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Use of Eye Care and Associated Charges Among the Medicare Population
1991-1998
Leon B. Ellwein, PhD;
Carol J. Urato, MA
Arch Ophthalmol. 2002;120:804-811.
ABSTRACT
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Objective To examine trends in the utilization and cost of eye care in the Medicare
population.
Methods Data were obtained from fee-for-service physician claims (Part B) from
a 5% sample of Medicare beneficiaries 65 years and older. Use of eye care
services and procedures, frequency of ocular diagnoses, and allowed charges
were compared for each year from 1991 through 1998.
Results The proportion of beneficiaries receiving eye care increased from 41.4%
to 48.1% during the 8-year period. Part B charges attributable to eye care
decreased from 12.5% to 10.4%, with annual inflation-adjusted charges per
beneficiary decreasing from $235 to $176 (1998 dollars). The proportion of
beneficiaries with cataract-related claims increased from 23.4% to 27.3%,
accounting for approximately 60% of eye care charges each year; beneficiaries
with retinal disease claims increased from 7.8% to 11.4%, capturing 15.4%
of eye care charges in 1998, up from 10.7% in 1991; and beneficiaries with
glaucoma claims increased from 6.8% to 9.5%, accounting for nearly 10% of
eye care charges each year.
Conclusions The proportion of the Medicare population receiving eye care increased
between 1991 and 1998. Nevertheless, eye care costs did not increase, primarily
because of constraints in charges associated with the management of cataract.
INTRODUCTION
THERE IS a continuing interest in determining the magnitude of ocular
diseases and associated conditions within the US population, with estimates
frequently based on prevalence data obtained in population-based surveys.
While not a substitute for data from such surveys, the demand for ophthalmic
services is an indicator of the extent to which ocular-related problems manifest
themselves within a community. This demand-based perspective of disease is
predicated, however, on the assumption that individuals with significant disease
or conditions will eventually seek access to care. Administrative databases
that record the provision of ophthalmic services within a geographic area
are an efficient source for obtaining this information—with the recognition
that asymptomatic conditions will be underrepresented, as will conditions
for which screening and treatment costs are not reimbursed by insurance carriers.
Because of Medicare's nearly comprehensive coverage of the US population
65 years and older, Medicare claims data are a valuable source of information
on the utilization and cost of eye care services. Using Medicare databases,
we reviewed eye care services obtained through fee-for-service (FFS) providers,
the allowed charges for these services, and the frequency of ocular diagnoses.
Analyses were conducted on a cross-sectional, year-by-year basis for 1991
through 1998. Previous articles have addressed both specialized and comprehensive
eye care utilization based on Medicare data1-9
and, to a more limited extent, with data from the National Ambulatory Medical
Care Survey.10-12
To our knowledge, none have presented long-term year-by-year trends in eye
care utilization or cost for the full spectrum of eye care services and procedures.
METHODS
The study population for each calendar year was identified from Medicare
Denominator Files for 1991 through 1998 obtained from the Health Care Financing
Administration (HCFA). (This agency has recently been renamed the Centers
for Medicare and Medicaid Services [CMS].) Beneficiaries included in the study
were those at least 65 years of age before the end of the calendar year, and
who had Medicare Medical Insurance for physician services (Part B) for at
least part of the time after reaching age 65 years. Beneficiaries enrolled
for the entire year in a Medicare health maintenance organization (HMO) or
other Medicare managed care plan were excluded from the study population for
that year. Full-time HMO enrollees were excluded because the use of services
is not routinely reported to CMS, unlike the systematic claim-based reporting
that occurs with FFS care. Railroad retirees, a subgroup of Medicare beneficiaries
with a different benefit structure, were also excluded.
