| Staying
Informed About Your Health Care Costs ...
As you plan
for plastic surgery, you will probably learn a lot about
what
will happen in the operating room and discuss with your
plastic surgeon
how you will look and feel afterward. However, another
important part of being an informed patient is knowing about
the costs associated with surgery and how these costs will be
paid.
The American
Society of Plastic Surgeons (ASPS) has prepared this
information to assist you in better understanding health
insurance benefits for plastic surgery. It is intended to
answer basic questions and guide you in communicating
effectively with your plastic surgeon's office staff and your
insurance carrier. It won't answer all of your questions,
because a lot depends on individual circumstances and your own
insurance. Be sure to contact your insurance company or your
employer's Human Resources/Benefits department with any
questions you have about coverage for specific services.
About
Plastic Surgery
Derived from
the Greek word "plastikos", meaning to mold or give
form, the specialty of plastic surgery encompasses two general
categories:
- Reconstructive
surgery is performed on abnormal structures of
the body caused by congenital defects, developmental
abnormalities, trauma, infection, tumors or disease. It is
generally performed to improve function but also may be
done to approximate a normal appearance.*
- Cosmetic
surgery is performed to reshape normal
structures of the body in order to improve the patient's
appearance and self-esteem.*
*Definitions
as adopted by the American Medical Association and the
American Society of Plastic Surgeons (ASPS).
What's
Covered
Your insurance
policy is an agreement between you and your insurance company.
In contrast, an agreement on services and fees is an agreement
between you and your plastic surgeon. When you have surgery,
you become responsible for payment of the doctor's fees.
Coverage for services and levels of payment by your insurance
company depend on the terms of the contract between you and
your insurance company. You are responsible for any amounts
not covered by your plan.
Reconstructive
surgery is generally covered by most health insurance
policies, although coverage for specific procedures and levels
of coverage may vary greatly.
Cosmetic
surgery, however, is usually not covered by health insurance
because it is elective. Cosmetic surgery is your choice and
not considered a medical necessity.
There are a
number of "gray areas" in coverage for plastic
surgery that sometimes require special consideration by an
insurance carrier. These areas usually involve surgical
operations that may be reconstructive or cosmetic, depending
on each patient's situation. For example, eyelid surgery (blepharoplasty)
a procedure normally performed to achieve cosmetic
improvement may be covered if the eyelids are drooping
severely and obscuring a patient's vision. Or, nose surgery (rhinoplasty
and/or septoplasty) may be covered if it will correct a defect
that causes breathing difficulties.
In assessing
whether the procedure will be covered by the patient's
insurance contract, the carrier looks at the primary reason
the procedure is being performed: Is it for relief of symptoms
or for cosmetic improvement? If a procedure is within these
"gray areas," insurance companies often require
prior authorization or approval before the surgery is
performed and/or extra documentation after surgery to
determine how much of the cost of your care they will cover.
Reading
Your Own Policy
It's important
to understand what's included in your policy before you
advance too far in planning surgery. Some policies provide
coverage for many plastic surgery procedures while others are
more limited in coverage. Read your policy and benefits manual
carefully and discuss any questions you may have with your
insurance plan manager.
There are
three typical cost sharing options:
- A deductible
is the total amount of covered medical expenses that must
be paid by the patient before the insurance company begins
paying benefits. Examples of standard deductibles are
$100, $250 or $500. After this requirement is reached, the
insurer will begin paying according to terms of the
contract often 75 percent to 85 percent of covered
medical costs. The patient is responsible for any
remaining balance.
- A flat-rate
copayment reflects a defined share of covered medical
costs that the patient pays with the insurance carrier
paying an amount based on the patient's policy. For
example, when the patient pays $15 of any office visit
charge or $3 for any prescription, the insurance carrier
is responsible for the balance.
- A percentage-based
copayment reflects a percentage share of covered
medical costs that the patient pays, with the insurance
company paying an amount based on the patient's policy.
Examples are: 20 percent of the office visit charge
$10 of a $50 charge, $12 of a $60 charge, etc. Typically,
this copayment arrangement includes a deductible and may
have other variations.
Your benefits
administrator will be able to explain these points to you. Be
certain that all patient financial responsibilities are
understood before having surgery. If you can calculate your
costs based on the terms of your insurance plan, there will be
no misunderstanding later of your obligation.
