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Provider Stops Gastric Bypass: Medicare, Medicaid Patients Must Go Elsewhere

December 28, 2005

By Kevin Graman, The Spokesman-Review, Spokane, Wash., The Spokesman-Review, Spokane, Wash.

Dec. 28–Morbidly obese patients on government-sponsored health care can no longer receive gastric bypass surgery in Eastern Washington because of low reimbursement rates and high medical malpractice premiums, according to a local doctors’ group.

Surgical Specialists of Spokane, one of three regional health care providers approved by the state to perform the controversial but potentially life-saving procedure on Medicaid patients, this month stopped offering gastric bypass surgery to patients covered by Medicaid or Medicare.

The decision of the medical group comes after Physicians Insurance served notice of a 25 percent insurance surcharge to the premiums of doctors who perform gastric bypass to facilitate weight loss.

A Physicians Insurance spokesman said the surcharge is justified because of the risks associated with the procedure, which dramatically reduces the size of a patient’s stomach and bypasses part of the intestine, resulting in fewer calories being absorbed by the body. At the same time, the state has limited the number and types of bariatric surgeries it will pay for because of studies that show high morbidity and mortality rates.

Gastric bypass is done for health, not cosmetic, reasons, say the three doctors who perform the surgery for Surgical Specialists. It is done when other weight-loss treatments have failed, a patient’s body mass index is 40 or higher or the patient is 100 pounds or more overweight, and the patient has a life-threatening or disabling condition related to weight.

“Gastric bypass is a last resort, but it is the only resort for some people,” said Christie Fresh, administrator for Surgical Specialists. The week before Christmas, she had to inform 35 patients expecting the surgery that for now they cannot have it done in Spokane.

Between 1998 and 2002, the number of bariatric surgeries performed in the United States more than quadrupled to about 70,000 a year, according to a University of California, Irvine, study reported in HealthDay News. That number may have doubled by 2004 due to the increased use of less invasive laparoscopic surgery using small incisions, according to the American Society for Bariatric Surgery.

At 41, Dena Fannin, of Ritzville, has fought obesity her entire life. For the last year and a half, she said, she also has fought the state Department of Social and Health Services, trying to win approval for gastric bypass surgery to be paid for by Medicaid, the state and federal health insurance for low-income patients. Fannin, who is 5 feet 10 inches tall, weighs 409 pounds, is disabled and lives on Social Security income.

“I am sick. I need to lose weight to help my health,” said Fannin, who has arthritis and suffers from a variety of ailments associated with obesity, including diabetes and heart problems. “I swear that Medicaid was outwaiting me, thinking something would happen to me before I was approved.”

But on Dec. 15, a Surgical Specialists nurse called to tell her she had been approved for surgery by Dr. Lawrence Schrock, the only surgeon east of the Cascades who performs gastric bypass on Medicaid patients.

“It is one of the more rewarding surgeries that I’ve ever done,” Schrock said. “The patients are extremely grateful for having a new life given back to them.”

However, within a week of being approved for the procedure, Fannin received a call from Fresh telling her the group had stopped performing gastric bypasses on government-sponsored patients. Her only options were to go to Seattle or Portland for the surgery. She has already begun a required six-month preoperative process during which she works with a dietician to lose at least 20 pounds and undergoes a psychiatric evaluation to determine her suitability for the life-altering procedure.

“It was like my last chance,” Fannin said. “I have to have surgery by June or go through the whole process again.”

Fannin is part of a class of patients whose medical options are limited by a combination of factors contributing to the U.S. health-care crisis “” medical costs rising much faster than inflation, low reimbursement rates for government-sponsored care, and the growing price of medical malpractice insurance.

“It’s one of the byproducts of the system we have that access to care is being threatened by necessary costs,” said Gary Morris, general counsel for Physicians Insurance.

Morris said the 25 percent surcharge on doctors performing gastric bypass, including Surgical Specialists of Spokane, is justified because of the risk of the surgery.

“That’s what insurance is all about,” he said, “spreading the risk across a larger group of people in as fair a fashion as possible.”

There have been several studies on mortality rates associated with bariatric surgery showing death rates from one in 50 operations to one in 500.

“When we started looking at this we noticed a huge variation in mortality among hospitals, from 0 to 40 percent depending on the hospital,” said Dr. Jeffery Thompson, chief medical officer for the state Department of Social and Health Services.

Finding this variance unacceptable, DSHS put a moratorium on gastric bypasses two years ago while it commissioned a University of Washington study to determine who should be getting the surgery and who should be performing it.

For the past 18 months, Thompson said, DSHS has approved Medicaid coverage for gastric bypass for patients with a body mass index of 35 or greater and who have diabetes as a result of their obesity. Surgeons whose clinics have performed at least 100 procedures in the last five years are approved provided they can show a mortality rate of no more than 2 percent and a morbidity rate “” patients developing health problems like malnutrition as a result of the surgery “” of less than 15 percent.

“No longer are we exposing our clients to excessive mortality risk for an unknown benefit,” Thompson said.

