase 2 clinical trials of NT-501 with
the National Eye Institute in Maryland. Positive results from an open-label phase
1 clinical trial involving 10 RP patients were announced in May. Results from the
trial confirmed that CNTF can be safely delivered into the vitreous of patients
with RP and that the ECT device was well tolerated by all patients. In addition,
some patients achieved more than 1 line of improvement in visual acuity.
In related news, Neurotech recently named Ted Danse as its president
and CEO. Danse, a veteran of more than 20 years in the ophthalmic industry, previously
held senior management positions at major eyecare companies, including Allergan
and ISTA Pharmaceuticals. Danse is based at Neurotech's headquarters in Lincoln,
RI. The company also has a European office in Paris.
Early treatment with Macugen. A team of researchers led by Christine P. Gonzales,
MD, of the Jules Stein Eye Institute at UCLA, conducted a retrospective analysis
of the pivotal phase 3 VISION study that led to the approval of Macugen for wet
AMD and found that early treatment with the drug resulted in superior vision outcomes.
The team found that 2 groups of patients with early signs of the
disease who were given Macugen demonstrated better visual acuity and had less chance
of sustaining severe vision loss than patients in the study who were given Macugen
at a later stage of the disease. Patients given sham injections on average fared
significantly worse than those given Macugen at any stage of the disease.
The findings were published in the October 2005 issue of Retina.
AMD partnership. Sirna Therapeutics, Inc., said it has entered into a multi-year
alliance with Allergan, Inc. to develop Sirna-027, a novel RNAi-based therapeutic
currently in phase 1 for AMD, and to discover and develop other novel RNAi-based
therapeutics against select gene targets in ophthalmic diseases.
Sirna will receive an initial payment of $5 million from
Allergan and be eligible for development milestones of up to $245 million in addition
to research funding and royalties on the worldwide sales of products resulting from
the alliance. Sirna also will receive contract manufacturing revenues.
Retinal Physician, Issue: January 2006