Example
One
A woman is planning to undergo hand surgery, the surgical fee
will be $2,000. Her plan has a $250 annual deductible, and
will cover 80 percent of her covered medical costs. Because
she has paid only $70 so far this year in covered medical
expenses, she must pay the first $180 of the covered costs of
the hand surgery to satisfy her plan's $250 deductible. If her
plan's cost share is a percentage-based copayment of 80
percent to 20 percent, the carrier will pay 80 percent of the
covered costs of the procedure. Once that is settled, she must
pay for 20 percent of the covered costs, plus any costs for
which the insurance plan denies coverage.
If the
patient's insurance plan covered the full surgical fee, the
cost sharing would look like this:
Reconstructive
Hand Surgery: $2,000
Balance of deductible: $180 ($250 - $70)
-----------------------------------
$1,820
Insurance coverage: $1,820 x 80% = $1,456
Patient payment: $2,000 - $1,456 = $544
The $544 is
the patient's responsibility under the percentage-based
copayment arrangement.
Example
Two
A different scenario occurs if the patient has met the
deductible and the plan covers the full surgical fee. Then the
math might look like this:
Reconstructive
Hand Surgery: $2,000
Percentage-based agreement: $1,600 (80%)
Patient payment: $400
The patient's
responsibility is, in this example, $400.
Example
Three
If the patient's insurance has a flat-rate copayment plan for
covered medical services with no other limiting conditions and
the copayment rate is $15, then the surgical cost might be
paid as follows:
Reconstructive
Hand Surgery: $2,000
Contracted patient copayment: $15
Balance paid by insurance: $1,985
Example
Four
With a coordination of benefits or dual coverage, the
hand surgery patient is also covered under her spouse's
insurance, and the benefits of both plans may be coordinated
to cover more of the cost of the surgery. With dual coverage,
the patient's carrier is considered the primary insurer.
Coverage under a percentage-based copayment is 80 percent of
the cost of surgery. The secondary insurer, her spouse's plan,
may cover the remaining 20 percent depending on the specific
terms of the spouse's policy.
After the
primary insurer has paid its share, it will send the patient
an "explanation of benefits" statement, including
the date of service, the doctor's charges and/or hospital
covered charges, the amounts and payment dispersal dates. If
the patient is covered under only one plan, she must pay the
unpaid balance. With dual coverage, the secondary insurer may
pay some or all of the remaining balance. Usually, the
secondary insurer will not pay for any portion of the
remaining balance until a copy of the primary insurer's
benefits statement is received.
The above
illustrate examples of coverage. The amount billed to your
insurance by your physician may not be the actual amount on
which reimbursement is calculated; your insurance plan may
assign a lesser fee for the procedure. Where a physician has
agreed to be a contracted provider, these illustrations will
not necessarily apply.
Your
particular situation will:
- reflect the
coverage and cost-sharing agreement of your insurance
plan;
- the
deductible and any amount of the deductible that you have
already met;
- and any
dual coverage available if you are also carried on your
spouse's or another secondary plan.
Understanding
your policy and your responsibility for payment is essential.
Securing approval of medical services and fees by your
insurance carrier prior to surgery will prevent any
misunderstanding of coverage and responsibility for payment
after your care is complete.
Beginning
the Process
When you visit
your plastic surgeon's office for the first time, bring your
insurance card with you. If you are eligible for coverage
under another plan, bring this insurance card with you as
well. With verification of this information on file, the
plastic surgeon's office staff may bill your health care plan
directly for covered services.
Once you and
your plastic surgeon have agreed on the specifics of your care
and the fees, it's likely that your plastic surgeon will
assist in determining if your care is indeed covered by your
insurance plan. Your plastic surgeon will probably send a
pre-authorization letter to your insurance carrier, explaining
the procedure, listing the ICD-9 (diagnosis) and CPT
(procedure) codes, the surgical fee, place of service and
anesthesia. The pre-authorization letter will request
authorization to proceed with your surgery and an indication
of the level of coverage provided by your policy. Before
giving the "go-ahead" to proceed with surgery, the
insurance company will review your case to ensure that the
procedure is medically necessary based on the insurance
carrier's guidelines of medical necessity.
During this
review period, make sure you have a clear understanding of the
costs and fees and determine the portion you'll be expected to
pay. Remember, if a hospital stay is also required, a number
of other costs will be involved.
