[Federal Register Volume 60, Number 194 (Friday, October 6, 1995)]
[Notices]
[Pages 52396-52403]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-24835]



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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Health Care Financing Administration
[BPD-797-PN]
RIN 0938-AG65


Medicare Program; Limitations on Medicare Coverage of Cataract 
Surgery

AGENCY: Health Care Financing Administration (HCFA), HHS.

ACTION: Proposed notice.

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SUMMARY: This notice announces the Medicare program's proposal to 
define medical necessity with respect to Medicare coverage of 
preoperative testing for cataracts, cataract surgery, and Nd:YAG 
capsulotomy.

DATES: Comments will be considered if we receive them at the 
appropriate address, as provided below, no later than 5 p.m. on 
December 5, 1995.

ADDRESSES: Mail written comments (1 original and 3 copies) to the 
following address: Health Care Financing Administration, Department of 
Health and Human Services, Attention: BPD-797-PN, P.O. Box 26688, 
Baltimore, MD 21207.
    If you prefer, you may deliver your written comments (1 original 
and 3 copies) to one of the following addresses:

Room 309-G, Hubert H. Humphrey Building, 200 Independence Avenue SW., 
Washington, DC 20201, or
Room C5-09-26, 7500 Security Boulevard, Baltimore, MD 21244-1850.

    Because of staffing and resource limitations, we cannot accept 
comments by facsimile (FAX) transmission. In commenting, please refer 
to file code BPD-797-PN. Comments received timely will be available for 
public inspection as they are received, generally beginning 
approximately 3 weeks after publication of a document, in Room 309-G of 
the Department's offices at 200 Independence Avenue SW., Washington, 
DC, on Monday through Friday of each week from 8:30 a.m. to 5 p.m. 
(phone: (202) 690-7890).
    For comments that relate to information collection requirements, 
mail a copy of comments to: Allison Herron Eydt, HCFA Desk Officer, 
Office of Information and Regulatory Affairs, Room 10235, New Executive 
Office Building, Washington, DC 20503.
    Copies: To order copies of the Federal Register containing this 
document, send your request to: New Orders, Superintendent of 
Documents, P.O. Box 371954, Pittsburgh, PA 15250-7954. Specify the date 
of the issue requested and enclose a check or money order payable to 
the Superintendent of Documents, or enclose your Visa or Master Card 
number and expiration date. Credit card orders can also be placed by 
calling the order desk at (202) 512-1800 or by faxing to (202) 512-
2250. The cost for each copy is $8. As an alternative, you can view and 
photocopy the Federal Register document at most libraries designated as 
Federal Depository Libraries and at many other public and academic 
libraries throughout the country that receive the Federal Register.

FOR FURTHER INFORMATION CONTACT: Karen McVearry, (410) 786-4643.

SUPPLEMENTARY INFORMATION:

I. Background

A. Medicare Program Description

    The Medicare program was established by the Congress in 1965 
through the enactment of title XVIII of the Social Security Act (the 
Act). This program provides payment for certain medical services and 
supplies for persons 65 years of age and over, certain disabled 
persons, and beneficiaries with end-stage renal disease.
    While Medicare does cover many health care costs, the program was 
not designed to pay for every type of medical care for its 
beneficiaries. Section 1862(a)(1)(A) of the Act prohibits Medicare 
payment for any expenses incurred for items or services that are not 
reasonable and necessary for the diagnosis or treatment of an illness 
or injury or to improve the functioning of a malformed body member.
    Longstanding Medicare policy has interpreted the term ``reasonable 
and necessary'' to mean that an item or service is safe and effective, 
not experimental or investigational, and generally accepted in the 
medical community. We have used various methods for seeking medical and 
scientific opinion in determining whether a health care technology is 
reasonable and necessary. These methods have included, at one time or 
another, the use of the Office of Health Technology Assessment (OHTA), 
a unit of the Agency for Health Care Policy and Research (AHCPR) within 
the Public Health Service (PHS), and various forms of consultation and 
liaison with national medical associations and groups along with 
carrier medical directors, our central office staff physicians, and PHS 
representatives.
    In developing this proposal for a national coverage policy 
concerning preoperative testing, cataract removal surgery, and 
postoperative issues, we 

