The federal government will waste $2 billion on cataract surgery this year because of kickbacks to eye doctors, unnecessary operations and overcharges, a House subcommittee said in a report to be released today.
A two-year investigation by a subcommittee of the House Select Committee on Aging, with help from the inspector general's office of the Health and Human Services Department, revealed numerous instances in which doctors overcharged the Medicare program for the lenses they implanted and, in addition, received kickbacks from lens salesmen for placing their orders with particular companies.
Some eye doctors were offered free trips to Europe, cash deposits in Caribbean banks for each lens purchased and free stock in lens companies, according to the investigation by the health and long-term care subcommittee. Others were offered surgical equipment, and the use of boats, cars and resort homes.
About 1.2 million Americans will undergo cataract surgery this year, making it the most common procedure paid by Medicare, the federal health care program for those over 65.
In the 20-minute procedure, cloudy cataracts are removed through the use of a needle inserted in the eye. In most cases, vision is improved after a plastic lens is implanted.
But the subcommittee found some instances in which the surgery was performed on elderly patients who already had "perfect" 20/20 vision. It estimated that, nationwide, $525 million worth of unnecessary surgery was performed on Medicare patients this year.
The subcommittee also found:
* A well-known surgeon received 1,600 free lenses in return for allowing his name to be used to advertise the lens. He then billed the government $500 for each lens.
* Ophthalmologists reported they received offers of the use of a yacht off Florida, travel in Europe, all-expense-paid weeks of "training seminars" in the Bahamas, second homes and cash rebates, all for buying a certain brand of lens.
* One lens firm, owned by doctors, offers stock to doctors who use their lenses.
* A Maryland ophthalmologist said his center was offered a $35,000 machine if it bought a certain number of lenses.
Cataract surgery is considered one of the most successful recent advances in medicine, but Rep. Claude Pepper (D-Fla.), subcommittee chairman, said, "This procedure from the taxpayer's perspective is an unmitigated disaster."
The report said that $1.2 billion of the $2 billion in wasted costs was attributable to a lack of federal price limits on outpatient Medicare surgery.
HHS sets in advance the fee it will pay for cataract surgery performed on Medicare patients in hospitals. But doctors who perform the procedure in an office or clinic are free to charge whatever is considered "usual, customary and reasonable."
The subcommittee found that many doctors who perform the procedure outside of hospitals charge hundreds or even thousands of dollars more than the $2,400 that the government will pay when it is performed in a hospital. The report said the government has been billed for up to $700 for a lens, which costs about $50 to manufacture.
Implants in hospitals now cost the government less than $100. But 70 percent of cataract operations are done on an outpatient basis.
Gerry Connor, a lobbyist for the Health Industry Manufacturers Association, said he had heard reports of many of the sales practices, adding, "The market is so competitive that folks could view it as close to the edge of fraud and abuse."
Cynthia Root, director of the 13,500-member American Academy of Ophthalmology, said its ethics committee studied six rebate schemes offered by lens salesmen last year, but "we looked at it only in hypothetical terms. We don't know how widespread it is."
An academy newsletter this month predicted "a few" ophthalmologists may be indicted for receiving kickbacks, which are illegal under Medicare laws.
But Root disputed Pepper's contention that $2 billion could be saved. She said the academy asked HHS's Health Care Financing Administration last year to set one standard payment for cataract surgery and lens implants to cover procedures in and out of hospitals. But the academy doubts that the change would save as much as the $1.2 billion that Pepper cited.
Pepper, contending that only a few of the 20 lens manufacturers make an effort to police their salesmen, said inducements to doctors will force Medicare to pay an additional $160 million this year for the implants. But Root contended that the cost is "closer to $10 million."