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Digging Deeper: Insurance for Bariatric Surgery

From the insurance perspective, weight loss surgery has always been considered “medically necessary.” This means that weight loss surgery is not considered cosmetic, but rather is performed to decrease the health risks associated with severe obesity.

Recently there have been several important articles in medical journals suggesting that weight loss surgery can actually increase a person’s lifespan. One recent publication from Canada, which followed a large number of patients during a 16 year period, showed that the risk of NOT having surgery was associated with a four times higher death rate during the study period versus patients who actually had weight loss surgery. This study affirmed medical community’s “common knowledge” that severe obesity is associated with a shortened lifespan.

The Obesity Epidemic and Medicare

A number of recent studies have shown that the rate of severe obesity has increased more than threefold in some regions during the past decade. Some severely obese patients are disabled by their multiple health problems. Many disabled obese patients have their health care coverage through Medicare disability. Obesity related illnesses such as diabetes, degenerative arthritis and sleep apnea are primary reasons for disability coverage under Medicare.

Up until recently, Medicare had a clause stating that “obesity is not an illness” in their policy statement. This clause was recently deleted with the implication that obesity therefore must be considered an illness. Medicare officials make a point to state that a statement regarding “obesity as an illness” was not added to Medicare policy.

Medicare has traditionally covered weight loss surgery under the so-called comorbid illnesses such as diabetes, high blood pressure, sleep apnea etc. This meant that in order to qualify for surgical treatment, a patient must have had one or more of these conditions in order to be considered. Medicare never strictly followed the criteria of the 1991 National Institutes of Health Consensus Development Panel, which stated that severe obesity (body mass index/BMI of at least 40kg/m2 or slightly more than 100 pounds overweight) in of itself met the criteria for weight loss surgery. The National Institutes of Health (NIH) is heavily involved in a variety of research approaches with the goal of slowing the obesity epidemic in the U.S. Ironically the NIH is also a branch of our federal government.

The good news about Medicare’s recent ruling is that Medicare has publicly acknowledged the tremendous burden obesity places upon health. Medicare officials are also acutely aware of the increased cost of treating all of the comorbid illnesses associated with obesity. It seems likely that Medicare will endorse successful treatment strategies for obesity with the goal of reducing cost.

Private Insurance Coverage

The tremendous increase in the number of surgical procedures performed for the treatment of severe obesity has also become a focus of the private insurance industry in the U.S. Weight loss surgery is expensive. Even though patients may spend only two days in the hospital, these operations are associated with use of expensive high technology equipment, advanced nursing and surgical training, etc., all of which drive up costs.

Unlike Medicare, private health insurance companies are focused on the short term. This short term focus is due to the fact that these for-profit corporations must report to their stockholders on a quarterly basis. The industry is also acutely aware that the typical American will spend less than 3 years with a given insurance carrier before changing coverage. Hence, the long term cost savings of weight loss surgery for a given insurance company may not be realized in this less than 3 year time frame.

The increasing costs associated with weight loss surgery have lead many insurance carriers to “change the rules” in terms of providing this coverage. Up until recently, nearly all private insurance carriers accepted the guidelines laid down by the 1991 National Institutes of Health Consensus Development Panel as qualifications for weight loss surgery. However, the recent explosion in the number of surgical procedures has resulted in many carriers adding qualifiers to the NIH guidelines, such as 6 or 12 months of a continuously medically supervised diet. Though most patients seeking weight loss surgery have accumulated years of failed diet treatments, these attempts are rarely associated with written documentation of those efforts. An extended diet program lacking written documentation over a 6 to 12 month period is, unfortunately, not considered sufficient qualification by many private insurance carriers.

The Future of Insurance Coverage for Bariatric Surgery

There has been considerable speculation regarding actions which might be taken by private insurers in covering weight loss surgery during the next year or so. Some carriers may add “riders” which permit coverage but at a substantially increased cost to the insured, thereby passing this cost on to the consumer. This approach, of course, transfers the option of offering weight loss surgery coverage to the employer. Individual employees are likely to have very little say in the matter.

The high cost of practicing bariatric surgery also plays a role in the insurance coverage issue. Due to the complexity of obtaining insurance coverage for patients seeking weight loss surgery, most practices have at least one full time employee responsible for precertification of individual patients.

What is precertification approval?

This is the procedure by which the insurance company reviews your medical and dietary history prior to approving you for surgery.

Precertification has become a complicated, long-term process. Because bariatric surgical procedures are complex and associated with potentially serious complications, malpractice coverage for weight loss surgery has become increasingly difficult and very expensive. Thus, the increased overhead associated with weight loss surgery has driven many surgeons to drop out of the HMOs and accept only patients with out of network coverage. Patients with out of network coverage have the freedom of choosing their surgeon, but are also likely to pay a portion of the surgeon’s fee “out of pocket.”

These new qualifications have tremendously extended the waiting period for patients seeking weight loss surgery. Many become discouraged by repeated denials from their insurance carrier and stop seeking weight loss surgery altogether. Other carriers such as Blue Cross Blue Shield of Florida have taken a more direct approach by simply denying coverage altogether. Although Blue Cross spokespersons have provided a number of reasons for the decision to stop covering weight loss surgery, it seems clear to most observers that the underlying reason is high cost.

The increased cost associated with weight loss surgery will likely drive other carriers to add exclusionary clauses for coverage of these operations into their new policies.

What Patients Should Do

During the period of open enrollment for health insurance, employees who have the option to choose their health care coverage from a variety of insurance plans should be aware of the language in their policy regarding weight loss surgery. Ask these questions:

  • Does the policy exclude it all together?
  • Is coverage for surgery offered only at increased cost to the employer?
  • If it is offered, what are the specific qualifications for coverage?

In the long term, it seems like weight loss surgery will remain an option for prospective patients who meet qualifications. It’s likely that qualifications will become better defined, more reasonable, and consistent with knowledge of the effectiveness of various surgical procedures.