The Affordable Care Act and Retina

What does Obamacare mean for retinal physicians?

The Affordable Care Act and Retina

What does Obamacare mean for retinal physicians?


The Patient Protection and Accountable Care Act,1 or the ACA (also known as “Obamacare”) has had, and will continue to have, a major impact on all physicians. In this article, I will highlight two provisions that are likely to have a particular impact on retinal physicians.

Dennis Hursh is managing partner of Hursh & Hursh, P.C., a Pennsylvania law firm that serves the needs of physicians and medical practices. He is a member of the American Health Lawyers Association, where he is involved in the Physician Organizations Practice Group. Mr. Hursh can be reached via the Hursh & Hursh Web site at


The trend towards consolidation of physician practices was certainly not started by the ACA. There can be little question that laws regarding use of electronic health records2 and quality reporting3 accelerated this trend. However, the ACA provisions regarding the formation of Accountable Care Organizations (ACOs) have led to a frenzy of consolidation in the healthcare industry.

A brief background of the purposes for forming an ACO is necessary to understand why retinal physicians are being approached (and sometimes abused) by various ACOs. To create incentives for providers to perform the necessary work and invest the necessary money to work toward more efficient care for Medicare beneficiaries, the ACA provides for a payment to providers of a portion of the savings generated by providing efficient but high-quality medical services to Medicare patients.

The ACA established a Medicare Shared Savings Program (MSSP) administered by CMS, which was intended to promote accountability for a patient population by coordinated activities among providers to “encourage investment in infrastructure and redesigned care processes for high quality and efficient services.”4 The MSSP encourages the formation of an ACO as a vehicle to serve Medicare fee-for-service beneficiaries.5

The ACO, once approved, will be eligible to share in the savings generated for a given population of Medicare fee-for-service beneficiaries. A Medicare population, of course, will rely more heavily on retinal physicians than on virtually any other population. Therefore, most retinal physicians are squarely in the cross-hairs of entities trying to form an ACO.

Expectations and Reality

Many commentators (including myself) felt that physicians would be a primary driver in forming ACOs. However, although a few physician organizations have formed ACOs,6 the vast majority of these enterprises have been formed by health systems.

Because most health systems seem to base their business decisions on what other health systems are doing, the best reason for forming an ACO in the mind of a health system executive might be that his or her competitor is doing it.

Improving the health of a given population is a very worthy goal. However, today in the United States, patients (especially Medicare patients) tend to utilize a wide variety of physicians and other healthcare providers. Under the guise of quality improvement for the population, health systems have been driven to ever-increasing consolidation to attempt to control every aspect of a population’s health care. Retinal physicians are obviously not immune to this trend.

I have seen health systems preying upon physicians based on supposedly legal grounds, attempting to induce a physician to grant exclusivity to a given ACO. I have also had clients who were told that “the law” requires them to be exclusive to only one ACO. As with most urban legends (and health system tall tales), the myth of required exclusivity has a kernel of truth.

Obviously, to determine the savings generated for a given population, you must first carefully define that population. Medicare fee-for-service beneficiaries are automatically assigned to an ACO based on their primary care provider.

Primary vs Secondary Care

For purposes of the MSSP, “assignment” means the operational process by which CMS determines whether a beneficiary has chosen to receive “a sufficient level of the requisite primary care services from a physician who is an ACO provider/supplier so that the ACO may be appropriately designated as exercising basic responsibility for that beneficiary’s care.”7

CMS uses a relatively simple system to assure that a given beneficiary is only assigned to one ACO. Specifically, each ACO participant upon which beneficiary assignment is dependent must agree to be exclusive to one ACO.8

Because beneficiary assignment is based upon the level of primary care services that the beneficiary receives, PCPs who participate in an ACO must agree to be exclusive to only one ACO.

However, retinal physicians obviously do not supply primary care. Since beneficiary assignment is not dependent upon the participation of retinal physicians, retinal physicians are not required to be exclusive to one ACO.8

To control the cost and quality of services to beneficiaries, it is in the best interest of each ACO to attempt to control the services of every physician and entity providing healthcare services to these beneficiaries — particularly, of course, retinal physicians, who are so vital for an older population.

Because most ACOs are controlled by health systems, it is not surprising that ACOs attempt to obtain exclusivity from retinal physicians. If you agree that you will not participate in any ACO other than that controlled by Hospital X, then you will not be able to participate in the ACO controlled by Hospital X’s competitor, Hospital Y. It then follows that referral sources in the ACO controlled by Hospital Y will stop referring to you, and there seems to be little reason for you to continue to treat patients at Hospital Y.

This is obviously a win for Hospital X. It is also obviously a loss for you, your referral sources who are not in the ACO you agreed to be exclusive to, and your patients who have a primary care physician who is not in “your” ACO.

