RECONSTRUCTIVE SURGERY: Will Mandated Coverage Law Bankrupt Surgeons?

      When California's new reconstructive surgery law takes effect next year, some doctors say it could be financially detrimental to their group practices. American Medical News reports that the law "would raise the current standard" of reconstructive surgery that HMOs and health plans are required to cover "from ensuring that a patient has normal bodily function ... to creating 'a normal appearance, to the extent possible.'" Group medical practices have "vehemently" opposed the law because they will be "required to carry out new coverage mandates," but won't see a corresponding change in the capitation rates they receive from HMOs. According to Dr. Al Briccetti of the Corona Regional Medical Group, some medical groups could find themselves "bankrupt," as they could be covering an "unpredictable volume of surgical procedures" that cost anywhere from $2,000 to $100,000. American Medical News reports that the new law will extend coverage "to patients of all ages and the full range of conditions that do not appear 'normal.'" But Briccetti said, "We have parents who come in and say their child's ears are too big," noting that this type of corrective surgery might come under the law's definition of "normal" appearance. Dr. Joseph Leonard, a board member of Sharp Community Medical Group, said, "The HMOs don't have to worry about the added costs of this bill because they have placed the insurance risk on the medical groups." Dr. Gene Ogrod, CMO for Sutter Medical Group, said that in a state "where models shave millimeters off their nose," such a law could usher in a rash of costly claims.

Two Sides
      AMN reports that the plastic surgery field supported the law, contending that HMOs had denied coverage of basic procedures for too long. And even when HMOs did cover certain procedures, the surgeons contended, patients had to undergo lengthy appeals, surgeons were reimbursed way below their actual costs and only the first in a series of needed surgeries was covered. Dr. Marie Pletsch, a Santa Cruz plastic surgeon, said her practice is "gasping our last breath" because HMOs haven't been covering the full cost of reconstructive surgeries, and patients can't afford them either. AMN reports that representatives of HMOs and plastic surgeons -- the California Association of Health Plans and the American Society of Plastic and Reconstructive Surgeons, respectively -- will meet to "discuss what specific types of surgery would fall under the measure's broad mandate," but representatives of physicians groups are "not invited." While the California Medical Association supported the surgery bill, it also supported a bill that would have required capitation rates to be "actuarially sound." In other words, HMOs would have to raise their rates to reflect increases in mandated procedures. However, AMN reports, the American Medical Group Association "opposed the bill, claiming that it would force groups to reveal sensitive business information to HMOs." The CMA says it will push for the bill's passage next year (Page, 10/19 issue).