As a result of this policy, DSHS has approved Medicaid coverage for only three institutions: the UW Medical School in Seattle, Oregon Health Sciences in Portland and Surgical Specialists of Spokane. The Spokane group has performed only six Medicaid-funded gastric bypass procedures in the past 18 months, with another 40 patients in line, Thompson said.

“It would be nice if the government approved more of these patients,” said Dr. Scott Nye, of Surgical Specialists, who has been performing gastric bypass about a year.

Nye said this surgery is done “not to make them skinny. You are doing it so they can lose weight and get off medications.” He cites studies that show patients who have gastric bypass show improvement in such conditions as diabetes, high blood pressure and sleep apnea.

A study at McGill University Health Centre in Montreal comparing obese patients who had surgery with obese patients who did not have surgery found “an 89 percent reduced risk of death” in the patients who had surgery, according a 2004 Annals of Surgery report.

“I’m alive today because of gastric bypass surgery,” said Ann Campeau, 66, of Spokane, who had the procedure two years ago.

Since then the 5-foot-8 woman has seen her weight decrease from 470 pounds to 270 and counting. Private insurance paid for her surgery.

“Nobody wanted to handle me because I was such a high-risk patient,” Campeau said. “They all recommended surgery, but nobody wanted to do it.”

Without the procedure, she said, she was given a 60 percent chance of being alive in another six months. She was told she had a 50 percent chance of surviving the surgery. She was taking 20 pills a day for conditions related to obesity, including high blood pressure, a heart condition, diabetes, cholesterol and sleep apnea.

Today she is taking two pills a day and the minimum amount of insulin, she said.

“I’m saving my insurance company hundreds of thousand of dollars a year,” said Campeau, who one year racked up more than $400,000 in medical bills.

She believes there are people who cannot lose weight, and for them the option of gastric bypass should be available. “But you have to be prepared to make life-altering changes.”

Since Schrock performed her procedure, Campeau can eat no more than three ounces of food at a time, and there is a lot of food she cannot eat. She has to chew everything thoroughly to avoid pain and vomiting.

Campeau said her insurance company turned her down three times for the procedure before a medical review board finally approved her. While in support groups, she heard people’s stories about what they had to go through to get surgery. Some had to mortgage their homes. Her insurance company will no longer cover gastric bypass.

“A lot of people are going to die from lack of necessary surgery because they don’t have the resources,” she said.

Any surgery has its risks, Schrock said, especially surgery involving such high-risk patients as the morbidly obese. “But is it any higher risk than working on the pancreas, or liver, or coronary artery patients? I don’t know if that’s true,” he said.

Schrock regrets not being able to perform gastric bypass for patients on Medicaid and Medicare, the federal health plan for the elderly and some disabled people. He said patients who would qualify under other insurance plans are being excluded unreasonably.

“I’m disappointed in not being able to do this,” Schrock said. “I don’t say we’re quitting the program. We’re putting a moratorium on the program until we get these issues looked at.”

His medical group has asked Physicians Insurance to explain the surcharge.

“From a malpractice point of view they have shown us nothing that justifies a 25 percent surcharge,” he said. “Show us the statistics that this surgery is any riskier than surgeries they are not surcharging.”

Fresh said the surcharge will increase the group’s malpractice premiums from about $500,000 a year to about $600,000. She said notice of this increase came immediately after the state’s Nov. 8 elections, in which Initiative 330, limiting non-economic damages in medical malpractice claims, and Initiative 336, regulating doctors with multiple malpractice claims, were both defeated.

None of the Surgical Specialists of Spokane doctors has had malpractice claims for gastric surgery, said Fresh. A 2003 malpractice claim against Dr. Mark MacFarlane, which was denied by a Spokane County Superior Court judge, was unrelated to bariatric surgery, and according to Physicians Insurance had no bearing on the regionwide gastric bypass surcharge.

MacFarlane said his group donated nearly $30,000 worth of medical services last year but has reached a critical point where it can no longer afford to give care to low-reimbursement payers.

“It comes to a point if we don’t get higher reimbursements or malpractice relief, we can’t afford to do the work,” he said. “Legislators have ignored the issue, and doctors do not have the power to do it.”

Under state law, doctors apparently have no avenue to appeal the insurance price hike with the Washington state Insurance Commission.

As a medical malpractice carrier, Physicians Insurance is required to file rate increases up to 25 percent with the commission within 20 days of initial use, according to Beth Berendt, the state’s deputy insurance commissioner for rates and forms. Though the insurer has been asked to make minor changes in its filing, these are unlikely to change the outcome.

“Many carriers consider this higher-risk surgery,” Berendt said. “Many do not write this policy.”

Among Physicians Insurance’s two main competitors, Medical Protective does not offer malpractice insurance to doctors performing gastric bypass. The other, The Doctors Company, also has a surcharge, Berendt said.

She said Surgical Specialists’ decision creates “a significant access problem” for Eastern Washington and encouraged the group to sit down with Physicians Insurance officials and “find out why they are taking this route.”

Meanwhile, Dena Fannin waits for the procedure she hopes will change her life.

“I’ve heard a lot of people say it’s like a new birthday,” she said. “If they don’t do the surgery soon, I don’t think I’m going to be able to have it done.”

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Copyright (c) 2005, The Spokesman-Review, Spokane, Wash.

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