South Carolina insurers halt bariatric surgery reimbursement

More plans -- and some employers -- conclude the procedures are too costly and too risky for them to cover.

By Robert Kazel — Posted Oct. 11, 2004

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Additional insurers and employers are trying to reduce medical costs by halting reimbursements for gastric bypass surgery.

The board that runs the insurance plan for 370,000 South Carolina state employees, family members and retirees said in September it will decline to pay for the increasingly sought-after surgery starting Jan. 1, 2005. And BlueCross BlueShield of South Carolina decided to rescind coverage of the surgery for its 13,000 workers.

The self-funded South Carolina employee plan, which encompasses schoolteachers, public college employees, police and others, had paid for bariatric surgeries since about 1998. The state expects to save about $7.1 million a year by halting such coverage, said Mike Sponhour, a state spokesman. That was the amount the state Budget and Control Board spent in 2003 on 370 bariatric surgeries, or an average of more than $19,000 per case, he said.

BlueCross BlueShield of South Carolina, which administers the state plan, terminated coverage of gastric bypass operations for its own workers this summer after having covered it for about two years because "we've had very high rates of complications," said Ashby M. Jordan Sr., MD, the plan's medical director.

Karl Byrne, MD, a bariatric surgeon in Charleston, S.C., said it's arbitrary and shortsighted for payers to target bariatric patients.

"The state of South Carolina is poor," he said. "[But] the State Budget and Control Board are not doctors; basically they're just a bunch of politicians. ... So they go to Blue Cross and ask what can we cut and they [Blue Cross] says, 'Let's cut the fat folks.' "

Blues plans in Florida and Nebraska said this year they would stop coverage for the surgeries. CIGNA has halted reimbursements in several states.

The Gainesville, Fla.-based American Society for Bariatric Surgery will name clinics around the nation as "centers of excellence" for obesity surgery starting in November, said Harvey Sugarman, MD, the group's president. The hope is that payers will agree to cover the surgery if they know surgeons are experienced.

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