Managed care's methods for determining coverage of plastic surgery procedures: the example of reduction mammaplasty.

Abstract

The methods by which managed-care organizations determine coverage for plastic surgery procedures are poorly understood. The purpose of this study was threefold: to examine the processes used to make coverage decisions in health care's current business environment, to do the same for levels of reimbursement, and to ascertain ways in which plastic surgeons can better effect these processes. A survey was developed to assess these mechanisms with regard to reduction mammaplasty. It was mailed to the medical directors of all managed-care organizations in the four states with the most advanced managed-care markets (California, Oregon, Washington, and Minnesota). Detailed supplementary interviews with eight managed-care executives clarified and added depth to the survey's results. A total of 184 questionnaires were distributed and 88 were returned (response rate, 48 percent). For determining a general coverage policy, 62 percent of respondents cited outcome studies in the medical literature as the most important factor; at the other extreme, outcome studies performed by professional societies (31 percent) and demand from providers (33 percent) had the least effect on determining coverage policy. For coverage decisions in individual cases, respondents said their organizations approve an average of 42 percent of requests for the procedure. Sixty-nine percent used weight of excised tissue as the primary criterion for coverage; the average cut-off value was 472 g. Respondents said they denied treatment primarily because the procedure seemed to be cosmetic (38 percent), disability was not documented (24 percent), and it had not been approved by the primary care physician (21 percent). Reimbursement levels were determined by two factors: 53 percent said fees arose through negotiated contracts relying on market forces, and 40 percent said they were based on Medicare rates. No respondents cited skill and training of the surgeon as a basis for fees. When asked how plastic surgeons can enhance coverage for their procedures, 39 percent suggested performing outcome studies in the medical literature, and 36 percent said providers should demand broad coverage as part of negotiated contracts. Determination of coverage for reduction mammaplasty is complex, but managed-care executives and medical directors cite several issues that govern the overall process. Objective evidence of medical necessity is important both on the policy level, in the form of outcome studies in the general medical literature, and on the individual case level, in the form of documentation of medical disability. In addition to the medical issues, coverage is determined by local market forces (give-and-take between the organizations and plastic surgeons), which may be amenable to organized and hard-nosed bargaining during contract negotiations. Similarly, fee levels also are determined by local market forces and negotiation (and Medicare fee schedules) rather than perceptions of fairness or surgeon skill. Plastic surgeons may benefit by increasing their involvement in the larger political arena that governs the business of medicine. Reforms in antitrust law will allow for more organized negotiation and thereby shift the balance of power during interactions with the managed-care organizations.thetic methods by a single surgical team. (Plast. Reconstr. Surg. 107: 1234, 2001.)