The Economics of AMD

practice revenue

The Economics of AMD

Great clinical care, meticulous records and accurate medical coding will help build your practice in this fast-growing patient segment.


While writing about the economics of the annuity value of a disease state may seem self-serving for our profession, AMD is different. Why? As the leading cause of blindness, the early detection and treatment of this disease state not only benefits the patient, but it also has been suggested that it can save the healthcare system significant costs: Some prepublication studies have suggested that when CNV is treated at 20/80 or better, the outcome is generally around 20/50 vs. 20/160. If left treated at a later stage, the cost savings to the healthcare system could be in excess of approximately $200,000 per case.

The American Optometric Association (AOA) Clinical Practice Guidelines states that “Age-related macular degeneration is the second leading cause of legal blindness in the United States and other developed countries and is the leading cause in persons older than age 65.” Almost three-quarters of a million Americans have visual acuities of 20/200 or worse in one or both eyes due to AMD. Also, 90% of them are a result of the exudative form, the AOA Clinical Practice Guidelines say. AMD accounts for 16,000 cases, or 14% of new legal blindness annually. Among patients older than age 52, 9% have one or more forms of AMD; and 6.4% of those between the ages of 65 and 74 have AMD unilaterally or bilaterally. The prevalence of AMD and severe vision loss grows with age, and approximately 20% to 30% of individuals older than age 75 are affected, the AOA Clinical Practice Guidelines say. Applying standard diagnostic criteria, one-third of males and one-fourth of females older than age 75 have a form of AMD.

The prevalence of AMD was less than 10% in individuals aged 43 to 54, but more than tripled for those aged 75 to 85, says the American Academy of Ophthalmology Preferred Practice Patterns for AMD.

Further, the Beaver Dam Eye Study demonstrates that progression to any form of AMD in a 10-year period was 4.2% for individuals aged 43 to 54 and 46.2% for those 75 years of age and older. A significant risk factor for AMD is smoking, which doubles the risk. Other possible risk factors include:

▸ Hypertension and cardiovascular disease.1,2
▸ Low levels of anti-oxidants.3
▸ High intake of saturated fats and cholesterol and high body mass index.4
▸ High biomarkers of inflammation.5
▸ Sunlight exposure.6

So what does this mean for Optometry? Being the primary contact for most of the U.S. population for eye care, the optometrist most likely plays the most important role in the entire chain of care.

With the shift of technology, more sophisticated diagnostic equipment and genetic lab tests to order, AMD now rises to the top of the list of disease states that act like an annuity to an optometric practice. Let me state clearly for the record: In my opinion, from an economic perspective, the early diagnosis and management of AMD is to optometry today what refractive surgery was to ophthalmology in years past. Yes, it’s that big — to both patients, the healthcare system at large and to our practices.

The early detection and management of AMD is well within our wheelhouse. New tools and technology make this something that is not only vitally important to our aging patient within the U.S., but easy to assimilate and implement in our daily practice routines.

But before we concentrate on the economics, let’s make sure we follow the rules when performing medical care.

Establish medical necessity

Medical necessity is defined as, “Services or supplies that are proper and needed for the diagnosis or treatment of the patient’s medical conditions, are provided for the diagnosis, direct care and treatment of the patient’s medical condition, meet the standards of good medical practice in the local area and aren’t mainly for the convenience of the patient or the physician,” says Medicare. So how do we apply this to daily clinical care? It truly means that anything that you do for a patient that is being paid for by Medicare, must be necessary in order to:

1. Diagnose a condition.
2. Manage a condition.
3. Treat a condition.
4. Follow the treatment of a condition.

If your medical record is not specific enough about this, you raise the risk of exposure on an audit.

Other health insurance companies may have their own medical necessity definition, even if it is a derivation of the CMS definition. Therefore, as a contracted provider, you must follow that specific carrier’s definition with their beneficiaries to the letter.

The medical record has a beginning, a middle and an end. As the optometrist, it’s your job to explain the patient encounter. The encounter should contain your reasoning behind your actions. If you believe that a patient requires a procedure to help you diagnose or treat him or her, explain in the record “why.” Remember: This is your only protection during a postpayment review.

Correct coding

Coding for AMD is a very easily understood and straightforward process. Simply said, code for any office visit in which you meet the criterion for providing professional services, and then code for the specific procedure(s) performed.

