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Surgery: Fat people pay more

Medical scheme accused of discrimination.

Surgeons and anaesthetists are entitled to charge 50% more when operating on obese patients, irrespective of the nature of the surgery.

This has come to light in an appeal currently before the Council for Medical Schemes (CMS) that Moneyweb has seen with the permission of the patient.

The elderly lady (Mrs X), through her son to whom she has given power of attorney, is accusing Spectramed of discriminating against fat people because it refuses to pay for the treatment of obesity or any costs and procedures “directly or indirectly” related to it. The 50% surcharge is therefore also excluded.

In effect, Spectramed covers surgery on obese patients at a lower level than its other members, Mrs X says.

She had spinal fusion surgery earlier this year. The 50% surcharge was levied by her orthopaedic surgeon (R16 903), neurosurgeon (R4 581) and an anaesthetist (R8 041). As all the medical providers also charged more than Spectramed’s tariffs, her total co-payment for the operation and follow-up treatment topped R100 000.

Spectramed, in its Obesity Funding Policy, defines obesity as “any increase in weight”.

In documents before the council, neither Spectramed nor the patient dispute the right of the medical professionals to charge the 50% ‘modifier’ over and above their normal fees.

Medical coding specialist Dalena Coetzee of Medcodelink is, however, very critical of the surcharges.

She explains that medical professionals charge by citing codes on their invoices. These codes are generally accepted in the industry and represent the specific treatment administered to the patient. They are not time-based.

Since the mid-1990s, the SA Medical Association (Sama) has held a policy that all new codes and code changes to the South African coding system should have the US Current Procedural Terminology (CPT) coded in private hospitals in SA as a basis.

Coetzee says the CPT provides for a ‘modifier’ in terms of which surgeons may negotiate additional costs should they consider the normal costs inadequate in a specific case. This could, for example, be due to the time spent or the complexity of the case. The medical professional however must individually motivate the basis for the additional charges as well as the extent – how much they plan to charge over and above their normal fees.

In the US this is the exception, not the rule, Coetzee says. A body mass index (BMI) of 40 and higher is listed as a risk in the US – but for anaesthetists only, not for surgeons, she says.

She says that in South Africa, the modifier 0018 simply provides for surgeons and anaesthetists to levy a 50% surcharge for all surgery on patients with a BMI of more than 35, and it is widely applied.

There is no clinical basis for it being at a level of 50% and no requirement for the medical professional to show any clinical basis for the surcharge in a specific case. It could therefore be charged on anything from abdominal surgery to an operation on the eye or finger, where its clinical relevance could be questioned.

A representative of the CMS however told Moneyweb that the obesity must be clinically relevant for 0018 to lawfully apply.

In an earlier ruling against several medical schemes including Spectramed, the CMS Final Appeal Board found that the surcharge relates to increased surgical time and cost, not increased risk to the success of the procedure. The board referred to an article that explains that there is additional cost related to the preparation and positioning of the patient and increased cost of surgical instruments.

The 0018 modifier has been in use in South Africa since 2002, Coetzee says. More recently anaesthetists added “physical status modifiers” to their accepted codes.

These provide for five levels of additional cost where patients have pre-existing conditions that complicate surgery. These include a BMI above 40, smoking and heavy drinking.

Coetzee says the basis for these modifiers is more appropriate than a blanket BMI modifier. She points out that it could however result in duplication where these are charged in addition to the 0018 ‘obesity’ modifier.

Coetzee says medical schemes generally do not pay the costs associated with the ‘physical status modifiers’, which leaves members carrying the can.

In its earlier ruling the Final Appeal Board rejected a protocol, developed by a managed health care provider and applied by Spectramed and other schemes at the time, which excluded payment for joint replacement surgery on obese patients because the protocol was not evidence-based as required by law.

In her appeal, Mrs X argues that Spectramed is now trying to slip the same exclusion, this time in relation to all surgery, in through the back door via its Obesity Funding Policy.

She says the policy is not contained in the scheme rules and that the CMS would not approve such a rule as it discriminates against a vulnerable group of members.

Mrs X assumes in her complaint that the modifier was charged lawfully. Her complaint is aimed at Spectramed’s refusal to fund the 0018 surcharge for any type of surgery on a patient with a BMI of more than 35.

The scheme in its response made it clear that it relies on its Obesity Funding Policy, drafted by its managed care provider and administrator Agility Health. Agility also applies the policy to the Resolution Health Medical Scheme, which it also administers.

