Medicare Reimbursement Rules May Have Unintended Effect of Curbing Use of Sustained-Release Corticosteroids for Cataract Surgery

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The current Medicare reimbursement rules may explain while relatively few cataract surgery patients are being treated with sustained-release postoperative corticosteroids instead of traditional corticosteroid drops, new study results suggest.

Findings, published this month in JAMA Ophthalmology,are based on an assessment of Medicare fee-for-service (FFS) claims.

Although previous research has shown sustained-release corticosteroids may lead to improved adherence among patients and are more convenient for anti-inflammatory treatment following cataract surgery, the treatment is much more expensive than postoperative corticosteroid eye drops, explained lead author Xi Dai of the Wilmer Eye Institute at Johns Hopkins University School of Medicine, and colleagues.

Eliminating the need for patients or caregivers to administer corticosteroid eye drops after cataract surgery isn't just a matter of convenience, the authors noted. A recent study found that more than 90% of patients undergoing cataract surgery did not properly administer their eye drops; errors included failing to wash hands, using an incorrect amount of topical solution, contaminating the bottle tip, or missing the eye altogether

Cataract surgery is the most common operation in the country, while Medicare beneficiaries make up around 80% of all cases, Xi and colleagues explained. “It is estimated that Medicare spends approximately $3.4 billion annually on cataract surgeries,” they wrote.

Postoperative corticosteroid eye drops have historically been the standard of care to reduce discomfort and inflammation in patients after surgery.

Dexamethasone intraocular suspension 9% is one of two sustained-release corticosteroid formulations approved and commercially available in the United States. The treatment is injected behind patients’ irises and into the posterior chamber following surgery.

“Because sustained-release corticosteroids are inserted in the operating room at the end of surgery, their cost is bundled as a supply into the global surgical facility fee by the Centers for Medicare & Medicaid Services (CMS) and other commercial insurers,” said Dai and colleagues. This means facilities have to absorb this cost, as it is not paid by the patient or insurance.

However, in an effort to address the cost barrier and encourage new surgical techniques, CMS created a pass-through period where “average sales price (ASP) of qualified new drugs and products plus 6% is covered by Medicare and paid to facilities for a transitional period of 2 to 3 years.”

The program, explain Dai and colleagues, "was created to foster innovative drug and product development by allowing companies to recoup some of their research and development costs over an initial but temporary period"

Investigators sought to better understand the use and cost of sustained-release corticosteroids during Medicare’s temporary pass-through reimbursement program period. All beneficiaries included in the study had at least one year of Medicare enrollment and had at least one cataract surgery performed between March 2019 and December 2021.

More than four million cataract surgeries were recorded among beneficiaries. A total of 1,730,811 surgeries were carried out on male patients, and 2,521,721 on female patients. Average patient age was around 75 years old.

While 34,627 patients received dexamethasone intraocular suspension 9%, 73,430 had a dexamethasone ophthalmic insert — the second approved sustained-release corticosteroid formulation available in the United States.

Data showed use of both drugs increased throughout the two-year study window, but overall, they were used in just 2.5% of all cataract surgeries.

When investigators calculated average Medicare allowed charges, they found dexamethasone intraocular suspension 9% cost $531.47 and dexamethasone ophthalmic insert cost $538.49.

"Although CMS does not set the sales price for the product, the rules to qualify for the pass-through program state that the cost of the drug must be substantial in to the applicable ambulatory payment classification (APC) made to the facility (more than 10% of the overall APC or 25% greater than the estimated reasonable drug portion of the APC)," the authors wroter.

In total, Medicare allowed a charge of $57.9 million for both formulations throughout the study period ($18.4 million on dexamethasone intraocular suspension 9% prescriptions and $39.5 million on dexamethasone ophthalmic inserts).

According to Dai and colleagues, findings indicate use of the two treatments was low and linked with cost increases compared with standard postoperative eye drops.

“As these new products must be priced high enough to qualify for the Medicare pass-through program, unreasonable cost may have been a deterrent to their use,” they added.

A payment system where patients could opt to purchase these treatments as opposed to purchasing the eye drops might improve manufacturers’ pricing flexibility.

“This scenario might improve access by allowing individual patients to determine whether a product whose main attribute is convenience is worth the additional cost,” Dai and colleagues concluded.