[[Page 52397]]
carefully considered cataract practice guidelines developed by a 
private-sector panel of experts under the auspices of AHCPR (referenced 
in this notice as the ``Expert Panel'') as well as findings from 
several other studies discussed in this notice.
    The following studies are those that we considered:
     Cataract Management Guideline Panel, Cataract in Adults: 
Management of Functional Impairment, Clinical Practice Guideline Number 
4, Rockville, MD, U.S. Department of Health and Human Services, PHS, 
AHCPR, AHCPR Publication Number 93-0542, February 1993. (Throughout 
this notice, this study will be referred to as the Clinical Practice 
Guideline). In addition to the Clinical Practice Guideline, AHCPR also 
published as companion pieces a Patient's Guide (AHCPR Publication 
Number 93-0544) and Management of Cataracts in Adults, Quick Reference 
Guide for Clinicians Number 4 (AHCPR Publication Number 93-0543). 
(Copies of the guidelines may be obtained from the AHCPR Publications 
Clearinghouse, P.O. Box 8547, Silver Spring, MD 20907; its toll free 
telephone number is 1-800-358-9295.)
     American College of Eye Surgeons, Outpatient Ophthalmic 
Surgery Society, Society for Excellence in Eye Care, and Society for 
Geriatric Ophthalmology, Guidelines for Cataract Practice, Bellevue, 
WA, McIntyre Eye Clinic and Surgical Center, February 1993. (Copies of 
the guidelines may be obtained from the McIntyre Eye Clinic and 
Surgical Center, 1920-116th Avenue NE., Bellevue, WA 98004; its toll 
free telephone number is 1-800-822-0199. Its fax number is 1-206-646-
5914.)
     General Accounting Office (GAO), Program Evaluation and 
Methodology Division, Cataract Surgery, (GAO/PEMD-93-14 Cataract 
Surgery, B-239626, April 20, 1993. (Copies of the GAO study may be 
obtained from the following address: New Orders, Superintendent of 
Documents, P.O. Box 371954, Pittsburgh, PA 15250-7954. The telephone 
number is 1-202-512-1800. The fax number is 1-202-512-2250.)
     U.S. Department of Health and Human Services, Office of 
Inspector General (OIG), Outpatient Surgery--Medical Necessity and 
Quality of Care (OEI-09-88-01000, 1991). (Copies of the OIG study may 
be obtained from the following address: New Orders, Superintendent of 
Documents, P.O. Box 371954, Pittsburgh, PA 15250-7954. The telephone 
number is 1-202-512-1800. The fax number is 1-202-512-2250.)

B. Medicare Coverage of Cataract Surgery

    A cataract is an opacification, or clouding, of the eye's lens that 
usually occurs as a part of the aging process. This condition affects 
about 50 percent of Americans between the ages of 65 and 75, and 
approximately 70 percent of people over 75. Not all cataracts require 
surgical removal. The presence of a cataract does not always produce a 
noticeable or functional impairment. Thus, cataract surgery is 
generally considered to be elective.
    When cataract surgery is performed, the opacified lens is removed 
from the eye. Extracapsular extraction and phacoemulsification are 
cataract removal procedures. The extracapsular procedure is done by 
making an incision in the eye and removing the anterior portion of the 
capsule. In addition, the nucleus and lens cortex are also extracted, 
leaving behind the posterior capsule. Phacoemulsification cataract 
removal is a modification of the extracapsular procedure. In 
phacoemulsification, the nucleus of the cataract is fragmented by a 
probe through ultrasonic frequency while simultaneously aspirating the 
fragments from the eye. In most cases, an intraocular lens is then 
implanted in the treated eye. The Expert Panel reviewed medical 
literature and prepared guidelines based on that review, which revealed 
that these surgeries appear to be equally effective in restoring 
vision. Adequate data are not available to determine if one technique 
is more effective than the other in reducing or eliminating functional 
impairment due to the cataract.
    Section 35-9 of the Medicare Coverage Issues Manual (HCFA-Pub. 6), 
``Phacoemulsification Procedure--Cataract Extraction,'' states that 
phacoemulsification is an acceptable procedure for the removal of 
cataracts. Therefore, the Medicare program covers reasonable and 
necessary services furnished in connection with this procedure, as well 
as for extracapsular extractions.
    Although Medicare presently does not have a national coverage 
policy that specifies the exact parameters for determining coverage of 
cataract surgery, there are guidelines for the coverage of presurgery 
cataract diagnostic evaluations in Medicare Coverage Issues Manual 
section 35-44, ``Use of Visual Tests Prior to and General Anesthesia in 
Cataract Surgery.'' Medicare currently covers one comprehensive eye 
examination and an A-scan and, if medically justified, a B-scan. (These 
scans use sonar to study structures that are not directly visible. They 
are used to determine the appropriate pseudophakic power of the 
intraocular lens. For most cases involving a simple cataract, a 
diagnostic ultrasound A-scan is used. For patients with a dense 
cataract, a diagnostic ultrasound B-scan may be used.) These ultrasound 
scans are billed and paid for separately from the comprehensive eye 
examination because they are separate procedures with their own 
Physicians' Current Procedural Terminology (CPT) codes. (Tests 
performed that have separate CPT codes are not included as part of the 
service reported under ``evaluation and management'' codes. Thus, A-
scans and B-scans cannot be included in the payment for the 
comprehensive eye examination.)
    Section 50-38 of the Medicare Coverage Issues Manual sets forth 
Medicare's current policy on endothelial cell photography. This test is 
used to determine the endothelial cell count, which is a predictor of 
success of ocular surgery or certain other ocular procedures. Section 
50-38 states that this test may be covered in certain circumstances but 
that, if the test is performed as part of a presurgical examination for 
cataract surgery, coverage for the test is available only as part of 
the comprehensive eye examination. In this circumstance, therefore, 
separate payment is not made.
    This notice proposes to continue this policy of limiting coverage 
of diagnostic testing performed before cataract surgery to a 
comprehensive eye examination, an A-scan, and, if medically necessary, 
a B-scan. Thus, Medicare's policy of not providing additional or 
separate coverage for other preoperative tests unless there is another 
diagnosis in addition to cataracts would be continued.
    Currently, Medicare does not have a national coverage policy that 
specifically addresses the following tests:
     Contrast sensitivity testing, which is designed to measure 
the amount of contrast required to detect a specific stimulus.
     Glare testing, which attempts to reproduce the symptom of 
glare in cataract patients and to quantify the amount of visual 
impairment it causes by comparing acuity with and without a bright 
light source directed by the eye.
     Potential vision testing, which is designed to determine 
whether patients with obviously impaired vision have the potential to 
see well following cataract surgery. 

