There have been ups and downs, but historically insurers have considered bariatric surgery to be a cosmetic procedure. That's not so much the case now, but you, the provider - and the patient - have to jump through more hoops than usual to secure coverage and reimbursement. Here's a look at the ins and outs of the insurance game, and what it takes to get reimbursed for bariatric procedures, which typically cost $30,000 to $40,000 and can get up to $100,000 if there are complications.

The Medicare factor
Medicare will pay for surgery for obesity when patients suffer other problems associated with the condition, like diabetes. Medicare says it might decide to cover treatment for those who are simply obese, meaning their body mass index, a measure of body fat, is at least 30. That includes 61 million Americans, nearly one-third of the adult population, and 9 million of Medicare age, 65 and older.

The Centers for Medicare and Medicaid Services (CMS) has a national coverage determination that allows bariatric surgery if the surgery is to correct an illness which caused the obesity or was aggravated by the obesity. CMS has asked the Medicare Coverage Advisory Committee to make recommendations as to the adequacy of the evidence for bariatric surgery - both in those Medicare beneficiaries who have co-morbidities (currently covered) as well as those Medicare beneficiaries who are obese but don't have co-morbidities.

As it does with most every procedure, Medicare sets the standards for selection criteria and reimbursement regarding bariatric surgery. That's mostly because Medicare goes through long investigatory processes before issuing policy statements or standards, so most people use that as a guideline - and it's to your advantage to stay aware of Medicare's dealings with weight-loss surgery.

With the government, obesity is not enough. Medicare will cover gastric bypass surgery for extreme - morbid - obesity if the surgery is medically appropriate for the patient, and if it corrects an illness caused or aggravated by the obesity. As it stands right now, there are two sentences in the Medicare guidelines that grant bariatric surgery coverage for all patients covered by Medicare. CMS is reviewing the Medicare policy issue for obesity surgery in general including coverage issues for enrollees younger than 65. Regional carriers cover multiple states and write their own guidelines, but there are generic rules you can set for accepting patients. Multiple programs I've worked with that have followed these three rules have yet to have a patient rejected for medical necessity:

• The patient must be morbidly obese for five years.
• The patient must be incapacitated or unable to work.
• The patient must have a life-threatening or incipient life-threatening co-morbid condition.

At least one regional carrier, Heritage National, might soon also require a physician-monitored, medically documented prior attempt at weight loss. In any event, it's best to have these three conditions well-documented (pulled from the patient's files, not retroactively dated by the physician) before you proceed.

The insurance process
You might be dealing with two private insurance models.

The first is commercial. With PPOs, coverage varies by specific, state-mandated patient criteria based on medical necessity and external reviews. With HMOs, the coverage criteria are even stricter, and includes license jurisdiction.

The second is self-funded. These insurance plans are ERISA-controlled and are affected by benefit and exclusion language. Benefit appeals are determined contractually rather than because of medical necessity. In a plan-document (often found in the employee handbook), the employer can say to the insurer, "We don't want to pay for you to cover weight-loss surgery." Even if the patient has life-threatening co-morbidities, he couldn't have the procedure done; the only level of appeal is to the federal Department of Labor.

With third-party private insurers, medical necessity doesn't always determine payment benefit. This is why it's very important to have a process in place for dealing with them pre-operatively. Here's what you need to do.

• Assign staff responsibility. Who will check eligibility and potential coverage and benefits? It's nice if you can give this task to someone who's a financial specialist or an insurance analyst, because this person won't just call insurers to determine whether insurance is effective - there are multiple pieces to insurance verification. This person must verify all issues: insurance eligibility; whether patients have potential benefits; what clinical information needs to be sent to access a pre-determination benefit; put together a letter of medical necessity; and follow up for responses.
• Determine benefits. Determine whether the patient still has that insurance and if that insurance extends benefits for bariatric procedures.
• Communicate with patients. Especially if the payer's contract with the patient's company includes exclusion or selection criteria, you need to let the patient know benefits might be denied. If the patient is prepared to potentially pay out of pocket and wants to go forward, you need to do more information gathering.
• Find out and record what each payer wants. Gather the information to send to the insurance company. This might include dictation from the surgeon, primary care physician, psychiatrist/psychologist and/or internist; weight-loss documentation; and lab, radiological and other studies. Determine the required submission data with a call to the insurance carrier.
• Document everything. Everything you've done to this point should be documented, duplicated and chronologically put together in a packet that you'll forward to the coders and billers at your facility. This information includes potential coverage, selection criteria, deductible co-pay, eligibility, exclusion language, plan document benefits, the pre-certification process, the surgery date and the diagnosis codes (all of them). Post-op, they'll also need to receive the op report and discharge information.

Coding and billing component
Before you go anywhere, you need the appropriate diagnosis (ICD-9 CM) code: 278.01, which is defined as morbid obesity. You also need to have all the patient's diseases defined in the medical record. Put them all down and code them properly, as claims for bariatric surgery must not only include the primary diagnosis of morbid obesity, but also at least one of the secondary diagnoses. These co-morbid conditions are to be selected from 250.00 through 997.1 in the ICD-9 CM codebook, and commonly include joint arthropathies (716.97) and malaise/fatigue (780.7).

The next step is coding for the procedure. See "Coding for Bariatric Surgery" on page 24 for your options. Next is the facility code, which is used to designate the type of procedure. There's high gastric bypass (44.31), other gastroenterostomy (44.39), and revision of gastric anastomosis (44.5).

Finally, the DRG code denotes the grouping for what the insurer will pay for the amount of time the patient is in the hospital. DRGs must be accompanied by the primary diagnosis with the procedure performed - basically, the primary reason you admitted the patient for surgery in the first place. Use 288 for the primary procedure and either 154 or 155 for complication re-admits.

Getting patients involved
Encourage patients to be aware of their benefits and coverage. During the initial information session you should tell the patient that, if he hasn't already done so, he needs to contact his insurance company to find out about coverage.

If the patient does have an exclusion, it's his job to appeal this. Offer to help - in the long run, it might be in your best interest to do so. Design insurance research packets to give to patients who have exclusions to help them appeal for denials (include IRS rules, and information on the procedure from the FDA, World Health Organization and National Institutes of Health). You and the patient also need to know how many times he can appeal before final denial. Let's say the insurer grants him two appeals, then a peer review of the appeal outside the company - the patient might want to see a lawyer before that final review.

If the patient will be self-pay, determine all fees (facility and professional), prepare the patient a financial agreement and collect all fees before the operation is performed. Fees to be determined include facility, surgeon, RN visits, patient needs, primary care, ancillary services, data collection and long-term follow-up. There are companies that offer credit for medical needs; be aware that it is best to collect all fees before admission.

A more progressive view
The insurance barriers that stand between the patient and his having bariatric surgery can be stultifying. CMS might soon consider language stating obesity "is not a disease." This may open the door to patients with this illness getting the care they really need. Some payers are already recognizing the overall value of bariatric surgery; many of them based their coverage policy determination on the Quesenberry study,1 which found that patients who have BMI over 35 cost the insurer 44 percent more over one year for medical costs than if they had simply been operated on in the first place. Hopefully we'll soon see more recognition of the cost-ratio benefit of these procedures so that they'll be more attainable for more patients.

Reference:
1. Quesenberry CP Jr, Caan B, Jacobson A. "Obesity, health services use, and health care costs among members of a health maintenance organization." Arch Intern Med 1998 Mar 9;158(5):466-72.