Misguided HCFA regulation could trigger shortage of corneas for transplantation, EBAA charges.

A proposal under review by the Health Care Financing Administration (HCFA) could hit eye banks so hard financially that it could shrink the nation's supply of corneas for transplantation and actually trigger a shortage if adopted, according to the Eye Bank Association of America (EBAA).

Under the proposal, HCFA would require that payment for the acquisition costs of corneal tissue be bundled or packaged with payment to the facility where the corneal transplant occurred. Currently, payments for corneal tissue are made separately when the procedures are provided in Ambulatory Surgical Centers (ASCs) or hospital outpatient departments (HOPDs).

Under the complicated reimbursement system, HCFA is proposing to pay ASCs a bundled payment of $1648 and HOPDs a bundled payment of $1476. If ASCs and HOPDs continue to receive a payment of $941 for corneal transplant procedures, eye banks would receive the remaining payment of either $707 or $535 for acquisition services, depending on the place of transplant.

The EBAA, supported by the American Academy of Ophthalmology (AAO), American Society for Cataract and Refractive Surgery (ASCRS) and others, is lobbying hard to get the payment bundling proposal scheme dropped from the proposed HCFA rule.

In a letter to HCFA Administrator Nancy-Ann Min DeParle, the EBAA charged that under the new system, the reimbursements being proposed would cover less than half of most eye banks' acquisition fees, resulting in financial shortfalls to the eye banks of between $749 from transplants done in ASCs and $1,154 in HOPDs. The figures were determined by a study of 1997 eye bank cost data compiled by The Lewin Group, an independent company hired by the EBAA, to analyze the cost structure of eye banks and the impact of the proposed payment change.

"The financial analysis of the eye banking community demonstrates that it is not plausible to develop a fixed-rate payment mechanism without severely impacting a well-functioning charitable system-which would result in the closure of many community based eye banks," Patricia Aiken-O'Neill, EBBA president and CEO, wrote DeParle.

"The present pass-through payment system recognizes significant charitable contributions and allows for a community-based donation network," O'Neill said.

"To change the payment policy to a "bundled" fixed rate or fee schedule-based system would devastate the present donation network, create dislocation and closure of local eye banks, resulting in the loss of tissue opportunity and fewer sight restoring transplants. The implementation of such policy would undermine the Administration's goal of increasing organ, eye, and tissue donation."

O'Neill pointed out that the data from which the ASC proposed rule was derived, was "largely collected from a limited ASC survey conducted in 1994 in which eye banks were not included which in turn contributed to a "serious misunderstanding of how eye banks operate and the role of charitable contributions in providing corneas for transplant."

O'Neill explained the current system in her letter:

"Eye banks bill a 'fee' for the acquisition of human eye tissue-not costs. An invoice for the acquisition fee is advanced to the transplanting facility. The 'fee' reflects charitable contributions and/or in kind services; therefore, it does not reflect true costs. Eye banks charge an acquisition fee that is less that the true cost associated with the retrieval, preparation, testing and distribution of corneal tissue for transplant. Community-based philanthropic efforts support eye banks in their mission to increase donation rates, procure tissue, and provide corneal tissue to transplanting surgeons in a timely manner, thus subsidizing acquisition costs. This charitable subsidy varies from year to year and community to community."

The Lewin Group calculated the Gross Cost Per Transplant (GCPT), which reflects the true cost of acquisition. The adjusted mean for GCPT is $1719, and the adjusted median is $1689. The true cost of acquisition would consume the entire proposed bundled payment rate in both HOPD and ASC settings. Even under all the Lewin Group's financial equations, including and not including in-kind and cash donations, more than half of all surveyed eye banks would be unable to recover their costs, O'Neill said.

O'Neill also pointed out that the proposed policy in inappropriate for the acquisition of corneal tissue because bundling payments involve surgical supplies and equipment. Human eye tissue is not manufactured, and has a very limited period of viability; it cannot be stored and may not be available at the time of surgery.

"Financial data demonstrate that the present system benefits from a charitable- based local donation network, and that the proposed payment level would be far from sufficient to cover eye banks costs," O'Neill concluded. "Simply, the 'bundling payment policy' advanced in the ASC and HOPD proposed rules would destroy the present system, resulting in the closure of almost all eye banks. The EBAA respectfully seeks deletion of the proposed 'bundling' policy from both the proposed rules and asks that the current policy be maintained to avoid disruption in the provision of sight restoring procedures."

The EBAA also emphasized that costs related increased tissue donation associated with the recent implementation of the Medicare Conditions of Participation which require hospitals to report every potential donor to their local organ procurement organization had not been factored into the Lewin study.

The EBAA, AAO and others are encouraging all corneal surgeons to express their concerns about the procedure before the July 30 comment period ends. Comments should be sent to: Nancy Ann Min DeParle, Administrator, Health Care Financing Administration, 200 Independence Avenue, S.W., Rm 309G, Washington, DC 20201