Eye care utilization data were obtained from a random 5% sample of FFS
Medicare beneficiaries 65 years or older, as found in CMS's 5% Part B Physician/Supplier
Files. These annual files contain claims submitted by physicians and limited-license
practitioners for inpatient and outpatient services, as well as claims from
free-standing ambulatory surgical centers (ASCs). (Part B claims for facility-related
services are unique to ASCs. When such services are provided by hospitals
for inpatients or for clinic outpatients, they are claimed under Part A of
Medicare.) Claims for all services or procedures
performed by an ophthalmologist or optometrist, and claims for ocular-related services
or procedures performed by other providers, were used in identifying
recipients of eye care. Each service or procedure in a Medicare claim (a claim
line item) is coded by means of the HCFA Common Procedure Coding System (HCPCS),
which is based on Physicians' Current Procedural Terminology codes.13 The HCPCS also includes CMS-specific
codes for local (state-level) services and procedures. Eye care recipients
were also identified through claims coded with an ocular-related
diagnosis, even if the service or procedure was not necessarily ocular-related
(eg, a claim for general evaluation and management services from a provider
other than an ophthalmologist or optometrist). Claim diagnoses were coded
by means of International Classification of Diseases, Ninth
Revision, Clinical Modification, codes.14
(The list of ocular-related HCPCS service or procedure codes and diagnosis
codes that were used in identifying eye-related claims is available from the
authors.)
A "visit" variable was created to quantify beneficiary eye care visits.
A claim was taken to represent more than 1 visit if it covered services on
multiple days (claim expense dates) by 1 or more providers. For example, if
services were received from 1 provider on 2 different days, and if a second
provider specialty also billed for services on 1 of these days, 3 visits took
place. Each claim represented at least 1 visit, even if 2 claims were submitted
(by 2 providers) for the same beneficiary for services on the same date.
The first, or principal, claim diagnosis was used in the classification
of visits according to 16 previously defined categories and 97 subgroupings
of eye diseases and disorders.15 Claims with
a general, nonspecific diagnosis (eg, diabetes) that could encompass the provision
of ocular-related services were categorized as "other ocular" (one of the
16 categories) when the service was provided by an ophthalmologist or optometrist,
but as "nonocular" (another category) when some other specialty was involved.
For each calendar year, case incidence within
diagnostic categories and subgroupings was determined. A beneficiary with
1 or more visits during the calendar year, all with principal diagnoses represented
by a single diagnostic category (or subgrouping), was an incidence case for
that particular category (subgrouping) in that year. Beneficiaries with visits
corresponding to multiple diagnostic categories within a specific year represented
an incidence case for each of the categories.
Costs of services and procedures were examined by means of allowed charges,
the amount Medicare will reimburse for the service or procedure on the basis
of a periodically updated fee schedule. (The claim file also includes the
actual payment amount, which is an adjustment of the allowed charge taking
deductibles and beneficiary coinsurance into account.) Allowed charges were
reported on a per-beneficiary or per-recipient basis to accommodate the changing
number of beneficiaries in each year.
Calculation of service or procedure utilization rates and allowed charges
per beneficiary and eye care recipient was based on denominators adjusted
to reflect the duration of active FFS Part B enrollment, thus representing
person-year rates. Month-to-month changes in beneficiary status because of
reaching 65 years of age, Part B enrollment, HMO enrollment, or death were
taken into account. Allowed charges were adjusted to account for inflation
by means of the medical expense component of the Consumer Price Index.
Because of its large size, the 5% Medicare sample is an unusually precise
representation of what actually takes place within the entire Medicare population.
To illustrate, with an estimated case incidence or service or provider utilization
rate of 25 per 10 000 beneficiaries, the 95% confidence interval would
be 24/10 000 to 26/10 000 (±4% of the point estimate) when
calculated on a sample of 1 million beneficiaries. The confidence interval
as a percentage of the point estimate would be even tighter for more elevated
incidence or utilization rates. Considering that our estimates were derived
from a sample approaching 1.5 million beneficiaries, confidence intervals
around these estimates were ignored.
RESULTS
The number of Medicare Part B enrollees aged 65 years or older in the
5% sample for 1991 through 1998 is shown in Table 1. Although US demographics are reflected in the increasing
number of enrollees each year, because of the accelerating popularity of HMOs
the FFS beneficiary population actually declined during the latter part of
the 8-year period—dropping from 92.3% of enrollees in 1991 to 81.1%
in 1998. (Railroad retirees, who are not included in the study population,
represented approximately 2% of enrollees.) The combined effect of HMO enrollment,
which was particularly popular among newly eligible beneficiaries, and the
aging of the US population produced a "graying" of the study population. (In
1991, 5.4% of all Part B enrollees were excluded from our sample because of
HMO enrollment; by 1998, this percentage had increased to 16.7%. Among beneficiaries
who were aged 65 years, 19.5% were excluded because of HMO enrollment in 1991
and nearly 50% were excluded in 1998.) The sex and race composition of the
study population remained comparatively stable.
