The Economics of Visudyne
The latest cost and reimbursement changes were a net positive, but attention to efficiency remains crucial.
With FDA approval of verteporfin for injection (Visudyne) in 2000 came the challenge of introducing photodynamic therapy (PDT) into ophthalmology practices, but providing the treatment was not necessarily an economic hardship. Initially, practices were able to realize a profit as long as they carefully tracked purchasing and reimbursement of the drug, according to Carl D. Regillo, MD, Wills Eye Hospital.
That changed in January of this year when the Centers for Medicare and Medicaid Services (CMS) reduced reimbursement for Visudyne. "Most people would argue, depending on how you work your costs, that it then became a money loser," he says.
Some practices considered dropping the treatment. While Vitreous-Retina-Macula Consultants of New York was not among those practices, Richard F. Spaide, MD, says "If the reimbursement was less than the cost for an extended period of time, we might have been forced to curtail our use."
A measure of relief came when Novartis reduced the price of the drug earlier this year. "This, in turn, was followed by another change in reimbursement from CMS, which effectively increased reimbursement a bit as of April 1," Dr. Regillo says. "Together, these changes allow for what is currently an acceptable margin between what you pay for the drug and what you get reimbursed, which now hovers around $100. That helps offset the administrative costs involved with purchasing, stocking, tracking, and administering the drug." At the same time, CMS expanded reimbursement to include occult and minimally classic lesions.
Joseph M. Googe, Jr., MD, says his practice loses money or breaks even when providing PDT. "We are watching it very closely and are still unsure how we will end up financially," says Dr. Googe, who is part of a 12-physician retina practice with 26 offices, mostly in Tennessee.
David S. Boyer, MD, who's in private practice in Los Angeles, reiterates the ongoing challenge: "This is the first time we've ever been financially responsible for an expensive item and can't provide the care in many cases without having a guarantee that the entire bill will be paid by insurance or the patient. So it's put us in a somewhat different position than we've ever been in before. With the advent of new macular degeneration drugs, this is the way it probably will continue to be.
"It's actually caused us to rethink our internal financial distribution to the physicians in our practice," continues Dr. Boyer, who is part of a six-physician retina practice with four offices and two satellites. "If you do a lot of Visudyne, it looks like you're a big producer and big collector, but you've taken the economics and switched them so you have a very low profit margin or no profit margin. Drug cost is an expense. It's a tough situation."
LOOK AT THE WHOLE PICTURE
As you try to determine the financial impact of Visudyne in your practice, consider all of the relevant factors. For example, PDT with Visudyne allows you to treat a larger portion of your patient base, which may contribute to revenue. The number of patients referred to your practice has likely increased as well.
In addition, Visudyne has increased the need to perform diagnostic tests for evaluating response to treatment and monitoring fellow eyes, which can help to offset losses associated with Visudyne. "You certainly are seeing patients more frequently than you were before and you are doing more diagnostic tests," Dr. Boyer says. "We are doing more optical coherence tomographies, more fluorescein angiograms, occasionally indocyanine green angiograms, and more intravitreal triamcinolone."
STAY FOCUSED ON EFFICIENCY
As accurately evaluating associated costs requires consideration of all financial factors, reducing expenses requires constant attention to streamlining. Following are strategies that work for the practices that employ them:
Treat in one location. Some of the largest practices offer PDT in multiple locations, but you may find it more economical to confine PDT to one location. Dr. Boyer's practice has taken this approach. It is difficult to recoup expenses unless you have a very high volume in each location.
Block schedule. In a small practice especially, consider scheduling patients in treatment blocks, offering PDT on 1 or 2 days per week or at specific times during the day. "I think you have to turn this into a chemotherapy type of experience," Dr. Boyer says. His practice schedules all PDT treatments on one day, increasing efficiency and benefiting patients not covered by insurance. "If you do multiple treatments on the same day, many times you can safely save the leftover drug in the vials for off-label uses for people who can't afford the drug," he says.
Make the most of staff members. Practices have found it helpful to cross-train employees to perform tasks associated with PDT. (Some states require that a registered nurse administer the infusion.) Practices at Wills Eye Hospital share a nurse specifically for PDT at one location. "Our practices utilize a nurse to prepare and infuse the drug for PDT," Dr. Regillo says. His practice also cross-trained employees to help with PDT administrative services, such as scheduling and counseling.
In Dr. Boyer's practice, technicians start the intravenous line (IV) and instruct patients, reminding them to avoid sunlight and to return for follow-up appointments. "We cross-train so that we don't have only one staff member who is able to do the IVs," he says. "If one infusionist goes on vacation, we don't want to shut down."
Physicians in Dr. Spaide's practice examine patients and perform the laser portion of Visudyne treatment, of course, but technicians do as much of the other work as possible, allowing physicians to see more patients. "The economic impact of seeing patients for a maintenance type of therapy that's paid at a lower rate per examination is mitigated by the fact that we're doing more treatments," he says.
