What happens when a patient's plan no longer pays for treatment?

David Goldberg, M.D., J.D.

Dr. Smith completed his dermatology residency program almost 20 years ago. His successful practice in the Sun Belt serves many affluent retirees. Because of the excessive sun exposure seen in many of his patients, four out of every 10 patients present with a variety of signs of photodamage. Most commonly, patients present with myriad actinic keratoses.

In an ethical attempt to limit the numbered of required patient visits, Dr. Smith often will treat 20 to 30 solar keratoses in one visit. Unfortunately, such patients continue to contract additional actinic keratoses and sometimes reappear in his office every two months for treatment.

Dr. Smith has taken courses on proper coding and codes in a recognized, honest and ethical manner. Unfortunately, several of his carriers inform him that only 15 actinic keratoses can be treated at each visit, and only four such visits are allowed during a year for each patient.

Dr. Smith demands a rehearing by the insurance plans only to find that his pleas for appropriate reimbursement are unheard. He contends that the insurance plans are “practicing medicine;” that such an approach is poor quality of care; that forced “undertreatment” by him will lead his patients to contract squamous cell carcinoma (he believes that solar keratoses represent incipient squamous cell carcinoma); and that squamous cell carcinoma may lead to metastatic disease and death. None of this changes the views of the carriers. How could this happen?

Minding the numbers

In 1996, the U.S. spent 14.2 percent of its gross domestic product (GDP) on healthcare, at $3,708 per person. By comparison, Germany spent 10.5 percent of GDP, at $2,222 per person. Canada spent 9.2 percent of GDP, at $2,002 per person; and Japan spent 7.2 percent of GDP, at $1,581 per person. The United Kingdom spent 6.9 percent of GDP, at $1,304 per person.

The numbers spent in the U.S. may double over the next decade. Of course, these numbers do not tell the whole story. Although Americans do not necessarily do better health-wise than these other countries, life expectancy for whites or for persons over age 65 in the U.S. is higher than seen in other countries. These are the very people who contract solar keratoses. Their increasing numbers simply add to healthcare costs in the U.S.

By controlling physician visits by such patients and limiting the number of treated lesions per visit, it is argued, one can control spiraling healthcare costs. Does such “rationing” work?

Oregon’s experience

The Oregon Health Plan (OHP) was the first large-scale plan to ration healthcare in this country. Under this plan, Oregonians who receive healthcare through the state’s Medicaid plan would receive healthcare services through a rationing plan. Medicaid coverage would only be for certain services, not for all services.

The Oregon legislature hoped that by “prioritizing” or “allocating” (both phrases preferred over “rationing”) services, it could reduce excess spending, allowing a “more sensible, systematic and utilitarian manner - benefiting the greatest number of recipients possible within limited resources.” Did the plan succeed?

The OHP did succeed in providing more of Oregon’s poor with insurance, but it did not necessarily succeed in cutting healthcare costs. In fact, the plan was funded by not only contracting with managed care plans, but also by raising revenues.

In a 1992 University of Pennsylvania Law Review article, Joseph A. Califano Jr., said, “Rationing is a macabre dance of despair, choreographed by the failure of half-hearted efforts to rein in healthcare costs, by extravagant waste, by refusing to provide timely care to the poor, and by self-indulgent lifestyles.”

Reining in costs

States such as Florida have tried to rein in the number of actinic keratoses to be treated. Florida has mandated that topical chemotherapeutic agents are required before surgically removing them. In addition, a set limit on the number of treated lesions would be required.

The Medicare carrier stated that such measures were required because Florida was a leading state in the treatment of solar keratoses. The counterargument that so many aged white Americans live in Florida fell on deaf ears.

Other states have joined Florida with such requirements. The impact of the 2010 Affordable Care Act has yet to be seen. The issue is thus far not resolved. Dr. Smith will not be reimbursed for his “excessive” treatments. Unfortunately, the policies limiting the amount of actinic keratoses treated in one year will not shield him from a medical malpractice case should he choose not to treat his patients, as would be required by the duty of reasonable care. Lack of reimbursement for procedures does not provide for such a shield. DT