‘Why pay for a Cadillac, when a Chevy will do?’ How does the saying go? If I had a nickel..? So it goes with this phrase; repeated by rehabilitation claims reviewers and insurance payers, demonstrating that there is a growing national trend towards evaluating the medical necessity of a claim simply for its overall cost. Generally, an understanding exists between payer and beneficiary, that any catastrophic, illness or event involves an issue of financial responsibility. However, the expectation persists that insurance will provide for the purchased services.
How much does “an arm and a leg” really cost? A lower extremity prosthesis (leg) can range in cost from $5,000.00 to $50,000. An upper extremity device (arm) can range from $3,000.00 to $30,000. Why the difference and why not just give everyone the less expensive variation?
Cost does not define medical appropriateness. An amputee’s residuum, age, daily activities, profession and certain health factors determine the specific materials and technologies used for each custom manufactured device. A prosthetic device can be body powered or computerized, made of aluminum, stainless steel, titanium, plastics or carbon composites. A prosthetic is device is made up of moving parts. Parts wear down; interfaces need replacement. Humans grow, gain or loose weight, change in shape. All of these factors contribute to need and cost.
What are the costs of denying someone a prosthetic device? The California Health Benefits Review Program determined the cost of California state parity would be approximately $.25 per insured member. Additionally, a recent survey found that every $1 dollar spent on rehabilitation saves the economy $11 dollars in various welfare and disability benefits.
On the other hand, a person who does not receive a prosthetic within 2 years of amputation has a greater likelihood of social welfare, increased health concerns including obesity related diseases and conditions and is more likely to suffer depression.
The US amputee population is approximately 1.9 million persons and growing, however science and medicine provide the technology to restoring a person’s dignity, self-reliance, productivity and ability to contribute to society.
In consideration, the benefits to the person and to the community far outweigh the cost of provision.
Saturday, July 14, 2007
Wednesday, July 11, 2007
Prosthetic Parity: What is It?
Parity is a buzzword meaning, “on par with” or “equal to”. Legislative Parity is the attempt through either the State or Federal legislative process, to seek equalization. One of the most appropriate and logical applications of legislative parity is in Heath Care, specifically health insurance coverage. Legislative parity in health care means to pass legislation that equalizes insurance benefits.
So, again, what is prosthetic parity? It is state or federal legislation requiring insurance companies to pay for prosthetic devices on par with federal programs, payment rules and regulations. Federal Program could be Medicare, Medicaid, or programs such as the Federal Employee insurance held by Congress and other government employees. These programs provide reimbursement without capitation or exclusions for medically necessary services such as prosthetic devices.
Why is legislation necessary? Because not all private insurance policies are created equal. While many insurances policies do pay for prosthetics without extensive requirements, there is a growing trend across the US demonstrating that private insurance companies are significantly reducing prosthetic benefits or eliminating prosthetic coverage. The most notable change in prosthetic coverage is the “insurance cap”. Simply put an “insurance cap” is a yearly or lifetime benefit maximum. The “cap” is a common method used to limit coverage, reducing the company’s financial obligation and payout, but still allowing the company to claim to offer the benefit.
Yearly caps on prosthetic services range from $ 500 to $ 3000.00 and lifetime restrictions range from $10,000.00 to one prosthetic device during a person’s lifetime (from birth to death). In a recent survey of the 20 major insurance insurers, the number of insurers with financial caps, exclusions or unusually high deductibles rose 100% during a six-year period from 2000 to 2006. All 20 insurers surveyed had implemented financial caps to prosthetic coverage.
An Explanation of Cost. These “caps” are important because one lower extremity prosthesis can range in cost from $5,000.00 to $50,000. An upper extremity device or arm can range from $3,000.00 to $30,000. Why the difference and why not just give everyone the less expensive variation? Cost does not define medical appropriateness. An amputee’s daily activities, profession and certain health factors determine the specific materials and technologies used for each custom manufactured device. As an example, the same medication is not appropriate for every person with Diabetes nor is everyone given the same analgesic after surgery.
