This study explores how state managed care patient protection laws affect health insurers' criteria for medical necessity, using weight reduction surgery as a case in point. Six states and three national insurers were selected for in-depth case studies to represent a range of market, demographic, and legal conditions. In each state, 10-12 qualitative interviews were conducted with insurers, regulators, providers, and health care attorneys, for a total of 71 interview subjects.
Unlike most areas of medicine, where health insurers have greatly scaled back their past efforts to scrutinize medical necessity, for weight reduction surgery, many insurers continue to apply a more stringent standard for medical necessity than the one that independent practicing physicians use. Accordingly, denials of coverage for weight reduction surgery are a frequent source of appeals to external review, and external reviewers frequently overturn these denials. However, few insurers feel pressured to approve most or all requests for coverage because external review decisions do not set binding precedents. Instead, insurers continue to assert their own criteria for medical necessity, relying on the insurance contract's general definition of medical necessity. Some insurers, however, specifically exclude all weight reduction surgeries because of the difficulty of defending case-by-case denials on appeal.
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