How does it affect your practice?
The recent changes to Medibank Private’s insurance policy poses a serious question: Is Australia on its way to an American-style managed care system?
On 1 June 2014, Medibank Private announced changes to the level of cover offered by a number of its policies, many of which affect plastic surgery procedures. Australia’s largest private health insurer has come under fire for delaying or knocking back plastic surgery claims as a result. BUPA, the second largest health insurance provider in Australia, is also cracking down on plastic surgery claims to ensure, it says, cosmetic surgery is not incorrectly claimed as plastic surgery.
Previously, private health insurers have generally covered the gap for all procedures with a Medicare Item Number provided the patient’s private health insurance policy does not exclude that treatment from its cover. It should be noted that the Medical Benefi ts Schedule (MBS) has never covered cosmetic-only services and, hence, nor have the private funds.
The change to Medibank Private’s policy now means all of its policy holders must obtain pre-approval from Medibank Private for their surgical procedure – regardless of whether a Medicare Item Number applies to the procedure or whether their doctor deems the surgery medically required and not cosmetic in nature. In other words, Medibank Private can now veto the surgeon’s opinion that a surgical procedure is medically necessary, in essence redefi ning the term “medically necessary”.
It is this usurping of the patient-doctor relationship that is causing the most concern. “We are receiving calls from an increasing number of patients requiring medically necessary procedures who are being told by Medibank Private that their claim for cover is rejected because Medibank Private deems the procedure to be cosmetic,” says President of the Australian Society of Plastic Surgeons Dr Tony Kane.
“We ask: who is best placed to determine what is in a patient’s best interest?”, he says. “Is it the patient’s specialist or an insurance company administrator without relevant specialist medical qualifi cations and without examining the patient?”
The Private Health Insurance Ombudsman has told health funds to be very clear about the defi nition of plastic surgery and what’s covered under their changed policies. The Ombudsman has asked health insurers to give a plain-English explanation of plastic surgery, as well as examples of what patients won’t be covered for if they buy a policy with restrictions or exclusions. A consumer fact sheet has recently been issued by the government, advising patients to contact their health insurer before any procedure to check if they are covered – read it at www.phio.org.au/facts-and-advice/ plastic-and-reconstructive-surgery.aspx
How it affects patients and your practice
As a result of the policy changes, patients are now generally left to either pay up-front the cost of the hospital treatment or delay or forego surgery. “Our concern is that patients could be driven to consider less safe options such as unaccredited facilities, including travelling overseas,” says Dr Kane.
The main procedures targeted are abdominoplasty, blepharoplasty, breast reduction and lift, and rhinoplasty. Patients requiring surgery after treatment for skin or breast cancer, which are among the most common cancers in Australia, are also among those procedures affected by the Medibank Private policy changes. “As a result, we’re operating on people publicly who have been paying consistently to a private health insurer, at the public’s expense,” says Dr Kane. “A likely consequence of this practice is for consumers to lose confidence in the private health insurance system and stop taking out private health insurance.”
In some casess, breast cancer survivors requiring reconstructive plastic surgery and skin cancer patients and burns victims requiring skin grafts have been denied or delayed hospital cover by Medibank because the insurance provider claims it is a “cosmetic” procedure. The ABC’s 7.30 program featured one such affected patient, breast cancer survivor Candi Browne. She required a double mastectomy and elected to have a full reconstruction of her breasts. But a second stage of her procedure – the tattooing of her reconstructed nipples – was delayed when the hospital admissions department said Medibank Private was querying the procedure because it was possibly “cosmetic”.
“I didn’t decide to have a mastectomy and have new breasts for the heck of it,” Ms Browne said. “I’m just being put back to what I was before.”
Eventually the case was resolved and Medibank allowed the cover – but not without undue distress to the patient.
Medibank Private says it made the decision to challenge proposed plastic surgery procedures after uncovering a number of claims that could not be verified. In an audit of more than 800 hospital procedures the insurance company had paid for, it was found that 25 percent of these were cosmetic or not able to provide evidence of being medically necessary. A further 20 percent of cases were still waiting on information from hospitals as to whether the procedures were medically necessary.
“As this area of surgery is unique and procedures such as eyelid surgery, breast augmentation and lipectomy can be performed for purely cosmetic or medical reasons it is essential that we have robust review process to ensure we are paying the correct claims on behalf of our members,” says Medibank Private spokesperson Victoria Hanlon.
“We have a duty and an obligation under the Health Insurance Act and to all of our members to ensure that we can do whatever we can not to pay for cosmetic treatment,” says Medibank’s chief medical officer Ian Boyd.
A move towards a “managed care” system?
Australian Medical Association (AMA) president Assoc Prof Brian Owler warns of an Americanisation of our healthcare system, a move towards “managed care” where insurers have a say in what procedures doctors perform.
In a speech to the National Press Club in Canberra, he said: “The stage is being set for a US-style managed care system in both the primary care and hospital settings. I am concerned that the Government is also looking towards such a system.
“The AMA supports a strong role for private health insurers but we will not allow private health insurers, motivated by profits and market share, encroaching into the doctor-patient relationship.”
“The fear of what’s going on at present is that health insurers such as Medibank Private are looking over the shoulder of plastic surgeons and are denying what a plastic surgeon perceives to be medically necessary,” says Dr Tim Papadopoulos, President of the Australasian Society of Aesthetic Plastic Surgery (ASAPS).
“This is definitely a move towards US-styled managed care where health insurers are seen as entrepreneurial agents of cost containment. This is when economics reigns over ethics. Ethics must be done in close range, not at a distance by third parties which blurs the complexities of human experiences.”
Dr Papadopoulos says this ethical concern also pertains to the effect of managed care on doctor-patient relationships. “Many of us worry that managed care will undermine doctor-patient relationships by eroding patients’ trust in their doctors, reducing the amount of time doctors spend with patients, and restricting patients’ access to doctors,” he says.
“Furthermore, health insurers in Australia are structuring themselves around a variety of incentives to encourage the practice of cost-effective medicine, and to minimise variation in clinical practice patterns. So efficiency in their eyes means providing a product, in this case health care, while minimising resources used and care given, in order to minimise dollars spent.” He says this style of managed health care may create pressure to do more with less: less time per patient, less costly medicines, and fewer costly diagnostic tests and treatments. In this context, it is difficult to provide empathic and genuine personal care by doctors and almost impossible to foster the mutual trust and trustworthiness on which successful health care depends.
“We all buy private health insurance for peace of mind and it is disappointing that Australia’s largest health insurer, Medibank Private, is leading a move towards American-style managed care,” says Dr Kane. “Our understanding of top hospital cover is that if it’s in the Medicare schedule book, you should be covered for an in-hospital episode. But clearly, that’s not the case now.”