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Medicare questions


Frequently Asked Questions

  In July 2004, the Secretary of the Department of Health and Human Services (HHS) announced a change in the Medicare policy to reflect the seriousness of obesity as a medical condition. Below are questions and answers compiled by the AOTA, in response to the many questions received regarding the Medicare policy change.

  1. What exactly did Medicare do in July, 2004?
    In July, Secretary of Health and Human Services Tommy Thompson announced that Medicare was removing language in its regulations (called the Coverage Policy Manual) which said, "obesity is not an illness". This language meant that no payments may be made for obesity treatment because, by statute, Medicare only pays for the treatment of illnesses and accidents. Thompson indicated that Medicare would pay for treatments of obesity which were reasonable and effective. Effectiveness would be decided by the established Medicare process. Read the Medicare Coverage Advisory Committee's (MCAC) Recommendations for Evaluating Effectiveness.
  2. Did Medicare say obesity is a disease?
    Yes and no. Medicare did not definitively say obesity is a disease. It did remove language which said obesity is not a disease and it said it would pay for treatments which were effective. By law, Medicare can only pay for treatment of a disease or illness. Medicare has recognized obesity as a disease in a tortured, bureaucratic manner.
  3. How did this change come about?
    The AOTA first complained about this policy in our first Public Policy Conference in 1999. Subsequently, AOTA testified before one of the first MCAC meetings in 2000. In April 2001, William Dietz, M.D., of the CDC, convened a workshop on reimbursement treatment. AOTA presented the case that we were making at the time to the Internal Revenue System (IRS) to recognize obesity as a disease. In the course of the presentation, we pointed out that the Medicare policy manual language was an obstacle. In the audience, at this workshop, was a representative of the Centers for Medicare and Medicaid Services (CMS), Dr. John Whyte who was concerned about the Medicare policy. At the break, a plan was hatched that CDC would ask its sister agency, CMS, to reconsider its policy.

    The AOTA submitted the case for obesity as a disease to CMS and the process was underway. Subsequently, CMS asked for public comments and asked another HHS agency, the Agency for Healthcare Research and Quality (AHQR) for an evaluation.
  4. What will Medicare do next?
    The Medicare Coverage Policy structure will review different treatments, starting with bariatric surgery, and determine which meet its standards for effectiveness. It is open to requests from anyone to review different therapies.
  5. In addition to surgery, what treatments might Medicare cover?
    Medicare is a federal program established by Congress. Its benefits are organized by specific categories, e.g. hospitals, physician services, home health agencies, skilled nursing facilities, home health agencies and, recently, outpatient drugs. Treatments which fall within these categories and which are established to be effective can be covered. Since drugs to treat obesity are not included in the Medicare drug benefit, CMS cannot now include them; Congress will have to change the statute. Likewise, the medical nutrition benefit is limited by statute to specific diagnoses, e.g. diabetes and renal disease. Congress would have to add obesity to the list of diagnoses. However, Medicare does cover physician services and services incident to a physician’s services. This would allow Medicare to approve payments for physician counseling of patients on obesity and for those working in a physician’s office, e.g. dieticians and psychologists. Another possibility is in-patient hospital programs.
  6. How does Medicare evaluate therapies?
    The CMS makes National Coverage Determinations (NCDs) which provide national rules. But Medicare is actually administered by a number of insurance companies. These companies are known as carriers and fiscal intermediaries. These entities can also make their own coverage determinations but cannot contradict a National Coverage Determination. National Coverage Determinations are made by CMS with the advice of the Medicare Coverage Advisory Committee. In the ’early days,’ Medicare made coverage decisions without much procedural structure. This has changed over the years to a more elaborate process. The process is described at the CMS web site in the Medicare Coverage section.
  7. Is obesity being treated differently than other diseases?
    Again, yes and no. You can look at Medicare and say that, if in 1965, obesity were simply accepted as a disease, it would have been covered by Medicare and probably would not now be asked to demonstrate effectiveness. However, a more realistic way to look at it is that if, for example, Medicare had declared cancer was not a disease and now had reversed that decision, cancer treatments would be subject to the same scrutiny. Since the inception of Medicare, a host of policymakers and healthcare experts have felt that Medicare did not sufficiently ask if what it was paying for actually worked or not. Now, evidence-based medicine has emerged and is affecting every decision.
  8. What is Medicare’s position on bariatric surgery?
    Medicare has a coverage policy manual which approves gastric bypass surgery when used for the treatments of diseases caused by obesity, e.g. type 2 diabetes, cardiovascular disease, etc. This coverage has not been reopened. The MCAC held a hearing on November 4, 2004 to review bariatirc surgery. The MCAC was looking at the scientific evidence for the various forms of bariatric surgery in instances where comorbid conditions were present and in the absence of comorbid conditions.
  9. What happened on November 4th at the MCAC Hearing?
    The Committee had two sets of questions. One set dealt with the scientific evidence for bariatric surgery in the absence of comorbid conditions; the other in the presence of comorbid conditions. CMS asked the American Society for Bariatric Surgery (ASBS) to assemble a panel of experts to make about an hour-long presentation. Then, others testified by brief periods of time to address the committee. The committee then asked questions of the presenters and of each other before moving to take votes on the specific issues.

    What was the outcome? First, the committee dismissed the set of questions dealing with bariatric surgery in the absence of comorbid conditons. The committee was persuaded that surgeons follow the 1991 NIH Consensus Conference protocol, which provides surgery to (a) persons with a BMI > 40 and (b) persons with a BMI > 35 with comorbid conditions. Therefore, there were virtually no studies in persons without a comorbid condition.

    The committee then considered a series of questions that dealt with the scientific evidence for gastric bypass, banding and biliopancreatic diversion with or without duodenal switch, whether performed open or laproscopically. In general, the Committee gave a high endorsement to all the procedures in both modalities for achieving durable weight loss, net improvement in health, with acceptable short-term mortality and complications. It expressed less certainty for the application of this evidence in the population over age 65 and in general community settings. These conclusions are taken under consideration by CMS. CMS may decide to leave the current coverage language in effect or issue a new proposed NCD. If they issue a new, proposed NCD another round of public comments and hearing will be required.

  10. Did AOTA testify?
    AOTA did not provide oral testimony. We did submit a written statement in support of bariatric surgery.
  11. What is next for Medicare and obesity?
    At this point, it appears that ASBS will ask CMS for a new NCD based on the strong support for surgery expressed at this meeting. Others in the surgery field may also request a new determination.

    As mentioned earlier, AOTA is considering a petition to CMS to cover physician counseling and services incident to physician services consistent with the existing Medicare program. In addition, AOTA is planning to return to Congress to seek inclusion of drugs to treat obesity in the Medicare pharmacuetical benefit. We are waiting to see what the American Dietitic Association decides to do regarding the Medical Nutrition Therapy benefit.
  12. What are the implications for Medicaid and private insurance?
    Traditionally, what Medicare decides to cover has a powerful ripple effect through the federal-state Medicaid program and in private, commercial insurance. It is our expectation that this will be the case with obesity. However, our health insurance system is very diffuse and it will come down to what states and private payors can afford. Nonetheless, Medicare endorsement has a powerful effect on all payors in the health care system.
  13. What are the other implications of this decision by Medicare?
    AOTA believes that this decision has major research implications. The elderly-obese population has been growing at much higher rates than the general population. Yet, this is a very under-studied population. We expect, and hope, that this decision will open up a virtually new field in geriatric-obesity. In addition, the MCAC process will only encourage greater data-collection and demonstration of effectiveness, which can only raise confidence in the obesity treatment field.