[[Page 52398]]


C. Rationale for This Notice: Clinical Studies and Other Evaluations

    In reviewing Medicare's cataract removal policy, we have reviewed 
the Expert Panel's Clinical Practice Guideline as well as the findings 
of the Guidelines for Cataract Practice, the GAO study, and the OIG 
study.
1. Findings From the Expert Panel
    Through the sponsorship of AHCPR in PHS, the Clinical Practice 
Guideline was published in February 1993. In sponsoring development of 
this guideline, AHCPR convened an interdisciplinary panel of private-
sector experts made up of ophthalmologists, nurses, optometrists, 
internists, a family physician, a psychiatrist, an anesthesiologist, a 
clinical social worker, and a patient representative. The panel first 
undertook an extensive and comprehensive interdisciplinary review of 
the field to define the existing knowledge base and to evaluate 
critically the assumptions and common wisdom in the field of cataract 
care. Next, the panel developed and initiated a peer review of the 
guideline drafts and field reviews with intended users in clinical 
sites. Finally, comments from these reviews were assessed and used in 
the development of the final guidelines.
    The Expert Panel included the following findings concerning 
preoperative testing, cataract removal surgery, and postoperative 
issues in its guidelines.
    a. Preoperative Testing. The Clinical Practice Guideline found 
inadequate scientific evidence to support the use of most preoperative 
tests in deciding whether cataract surgery is medically appropriate. 
These preoperative tests include contrast sensitivity testing, glare 
testing, potential vision testing, and specular photographic microscopy 
(referred to in this proposed notice as endothelial cell photography).
 Contrast Sensitivity Testing
    The guidelines state that, at this time, there is inadequate 
evidence that contrast sensitivity testing provides information, beyond 
the information obtained through a patient's history and an ocular 
examination, that is useful for the determination of whether a patient 
would benefit from cataract surgery.
 Glare Testing
    The report of the Expert Panel indicates that there is inadequate 
evidence that glare testing provides useful information beyond that 
found in a patient's history and an eye examination. This testing, 
however, may be useful for corroborating glare symptoms in a small 
percentage of cataract patients who complain of glare, yet measure good 
Snellen acuity (a standard method of measuring visual accuracy during 
an eye examination) in office testing. Even in these patients, a 
positive glare test does not determine whether surgery should be 
recommended.
 Potential Vision Testing
    Regarding potential vision testing (PVT), the Expert Panel found 
that adequate evidence is lacking as to whether PVT can assist the 
ophthalmologist in predicting the outcome of cataract surgery.
 Endothelial Cell Photography
    The Expert Panel found that there is currently no evidence or 
rationale to support the use of endothelial cell photography on all 
patients who have cataracts in order to predict the response of the 
cornea to cataract surgery.
 Other Preoperative Tests
    Other preoperative tests were also reviewed by the Expert Panel. 
The panel concluded that the following tests are not indicated as part 
of the preoperative workup for cataract surgery unless specific 
circumstances justify them and unless the justification is documented 
in the patient's chart:

--Formal visual fields, which refers to the entire area that can be 
seen without shifting the gaze.
--Fluorescein angiography, which is a process in which dye is used to 
assess adequate circulation in the blood vessels of the eye.
--External photography, which is a photograph of the external portion 
of the eye and lens.
--Corneal pachymetry, which is a procedure that quantifies and monitors 
changes in the thickness of the central cornea.
--B-scan ultrasonography, defined earlier in this notice.
--Specialized color vision tests, which are done to determine the 
functional ability of the macula and optic nerve.
--Tonography, which records changes in intraocular pressure produced by 
the constant application of a known weight on the globe of the eye, 
reflecting the facility of outflow of the aqueous humor from the 
anterior chamber.
--Electrophysiologic tests, which test the organic functions of the eye 
by means of electrical current.

    The Expert Panel's report indicates that most of the preoperative 
tests reviewed by the panel provide inadequate scientific evidence to 
support the need for surgery. Thus, the Expert Panel concluded that 
these tests do not predict the benefits a patient may experience from 
the surgery or negative outcomes of the surgery. The Expert Panel found 
inadequate evidence to support the use of these tests in most cases to 
determine the need for cataract removal surgery. The Expert Panel also 
found that ``special circumstances'' often necessitate the use of these 
preoperative tests.
    b. Cataract Removal Surgery. The guidelines also found that surgery 
usually is not necessary solely because a cataract is present. The 
Expert Panel found that the decision to have cataract surgery should be 
based on several factors, such as a complete patient history and an 
ocular examination, and an evaluation of the effect of the cataract on 
the patient's visual and overall function, after assessing the 
patient's visual needs, and after a thorough consideration of the 
potential risks associated with the surgery. The Expert Panel believes 
that cataract surgery should be considered if--
     The individual is afflicted with visual disability that 
results in functional impairment, taking into special consideration the 
circumstances of the one-eyed patient;
     The individual suffers from a lens-induced disease (such 
as phacomorphic glaucoma or phacolytic glaucoma); or
     The individual has an ocular condition that requires 
cataract extraction in order to be adequately diagnosed or treated.
    Functional impairment means that the cataract causes a reduction in 
visual function that significantly interferes with the person's ability 
to participate in everyday activities and infringes on the person's 
autonomy. Management of the cataract should be determined primarily on 
the basis of the patient's overall visual function and needs, a 
complete medical history, an eye examination, and the person's 
understanding of the risks and benefits of cataract surgery. The Expert 
Panel concluded that cataract surgery performed solely for improving 
vision should not be performed if the patient does not want surgery; if 
glasses or visual aids provide satisfactory functional vision; if the 
patient's lifestyle is not compromised; or if the patient is medically 
unfit for cataract removal surgery. Whether the patient's lifestyle is 
compromised because of the cataract is a decision made by the patient 
and reached through subjective criteria. In addition, the physician 
should assist in assessing the patient's visual needs as well as 
informing the patient of the potential risks associated with the 
cataract removal surgery. The 