Who does this effect? Amputation is a catastrophic event. There is no cure. Amputation is a lifelong condition that does not go away. Fortunately, through medical skill training and recent advances in technology the Limitations of Limb Loss can be conquered. There are an estimated 1.9 million amputees in the United States and approximately 185,000 amputations surgeries performed each year. Of those amputations, performed 82% are due to Peripheral Vascular Disease and Diabetes. However, there are other causes of amputation. Approximately 8900 children receive amputations each year due to lawn mower accidents. Birth defects result in a life long need for prosthetic devices. As of February 2007, 897 US Armed Forces personnel were in need of prosthetic devices.
Benefits of Parity Legislation. Simply put insurance protects against catastrophic events. That is the expectation upon purchasing an insurance policy. However, it has become increasingly apparent that legislation is necessary to ensure prosthetic coverage and fair payment rules. Individuals who pay for insurance through premiums should receive appropriate and medically necessary treatment: their arms and legs. Prosthetics provide dignity and self-reliance. Prosthetics put people back to work. In addition, by returning amputees to the workforce, strengthen a community and its economy.
So, again, what is prosthetic parity? It is state or federal legislation requiring insurance companies to pay for prosthetic devices on par with federal programs, payment rules and regulations. Federal Program could be Medicare, Medicaid, or programs such as the Federal Employee insurance held by Congress and other government employees. These programs provide reimbursement without capitation or exclusions for medically necessary services such as prosthetic devices.
Why is legislation necessary? Because not all private insurance policies are created equal. While many insurances policies do pay for prosthetics without extensive requirements, there is a growing trend across the US demonstrating that private insurance companies are significantly reducing prosthetic benefits or eliminating prosthetic coverage. The most notable change in prosthetic coverage is the “insurance cap”. Simply put an “insurance cap” is a yearly or lifetime benefit maximum. The “cap” is a common method used to limit coverage, reducing the company’s financial obligation and payout, but still allowing the company to claim to offer the benefit.
Yearly caps on prosthetic services range from $ 500 to $ 3000.00 and lifetime restrictions range from $10,000.00 to one prosthetic device during a person’s lifetime (from birth to death). In a recent survey of the 20 major insurance insurers, the number of insurers with financial caps, exclusions or unusually high deductibles rose 100% during a six-year period from 2000 to 2006. All 20 insurers surveyed had implemented financial caps to prosthetic coverage.
An Explanation of Cost. These “caps” are important because one lower extremity prosthesis can range in cost from $5,000.00 to $50,000. An upper extremity device or arm can range from $3,000.00 to $30,000. Why the difference and why not just give everyone the less expensive variation? Cost does not define medical appropriateness. An amputee’s daily activities, profession and certain health factors determine the specific materials and technologies used for each custom manufactured device. As an example, the same medication is not appropriate for every person with Diabetes nor is everyone given the same analgesic after surgery.
Who does this effect? Amputation is a catastrophic event. There is no cure. Amputation is a lifelong condition that does not go away. Fortunately, through medical skill training and recent advances in technology the Limitations of Limb Loss can be conquered. There are an estimated 1.9 million amputees in the United States and approximately 185,000 amputations surgeries performed each year. Of those amputations, performed 82% are due to Peripheral Vascular Disease and Diabetes. However, there are other causes of amputation. Approximately 8900 children receive amputations each year due to lawn mower accidents. Birth defects result in a life long need for prosthetic devices. As of February 2007, 897 US Armed Forces personnel were in need of prosthetic devices.
Benefits of Parity Legislation. Simply put insurance protects against catastrophic events. That is the expectation upon purchasing an insurance policy. However, it has become increasingly apparent that legislation is necessary to ensure prosthetic coverage and fair payment rules. Individuals who pay for insurance through premiums should receive appropriate and medically necessary treatment: their arms and legs. Prosthetics provide dignity and self-reliance. Prosthetics put people back to work. In addition, by returning amputees to the workforce, strengthen a community and its economy.
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