Mrs X argues that a stipulation – that “no member who is obese” or who has an “increased weight”, whatever this vague term means, “may under any circumstances claim payment for costs associated with surgery for any condition”, for the mere reason of them being overweight – constitutes unfair discrimination and is in contravention of the Medical Schemes Act.

She says the policy is not evidence-based as required and constitutes risk selection, which is prohibited. Risk selection occurs when schemes directly or indirectly encourage low-risk members to enlist in schemes while discouraging high-risk members.

If the funding policy stipulated that no smokers may claim payment for any lung-related ailments such as bronchitis, it would cause a public outcry, Mrs X states.

She says Spectramed seemingly argues that obesity is self-inflicted and that non-obese members shouldn’t be expected to cross-subsidise the surgery cost of obese members. She says there are many conditions that could cost more to treat and may be more prevalent or even caused by alcoholism, smoking, HIV infection and so on. “Yet the mere thought of singling out those populations for compulsory co-payments – which the 0018-modifier exclusion amounts to in its crude form – for their perceived lifestyle choices rightly fills anyone with repulsion.”

No date has yet been set for the appeal hearing.

Moneyweb has asked Agility Health for comment. Agility responded but failed to answer our questions. Read our questions and Agility Health’s response.

* Spectramed does cover the 0018 modifier when the condition is a prescribed minimum benefit (PMB).

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Why should not be legal to charge more for more and riskier work? If you pay somebody to dig a trench you can not expect the same price for a 2 metre deep one as for a half a metre one. Btw, I am also overweight.

“Why should not be legal to charge more for more and riskier work?”

The article says that it is legal to charge fat people more (it’s in the article, after all).

She is not suing them for charging more, she is suing the medical aid for failing to pay the extra cost.

She is basically suing them for the shortfall with the base of her argument being she was charged more due to her being fat.

But who is really to blame? the broker for not advising her to take 200 or 300% hospital cover plan? not advising her on gap cover? the medical aid for not informing obese people in bold letters that they will (Logically) pay more for procedures as it is higher risk and takes more time? the doctors themselves?

or the patient, who should take responsibility for her life.

According to the article the medical aids do not pay for ‘modifiers’, so it is in the contract which she signed. Of course most people sign every contact without reading it and complain afterwards (me too).

@Charles. Please see my comment below. It is actually not possible to take out gap cover these sorts of shortfalls. And of course the patient should take responsibility for her life. We don’t know the circumstances. As a smoker, I find it astounding that my scheme will not help me to quit, but will pay for my cancer or bronchitis. All schemes also exclude treatment for obesity as it is “cosmetic”.

@The Hun. The article says she argues the policy and exclusion is NOT listed in the scheme rules. If she is correct, it is not in the contract she signed…

Medical Aid is an insurance product. Maybe fat people should pay more. So should smokers, those who compete in high risk sport and drug addicts.

Simple really.

Not simple at all. Medical aids are not insurance products in terms of the Short Term Insurance Act. It’s a distinct breed regulated by its own Act. They cannot deny anyone membership and cannot impose a loading on anyone based on their health or risk. It’s called “community rating”.
Even if we accept your argument, the patient’s case would have been much better. She may have been willing to pay more for medical coverage, but she is not required to or allowed to in terms of the law and now the “insurer” — on payout phase — treats her different. That’s where the unfairness is.
I can think of hundreds of activities, behaviours and pre-existing conditions that would justify a “loading” in an insurance sense. Why discriminate against the obese?

Ok, I accept “insurance product” is bad terminology. But we definitely buy medical aid as an “insurance”or “financial cover” against expensive medical eventualities we may encounter in life.

She is not being discriminated against because she is obese. She is being charged more for a procedure because 1. it is higher risk and 2. it will take longer. Why is it higher risk and why will it take longer…. because she is obese.

The real issue here is how surgeons are able to bill for a procedure. A code should not be a blanket cover, realistically there are other factors. Thats why people get so pissed with anesthetists who charge on their time, not procedure.

Obese is unhealthy, leading to more claims, which other healthy members subsidize. Obese people should also pay more for flight tickets. I had the most unpleasant experience once to land next to an obese lady on a flight to Schiphol. A nightmare of a flight.

No -it is very simple-fat people constitute a bigger medical risks so they should pay more and medical aid is insurance. Same as car insurance.

