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9
Additional Stakeholder Perspectives
The determination of the essential health benefits (EHB) package (including whether more categories of care
will be added to the 10 listed in Section 1302 of the Patient Protection and Affordable Care Act (ACA) or whether
specific services will be classified within the existing categories), the role of state mandates in shaping the EHB
package, approaches to medical necessity determinations and appeals, cost-sharing practices, and the “required ele-
ments for consideration” included in Section 1302(b)(4), are of interest to numerous stakeholders. On January 14,
2011, the committee heard five-minute presentations from 15 stakeholders, including providers, consumers, and
researchers. The themes across these presentations were that in order to ultimately improve patient outcomes, the
EHB package should be comprehensive, evidence-based, affordable, accommodate individual needs, and take a
long-term view of the value of interventions.
PRESENTATION BY DR. R. SEAN MORRISON,
NATIONAL PALLIATIVE CARE RESEARCH CENTER (NPCRC)
Dr. Morrison, the Director of NPCRC, advocated for the inclusion of palliative care 1 in the EHB package,
stating that patients with serious illness have high clinical needs and therefore significantly contribute to health
care costs (Morrison and Meier, 2004; Morrison et al., 2011). Under the current health insurance model, he said,
the only reimbursement for palliative care is for hospice,2 which some insurers do not cover. For those that do,
to qualify for hospice reimbursement, the individual has to have a prognosis of six months or less to live, which
1 In Dr. Morrison’s words, palliative care is the medical specialty focused on preventing, treating, and relieving the pain and other debilitating
effects of serious and chronic illness, including cancer, cardiac disease, respiratory disease, kidney failure, Alzheimer’s, AIDS, ALS, and MS.
Palliative care is interdisciplinary and patient/family centered. It is provided from the time of diagnosis and involves the relief of pain and
other symptoms that cause discomfort, such as shortness of breath and unrelenting nausea. Palliative care involves extensive patient and family
communication, decision making, and coordination of care. Unlike hospice care, it is not dependent on a terminal prognosis and may actually
help an individual recover from illness by relieving symptoms such as pain, anxiety, or loss of appetite while undergoing sometimes difficult
medical treatments or procedures, such as surgery and chemotherapy.
2 In Dr. Morrison’s words, hospice is considered the model for quality compassionate care for people facing a life-limiting illness. Hospice
provides expert medical care, pain management, and emotional and spiritual support expressly tailored to the patient’s needs and wishes. In
most cases, care is provided in the patient’s home but may also be provided in freestanding hospice centers, hospitals, nursing homes, and
other long-term care facilities. In 2009, approximately 1.56 million patients (approximately 40 percent of all U.S. deaths) received services
from hospice (Sutton, 2011).
91
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92 PERSPECTIVES ON ESSENTIAL HEALTH BENEFITS
Dr. Morrison called “extremely limiting.” He advocated for insurers to cover palliative care “sooner than hospice”
(i.e., at the time of diagnosis).
A recent study indicates that when palliative care is provided in concert with curative care at the time of
diagnosis, palliative care results in better patient outcomes and survival. Lung cancer patients receiving early
palliative care lived 23.3 percent longer than those who delayed palliative treatment, and median survival for
“early” palliative care patients was 2.7 months longer than for those receiving standard care (Temel et al., 2010).
Additionally, a 2007 study found hospice patients had a 29-day longer mean survival than patients not receiving
hospice (Connor et al., 2007).
Furthermore, Dr. Morrison noted, hospice and palliative care services can lower health care costs. A study
conducted at Duke University demonstrated that hospice services reduce Medicare expenses by an average of
$2,309 per hospice patient while improving the quality of care provided to patients with life-limiting illness
(Taylor et al., 2007). Moreover, the study found that Medicare costs would be further reduced for seven out of 10
hospice recipients if hospice was used for a longer period of time. For cancer patients, up to 233 days of hospice
care decreased Medicare costs, while for non-cancer patients, up to 154 days of hospice care decreased Medicare
costs. Palliative care programs in hospitals also provide “substantial savings.” In a recent study comparing Medicaid
beneficiaries in four New York State hospitals, provision of palliative care reduced hospital costs by $4,098 per
admission for patients discharged alive and $7,563 for patients who died in the hospital. Consistent with the goals
of a majority of patients and their families, palliative care recipients spent less time in intensive care, were less
likely to die in intensive care units, and were more likely to receive hospice referrals than usual care patients
(Morrison et al., 2011).
