by Katherine Restrepo
Director of Health Care Policy, John Locke Foundation
North Carolina’s Certificate of Need (CON) law limits lower-cost health care options for patients electing cataract surgery. This is because the law not only caps the number of stand-alone ambulatory surgery centers (ASCs) that offer this service for patients across the state, it also blocks ophthalmologists from performing cataract surgery in their offices. Thankfully, the Senate’s budget proposal plans to lift these oppressive regulations and do away with CON altogether by 2025.
In the U.S., cataract surgery ranks as the safest and most common outpatient procedure for people over age 65, with over 80 percent of cases being conducted in ASCs. Smaller than hospital outpatient departments (HOPDs), ASCs have proven to be a more nimble practice setting for physicians and patients. A surgery center’s lower overhead also brings significant cost savings to the health care system, since the facility fee Medicare pays surgeons for cataract removal averages about $975 compared to $1,760 for hospitals.
Advancements in cataract removal have also led ophthalmologists to handle cases within the four walls of in-office surgical suites. Thanks to the development of topical anesthesia, anesthesiologists are not needed to intravenously sedate a patient for routine cases. In fact, a monumental study released in 2016 observed health outcomes of over 21,000 cataract surgeries performed in Kaiser Permanente’s in-office clinics. With minimal staffing and no anesthesiologist present, 600 cases experienced surgical complications while 0.7 percent of total patients needed follow-up surgeries within six months.
Exempting ASCs from CON review ultimately allows physicians to bypass the headaches that come with the law’s approval process. This typically involves spending thousands of dollars on an application that explains why another surgery center is ‘needed’ in a designated area and how it will fulfill an unmet patient demand for particular services based on population growth projections and service volume. If the state grants approval, it’s still fair game for competitors to petition against the proposed project – even if they have no interest in submitting a bid to establish an ASC. Situations like these have resulted in lengthy legal battles that cost thousands of more dollars.
As for in-office procedures, Medicare does pay ophthalmologists a professional fee for cataract removal, but CON currently prohibits surgeons from allowing them to register their facility with Medicare so they can also collect a facility fee to cover the costs of medical supplies and equipment. Before an in-office surgical suite can register their facility with Medicare, it must be licensed by the state. For that to happen, they need a CON.
Expedited access to a Medicare facility fee for in-office surgery would make office-based cataract removal a financially viable service in North Carolina. It would also open up more treatment options for patients over age 65. The facility fee amount would be equal to what an ASC receives, although the Center for Medicare and Medicaid (CMS) has begun considering the idea to define a lower facility payment for this procedure since patients have consistently experienced quality outcomes in an even smaller setting.
Despite CON’s impediments to Medicare patients, one North Carolina ophthalmologist has been able to successfully negotiate bundled payments for cataract surgery with a private insurance carrier – another example of the market responding faster to health care innovation than the government.
It’s clear that ASCs and office-based procedure rooms are reining in health care costs for third party payers while using cutting edge technology to minimize patient discomfort during cataract surgery. Yet, North Carolina’s CON law still exists because of the flawed logic that state centralized planning is the best way to slow the growth of rising health care costs. One would think, however, that increasing the supply of life-enhancing, let alone life-preserving, treatments is the preferred method to generate more competition in the health care arena and force downward pressure on prices.
Nevertheless, the battle wages on to shift oversight of critical health care investments away from bureaucrats and into the hands of those who have a stronger sense as to what’s “needed” for patients in their communities.