Although more than 1 million cataract surgeries are performed annually in the United States, little is known about the frequency of use or cost of various services provided in connection with this procedure. To assess the frequency with which various ophthalmic, optometric, anesthesia, and medical services are provided in conjunction with cataract surgery and to estimate the cost to Medicare associated with those services, we analyzed 1985 through 1988 Medicare claims records of a nationally representative 5% sample of Medicare beneficiaries. The experience of 57,103 Medicare beneficiaries who underwent extracapsular cataract surgery in 1986 or 1987 that was not combined with another ophthalmologic procedure formed the basis of our analysis. Projections for current costs were performed using 1991 charges allowed by Medicare for physician services. We estimate that the median charge allowed by Medicare for a "typical" episode of cataract surgery in 1991 was approximately $2500. In addition to the $3.4 billion that Medicare spent in 1991 on such "typical" episodes, Medicare spent more than $39 million on miscellaneous "atypical" preoperative ophthalmologic tests, such as specular microscopy (14% of cases) and potential acuity testing (8% of cases), more than $7 million on postoperative ophthalmologic diagnostic tests, such as fluorescein angiography (3% of cases), and more than $18 million on perioperative medical services (most commonly electrocardiography and chest roentgenography). The major determinants of the cost to Medicare associated with cataract surgery are the rate of performance of cataract surgery and neodymium-YAG laser capsulotomy and the charges allowed for these procedures.(ABSTRACT TRUNCATED AT 250 WORDS)