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Table 1. Medicare Enrollees and Fee-for-Service Beneficiaries 65 Years
or Older: 5% Sample
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As shown in Table 2, the
percentage of FFS beneficiaries receiving eye care increased steadily, from
41.4% in 1991 to 48.1% in 1998 (using adjusted numerators and denominators),
representing an average increase of 2.4% per year. Despite a declining number
of study beneficiaries beginning in 1994 (Table 1), the number of eye care recipients continued to increase
until 1997. This increase was reflected in the average number of eye care
visits per FFS beneficiary, which increased from 1.16 to 1.36 during the 8-year
period. The number of eye care visits per recipient was reasonably constant,
however, averaging between 2.67 and 2.83.
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Table 2. Fee-for-Service Eye Care Among Medicare Part B Beneficiaries
65 Years or Older: 5% Sample
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Average allowed charges for eye care services per beneficiary followed
a generally decreasing trend during the 8-year period, decreasing from $235
to $176, a 25% decline. Average overall Part B charges per beneficiary decreased
10%, from an average of $1877 per beneficiary in 1991 to $1689 in 1998. Accordingly,
eye care represented 12.5% of Part B charges in 1991, but only 10.4% by 1998.
On a recipient basis, average eye care charges decreased from $567 to $366
during the 8-year period.
Table 3 shows case incidence,
per 100 Medicare beneficiaries, within diagnostic categories for each calendar
year. For broad diagnostic categories, specific subgroupings are also shown
when the subgroup incidence was 0.4/100 or more in any 1 year. Case incidence
increased for almost all of the diagnostic categories and subgroupings; exceptions
were refractive conditions (refractive error, myopia, astigmatism), which
decreased, and strabismus (amblyopia) and uveitis, which remained constant.
The reduction in cases with a missing or nonocular diagnosis, from 7.09/100
to 4.38/100, contributed to the increase in diagnosis-specific incidence.
(The diagnosis coding improved over time.) Most of the cases with missing
or nonocular diagnoses, especially by 1998, were those treated by providers
other than ophthalmologists or optometrists.
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Table 3. Case Incidence per 100 Fee-for-Service Medicare Beneficiaries
by Calendar Year*
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Cataract-related cases were particularly common, with an 18.0% increase
in case incidence between 1991 (23.44/100) and 1997 (27.65/100) before dropping
1.3% in 1998 (to 27.29/100). Cataract-related cases represented approximately
55% of eye care recipients in each year. Glaucoma cases had the next highest
incidence, 6.81/100 in 1991 and 9.51/100 in 1998, a 39.6% increase during
the 8-year period. Particularly large percentage increases in case incidence
were also seen with retinal diseases, 46.6% (including an 87.5% increase in
diabetic retinopathy); neurologic disorders, 45.8%; orbital disorders, 44.4%;
plastics, 37.6%; and external diseases, 33.0% (including a 57.4% increase
in dry eye). Because Medicare reimburses for correction of refractive error
in only very limited circumstances, the incidence of refraction cases was
low and nowhere close to representing the true magnitude of refractive error
within the Medicare population.
Table 4 shows the distribution
of allowed charges for eye care across the 16 diagnosis categories for each
of 3 representative years. Visits with a cataract-related principal diagnosis
accounted for approximately 60% of all eye care charges, clearly dominating
all other disease categories. Retinal diseases and glaucoma were in a distant
second and third place, respectively. Retinal disease–related claims
represented 10.7% of eye care allowed charges in 1991, increasing to 15.4%
in 1998. Glaucoma accounted for slightly less than 10% across the entire study
period. Changes in the relative distribution of allowed charges across time,
as exemplified by the relative increase in charges for retinal diseases, paralleled
changes in case incidence (Table 3).
As noted earlier, the reduction in cases with missing or nonocular diagnoses
contributed to the increases seen in diagnosis-specific charges.