@EricBrownJHB. Point taken. She should insure herself against eventualities. Isn’t that what she did with membership to a medical scheme? And curiously, it is not possible at all (really) to take out Gap cover for something that is “excluded” by your medical scheme. By law they may only cover the shortfall on any line item. Modifier 0018 is treated as a different line item that is “excluded”. She therefore cannot take out additional “insurance” for the surcharge. Trust me, I’ve had similar situations before (not 0018 modifier, though.) I’m baffled by what people think the vulnerable groups (fat, HIV positive, rare diseases, chronic ailments such as blood pressure, cholesterol, cancer) must do? Almost 10% of all medical schemes premiums of the healthy and unhealthy are used to treat cholesterol. Where is the diet police? Would people dare to ask someone upfront how they contracted HIV? How would you prove it? How many drinks are “too many” in others’ opinion? What constitute a “dangerous sport”?

Let’s just be honest that it is very easy to discriminate — in all respects — against obese people because their vice is completely visibile and transparent.

@LuluAlert and @Oaktree: If we are all so healthy and righteous and don’t want to contribute to the so-called “unhealthy” people, why do we belong to medical schemes? That’s the point of medical schemes: Cross-subsidies and risk-sharing. Some will win, some will lose, but you join for in case you lose big time due to an unforseen event or unknown bad genes or our own mistakes. Simple, really. Or do you join only for free smoothies and gym discounts?

Also, on your argument, let’s start charging people over 50 double the premium of young members. Surely it is scientifically proven that they are higher risks than the rest. See how that will go down with Moneyweb’s readers…

They do charge more for older people. Ask a medical how much they charge for a new 50 year old and a a 20 year old member.

Sorry, I don’t think you are correct. You aren’t allowed to charge differentially on the basis of age AFAIK

@ The Hun, the rates are the same for everyone regardless of age. If a NEW member over the age of 35 pays more, that is because they are paying a Late Joiner Penalty ranging from 5% at age 36 to 75% at age 60 as a result of not having contributed to the South African risk pool up to that point.

@Wendy: You are spot on.

Most people join and pay for many years without claiming so that they may have the benefit in their later years when we are all bound to incur heavy expenses.

She is described as an “elderly lady”. How do we know how many decades she contributed to a scheme as a healthy individual?

The risk is just higher……overweight,smoking,etc. policy holders also pay a higher premium.
Younger car owners also pay more on vehicle insurance. The list can go on.

Absolutely, the risk is higher. Then lobby to change the law. But until it is changed, stop discriminating! Before the implementation of the Medical Schemes Act that is exactly what funds did. Who would want to insure an obese member or an HIV positive member or a member with a rare, costly disease? The Act deliberately moved away from this insurance model for medical schemes as you can imagine how hard it hit millions of members who wanted medical aid cover. The current approach is flawed, but it is better than the alternative. Besides, insurers aim to make money. Medical schemes are non-profit entities. You cannot compare apples to bananas.

The law is an ass.

Natural justice, a.k.a. common sense, eventually takes over in the real world.

The article does say that in SA it is not an exception to charge more but it is a norm. A example of a finger surgery, I think was also mentioned just to clarify.

The bottom line is that by being fat you are more at risk of dying anyway – why should you pass that risk onto someone else without compensating them for the risk they are taking on your behalf?
Stop feeding your face and save your life and money at the same time.
Fat people like smokers and alcoholics need to take control of their own lives and not pass the buck for their own choices.
Like overweight baggage on a flight – the heavier you are ….the more you pay!

The bottom line, according to you, is that cancer patients or HIV positive patients or people with chronic health issues after an accident are more at risk of dying anyway — why should you pass that risk onto someone else without charging them more?
Well, because it is a medical scheme! It is a risk-sharing vehicle. And you don’t have to ride along in the vehicle.
It is pointless to share risk if you truly believe that the others pose the risk and not you.
Be honest: Don’t we all know in our hearts that somewhere down the line we all plan to take out far more out of our schemes than our premiums?

There are only 2 medical aids that do not pay the surcharge for morbidly obese patients (BMI over 35). Resolution and Spectramed. They have already lost their case at the Council for Medical Schemes concerning non-payment but have cynically appealed. Hopefully this will accelerate the legal action. This affects about 10% of their clients.

Why is the appeal cynical?

The appeal is cynical for 2 reasons. They know they are the only medical aids not paying that code and they are making money out of their malinterpretation of the rules governing medical aids.

I’m going to keep quiet and happily agree to pay for the fat people so they carry on paying for my physiotherapy and orthopaedic surgery cause by my mountain biking and skiing crashes

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