PRESENTATION BY MS. JINA DHILLON, NATIONAL HEALTH LAW PROGRAM (NHeLP)
Ms. Dhillon, a staff attorney with NHeLP, outlined several principles for the EHB package, including flexibility
to allow for the best treatment options. She advised the committee to rely on Medicaid for guidance on developing
the EHB package. The standards of care for children and adolescents in Medicaid, for example, provide an array
of important services, including early and periodic screening, diagnostic, and treatment services (EPSDT). NHeLP
believes Medicaid EPSDT “can be an instructive model for these packages to ensure a comprehensive and robust
set of services for very low-income and/or special needs children.”
Ms. Dhillon suggested that the standards of care recognized by the professional academies be used to deter-
mine the scope of coverage in EHB packages. This criterion, she said, should apply both to the U.S. Department
of Health and Human Services’ (HHS’) initial determination of the EHB package as well as to the coverage poli -
cies of insurers offering EHB packages. Relying on approved standards of care, she said, would address regional
variation in implementation and prohibit plans from “providing piecemeal coverage to insured individuals where
a more comprehensive scope of covered services would be more appropriate, both in saving costs and improv -
ing health.” NHeLP believes that health care providers should provide information about all treatment options
in accordance with the proper standards of care, based on the individual’s needs, and with the overall goal of
maximizing wellness. Furthermore, insurers should not be allowed to base the scope of coverage on non-clinical
reasons, such as moral or religious grounds. Insurers should not be permitted to limit coverage of reproductive
health services, for example.
NHeLP recognizes that in some cases, an individual may require services outside the scope of covered ben -
efits. Therefore, NHeLP recommends that all EHB packages have a clinical exceptions process that is timely, not
overly burdensome, and easily navigable by patients and providers. Medicaid can be instructive in this context;
while Medicaid allows for higher cost sharing for non-preferred drugs, it also provides an exception whereby if the
prescribing provider determines the preferred drug would not be as effective or if the patient would have an adverse
outcome, the Medicaid enrollee can then gain access to the non-preferred drug. In some cases, Ms. Dhillon said,
step therapy may be an effective strategy for providing safe, cost-effective care. However, because step therapy
policies may encourage insurers rather than providers to “have the final word in treatment options,” there must
be “special oversight” when this policy is used. The potential negative effects of step therapy can be mitigated,
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ADDITIONAL STAKEHOLDER PERSPECTIVES
Ms. Dhillon said, by implementing a clinical exceptions process that allows “first fail” to be avoided if there is an
important clinical reason for pursuing a different medical option as established by the treating provider.
Ms. Dhillon recommended that insurers directly address health disparities impacting their enrollees by offer-
ing preventive and treatment services that correspond to the health needs of specific populations. For example, if
a significant number of women of childbearing age in a coverage area have diabetes, the insurer should promote
reproductive health, primary care, and podiatry care, among other appropriate services. This recommendation,
she said, would require insurers to conduct needs assessments of current and potential enrollees. Finally, NHeLP
recommends that the process for reviewing and updating the EHB package be transparent and public, allowing
time for public review and comment.
PRESENTATION BY MR. STUART SPIELMAN, AUTISM SPEAKS
Mr. Spielman, Senior Policy Advisor and Counsel for Autism Speaks, urged the committee to be mindful in
making recommendations to the Secretary of congressional intent to improve the health of people with autism
spectrum disorders (ASDs). The clause “including behavioral health treatment” in Section 1302(b)(1)(E) of the
ACA was added by committee amendment. In the House, the amendment was offered by Representative Mike
Doyle (D-PA), co-chair of the 157-member Congressional Autism Caucus, and in the Senate, the amendment was
offered by Senator Robert Menendez (D-NJ). Senator Menendez’s amendment, Mr. Spielman noted, was given a
budget score of zero, indicating that it did not add to the cost to the health care package (U.S. Senate Committee
on Finance, 2009). Additionally, Mr. Spielman referenced a letter written to the Institute of Medicine (IOM) com -
mittee by Senators Menendez, Dick Durbin (D-IL), and Robert Casey (D-PA) on the needs of individuals with
autism and the importance of behavioral health care for individuals with ASDs. In a separate letter, Representative
Doyle “went even further to say that it was Congress’ intention” to cover applied behavioral analysis (ABA) in the
EHB package. Mr. Spielman concluded that section 1302(b)(1)(E) should be understood as requiring behavioral
health treatments for ASDs in the EHB benefit package.