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Table 4. Percentage Distribution of Allowed Eye Care Charges by Diagnosis
Category
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Table 5 presents the use
of eye care procedure and service codes during the 1991 to 1998 period; those
with a frequency in any year of at least 25 per 10 000 beneficiaries
are itemized. (Fitting of spectacles [92340-92371], which had a frequency
between 32/10 000 and 41/10 000 during 1991 to 1995 before being
discontinued from 1996 onward, is not shown separately but is included in
"other procedures." Claims representing the purchase of frames, lenses, and
coatings [HCPCS codes V2020-V2799] were not included in the analysis.) Substantial
increases were seen during the 8-year period for procedures associated with
cataract (extracapsular cataract extraction and intraocular lense implantation
[ECCE/IOL] increased at an average annual rate of 6.9%; ophthalmic biometry
at 6.5%; lens surgery anesthesia at 4.5%; and laser capsulotomy at 2.4%),
retinal diseases (fundus photography increased at an average annual rate of
5.7%; fluorescein angiography at 5.2%; and laser photocoagulation at 4.2%),
glaucoma (trabeculectomy increased at an average annual rate of 3.0% and visual
field study at 2.7%), and dry eye (lacrimal punctum closure increased at an
average annual rate of 33.2%). Substantial increases were also seen with eyelid
epilation (9.4%) and external ocular photography (5.7%). Serial tonometry
and anterior segment photography experienced particularly dramatic decreases
(average annual decreases of 22.0% and 15.7%, respectively). With regard to
services, ophthalmic examination and office evaluations (taken together) increased
at an average annual rate of 1.8% for new patients and at 2.4% for established
patients.
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Table 5. Procedure/Service Code Frequency per 10 000 Fee-for-Service
Beneficiaries*
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Changes in procedure or service volume did not always move in a uniform
fashion. For example, ECCE/IOL increased in 1992, followed by a decrease in
1993, suggesting that cases that normally would have been operated on in 1993
were moved up to 1992—perhaps in an attempt to maintain practice income
in the face of a decrease in the Medicare fee schedule for cataract surgery.
(Unadjusted average allowed charges for the surgical procedure dropped from
$1274 in 1991 to $1074 in 1992 and $1061 in 1993.) Reimbursement levels may
also have had an influence on the coding of examination and evaluation visits.
For example, the decrease in ophthalmologic examinations (Current Procedural Terminology codes 92012 and 92014) between 1991
and 1992 was nearly offset by a corresponding increase in office evaluations
(Current Procedural Terminology codes 99211-99215).
The subsequent leveling off of office evaluations beginning in 1993 was interrupted
in 1997 and again in 1998 by increases corresponding roughly to the decreases
in ophthalmic examinations during these 2 years. The back-and-forth switching
between ophthalmic examination and more general office evaluation and management
codes was consistent with changes in charges allowed for such services. For
example, comprehensive office evaluations and management for new patients
had an unadjusted average allowed charge of $80.55 in 1992, up from $60.05
in 1991, whereas the average allowed charge for a comprehensive ophthalmic
examination increased less, from $50.23 to $56.81.
Table 6 shows the distribution
of charges for procedures and evaluation and management services in each of
3 representative years; itemization was limited to procedures and services
that exceeded 0.5% of total allowed charges in any 1 year. The ECCE/IOL category
accounted for a major portion of all charges for eye care but experienced
a relative decrease during the 8-year period. Ophthalmic examinations and
evaluation and management services for new and established patients were also
of major significance, increasing from 16.5% of allowed charges in 1991 to
25% in 1998. This increase relative to other procedures or services was largely
the consequence of changes in the Medicare fee schedule: allowed charges for
evaluation and management services increased during this 8-year period while
those for surgical procedures decreased. The dramatic drop in charges for
laser trabeculoplasty was the result of a reduction in the charge allowed
for the procedure, from an unadjusted average of $787 in 1991 to $325 in 1998,
coupled with a more than 40% decrease in procedure frequency during this period
(Table 5). The reduction in the
use of laser trabeculoplasty was also, no doubt, motivated by the introduction
of new, more effective medications to reduce ocular pressure. Anterior segment
photography also experienced a substantial reduction in the charge allowed
for the procedure and in its utilization: allowed charges decreased from an
average of $100 in 1991 to $68 in 1998, and procedure frequency decreased
70%.