[[Page 52399]]
patient must decide whether the cataract infringes on his or her 
ability to carry out needed or desired activities. Therefore, it is the 
patient along with the physician who must determine whether the visual 
disability caused by the cataract is significant enough to warrant 
surgery.
    The panel reviewed situations in which cataract surgery is 
indicated for both eyes. The panel concluded that indications for 
cataract removal surgery are the same as those for the first eye. 
Therefore, the same subjective and objective criteria used to determine 
the need for cataract removal in the first eye should also be used in 
the evaluation of the second eye. According to the panel, visual 
acuity, stereopsis, and visual field are all enhanced by binocular 
vision. These facts strongly support the potential benefit of cataract 
removal surgery on the second eye.
    At this time, there appear to be no scientific data indicating the 
optimal time interval for surgically removing a cataract in the second 
eye. The panel strongly emphasized, however, that cataract removal 
surgery not be performed on both eyes at the same time. The panel 
warned that surgery on both eyes during the same procedure runs the 
risk of catastrophic consequences if there are unrecognized problems 
with unsterile instruments or materials used during the procedure.
    In summary, the Expert Panel believes the goal of cataract 
treatment is to maintain or restore autonomy through appropriate 
treatment in order to remove the disability. In addition, the panel 
also asserts that the purpose of cataract surgery is to reduce and, 
ideally, alleviate functional impairment caused by the cataract. If a 
patient does not have to compromise everyday activities because of the 
cataract, the surgery is usually unnecessary. The panel considers 
surgery necessary only when the cataract has progressed to the point 
that the person's vision is functionally impaired to a level that 
infringes on the person's lifestyle.
    c. Postoperative Issues. Opacification of the posterior, or back, 
lens capsule is a consequence of modern cataract surgery. As the 
cloudiness increases, the patient's vision is adversely affected. This 
opacification can lead to functional impairment. The most common 
technique for treating posterior capsular opacification (PCO) is Nd:YAG 
capsulotomy, also referred to as YAG or laser capsulotomy. This 
technique uses a laser to make a hole in the central part of the 
posterior lens to improve vision.
    The Expert Panel lists indications for Nd:YAG capsulotomy in its 
Clinical Practice Guideline that include subjective, objective, and 
educational criteria. Nd:YAG capsulotomy is considered appropriate and 
justified when the ability to carry out needed and desired activities 
is impaired. The eye examination confirms the diagnosis of PCO and 
excludes other ocular causes of functional impairment, and also 
confirms that the patient has been educated about the risks and 
benefits of laser surgery to the posterior capsule.
    The Expert Panel found no justification for Nd:YAG capsulotomy to 
be scheduled at the same time the patient is scheduled for cataract 
removal surgery, or when the cataract removal is performed. The Expert 
Panel noted that Nd:YAG capsulotomy should never be performed 
prophylactically because there is no predictable time at which this 
procedure may be necessary. The Clinical Practice Guideline reports 
that Nd:YAG capsulotomy is seldom needed before 3 months have elapsed 
following cataract surgery, and that Nd:YAG capsulotomy carries its own 
risks. Although PCO is common, it varies in severity and does not 
always necessitate surgery. It is rare that opacification is severe 
enough to require Nd:YAG capsulotomy within 3 months of cataract 
surgery, and it is uncommon within the first 6 months after cataract 
surgery. The Expert Panel asserts that less than 25 percent of those 
having cataract surgery have Nd:YAG capsulotomy done within 2 years of 
surgery. The Expert Panel found Nd:YAG capsulotomy to be a highly 
successful procedure. However, justification for Nd:YAG capsulotomy 
should be well documented in the patient's record.
2. Findings From the Guidelines for Cataract Practice
    Another study on cataract removal was issued at approximately the 
same time that the AHCPR-sponsored Clinical Practice Guideline was 
published. The additional study is entitled Guidelines for Cataract 
Practice and was completed by a cooperative committee composed of 
members of the leadership of several clinical ophthalmic surgeon 
organizations. These guidelines represent a consensus of highly 
experienced surgeons who have been personally involved in the 
development of cataract surgical removal techniques, the treatment of 
patients, and the education of other ophthalmic surgeons.
    a. Preoperative Testing. The Guidelines for Cataract Practice, like 
the Clinical Practice Guideline, states that before the decision to 
have cataract surgery is made, full information regarding the correct 
diagnosis of the cataract and the prognosis for return of visual 
function following the anticipated treatment must be obtained. The 
patient's medical history should be carefully evaluated including how 
the cataract presently affects the patient's ability to function 
normally. In other words, these guidelines support the Expert Panel's 
findings that functional impairment of the patient should be weighed 
heavily before deciding whether to have cataract removal surgery.
    In addition, the Guidelines for Cataract Practice states that 
preoperative testing may be of some use in determining the presence of 
a cataract, as well as the presence of other ocular diseases. Several 
preoperative tests that are discussed in the Expert Panel's findings 
are also addressed in the Guidelines for Cataract Practice. Three 
specific tests are discussed in detail by both studies. These tests are 
contrast sensitivity testing, glare testing, and endothelial cell 
photography.
 Contrast Sensitivity Testing
    Contrast sensitivity is a measure of the contrast level required 
for detection of a specified size of a test object. This test 
quantitatively reveals decreased perception of low contrast objects. 
Although the Guidelines for Cataract Practice indicates that contrast 
sensitivity has been shown to be an indication of the need of 
recognition of visual targets for those dealing with rapidly moving 
test targets, the Expert Panel's guidelines state only that there is 
inadequate evidence as to whether this test will indicate either the 
presence or severity of a cataract or a prognosis for improvement 
following cataract removal surgery.
 Glare Testing
    Glare testing measures the effect of simulated glare on vision 
function. Disabling glare is often an indication that a cataract has 
developed. But, the Guidelines for Cataract Practice found that using 
glare testing as a diagnostic tool may be effective only if the patient 
complains of glare in situations when visual function would otherwise 
be considered satisfactory. If visual function is decreased in normal 
lighting conditions, glare testing adds little to the diagnostic 
evaluation. Although glare testing may indicate the presence of a 
cataract, the test does not measure the severity of the cataract or the 
prognosis for improvement after cataract surgery. Thus, this test does 
not show that cataract removal surgery is medically necessary. 

