RD264 - Evaluation of House Bill 667: Mandated Coverage of Alternatives to Surgery


Executive Summary:
House Bill 667 of the 2008 General Assembly Session would require that health insurance plans including coverage for surgical treatment of a medical condition or disease also include coverage for any non-surgical treatment for the medical condition or disease that is (a) less expensive, (b) less dangerous, (c) not experimental or investigational, (d) generally recognized by the regional medical community as an appropriate treatment for the condition or disease, and (e) not less efficacious than the surgical treatment. Subsequent to the referral of HB 667 to the Special Advisory Commission on Mandated Health Insurance Benefits, the patron of the bill indicated that HB 667 was introduced only to secure coverage for the oral consumption of amino acid-based formula in light of one insurance company’s policy requiring that formula be delivered via a surgically placed tube to obtain coverage (even though medical experts indicate that oral consumption is preferred, when possible). This evaluation comments on the proposed coverage in its entirety and the specific issue relating to the administration of amino acid-based formulas.

MEDICAL EFFICACY AND EFFECTIVENESS

Due to the breadth of the medical conditions and treatments covered by HB 667, medical experts indicate that it is difficult to make a meaningful assessment of the medical efficacy or effectiveness of treatments that may be covered by the proposed mandate. Experts indicate that oral consumption of amino acid-based formula is preferred when possible due to the risk of complication. However, there may be situations when enteral (tube) feeding is necessary.

SOCIAL IMPACT

The broad nature of the coverage proposed in HB 667 makes it difficult to assess the bill’s social impact and challenging for health insurance companies to determine whether they provide the proposed coverage. With regard to amino acid-based formula, most children likely consume the formula orally, but medical experts indicate that some children may require enteral feeding of the formula to adhere to a strict formula diet. Advocates for the proposed mandate and information from another state indicate that some children use feeding tubes solely to receive insurance coverage of the formula, although medical experts consulted for this review were not aware of any cases of this happening. Less than one third of health insurance plans surveyed indicate that they provide coverage of the formula when it is taken orally. Several plans indicated that coverage is only provided if the formula is taken through a feeding tube; some plans further require the patient be hospitalized to receive coverage when taken enterally.

FINANCIAL IMPACT

The premium impact of HB 667 is indeterminate because the scope of the bill is too broad for many insurance companies to develop premium estimates. Some medical experts are concerned that HB 667 could lead to patients not receiving effective and appropriate care for their medical needs, in part because HB 667 does not require non-surgical alternatives to be prescribed by a physician or other licensed personnel and does not require treatments to be provided by certified, registered, or licensed professionals. The financial impact of requiring coverage of oral consumption of amino acid-based formula when enteral consumption of the formula is already covered is expected to be small.

BALANCING MEDICAL, SOCIAL, AND FINANCIAL CONSIDERATIONS

The impacts of HB 667 could be far reaching, and the breadth of the proposed mandate makes it difficult to assess many of the criteria reviewed by the Special Advisory Commission on Mandated Health Insurance Benefits. If the patron’s primary goal is securing insurance coverage for amino acid-based formula, whether taken orally or enterally, then a more direct solution would be to include language in the proposed mandates covering amino acid-based formula (HB 615 and HB 669 of the 2008 General Assembly Session) requiring coverage of the formula regardless of the method of consumption. Also, because not all feeding tubes require surgical placement, it is not clear the extent to which HB 667 would address the patron’s concerns.