Date of Award

January 2015

Document Type

Open Access Thesis

Degree Name

Medical Doctor (MD)



First Advisor

James C. Tsai

Subject Area(s)

Medicine, Economics, Ophthalmology


The purpose of this study was to evaluate the extent to which changes in the Medicare Physician Fee Schedule influence the volume and intensity of ophthalmic services for cataract, glaucoma, and retina procedures.

We conducted a retrospective, longitudinal analysis using a fixed-effects regression model of Medicare Part B carriers representing all fifty states and the District of Columbia from 2005 to 2009 to calculate Medicare payment-volume elasticities, defined as the percent change in Medicare service volume per 1% change in Medicare payment, for twelve procedures: non-complex and complex cataract surgery (CPT 66984 and CPT 66982), laser trabeculoplasty (CPT 65855), trabeculectomy without and with previous surgery (CPT 66170 and CPT 66172), aqueous shunt to reservoir (CPT 66180), laser iridotomy (CPT 66761), scleral reinforcement with graft (CPT 67255), intravitreal injection (CPT 67028), laser treatment for retinal edema (CPT 67210), laser treatment for proliferative retinopathy (CPT 67228), and optical coherence tomography (OCT) imaging (CPT 92135).

For cataract surgery, we found a significant negative Medicare payment-service volume elasticity. For every 1% decrease in non-complex cataract surgery payment, non-complex cataract service volume increased 0.27% (95% CI [-0.47, -0.06], p=0.01). For every 1% decrease in complex cataract surgery payment, complex cataract service volume increased 1.34% (95% CI [-1.54, -1.14], p<0.001). For glaucoma procedures, the payment-volume elasticity was non-significant for four of six procedures studied: laser trabeculoplasty (elasticity=-0.27, 95% CI [-1.31, 0.77], p=0.61), trabeculectomy without previous surgery (elasticity=-0.42, 95% CI [-0.85, 0.01], p=0.053), trabeculectomy with previous surgery (elasticity=-0.28, 95% CI [-0.83, 0.28], p=0.32), and aqueous shunt to reservoir (elasticity=-0.47, 95% CI [-3.32, 2.37], p=0.74). For laser iridotomy, the payment-volume elasticity was -1.06 (95% CI [-1.39, -0.72], p<0.001). For scleral reinforcement with graft, the payment-volume elasticity was -2.92 (95% CI [-5.72, -0.12], p=0.041). For all three retinal procedures, the regression coefficients representing the payment-volume elasticity were non-significant: intravitreal injection elasticity was -0.75 (95% CI [-1.62, 0.13], p=0.09); laser treatment for retinal edema elasticity was 0.14 (95% CI [-0.38, 0.65], p=0.59); and laser treatment for proliferative retinopathy elasticity was 0.05 (95% CI [-0.26, 0.35], p=0.77). For every 1% decrease in Medicare payment for OCT imaging, OCT imaging service volume increased 0.84% (95% CI [-1.36, -0.32], p=0.002).

Our analysis of twelve ophthalmic procedures from 2005 to 2009 suggest that there may not be a significant association between Medicare payment and service volume for many glaucoma and retina procedures. Among those procedures, including cataract surgery, that have a significant relationship, different elasticities are observed, suggesting that the volume response to changes in Medicare payments is not uniform across all Medicare procedures. Further research should explore the contributions of patient demand and physician supply to this response.


This is an Open Access Thesis.

Open Access

This Article is Open Access