[[Page 52400]]

 Endothelial Cell Photography
    Endothelial cell photography may be done before an intraocular 
operation because the corneal endothelium is particularly sensitive to 
the trauma of the surgery. This test is used to measure and record the 
evaluation of corneal endothelial cells. Patients with a preoperative 
reduction of their endothelial cell density are unusually sensitive to 
the trauma of surgery and may not maintain adequate visual functions 
following surgery. The Guidelines for Cataract Practice found that 
endothelial cell photography is useful in these cases to predict 
unusual surgical risks because low endothelial cell density may not be 
accurately predicted by patient history or examination. However, the 
Guidelines for Cataract Practice also found that many patients of low 
endothelial cell density can be identified through the patient's 
medical history and clinical examination.
 Other Tests
    In addition to contrast sensitivity, glare testing, and endothelial 
cell photography, the Guidelines for Cataract Practice discusses other 
preoperative tests. The Guidelines for Cataract Practice states that 
these additional tests may be of some use in the diagnosis and 
prognosis of cataract removal. The Guidelines for Cataract Practice 
suggests that patients with ocular diseases other than cataracts would 
benefit from additional preoperative testing because these tests would 
protect the patient from disappointing results if the cataract is not 
the major cause of visual impairment. Some of these additional tests 
are also discussed in AHCPR-sponsored Clinical Practice Guideline. In 
addition to the tests previously mentioned, both studies discuss B-scan 
ultrasonography, corneal pachymetry, the electrophysiological test, 
external photography, fluorescein angiography, formal visual fields, 
the specialized color vision test, and tonography.
    b. Cataract Surgery. Regarding the treatment of cataracts, the 
findings from the Guidelines for Cataract Practice are similar to those 
in the Expert Panel's guidelines. The Guidelines for Cataract Practice 
agrees with the Expert Panel's guidelines, which state that the goal of 
cataract removal surgery for the purpose of functional rehabilitation 
is improvement of visual function. Surgery should be performed for the 
purpose of reducing or eliminating functional impairment caused by the 
cataract.
    The Guidelines for Cataract Practice concurs with the Expert 
Panel's findings that surgery generally is not necessary solely because 
the cataract is present. Both guidelines list similar reasons why a 
patient may choose not to have surgery. These reasons include:
     The patient does not desire surgery.
     Glasses or visual aids provide functional vision 
satisfactory to the patient's needs and desires.
     The patient's lifestyle is not compromised.
     The patient is known to be medically unfit for safe 
surgical intervention.
    The Guidelines for Cataract Practice generally supports the Expert 
Panel's findings regarding surgical removal of a cataract in the second 
eye. The guidelines concludes that surgery on the second eye is 
justified in order to restore binocular vision. In addition, the 
subjective and objective criteria used to determine the necessity of 
cataract removal for the first eye must also be fulfilled before 
performing the same procedure on the second eye.
    While the Guidelines for Cataract Practice agrees that cataract 
removal generally should not be performed on both eyes during the same 
procedure, additional findings contend that some clinical circumstances 
may exist that would require consideration of operating on both eyes 
simultaneously. For example, a patient who has poor general health and 
multiple medical conditions may be a candidate for dual cataract 
removal because of the high risk involved in anesthetizing the patient 
twice. It is suggested that whenever possible, however, cataract 
removal surgery be performed on each eye separately and that sufficient 
time be allowed for the first eye to heal before the second cataract 
removal is performed.
    The Expert Panel's guidelines and the Guidelines for Cataract 
Practice both agree that the decision to have cataract surgery should 
be left to the patient after all appropriate counseling has been 
provided.
    c. Postoperative Issues. The Guidelines for Cataract Practice, like 
the Expert Panel's findings, indicates that PCO frequently occurs after 
cataract removal surgery. Nd:YAG laser capsulotomy was found to be the 
most commonly performed procedure to relieve PCO. Management of 
functional impairment due to PCO is similar to the management of the 
procedure that removes the cataract. Findings from the Guidelines for 
Cataract Practice also are consistent with the Expert Panel's 
guidelines that Nd:YAG capsulotomy should not be performed or scheduled 
at the same time cataract removal is performed. Both studies assert 
that routine or prophylactic posterior capsulotomy is not appropriate.
3. Findings from GAO
    In April 1993, GAO issued a report on cataract surgery. GAO's 
findings support the Expert Panel's assertion that the mere presence of 
a cataract does not necessitate the surgical removal of the cataract. 
GAO set up a study to determine how many cataract surgeries were 
performed unnecessarily. GAO hypothesized that the four States 
(California, Massachusetts, Pennsylvania, and Texas) from their survey 
on eye symptoms and functional impairment before and after surgery were 
not unrepresentative of current practice and applied the permissive 
criterion that surgery is considered inappropriate if the patient 
reported no functional impairment. The study revealed that by using the 
criterion of functional impairment, 6 percent of the respondents' 
surgeries were inappropriate. GAO further calculated that every 1 
percent of cataract surgeries represented approximately $34 million in 
expenditures for Medicare. Under this scenario, GAO concluded that 
Medicare spent $204 million in 1991 for inappropriate cataract surgery. 
This is a conservative estimate considering that, in that same year, 
1.35 million cataract surgeries were performed for which the Medicare 
program alone spent $3.4 billion. GAO theorized that if the number of 
inappropriate surgeries could be reduced, Medicare would not only save 
a great deal of money, but the quality of care for individuals with 
cataracts would improve.
4. Findings from OIG
    The OIG's study, Outpatient Surgery--Medical Necessity and Quality 
of Care (OEI-09-88-01000, 1991), found that high-volume 
ophthalmologists (those who earn at least $1 million annually) are more 
likely to perform medically unnecessary surgeries and provide poor or 
questionable care than non-high-volume ophthalmologists.

