December 2019


Pharmaceutical focus
Efforts of the Ophthalmic Pharmaceutical Coalition

By Liz Hillman EyeWorld Editorial Co-Director

Several years ago, the Ophthalmic Pharmaceutical Coalition was formed with the goal of advocating for payment pathways that would encourage innovation and progress for ophthalmic drugs to ultimately improve patient care.
The coalition is led by ASCRS and includes the Outpatient Ophthalmic Surgery Society, as well as companies (Allergan, Ocular Therapeutix, Omeros, and EyePoint Pharmaceuticals). Overarchingly, it has been seeking separate payment for drugs with a postoperative indication that are administered during cataract surgery at an ASC. The current policy is to bundle these types of drugs into the facility payment after they come off pass-through. In addition, the coalition is advocating that drugs with pass-through status not be included in the Merit-Based Incentive Payment System (MIPS) cataract surgery episode-based cost measure.
“ASCRS is concerned that including pass-through drugs in the cost measure could stifle innovation,” Parag Parekh, MD, chair, ASCRS Government Relations Committee, told EyeWorld in a previous article.1
Furthermore, Nancey McCann, director of ASCRS Government Relations, which manages the Ophthalmic Pharmaceutical Coalition, said bundling drugs into the ASC facility fee (after they no longer have pass-through status) has a stifling effect as well. As an example, Ms. McCann said, it’s unlikely a company will take on the expense for development, trials, and process for FDA approval for an intracameral antibiotic without an adequate payment pathway.
“It jeopardizes innovation and the future,” Ms. McCann said.
Let’s take a step back for a moment to better understand what pass-through status is, how it’s paid for, and the bundling of drugs into ambulatory payment classifications (APCs). Pass-through status is a designation for devices, drugs, and biologics that are new and innovative where the “cost is not insignificant.”2 Companies apply for this status, which is granted for up to 3 years. While a drug has pass-through status, it is paid for separately, outside of the facility payment. As Ms. McCann explained it, CMS estimates and sets aside (from small adjustments to all Medicare hospital outpatient departments and ASCs) how much Medicare will spend on pass-through drugs to cover this payment.
While a drug has pass-through status, data about its use is collected to inform the increase in Medicare’s APC group once the drug comes off pass-through. As Ms. McCann put it, under the current payment policy, pass-through drugs get added to the facility fee bundle. The increase to the facility fee bundle, however, is not enough to cover the true cost of the drug, so, use of the drug after pass-through often significantly drops, particularly in the ASC, Ms. McCann said.
“Which is why we are trying to get these drugs out of the bundle,” Ms. McCann continued, specifically those that have a postoperative indication. “CMS says they are ‘surgical supplies’ and as a result need to be bundled in the facility payment. Our argument is these drugs have nothing to do with the surgical procedure and have been approved for a postoperative indication, so they’re replacing postop drops that are paid for separately under Medicare Part D. So, why should the facility be absorbing the cost for these drugs that replace postop drops that are covered and paid for separately?”
Ms. McCann said these drugs can help with compliance of postop medications that are traditionally difficult for patients to administer themselves. In addition, she said, it can also be less expensive compared to drops.
A separate issue the Ophthalmic Pharmaceutical Coalition is seeking to address is the inclusion of drugs with pass-through status in the 2019 MIPS cataract surgery episode-based cost measure. Omidria (Omeros)—a drug added to the irrigating solution during cataract surgery with indications for maintaining pupil size and reducing postop pain—was included in this measure. This means that use of Omidria will negatively impact a physician’s cost score on MIPS, which Ms. McCann said defeats the purpose of pass-through. However, physicians will not be negatively impacted if they use Omidria on patients with select comorbidities.
“Do you really want to not have doctors use this drug because of the potential for payment penalties? No. Because they’re supposed to use [drugs on pass-through] based on merit,” Ms. McCann said.