The coding aspect for AMD consists of nothing more than an E/M visit code in most cases; this includes the 920XX codes. In most situations, the patient would be an established patient, so you’d use the codes 92012, 99212, 99213 or 99214 matched with an appropriate diagnosis based upon meeting the criterion for each visit. Remember to match the CPT code with an appropriate ICD-9 diagnostic code and to choose an ICD-9 diagnostic code with the highest level of specificity.

Example Patient

Patient AMD Status: Early AMD • Macula Risk Level: 3

CPT Code CPT Description Annual Frequency Medicare Revenue Per Unit
92004 Ophthalmological services: medical examination and evaluation with initiation of diagnosti… 1 $151.61
92014 Ophthalmological services: medical examination and evaluation, with initiation or continua… 0 $126.41
99214 Office or other outpatient visit for the evaluation and management of an established pat… 0 $106.97
99213 Office or other outpatient visit for the evaluation and management of an established pat… 1 $72.91
99212 Office or other outpatient visit for the evaluation and management of an established pat… 0 $43.96
92012 Ophthalmological services: medical examination and evaluation, with initiation or continua… 0 $87.57
92250 Fundus photography with interpretation and report. . . 1 $71.91
92134 Scanning computerized ophthalmic diagnostic imaging, posterior segment, with interpreta… 1 $46.34
92082 Visual field examination, unilateral or bilateral, with interpreation and report; interme… 0 $50.44

Total Number of Prodedures: 4
Total Annual Revenues Based Upon Medicare Maximum Allowables: $342.77

Special ophthalmic tests, such as fundus photography and OCT, are particularly easy to code for, as there are a limited (and repetitive) number of procedures we actually perform. Most carriers have published policies that follow the CPT very closely, although it is not uncommon for them to have specific policies or guidelines that build upon the CPT definition for a particular code. Always be sure of a carrier’s specific policy regarding billing a code rather than simply relying on the CPT definition. These policies are generally available on the carriers’ websites and are referred to in current nomenclature as Local Coverage Determinations (LCD’s) or on web-based real-time services.

Much consternation and misunderstanding still exists regarding the changes to the scanning computer diagnostic ophthalmic imaging codes implemented in January 2011. At that time, CPT code 92135 was retired and three new codes were implemented, 92132 (anterior segment), 92133 (optic nerve) and 92134 (retina). Many who owned these instruments were more than upset to learn that the definition of this procedure changed from “unilateral” to “unilateral or bilateral,” meaning that rather than getting paid for each eye individually, the reimbursement was now the same whether the device was used on one or both eyes. Realistically though, the definition of this code was simply brought into line with other tests, such as visual fields or corneal topography. What many failed to understand is that now that we had specific scanning codes for specific parts of the retina, the utilization guidelines had also changed. While remaining fairly constant for optic nerve use (usually twice per year), scanning laser for retina is now indicated as often as once every 28 days for retinal disease (based upon medical necessity) in many areas of the country. This certainly is more in line with a rapidly changing disease state, such as AMD.

In addition to clinical testing that we perform in our offices, there are also other valuable tests that we order, but are performed in a clinical lab, such as genetic tests. Additional tools, such as the Sightrisk assessment, can help you identify patient lifestyle risks that you can assist in modifying to prevent early onset of the disease process.

The economics

Many tools exist to help you develop your clinical care protocol. Whether it be genetic tests, Sightrisk, the American Optometric Association or the American Academy of Ophthalmology (the American Academy of Optometry does not provide clinical guidelines), all assist in providing you with a specific clinical path based upon clinical appearance, genetic risk and lifestyle elements.

As we progress with the economics, please understand a single overriding principle: Economic profitability is only the by-product of you providing the standard of care, a perfect medical record and the appropriate translation of that medical record into specific and accurate CPT codes that represent the care you provided was necessary. Don’t be tempted to do procedures just because you have a covered diagnosis.

In looking at the clinical profile of a hypothetical patient in Southern California (rest of California geographic area per CMS) who has a physical disease stage of early AMD and a Macula Risk level 3 (out of 5) genetic predisposition (see “Example Patient,” page 26), you can see this patient would generate ~ $345 per year (CMS maximum allowable values) based upon their clinical presentation and genetic risk.