Keep accurate
notes of all communication with the insurance company and your
plastic surgeon, and make a personal file to keep copies of
completed insurance forms and every letter sent or received.
Keep your file in a safe place in case papers are lost in the
insurance process or the mail or you need to reference
anything about your surgery.
The Appeals
Process: Another Chance at Coverage
If your
insurance company does not authorize payment for your
reconstructive surgery, or if it agrees to pay only a small
percentage of a claim, you may choose to appeal the decision.
Before
beginning this process, carefully read your policy or benefits
booklet. Make sure there is nothing in the plan that
specifically excludes the type of care you received or are
scheduled to receive.
In appealing
the decision, your first step is to write a letter to the
insurance company representative (usually the claims
supervisor) who signed the notification of denial. In the
letter, explain why you feel the procedure should be covered
and ask that your request be reviewed by a plastic surgeon
certified by the American Board of Plastic Surgery.
Your appeal
letter should also request a full explanation of why coverage
is being denied or paid at a reduced level. Request that the
claims supervisor send you a copy of the specific statement
drawn from the policy or from the benefits booklet
that explains why your coverage is limited or denied.
Attach a copy of the denial notification and a copy of your
doctor's pre-authorization letter to again provide the
statement of your surgeon's fee, the applicable billing codes
and an ASPS Position Paper specific to your procedure.
Position papers are available from your plastic surgeon.
If you receive
a vague response, or an explanation that "your policy
does not cover this type of surgery," you have the right
to see that policy language in writing. Make certain that
these policy restrictions were in place when you first began
your contract with the health plan and started paying
premiums. If the restrictions were not initially in place, you
may have the right to coverage under the insurance laws of
your state.
Many patients
find it helpful to send a duplicate mailing of their appeal
letter to the insurance commissioner of their home state for
indemnity insurance or to the department of corporations if
you are covered under a managed care plan such as a health
maintenance organization (HMO). This should include a brief
cover letter explaining the trouble you are having and asking
for assistance.
If your
insurance company responds favorably to your appeal, notify
the commissioner of your successful appeal efforts with a
second letter.
Paying for
Cosmetic Surgery
Your plastic
surgeon practices in an ethical manner and will submit claims
to insurance carriers only for valid reconstructive plastic
surgery. Any attempt to misrepresent a cosmetic procedure as
reconstructive is unethical. Cosmetic procedures are elective,
and payment is the responsibility of the patient.
Some plastic
surgeons accept major credit cards or offer financing programs
that allow patients to make manageable monthly payments for
cosmetic surgery. Ask your surgeon's office staff if any such
programs are available.
Glossary of
Terms
ASPS
Position Paper: a written statement by the American
Society of Plastic Surgeons detailing the background and
medical indications for reconstructive and cosmetic surgical
procedures. Position papers covering the most common plastic
surgery procedures are available.
Copayment:
in a contract with a health plan, the portion of covered
medical costs that the patient pays. In a typical plan, the
patient's copayment may be based on a percentage or a flat
rate.
Coordination
of Benefits: occurs when a patient is eligible for
coverage by more than one insurance plan. The benefits of the
plans are coordinated so that the patient may receive up to
100 percent coverage for his or her medical costs.
CPT Code:
a code number used to identify medical services. Developed by
the American Medical Association, "CPT" stands for
Current Procedural Terminology. CPT codes are used by
physicians in billing for services performed.
Deductible:
the total amount of covered medical-care expenses that must be
paid by the patient, usually on an annual basis, before the
insurance company begins paying benefits.
Exclusion:
a condition or circumstance for which a health plan does not
provide benefits.
ICD-9 Code:
a code that indicates the diagnosis - illness, disease or
trauma - for which care was rendered. "ICD" stands
for International Classification of Disease. Diagnosis codes
must correlate correctly with CPT codes for an insurance
carrier to consider payment.
Pre-authorization
letter: a letter written by a physician to an insurance
company prior to surgery. It explains in detail the procedure
a patient plans to have and requests confirmation that the
patient is covered, the planned services are covered, and the
level of coverage for the planned services.
Pre-determination:
a review process conducted by an insurance company to verify
the medical necessity of a planned procedure or treatment.
Pre-determination is often a condition of plan payment.
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