"We have a number of doctors in our practice feeding into this," Dr. Spaide explains. "We have a little PDT center in our office. We have several dedicated rooms. We have two full-time technicians working there and they are busy taking care of PDT patients because they are fed by all these different people. The physicians go back only when it's time for the laser. A minute before the laser, I go back, sit down, put a lens on the patient, do the laser for 83 seconds, wish the patient goodbye, and I'm seeing another patient within 3 minutes."
Nurses in Dr. Googe's practice recommend that staff maximize efficiency by looking approximately a month ahead at the appointment schedule to anticipate the number of potential PDT patients (who have a previous PDT history or diagnosis). This helps them schedule employees and patients. By understanding and anticipating the office flow, staff members can integrate PDT patients into the normal day so that the process requires the minimum amount of physician time. In addition, when patients receive their first treatment, they are scheduled for a follow-up visit to determine whether re-treatment is needed. If it is, the re-treatment is performed at the follow-up visit.
Dr. Googe's practice also performs photography ahead of time for PDT patients, inserts the intravenous line and calculates body surface area before the fluorescein angiogram, and prepares paperwork ahead of time to include the calculation sheet, discharge sheet, and bracelet.
Track and safeguard inventory. It's important to lock the cabinets where you store Visudyne and to track use carefully. "No one would leave a $1,300 watch out on a table in their office overnight," Dr. Boyer says. "But a lot of people don't track or log-in their Visudyne."
"We track purchasing and reimbursement very closely, and we pursue reimbursement problems actively," Dr. Regillo says. "You can get yourself in a financial hole very quickly if Visudyne vials go unreimbursed or partially reimbursed."
Manage expectations. To streamline the entire treatment process, manage patients' expectations upfront so they clearly understand the benefits and limitations of PDT. "Some people come with a mindset that they can have a Visudyne treatment and they are going to be better," Dr. Spaide says. "If they have that idea, every time they come in, they're amazed they need another treatment. You must talk to patients on a repetitive basis so they understand it is more of a treatment than a cure. If the patient has the right mindset to begin with, then you don't have to go through this repetitive conversation, and they understand what to expect. Then they are happy to remain stable. I tell them, in a gentle way, that they have a chronic lifelong disease and that with the treatment they will likely go downhill, but slower than if they had no treatment at all."
Staff members are key in patient education. "These patients take a lot of time -- a lot more time than we are given credit for," says Dr. Boyer. "It's a difficult concept. They call multiple times because they have multiple questions. So education starts at the front desk, with staff reminding them what to wear when they come to see you for treatment, reminding them about co-pays, and reminding them about the billing problems. Then, education is provided by the physician and ancillary staff as to what patients can expect."
Weigh materials options. Some practices have found it convenient to purchase Visudyne supply kits, but others pre-assemble kits from their individual supplies. Dr. Spaide's practice uses individual supplies in the Manhattan office, where the volume is greater, but kits in the smaller Brooklyn office, where there is less dedicated manpower.
Dr. Regillo's office uses kits, which he finds to be convenient but less cost-effective than using individual supplies.
"We find that the individual supplies seem to work fine," Dr. Boyer says. "That way, if we contaminate one aspect of it, we have backup for that." Dr. Googe's practice also has found it cost-effective to purchase individual supplies.
Manage insurance challenges aggressively. "HMOs have become a major problem for us," Dr. Boyer says. "We have suffered carve-outs. We have gone back to each HMO with explanations and have gotten amendments to every contract that we have concerning Visudyne."
"Over the last few years we have been able to get Visudyne therapy covered for most indications with the carriers in our market," Dr. Googe says. "To get favorable coverage decisions, we provided their medical directors with relevant articles and supporting information and, in some cases, had face-to-face meetings."
Collect fees upfront. When PDT is used for non-Medicare patients or for off-label indications, Dr. Boyer's practice makes every effort to collect fees upfront. "Fees for this procedure need to be discussed prior to the procedure," he says. "Patients need to know that co-pays may be substantial and that several treatments may be necessary."
Dr. Regillo's practice also collects payment upfront for these patients, especially if the practice isn't familiar with an insurance plan. "Then we offer the service of trying to collect from the insurance company on behalf of the patient," he says. "If there are problems with reimbursement, the patient needs to step in, too, but we don't bill them later or rely just on the hope that the insurance company will pay."
"We try to collect upfront from noncovered and off-label patients, but sometimes this is difficult or impossible," Dr. Googe says. "In those cases, we try to work out some sort of payment arrangement with the patients."
If patients will be charged for off-label use, Dr. Spaide's practice bills upfront. However, whenever possible, the practice tries to treat these patients with Visudyne remaining from other treatments, saving the patients the expense. When a patient is expected to need an off-label treatment, he or she is brought in during a session where a number of patients are already scheduled for treatment. (In all cases, only newly mixed drug is used.)
THE ONLY HOPE FOR MANY PATIENTS
While several complicated issues surrounding the use of Visudyne have arisen over the years, the fact remains that at this time it is the only option for preserving vision for many AMD patients. "Even if you don't get paid that much, it's still the right thing to do for the patient, and we are obligated to have consideration for the patient," Dr. Spaide says.