(Macula Risk is one of five currently available genetic tests for AMD. It identifies AMD risk level progression via the presence of CFH-5 [rs1048 663, rs3766405, rs412852, rs11582939, rs1066420], C3 [rs2230199], ND2 [rs28357980, and ARMS2] [no SNP- but an insertion-deletion called - NM_001099667. 1:C 372_815de l443ins54]. In addition, the test takes patient smoking history into account. Macula Risk level 1 is the lowest risk, and Macula Risk level 5 is the highest risk.)

While the clinical care that each patient receives and the economic return to each practice differs based upon the actual technology the practice has and the individual patient, one thing we generally don’t think about is the impact that the aging of America has on our patient bases and our practices. Until you can actually predict who is going to progress to vision loss without proper examination and follow-up, it is imperative you identify and manage this segment of your patient base properly using prevalence and incidence studies. (See “Total Active Records of Patients Older Than Age 50,” below.) If looked at in the aggregate, the average practice that has active patient records of individuals older than age 50 of 3,000 has a high number of patients who require follow-up and management. The aggregate economic picture is also significant. Based upon known incidence and prevalence, the average practice is sitting on an economic potential of nearly $860,000. You may not be able to incorporate these existing 3,000 patients into your practice routine, but perhaps you could incorporate 75% of them through the next five years or so. That is still a significant amount of care you are providing and a significant recognized practice revenue.

The power of change

In order to fully incorporate the diagnosis and management of the AMD patient into your practice, you have to change how you are doing things today; meaning doing things smarter, not harder. I realize that change is hard, but the mis-assumption that many make is that change means more difficulty. My thesis is the exact opposite: By using existing technology, you can actually make managing the AMD patient easier rather than harder. Simply follow vetted clinical care protocols that assist in determining both examination type and frequency as well as the frequency of special ophthalmic testing.

Total Active Records of Patients Over 50: 3000

  No AMD Early AMD Intermediate AMD Advanced AMD
Macula Risk Level 1 $106,780 $103,145 $38,722 $29,423
Macula Risk Level 2 $79,845 $82,373 $43,190 $29,423
Macula Risk Level 3 $38,961 $113,817 $44,679 $33,101
Macula Risk Level 4 $14,430 $31,561 $16,376 $11,034
Macula Risk Level 5 $2,405 $23,145 $9,358 $7,356

Total Practice Economic Potential from AMD: $859,114

Harness the power of new technological tools, follow the protocols determined to be clinically specific and appropriate for each patient, use your EHR to accurately record your encounters, and code your encounters properly, and you will have much to gain.

Optometrists are the primary eyecare providers in the U.S. today. Let’s make sure that we are fulfilling our role in doing our job correctly. Let’s make it a point to lead by example; detect early, manage properly and prevent the primary cause of blindness in the world today. After all, if not us, then who? OM

1. Age-Related Eye Disease Study Research Group. Risk factors associated with age-related macular degeneration. A case-control study in the age related eye disease study: Age-Related Eye Disease Study Report Number 3. Ophthalmology 2000 Dec;107(12):2224-2232.

2. Hyman L, Schachat AP, He Q, Leske MC. Hypertension, cardiovascular disease, and age-related macular degeneration. Age-Related Macular Degeneration Risk Factors Study Group. Arch Ophthalmol 2000 Mat;118(3):351-358.

3. Age-Related Eye Disease Study Research Group. A randomized, placebo controlled, clinical trial of highdose supplementation with vitamins C and E and beta carotene for age-related cataract and vision loss: AREDS report number 9. Arch Ophthalmol 2001 Oct;119(10):1439-52.

4. Clemons TE, Milton RC, Klein R, et al. Risk factors for the incidence of advanced age-related macular degeneration in the Age-Related Eye Disease Study (AREDS). AREDS report no. 19.AREDS report number 19. Ophthalmology 2005 apr;112(4):533-9.

5. Seddon JM, George S, Rosner B, Rifai N. Progression of age-related macular degeneration: prospective assessment of C-reactive protein, interleukin 6, and other cardiovascular biomarkers. Arch Ophthalmol 2005 Jun;123(6):774-82.

6. Khan JC, Shahid H, Thurlby DA, et al. Age related macular degeneration and sun exposure, iris colour, and skin sensitivity to sunlight. Br J Ophthalmol 2006 Jan;90(1):29-32.


Dr. Rumpakis is president and CEO of Practice Resource Management, Inc., a consulting, appraisal and management firm for healthcare professionals. He’s developed an Internet-based CPT code software program and is a prolific lecturer on these topics. Send comments to op