II. Provisions of the Proposed Notice

    The findings from the Expert Panel regarding cataract surgery and 
postoperative issues are supported by information found in the 
Guidelines for Cataract Practice. The GAO study concluded that there 
are substantial numbers of inappropriate cataract surgeries, while the 
OIG study found that high-volume ophthalmologists are more likely to 
perform medically unnecessary surgeries and provide poor or 
questionable care than non-high-volume ophthalmologists. 

[[Page 52401]]

    After evaluating these findings, we are proposing to adopt the 
following policies:
     Medicare would maintain its policy of paying only for a 
comprehensive eye examination or brief/intermediate examination as well 
as an A-scan and, if medically necessary, a B-scan before cataract 
surgery if the patient's only diagnosis is cataracts. We believe 
coverage of the B-scan is justified because this is a necessary 
diagnostic test for a patient who has a dense cataract rather than a 
simple cataract, which can be tested with an A-scan.
    Thus, Medicare would include payment for tests such as contrast 
sensitivity, glare testing, and potential vision testing in the payment 
for the comprehensive eye examination performed before cataract surgery 
if the patient's only diagnosis is cataracts. Additional or separate 
payment for these tests would not be allowed if the only diagnosis is 
cataracts. Also, when there is a diagnosis in addition to cataracts, we 
would require that the medical need for these tests be documented in 
the patient's medical record whenever they are performed.
     Medicare would cover cataract surgery only for individuals 
who desire the surgery; who are medically fit for the surgery; and 
whose lifestyle is compromised by functional impairment because of the 
cataract, as documented in the patient's medical record. Medicare would 
not consider cataract surgery reasonable and necessary if glasses could 
satisfactorily correct the condition; if the patient's lifestyle was 
not compromised; or, if surgery was performed solely because a cataract 
was present. Medicare would also cover cataract surgery for individuals 
who suffer from lens-induced disease and ocular conditions requiring 
clear media.
     The Expert Panel's guidelines strongly emphasized that 
clinical studies have revealed that there is the potential for great 
risk if cataract removal is performed on both eyes during the same 
procedure. As a result, the Expert Panel found that cataract removal be 
performed on each eye during separate procedures and sufficient time be 
allowed for the first eye to heal before cataract removal is performed 
on the second eye. If extraordinary medical circumstances exist in 
which it may be dangerous or life-threatening for the patient to 
undergo anesthesia twice, a single procedure may be considered. 
Medicare coverage extends to both sets of circumstances.
     Medicare would cover Nd:YAG capsulotomy only if this 
procedure is performed subsequent to cataract surgery and is found to 
be medically necessary. Namely, Nd:YAG capsulotomy would be covered 
when it is reasonable and medically necessary to remedy functional 
impairment due to opacification following cataract surgery, as 
documented in detail in the patient's record. Medicare would not cover 
Nd:YAG capsulotomy if this procedure is performed or scheduled 
concurrently with cataract removal surgery.

III. Response to Comments

    Because of the large number of items of correspondence we normally 
receive on Federal Register documents published for comment, we are not 
able to acknowledge or respond to them individually. We will consider 
all comments we receive by the date and time specified in the DATES 
section of this preamble, and if we proceed with a subsequent document, 
we will respond to the comments in the preamble to that document.