At the time the measure was drafted, Omidria was the only drug for cataract surgery with pass-through status (its status was extended to Sept. 30, 2020). Since then, others have received pass-through status—namely Dexycu (EyePoint Pharmaceuticals) and Dextenza (Ocular Therapeutix), which both have indications for reducing postop inflammation and pain. Dexycu and Dextenza are not currently included in the MIPS cataract episode cost measure, so physicians will not be penalized for using them at this time.
The Ophthalmic Pharmaceutical Coalition is advocating to get Omidria off the cost measure, due to its pass-through status, and for CMS to not include any drugs on pass-through in this measure. CMS has not established a regular schedule or given notice of if it will update the cataract cost measure. It will release 2020 specifications of all of the cost episode measures in December.
In February 2018, Dr. Parekh sent a letter to Acumen, LLC, the developer of the cost measure, urging Acumen to “exclude any FDA-approved Medicare Part B drug on pass-through status administered during cataract surgery from the cataract cost episode measure,” stating that it would “disincentivize surgeons from using the drugs and negatively impact the utilization data CMS is collecting for this purpose.”
In September 2019, ASCRS and OOSS submitted comments to CMS regarding its 2020 Medicare Physician Fee Schedule proposed rule, which includes MIPS, “opposition to the continued inclusion of FDA-approved pass-through drugs in the cataract surgery episode-based cost measure,” and encouraging CMS to “take immediate action to remove the current pass-through drug in the measure and set a policy to prevent any other pass-through drugs from being included.” ASCRS and OOSS also commented on the ASC outpatient proposed rule, advocating for taking drugs with postop indications administered at the time of surgery out of the facility payment.
Earlier this year, the Rep. Steve Stivers (R-Ohio), Rep. David Price (D-North Carolina)—co-chairs of the Vision Caucus—Sen. Sherrod Brown (D-OH), Sen. Rand Paul, MD (R-KY), Sen. Doug Jones (D-AL), and Sen. John Boozman (R-AR) sent letters to CMS Administrator Seema Verma, encouraging CMS to include potential updates to the packaging policy in its 2020 Hospital OPPS and ASC Payment System rulemaking. Specifically mentioning new ophthalmic drugs with postoperative indications, the representatives and senators wrote that these drugs “benefit Medicare beneficiaries beyond a traditional surgical supply.” “[I]t is critical that CMS develop a forward-looking mechanism to appropriately reimburse for new products that advance the standard of care for Medicare beneficiaries…,” the senators and representatives continued.
CMS released its final rule for the 2020 Hospital OPPS and ASC Payment System Policy Changes and Payment Rates in November and did not make the requested change by ASCRS and OOSS to pay separately for these drugs under Medicare Part B. It did, however, describe how CMS made the decision to start paying for the drug Exparel (Pacira BioSciences) outside of the typical bundled payment for “surgical supplies” in an ASC setting, because once it went off pass-through status its use in the ASC setting went down significantly (in the hospital Exparel remains bundled in the facility fee).
This, Ms. McCann said showed how CMS can take medications out of the facility-fee bundle due to the change in utilization of the drug in the ASC once it goes off pass-through.
“Sometimes these kinds of policies take several years to change,” Ms. McCann said. “If there isn’t a viable payment pathway when a drug goes off pass-through, the companies are not going to continue to invest in these innovative drugs.”

About the sources

Nancey McCann
ASCRS, Government Relations
Fairfax, Virginia

Parag Parekh, MD
ASCRS Government Relations Committee
State College, Pennsylvania


1. “How the new 2019 MIPS cataract episode-based cost measure will impact you.” EyeWorld. 2019 June;24(6):22–24.
2. Process and Information Required to Determine Eligibility of Drugs, Biologicals, and Radiopharmaceuticals for Transitional Pass-Through Status under the Hospital Outpatient Prospective Payment System (OPPS). Centers for Medicare & Medicaid Services. Accessed Nov. 4, 2019.

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