Insurance coverage for bariatric surgery often limited

Many patients who would benefit from this surgery are often unable to have it.

Issue: May 2005

Although bariatric surgery may be the most beneficial treatment for some morbidly obese patients, insurance coverage for the procedure is limited and the cost of the surgery often makes it an unaffordable procedure. The average cost of the surgery is about $20,000 in the United States; depending on location, the cost can range from $15,000 to $50,000.

About 144,000 bariatric surgery operations were performed in the United States last year. Due to cost restraints and the lack of insurance coverage, patients who would benefit from this surgery are often unable to have it.

Insurance expenses

Since the surgery represents a large one-time expense for insurance companies, many of them are unwilling or hesitant to pay. However, doctors have continually argued that although the initial expenses of the surgery may seem high, the long-term benefits will significantly reduce lifelong health care costs for the patient.

“One of the frustrations regarding insurance coverage for bariatric surgery is that it is really in the best interest of the insurance companies to cover this,” said Neil Hutcher, MD, president-elect of the American Society for Bariatric Surgery and a bariatric surgeon in Richmond, Va. “But the American health care system is made up of an assortment of different insurance plans for different people who change these plans frequently. Because of this, insurance companies often do not care about the long-term health care savings associated with bariatric surgery.”

Hutcher told Endocrine Today that although the initial cost of bariatric surgery seems high, patients usually have significantly reduced annual health care costs in subsequent years. Since patients often change insurance plans frequently, companies are forced to be more concerned with the one-time expense of the surgery.

Surgery pays for itself

John Baker, MD, chair of the Professional Liability Committee of the American Society for Bariatric Surgery and the co-medical director for bariatric surgery at Baptist Medical Center in Little Rock, Ark., told Endocrine Today that sometimes bariatric surgery can pay for itself within two to three years. “Medical treatment for patients who have undergone bariatric surgery averages about $2,000 per year,” he said. “The costs for some obese patients with comorbid conditions can exceed $10,000 per year.”

In a VA study that compared patients treated surgically to those treated medically, Baker said the medical costs dropped to $2,000 per year in the surgically treated group. The cost for the two groups was the same for the first year including the costs of surgery and after care ($10,000), but the savings become evident in subsequent years.

A separate Canadian study by Nicolas Christou, MD, PhD, demonstrated that on average, the total direct health care costs for managing an obese patient may be reduced 45% within five years following surgery; it would be greater if indirect costs were examined as well, Baker said.

The treatment costs for obesity-related conditions may exceed the costs of bariatric surgery as well. “It costs up to $60,000 to dialyze someone with end-stage renal disease for one year. Consider also the cost of a joint arthroplasty and coronary artery bypass grafting or endovascular treatment of coronary artery disease,” he said.

Insurance roadblocks

Both Hutcher and Baker said that patients are often discouraged by the lack of insurance coverage for bariatric surgery. Even when insurance companies do offer coverage, the process is so difficult that many patients are unable to qualify or give up.

Most insurance companies that do cover the surgery require that a patient has a BMI >40 or >35 with comorbidities such as heart disease or type 2 diabetes.

When patients meet these requirements, the process to apply for coverage is complicated. Patients may be required to document their failed efforts to lose weight from diet and exercise alone. Recent medical records from a doctor or dietician proving that a patient has continually tried and failed to lose weight through other means – including lifestyle changes and pharmacotherapy – are also required.

Almost all insurers require a letter from the patient’s doctor explaining why surgical treatment for obesity is medically necessary. Some insurance companies even require records of eating habits or of attendance at a gym or exercise program. Most insurers require a psychological evaluation to determine the patient’s state of mind and ability to cope with the effects of surgery.

As the obesity epidemic has escalated, there has been increased debate among lawmakers regarding coverage for bariatric surgery. Currently, four states – Georgia, Indiana, Maryland and Virginia – have laws that require coverage for obesity-related surgery.

In 1999, Georgia became the first state to enact a law stating that every major health policy that provides major medical benefits must offer coverage for the treatment of morbid obesity.

An Indiana law was passed in 2000 requiring the state to provide coverage under group insurance plans for public employees for nonexperimental, surgical treatment of morbid obesity.

A Virginia law, also passed in 2000, states that insurers and state health plans must offer and make available coverage for the treatment of morbid obesity through gastric bypass surgery or other methods recognized by the NIH. A Maryland law, passed in 2001, is similar to Virginia’s law. Currently, several other states are considering passing laws to address this issue.

Source: Trust For America’s Health

Legislation ineffective

Although these laws may lead to greater prevalence of coverage for obesity-related surgery, doctors and patient advocacy groups have complained that legislation is ineffective. “Even if a law mandates that surgery has to be offered by insurance companies as part of at least one plan, it still may not be covered under the patient’s particular plan,” Hutcher said. Insurance companies may circumvent the law by only covering a fraction of the surgery’s costs or reimbursing such a small percentage that hospitals and surgeons cannot afford to perform the surgery, he said.

Many insurance companies follow the lead of Medicare and Medicaid coverage policies. In recent years, the federal government has begun to recognize the long-term health care costs associated with the treatment of obesity.

Medicare is now covering bariatric surgery on a limited basis. According to its manual, “Gastric bypass surgery for extreme obesity is covered under the program if it is medically appropriate for the individual to have such surgery or the surgery is to correct an illness, which caused the obesity or was aggravated by the obesity.” – by Jay Lewis