IV. Collection of Information Requirements

    Under the Paperwork Reduction Act of 1995, agencies are required to 
provide 60-day notice in the Federal Register and solicit public 
comment before a collection of information requirement is submitted to 
the Office of Management and Budget (OMB) for review and approval. In 
order to fairly evaluate whether an information collection should be 
approved by OMB, section 3506(c)(2)(A) of the Paperwork Reduction Act 
of 1995 requires that we solicit comment on the following issues:
     Whether the information collection is necessary and useful 
to carry out the proper functions of the agency;
     The accuracy of the agency's estimate of the information 
collection burden;
     The quality, utility, and clarity of the information to be 
collected; and
     Recommendations to minimize the information collection 
burden on the affected public, including automated collection 
techniques.
    Therefore, we are soliciting public comment on each of these issues 
for the information collection requirements discussed below.
    The information collection requirements concern written 
documentation in the patient's medical record of the necessity of 
cataract surgery. The record must state that the individual desires the 
surgery, is medically fit for the surgery, and the lifestyle of the 
individual is compromised by functional impairment because of the 
cataract; or, the individual suffers from lens-induced disease and 
ocular conditions requiring clear media. The information collection 
requirements also concern written documentation in the patient's 
medical record of the necessity of Nd:YAG capsulotomy. The record must 
state that this procedure is performed subsequent to cataract surgery 
and is found to be medically necessary to remedy a documented 
functional impairment because of opacification following cataract 
surgery. Physicians, specifically ophthalmologists, would provide the 
information. Public reporting burden for this collection of information 
is estimated to be 166,666 hours per year based on an average of 5 
minutes per service for a total of approximately 2 million services 
furnished in 1994.
    These reporting and recordkeeping requirements are not effective 
until they have been approved by OMB. A notice will be published in the 
Federal Register when approval is obtained.
    Organizations and individuals desiring to submit comments on the 
information collection and recordkeeping requirements should direct 
them to HCFA, OFHR, MPAS, C2-27-17, 7500 Security Boulevard, Baltimore, 
Maryland 21244-1850 and to the OMB official whose name appears in the 
ADDRESSES section of this preamble.

V. Regulatory Impact Analysis

A. Regulatory Flexibility Act

    Consistent with the Regulatory Flexibility Act (RFA) (5 U.S.C. 601 
through 612), we prepare a regulatory flexibility analysis unless the 
Secretary certifies that a notice would not have a significant economic 
impact on a substantial number of small entities. For purposes of the 
RFA, all ophthalmologists, ambulatory surgical centers (ASCs), and 
hospitals are considered to be small entities.
    We are preparing a regulatory impact analysis because we anticipate 
that a majority of the ophthalmologists who perform cataract surgery 
would be affected by recommendations contained in this notice. The 
following discussion describes what we know about the impact of this 
proposed notice on affected entities and is intended to fulfill the 
requirements of the RFA.
1. Background
    The effect of a cataract on vision can range from minimal to 
catastrophic. In most cases, surgical removal of the obscured natural 
lens, usually combined with the insertion of an artificial lens 
implant, is the only treatment option available. In recent years, the 
vast majority of these operations have been performed either in a 
hospital outpatient department or in a Medicare-

