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Impact of the Acceptance of Medicare Assignment for the Mayo Ophthalmology Department

Research Domain: 
Health Economics & Policy
Community Partner: 
Mayo Clinic
Student Researchers: 
Nathaniel Howard, Jonathan Underwood, and Alexzandra Douglas
Faculty Mentor: 
Ellen Green

Mayo Clinic Ophthalmology derives 70% of revenue from Medicare patients. Currently, Mayo does not accept Medicare assignments and asks the patients to pay 15% premium for the same services. The revenue percentage could be higher if Mayo utilized referred Medicare assignment patients from Phoenix area optometrists. Gains have been made to improve payer mix by commercial fee-for-service patients. As Medicare and ACA pressures grow for decreasing reimbursement for elective cataract surgery, Mayo is anticipating revenue from government payer sources to reduce by an additional 10%. To counter the lowering revenue Mayo wants to remove the barrier to Medicare referral, and the 15% Medicare premium. Thus, increasing the patient volume for ophthalmology, and then generating more opportunities to capture revenue through the premium Intraocular Lens (IOL) service.     Objectives: To determine the feasibility and sustainability of a single Mayo ophthalmologist accepting Medicare assignment for cataract patients.

An economic feasibility assessment (EFA) was performed utilizing revenue data regarding the number of monthly cataract cases and the number of cases converted to a premium IOL, pertaining to a single Mayo Ophthalmologist from the years 2011 to 2014. The potential to increase the premium IOL conversion rate was estimated based on historical data. A Mayo Medicare strategist was consulted on the Medicare rules and regulations involved. Local optometrists were surveyed to assess their perceptions of the barriers to refer patients to Mayo Ophthalmology for cataract care.
Results: The EFA identified two approaches for offsetting the proposed reduction in price. The first approach necessitates performing an additional 45 cataract procedures annually. The second approach necessitates converting 15 additional cases (25% of cases) to the premium IOLs annually. Statistical analysis identified the premium IOL conversation rate was a stable process (mean of 20%) for the years 2011 to 2014. The consultation with the Medicare Strategist confirmed it is permissible for a provider within a non-participating organization to accept assignment on a claim-by-claim basis. The survey resulted in a low response rate, however, a majority of respondents reported not accepting Medicare assignment does create a barrier to refer.

The findings indicate accepting assignment for cataract patients is economically feasible, and permissible by Medicare rules and regulations. To be sustainable, Mayo Ophthalmology must perform an additional 45 cataract procedures or maintain a 25 percent premium IOL conversion rate, annually. Results from the referral survey show that there is willingness from local optometrists to refer to Mayo for cataract care. Ultimately, the removal of the financial barrier for Medicare patients by accepting assignment aligns with Mayo’s primary value of prioritizing the needs of the patient above all else.