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Spelling out precisely which elective procedures your health plan will?and will not?cover depends on a clear definition of terms.
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Spelling out precisely which surgical procedures your health plan willand will notcover depends on a clear definition of terms: Many clinicians define any surgery not done on an emergency basis as elective. Purchasers and payers, on the other hand, generally use "elective surgery" to mean any procedure that is not medically necessary.
But necessity, like beauty, can often lie in the eyes of the beholder. "Health plans follow the recommendation of the treating physician more than 99 percent of the time," asserts Mohit Ghose, manager of media relations at the American Association of Health Plans. "Any procedure with proven long-term benefits would no longer be considered elective."
Sound simple? Think again.
Cosmetic surgery, for instance, is one area that almost everyone agrees is truly elective. Thus, liposuctionthe most popular type, according to the American Academy of Cosmetic Surgery, with nearly 673,000 procedures performed last yearis rarely covered. Neither are tummy tucks, facelifts and hair transplants.
But what about breast reduction surgery? You can make a medical case for it if the patient has been suffering significant back or shoulder pain. Where do surgical obesity treatment and laser vision correction fit in?
Reproductive health adds another layer of complication. Vasectomy and tubal ligation may be matters of personal preference, but medical necessity enters the equations if a pregnancy would endanger a woman's health. What's elective in the spectrum from abortion to infertility treatment?
With so many gray areas, how can an employer provide appropriate coverage, stick to a budget and steer clear of legal battles besides? "Many plan sponsors have not thought about these issues, and plenty of plans leave them unaddressed," admits Mitch Bramstaedt, a Segal Co. consultant based in Chicago. He boils the solution down to two words: Be consistent.
"If you cover sterilizationand employer coverage is hit and missyou should probably be covering abortions, which are often considered elective," says Bramstaedt. Thus, he argues, excluding oral contraceptives but covering vasectomy would be inconsistent, since both are intended to prevent pregnancy.
Yet Julianna Gonen, director of family health for the Washington Business Group on Health, notes that many employers offer such anomalous coverage: "That's particularly true of health plans that evolved from an indemnity model where surgery was more likely to be covered than, say, prescription drugs." In the last year or two, Gonen observes, payment for the pill has been on the rise.
According to the Employer Health Benefits survey for 1999, jointly conducted by the Kaiser Family Foundation and Health Research and Educational Trust, some 37 percent of Americans with employer-sponsored health insurance have abortion coverage. (The 2000 survey did not address reproductive services.) Among large firmsdefined as 200 workers or morecoverage varied by type of insurance, with HMOs least likely and indemnity plans most likely to provide it.
Infertility is another story. Both the American Society for Reproductive Medicine and The American College of Obstetricians and Gynecologists recognize infertility as a medical condition. On the other hand, "employers and insurance companies have been slow to recognize infertility as a legitimate medical problem," according to RESOLVE: The National Infertility Association. The insurance industry has referred to the disorder as a "social condition" and "lifestyle choice," RESOLVE reports, and coverage for diagnosis and treatment is often "arbitrary and inconsistent."
But, here, too, reimbursement may depend on how a claim is presented. For example, an insurance company with no infertility benefits would likely pay for procedures to treat endometriosisa medical condition that often interferes with a woman's ability to conceive.
Some 13 states have mandated that plans provide infertility coverage or at least offer it at a higher premium, but state laws do not apply to the approximately 50 million U.S. workers covered by employers that self-insure.
Even when employers include infertility benefits the scope is often limited. William M. Mercer findings for 2000 break down coverage among all employers into five categoriesany service, professional services, Rx therapy, artificial insemination and in vitro fertilizationand by type of plan.
The highest numbers can be found in point-of-service plans, where fully half offer some kind of infertility service. The numbers plummet, however, for the assistive reproductive technologies: Nine percent of PPOs cover artificial insemination, and 8 percent cover in vitro fertilization. One in five point-of-service plans cover such treatments.
Do these plans find that their costs are soaring? Various studies say No. RESOLVE reports typical researchfrom Massachusetts, in this casethat found the cost of covering assistive reproductive technologies added less than $2.50 per member per year.
Still, Bramstaedt and others agree that employers considering infertility coverage would be wise to contain their financial risk with copays and limits on the number of cycles and procedures and the months of ther-apy covered. Bramstaedt's clients often settle on three attempts, he says, noting that the success rate declines with each consecutive cycle.
Deciding when and whether to cover obesity treatment is far less complicated. "Virtually all plans deny coverage unless it's for morbid obesity," says Bramstaedt. "At that point prescription drugs and surgical procedures all become medically necessary."
The point is generally defined as being 100 pounds or more overweight, notes S. Ross Fox, MD, of Tacoma, Wash., past president of the American Society for Bariatric Surgery. Fox adds that carriers will often pay for gastric bypass surgerya $20,000 procedureat lower weights if the patient's diabetes, hypertension or other obesity-related condition is out of control.
The National Institutes of Health and the National Academy of Sciences have both called this the only effective, long-term treatment of morbid obesity, Fox reports. He also cites a Swedish study in which obese workers who had bariatric surgery cut downtime on the job in half.
Laser vision correction surgery, on the other hand, has no proven benefits. The AAHP's Mohit Ghose contends: "Like all newer technologies, LASIK surgery has to run the course to make sure it has long-term benefits and no major side effects, and that it will yield savings on eyeglasses, before plans will cover it," he says. "This is in the interest of patient safety more than anything else."
Segal's Bramstaedt agrees. "We recommend that clients do not cover it," he says. "Studies are showing lots of botched jobs. And, from a consulting perspective, how do you advise your client to tell plan participants to use a network of providers when there's no way to know who's good?" Some large vision care plans, however, offer enrollees discounted rates at specified laser centers.
"I would also advise against covering it from a cost perspective," Bramstaedt adds. The procedure typically costs a little over $2,000 per eye, and, he notes, one large plan spent $1 million on LASIK alone.
There are cases, though, where an employer covers eye surgery because of occupationalnot medicalnecessity. One food company, for instance, picks up the tab only for workers who spend their days going in and out of freezers. Glasses interfere, Bramstaedt explains, "because they're always getting steamed up."
Perhaps the most unusual procedure under consideration for employer coverage is sex-change surgery, which the City of San Francisco is poised to offer. The Human Rights Commission has been pushing for it in keeping with the city's antidiscrimination laws, which include gender identity in addition to sexual orientation as a protected class, according to Larry Brinkin, senior contract compliance officer.
The board of San Francisco's Health Service System, which has power over city health plans, has agreed to coverage as a one-year pilot, and the mayor and board of supervisors are expected to give the final go-ahead in the next few weeks. "It looks likely to pass," he predicts. That would mean the benefit, which has a $50,000 lifetime cap, would take effect in July.
Helen Lippman. Pay or pass on elective surgery?. Business and Health 2001;4:43.