[[Page 52402]]
certified ASC. The GAO report, Cataract Surgery, discussed earlier in 
this notice, mentions that the Medicare program paid for more than 1.8 
million outpatient cataract surgeries in 1991. Our payment data 
indicate that these surgeries cost the Medicare program in excess of 
$3.4 billion.
    The information in the GAO report, issued in April 1993, was based 
on a random sample survey of 1,964 Medicare patients living in four 
States who had undergone cataract surgery. Usable responses were 
obtained from 76 percent of the sample. About 75 percent of the 
responding Medicare patients reported one or more substantial 
functional impairments affecting their ability to drive, read, or watch 
television before their cataract surgery. If the criterion for surgery 
is that any level of problem with either symptoms or functions (even 
those the patient considers slight) is sufficient to warrant surgery, 
responses to the GAO survey show that few surgeries (2.5 percent) were 
inappropriate. If the criterion is functional impairment, then 6 
percent of the respondents' surgeries could be considered 
inappropriate.
    The GAO report stated that the data from the four States did not 
allow them to make generalizations regarding the likely levels of 
questionable cataract surgery in the nation as a whole. However, to get 
some sense of the financial importance reducing this surgery could 
have, GAO: (1) Hypothesized that the four States in the survey were not 
unrepresentative of current practice; (2) applied the permissive 
criterion that, for the surgery to be considered inappropriate, a 
patient must have reported no functional impairment; and (3) calculated 
that every 1 percent of cataract surgeries represented approximately 
$34 million in expenditures for the Medicare program as a whole. Under 
the outlined scenario, GAO reported that Medicare spent approximately 
$200 million in 1991 for inappropriate cataract surgery.
2. Effects on Expenditures
    We believe that the provisions of this notice would facilitate 
savings. First, by reaffirming existing coverage for preoperative 
tests, we eliminate or reduce any confusion about this matter. Medicare 
would continue to pay for a comprehensive eye examination and an A-scan 
and, if medically necessary, a B-scan if the patient's only diagnosis 
is cataracts. Payment for additional preoperative tests would be 
considered as part of the payment for the comprehensive eye 
examination. Additional or separate payment would not be allowed for 
tests other than the comprehensive eye examination, A-scan, and, if 
medically necessary, a B-scan if the patient's only diagnosis is 
cataracts.
    Second, we believe that savings would result from a reduction of 
unnecessary cataract-removal surgeries. We do not have our own estimate 
determining to what degree cataract surgery is performed 
inappropriately or the effect this notice would have on reducing 
inappropriate cataract surgery. However, the GAO report estimated that 
6 percent of the respondents' surgeries could be considered 
inappropriate.
    Medicare would cover cataract removal surgery only if specific 
indications for the surgery are fulfilled. The group that may be most 
affected by the inclusion of these indications would be high-volume 
ophthalmologists. In its 1991 report, as discussed earlier in this 
notice, OIG stated that high-volume ophthalmologists (those who earn at 
least $1 million annually) perform almost twice the rate of medically 
unnecessary surgery and questionable care as non-high-volume 
ophthalmologists.
    Third, we believe there would be a decline overall in the number of 
Nd:YAG capsulotomies performed as a result of requiring physicians to 
document in the patient's medical record that the patient suffers from 
functional impairment due to PCO before performing or scheduling the 
surgery. Since we are proposing to redefine what constitutes medical 
necessity for Nd:YAG capsulotomy, we believe the frequency the 
procedure is performed prophylactically (sometimes within 3 months 
following cataract surgery) would be drastically reduced, resulting in 
additional savings.
    We cannot estimate the value of any savings we anticipate as a 
result of this notice because we lack information. Savings would depend 
upon our ability to generate payment edits that would help us enforce 
the proposed coverage policy.
3. Effects on Providers
    Cataract surgery performed to redress functional impairment due to 
cataract in the adult is the most common surgical procedure performed 
on Americans age 65 and over. As a result, cataract surgery is a 
significant item in the Medicare budget. The extent that 
ophthalmologists would be affected by this notice would depend upon the 
extent that they perform cataract surgery on Medicare beneficiaries 
that would not conform to the medical necessity criteria proposed in 
this notice. All ophthalmologists who treat Medicare beneficiaries, 
especially those who perform a high volume of cataract procedures, 
would be required to review their methods of evaluating patients before 
surgery. Also, ophthalmologists would be required to review their 
criteria for performing surgery to ensure that they perform surgery 
only on those Medicare patients who have a functional impairment 
resulting from the effect of the cataract that compromises the 
patient's lifestyle and for whom glasses do not satisfactorily correct 
the condition. Under the provisions of this notice, the 
ophthalmologists must document in the patient's record any impairment 
requiring cataract surgery.
    Because the policies we are proposing reflect some of the findings 
stated in the guidelines, which were developed by an interdisciplinary 
private sector Expert Panel under the sponsorship of AHCPR, we 
anticipate that the guidelines would be acceptable to those physicians 
furnishing services to Medicare beneficiaries. Most ophthalmologists 
are already documenting to some extent the need for cataract surgery in 
patients' records; however, this notice would impose additional 
requirements on ophthalmologists. We believe that any decrease in the 
number of tests and procedures that would result due to a change in 
Medicare policy would primarily affect ophthalmologists performing a 
high volume of cataract-related procedures on Medicare beneficiaries. 
The GAO findings describe a situation in which Medicare expenditures 
could be reduced and the quality of services furnished by 
ophthalmologists could be enhanced at the same time.
    In recent years, the vast majority of cataract surgery procedures 
have been performed either in a hospital outpatient department or in a 
free-standing ASC. Cataract procedures are performed approximately 
twice as often in a hospital outpatient department as in an ASC. A 
facility that specializes in eye procedures would be affected to a 
greater extent if the number of cataract surgery procedures is reduced 
than a facility that handles a wider range of surgical procedures.

B. Rural Hospital Impact Statement

    Section 1102(b) of the Act requires the Secretary to prepare a 
regulatory impact analysis if a notice may have a significant impact on 
the operations of a substantial number of small rural hospitals. This 
analysis must conform to the provisions of section 603 of the RFA. For 
purposes of section 1102(b) of the Act, we define a small rural 
hospital as a hospital that is located outside of 

[[Page 52403]]
a Metropolitan Statistical Area and has fewer than 50 beds.
    This notice would have little direct effect on payments to rural 
hospitals since this rule would recommend coverage changes that would 
affect primarily ophthalmologists, ASCs, and hospital outpatient 
surgery departments. Very few small rural hospitals would have an 
outpatient surgery department.
    We are not preparing an analysis for section 1102(b) of the Act 
since we have determined, and the Secretary certifies, that this notice 
would not result in a significant impact on the operations of a 
substantial number of small rural hospitals.
    In accordance with the provisions of Executive Order 12866, this 
notice was reviewed by the Office of Management and Budget.

(Sections 1861 and 1862 of the Social Security Act (42 U.S.C. 1395x 
and 1395y))

(Catalog of Federal Domestic Assistance Program No. 93.774, Medicare 
Supplementary Medical Insurance)

    Dated: May 7, 1995.
Bruce C. Vladeck,
Administrator, Health Care Financing Administration.

    Dated: June 30, 1995.
Donna E. Shalala,
Secretary.
[FR Doc. 95-24835 Filed 10-5-95; 8:45 am]
BILLING CODE 4120-01-P