I have reviewed ACO participation agreements for physicians who were told that they were not agreeing to exclusivity by signing the agreement. Shockingly, some of these agreements did, in fact, provide for exclusivity.

Given the importance of Medicare patients to retinal physicians, it is critical that you have competent legal counsel review any ACO participation agreement before you sign it.


Another gift of Obamacare that seems to fall disproportionately on retinal physicians is the Physician Payments Sunshine Act (the Sunshine Act).9 Here again, laudable goals don’t quite translate perfectly into the real world.

The goal of the Sunshine Act (referred to as the “Open Payments Program” by CMS) is to promote transparency by publishing data on the financial relationships between the healthcare industry and healthcare providers.10

CMS published a total of 4.45 million records for 2013, reflecting $3.7 billion in payments.10 CMS has also helpfully provided a public database so that the public (and, of course, the press) can check payments from Medicare to individual physicians.11

The public database has caused a flood of publicity concerning “top earning physicians” in the Medicare program.12 Organized medicine and other groups have criticized both the methodology of collecting information, and the potential usefulness of the information.

For example, the AMA noted that only 26,000 physicians of the nearly 550,000 physicians affected by the Sunshine Act were able to register to review their data and seek correction of any inaccuracies.13

The raw data have led to some great sensationalism in the media. For example, one newspaper reported that ophthalmologists were the biggest recipients of Medicare money in 2012. The 17,000 providers accounted for 7% — $5.6 billion — of the reimbursements to doctors and other providers.12

The obvious conclusion is that these fat cat doctors are taking home huge sums of money from Medicare. Local newspapers can always get a headline by seeing whether any local doctors are raking in the big bucks from Medicare.14

Who can resist reading an article in which it is reported that a physician (a retinal physician, to be precise) from Lancaster, PA, “got nearly $3.8 million from Medicare in 2013”?14 These articles sometimes (but not always) note in passing that this figure includes drug reimbursement.

The “Big Money”

Medicare pays a whopping 6% “profit” on the purchase of drugs.15 So the database might report that you received $1 million from Medicare. Obviously, you are doing quite well!

Of course, if one were to nitpick, it could be pointed out that you may have received, for example, $800,000 for ranibizumab (Lucentis, Genentech, South San Francisco, CA). Since you would have paid about $754,700 to the drug company, your actual take-home pay (assuming retinal physicians have absolutely no overhead) would be approximately $245,300.

If you have a 50% overhead on your practice, your take-home pay for Medicare services would be approximately $122,700. That would make for somewhat less spectacular reading than the headline of the million dollars you got from Medicare.

The amount of money that Medicare reimburses you for drugs obviously vastly exaggerates the money you are making. Because retinal physicians utilize such expensive drugs, they tend to be at the top of the charts when the local media searches for physicians in the area.

John Thompson, MD, president of the American Society of Retina Specialists, has pointed out that, if an internist admits someone to the hospital with pneumonia, and they go to the ICU and have a $300,000 bill, the bill is not attributed to the physician. However, when retinal physicians treat someone for AMD utilizing expensive drugs, the drug cost or that amount does get attributed to the physician.12


Because of the sensational press regarding the “massive” payments to retinal physicians, you need to educate the public proactively on the real story behind your Medicare reimbursement. In addition, you might do well to prepare for how ACOs might affect your practice. Being forewarned in this case can allow you to be (legally) forearmed. RP


1. Patient Protection and Affordable Care Act of 2010, Pub L. 111-148 (2010).

2. The American Recovery and Reinvestment Act of 2009, Pub.L. No. 111-5 (2009).

3. Tax Relief and Health Care Act of 2006, partially codified at 42 U.S.C. § 1395w-4.

4. 42 CFR § 425.10.

5. ACA §2706.

6. Mamula KB. First Pittsburgh area ACO launched. Available at: Accessed June 18, 2015.

7. 42 CFR §425.20.

8. 42 CFR §425.306(b).

9. ACA §6002.

10. Centers for Medicare & Medicaid Services. Annual Report to Congress on the Open Payments Program for Fiscal Year 2014. Available at: Accessed June 18, 2015.

11. Centers for Medicare & Medicaid Services. Open Payments Web site. Available at: Accessed June 18, 2015.

12. Pollack A, Abelson R. Eye specialists get big chunk of Medicare payments. Available at: Accessed June 18, 2015.

13. Wah RM. AMA statement on Sunshine Act data release. American Medical Association Web site. Available at: Accessed June 18, 2015.

14. Smart G. High drug prices boost Medicare payments to docs here. Available at: Accessed June 18, 2015.

15. 42 USCS §1395w-3a