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Table 6. Percentage Distribution of Allowed Charges for Procedures
and Services*
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Table 7 shows that more
than 18% of eye care visits in each year were to providers other than ophthalmologists
and optometrists, including 2% or more to ASCs. ("Cataract surgeon," which
was established as a separate provider type by HCFA from October 1991 to May
1992, is included with the data for ophthalmologists.) Changes in the distribution
of eye care visits by provider type were amplified in the distribution of
allowed charges. Allowed charges for optometrists and ASCs doubled, reflected
as an 11–percentage point decrease in ophthalmologist charges. If one
were to ignore the services of ASC facilities in calculating the distribution
of charges across provider types, ophthalmologist involvement would appear
more favorable—a decrease from 86.1% in 1991 to 80.3% in 1998. The increasing
popularity of ASCs for cataract surgery coupled with no significant decrease
in the charges allowed by such facilities resulted in ASCs receiving an increasing
percentage of eye care charges. The relative increase in charges by optometrists
reflects the predominance of evaluation and management services within the
profession—with increases in the fee schedule for such services during
the 1991 to 1998 period—and increased involvement with ophthalmologists
in the comanagement of cataract cases. Ophthalmologists were adversely affected
by decreases in the fee schedule for ECCE/IOL and other ophthalmic procedures
during the 8-year period.
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Table 7. Distribution of Eye Care Visits and Allowed Charges by Provider
Type
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Active specialties within the "other provider" type were internal medicine
(cardiology, neurology, dermatology, and allergy), anesthesiology and certified
nurse anesthetists, and general or family practice, along with multispecialty
clinics and group practices. In 1998, these other providers accounted for
4.2%, 5.7%, 2.4%, and 1.4% of eye care visits, respectively. (To the extent
that ophthalmologists participated in multispecialty group practices or billed
under a group practice identifier, they, too, were represented by the other
provider category.) Pathology and clinical laboratories, radiology, and surgery
specialties (otolaryngology and plastic and reconstructive surgery) accounted
for 1.0%, 0.5%, and 0.6% of eye care visits, respectively.
COMMENT
The use of eye care services is increasing within the FFS Medicare population,
from 41.4% of beneficiaries in 1991 to 48.1% in 1998. Average eye care charges
per beneficiary decreased by 25% during this period, in contrast to overall
Part B charges, which decreased by 10%. Accordingly, eye care represented
12.5% of Part B charges in 1991 but only 10.4% by 1998. Much of the decrease
in the cost of eye care was associated with a decrease in cataract-related
charges, despite cataract cases increasing from 23.4% of the beneficiary population
to 27.3%. Visits for retinal diseases, such as macular degeneration and diabetic
retinopathy, increased rapidly: 11.4% of the beneficiary population had such
visits in 1998, up from 7.8% in 1991; associated charges increased from 11%
of all eye care charges to 15%. Glaucoma-related visits also increased substantially:
9.5% of beneficiaries had such visits in 1998 compared with 6.8% in 1991,
while charges remained nearly constant at almost 10% of eye care charges in
each year. Less than 4% of the beneficiary population was affected by any
of the other disease categories.
Most eye care consisted of evaluation and management services and ophthalmic
examinations, representing nearly 60% of all procedure or service code usage
in each year. Procedure-based eye care was dominated by ophthalmic biometry,
lens surgery anesthesia, ECCE/IOL, and laser capsulotomy for cataract; visual
field studies for glaucoma; fundus photography and fluorescein angiography
for retinal diseases; and extended ophthalmology. Ophthalmologists were associated
with a decreasing percentage of Part B eye care charges during the 8-year
period, while charges for visits to optometrists and ASC facilities increased.
The relative decrease in charges by ophthalmologists was attributable to a
general decline in the Medicare fee schedule for cataract and other surgical
procedures.
The methodology used here has much in common with that of an earlier
study of 1991 Medicare data.4 The way in which
beneficiaries were identified and the way eye care was defined differed, however.
Specifically, the previous study did not exclude HMO enrollees or railroad
retirees from the beneficiary population, and the 65-year age criterion was
based on beneficiary age at the beginning of the calendar year, rather than
at the end. Of greater significance was the earlier use of a generally more
inclusive list of diagnoses in identifying eye care claims. This had the effect
of overstating visits to providers other than ophthalmologists and optometrists
in the earlier study (for example, for visits associated with eyelid dermatitis
and tumor diagnoses).
