Premium IOLs—A Legal and Ethical Guide to Billing Medicare Beneficiaries

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If you regularly attend the Academy’s Codequest meetings, you may have noticed an uptick in questions about out-of-pocket expenses. Here’s what you need to know regarding what can and can’t be billed out of pocket in conjunction with cataract surgery.

Billing Medicare Patients for the Noncovered Portion

On May 3, 2005, the Centers for Medi­care & Medicaid Services (CMS) pub­lished a ruling that reversed decades of policy.¹ Previously, services were either covered or not, with no middle ground. Under the 2005 ruling, if a Medicare beneficiary wants a presby­opia-correcting intraocular lens (IOL), Medicare will pay what it would cost to restore functional vision—i.e., the fee for replacing the cataractous lens with a conventional IOL, which is currently $105—and you can bill the patient for additional costs associated with the new lenses.

On Jan. 22, 2007, CMS issued a simi­lar ruling for toric astigmatism-correct­ing IOLs.²

Billing Do’s and Don’ts

When a Medicare beneficiary agrees to have a presbyopia- or astigmatic-cor­recting IOL, rather than a conventional IOL, you need to be careful with your billing.

What not to bill Medicare. Under the 2005 and 2007 rulings, Medicare will not cover the following:

• physician services and resources associated with the examination/fitting of premium lenses that exceed coverage for cataract surgery with insertion of a conventional IOL;
• physician services and resources related to refractive examinations specifically associated with insertion of a presbyopia- or astigmatic-correcting IOL;
• subsequent examinations (excluding the 1-time postcataract surgery exam); and
• changes in eyeglasses or lens power needed to accommodate the progres­sion of postoperative presbyopia. 

Here’s what you can bill to the Medicare beneficiary. You can directly bill the patient for the services and resources that are listed above. You also can bill the patient for the following services:

• Correction of the patient’s natural astigmatism with either a blade or a laser. For tracking purposes, practices may create an internal code for this noncovered procedure.
• Optiwave Refractive Analysis (ORA) System Intraoperative Wavefront Ab­berrometry, but only when a presby­opia- or astigmatic-correcting IOL is implanted and the patient has given his or her consent.

What can ambulatory surgery centers (ASCs) charge? ASCs may bill the patient for the dollar difference be­tween the $105 that Medicare pays for standard cataract surgery and the ad­ditional cost of the premium IOL, plus a small handling fee. ASCs may also charge a fee for use of the aberrometer when premium IOLs are used.

What about non-Medicare payers? The CMS rulings for presbyopia- and astigmatic-correcting IOLs apply to Medicare Part B only. Medicare Ad­vantage Plans and commercial plans may have the same coverage, or they may offer more benefits to cover the additional costs. It is imperative that you verify the coverage policy for each individual payer.

Which Codes to Use When Billing for Premium Lenses

Procedure codes. Regardless of what sur­gical method you use for cataract surgery, you should use CPT code 66984 or, if the surgery qualifies as complex, CPT code 66982. (Note: If you bill the latter code, make sure your documentation clearly indicates what it is that makes the case complex.)

In December 2005, CMS clarified that CPT codes 66985, for a secondary IOL, and 66986, for exchange of an IOL, may be used to report the inser­tion or replacement of presbyopia- or astigmatic-correcting lenses as well as conventional lenses.³ However, when using these 2 codes, you can’t bill the patient for the extra expense associated with a premium lens.

HCPCS codes. Practices can report the noncovered charges associated with premium IOLs using HCPCS code V2788³ for a presbyopia-correcting IOL and V2787⁴ for an astigmatic-correct­ing IOL.

However, as a noncovered benefit, physicians are not required to submit these HCPCS codes unless the patient requests that it be submitted.

Furthermore, because you are billing for noncovered service, V2788 and V2787 do not need to have modifier –GY appended to them.

Further Tips

Create a fact sheet. Some practices develop patient information fact sheets that detail the out-of-pocket expenses associated with a premium IOL. Patients can sign this to acknowledge that they understand those costs.

No ABN is needed. Because the pre­mium component of the IOL is statuto­rily excluded from Medicare coverage, no Advance Beneficiary Notice (ABN) is required.

Medicare patients must be able to opt for the standard IOL. When you are discussing IOL options with catarac­tous Medicare beneficiaries, you can’t tell them that you will only perform surgery if they request a premium lens.

What about additional charges associated with monovision orblended vision? One eye corrected for distance and one eye corrected for near has been an option since aphakic contact lenses were developed. There is no extra allowed billing when conven­tional IOLs are used.

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1 CMS Ruling 05-01 May 3, 2005. www.cms.gov/Regulations-and-Guidance/Guidance/Rulings/downloads/CMSR0501.pdf.

2 CMS Ruling 1536-R. Jan. 22, 2007. www.cms.gov/Regulations-and-Guidance/Guidance/Rulings/downloads/CMS1536R.pdf.

3 CMS Transmittal 801. Dec. 30, 2005. www.cms.gov/Regulations-and-Guidance/Guidance/Transmittals/downloads/R801CP.pdf.

4 CMS Transmittal 1430. Feb. 1, 2008. www.cms.gov/Regulations-and-Guidance/Guidance/Transmittals/downloads/R1430CP.pdf.