In general, annual case incidence as reported here is an underrepresentation
of the actual prevalence of ocular disease in the community. Case incidence
will correspond with prevalence, as typically obtained through examination
of population-based samples, when the disease or condition of interest is
in a symptomatic stage and treatment was sought during the year, or when the
eye disease is asymptomatic but detected during a routine or other eye examination.
A beneficiary with eye disease but without an eye care visit, whether symptomatic
or not, will not be reflected in case incidence tabulations. Diseases or conditions
with visits in previous years will also go unreported, unless there was also
a visit during the current year. Minority populations and the poor elderly
may be differentially affected by underreporting associated with reduced access
to care. Case incidence may be particularly useful in providing a perspective
on prevalence for chronic diseases or conditions where annual or more frequent
visits to eye care providers are common, such as for glaucoma. Similarly,
case incidence data should have merit in appraising the prevalence of acute conditions for which treatment is commonly sought,
for example, conjunctivitis, corneal infections, and retinal detachments.
It should be recognized that use of a procedure code (Table 5) is not necessarily an accurate reflection of the frequency
with which the procedure is actually performed. This applies, in particular,
to surgical procedures performed in ASC facilities, such as trabeculectomy,
laser capsulotomy, and ECCE/IOL. (Approximately 25% of the code usage for
these 3 procedures in 1998 was for ASC facility services, in addition to an
identically coded professional service claim for the actual surgical procedure.)
Code usage also overstates procedure frequency when a second physician provider
uses the same code for support services, such as for providing assistance
at surgery,4 or when the code is used for the
comanagement of patients. For example, in 1998, 2.6% of the laser capsulotomy
coding and 7.8% of that for ECCE/IOL was by optometrists, reflecting participation
in patient management but not the actual surgical procedure. Code usage can
also understate procedure frequency, eg, when during
a single visit the procedure is performed on both eyes. (A modifier field
in the claim is used to activate the increased allowed charge associated with
bilaterality.)
Because the objective of this study was to present descriptive analyses
and trends of eye care utilization and cost on an annual basis, along with
the incidence of ocular diagnoses, cross-sectional data were not adjusted
for year-to-year changes in age, sex, race, or geographic composition. Any
in-depth investigation of factors underlying the observed trends would require
these demographic adjustments, as well as others dealing with reimbursement
policies and financial incentives, provider service settings,7
and workforce supply.15 Indeed, considering
the increasing popularity of HMO enrollment among Medicare beneficiaries,
it is likely that some of the observed increase in eye care was because of
selective enrollment of healthier beneficiaries in Medicare HMOs and possible
disenrollment by sicker patients.16 Such enrollment
biases were shown to have affected cataract extraction rates.7
If FFS Medicare beneficiaries were representative of the US population,
approximately 16 million of 35 million Americans 65 years of age or older
(34 991 753 in the 2000 census) are receiving eye care on an annual
basis, at a cost of more than $6 billion for physician and ambulatory surgery
services, excluding correction of refractive error. The majority of this eye
care is cataract related, accounting for 60% of eye care costs. This current
projected volume of eye care represents a substantial increase over the estimated
12.5 million persons who received such services in 1991 (of a population of
31 779 000). Considering that the unadjusted cost for these services
in 1991 was on the order of $5.5 billion, the increase during the past decade
was at less than inflationary levels. Eye care utilization is increasing,
but without any corresponding increase in cost.
AUTHOR INFORMATION
Submitted for publication September 5, 2001; final revision received
January 23, 2002; accepted January 31, 2002. Ms Urato was supported by contract
290-95-2002 from the Agency for Healthcare Research and Quality, Rockville,
Md.
We thank Rita S. Hiller, MS, and Robert D. Sperduto, MD, of the National
Eye Institute, Bethesda, Md, and Nancy T. McCall, ScD, and Joyce H. Huber,
PhD, of Health Economics Research Inc, Waltham, Mass, for their assistance
and comments on data preparation and analysis.
Corresponding author and reprints: Leon B. Ellwein, PhD, National
Eye Institute, 31 Center Dr, Bethesda, MD 20892-2510 (e-mail: ellweinl{at}nei.nih.gov).
From the National Eye Institute, National Institutes of Health, Bethesda,
Md (Dr Ellwein); and Health Economics Research Inc, Waltham, Mass (Ms Urato).
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