Mr. Spielman argued that the committee should view state mandates “as informed judgments of what is needed
by populations.” In evaluating state mandates, Autism Speaks believes the Secretary should consider justice, cost-
effectiveness, and continuity of care. Mr. Spielman noted that because underinsurance adversely affects the health
of people with ASDs, Autism Speaks encourages state legislatures to enact laws mandating coverage of ASD-
related benefits. Autism Speaks retained a consultant to evaluate the cost of state mandates related to autism and
found that the mandates add approximately 0.42 percent to premiums (Lambright, 2011). This premium increase,
Mr. Spielman argued, is offset by savings associated with increased capabilities and decreased dependence of
people with ASDs. Mr. Spielman concluded that state autism laws strike a sound balance between short-term
costs and long-term savings, and noted that these laws have been, and continue to be, relied upon by people with
ASDs and their families.
When IOM committee member Dr. Nelson asked Mr. Spielman to describe how eligibility for an autism
benefit should be determined, Mr. Spielman responded that determinations should be “person-centered.” There is
not a “one-size-fits-all package.” An individual’s needs vary depending on the severity of their symptoms; some
individuals need significant amounts of care, while others need much less. In 2006, the Centers for Disease Con -
trol and Prevention (CDC) found “an average prevalence of ASDs in the United States approaching 1 percent”
(CDC, 2006). Thus, Mr. Spielman said, in defining the EHB, the health needs of individuals with ASDs must be
adequately addressed.
PRESENTATION BY MS. MEG BOOTH, CHILDREN’S DENTAL HEALTH PROJECT (CDHP)
As Deputy Director of CDHP, Ms. Booth advocated in favor of the inclusion of pediatric dental care in the
EHB package and promoted a comprehensive, robust, affordable, and evidence-based package. She began by noting
that the ACA failed to include oral health as an essential benefit necessary for individuals of all ages, but that it
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94 PERSPECTIVES ON ESSENTIAL HEALTH BENEFITS
did include oral health services as part of the pediatric essential benefit. 3 She added that the historic separation of
medical and dental services, as well as limited efforts to address dental disease alongside other pediatric chronic
conditions, challenges the implementation of a pediatric dental benefit that is inclusive of oral health care. Cur-
rently, over 90 percent of people with dental insurance receive coverage through a plan that functions separately
from their medical coverage (Delta Dental, 2011). Ms. Booth noted that commercial dental coverage is typically
structured as a “dental benefit plan” rather than as “dental insurance.”
Prepayment vs. Risk-Sharing
To ensure affordability for employers while covering a wide range of dental services, dental benefit plans func -
tion as limited prepayment programs as opposed to risk-sharing insurance programs. These benefit plans typically
provide lifetime and annually capped benefits (usually up to $2,000 annually) with potentially high out-of-pocket
expenses resulting from co-payments, exclusions, frequency and age limitations, and for care delivered after an
individual has reached the annual and lifetime caps. Unlike Medicaid and some Children’s Health Insurance Program
(CHIP) plans, these commercial benefit plans, she said, do not use a medical necessity definition as the standard
for benefit determinations. This structure leaves little incentive to prevent or manage dental disease as a chronic
condition.
The advantage of the existing dental benefit model, Ms. Booth pointed out, is that it allows an employer to
assume a fixed and predictable premium for providing the elected level of dental coverage. The cost of the benefit
is controlled by the limits placed on the scope of the benefit, which requires the enrollee to pay for care that falls
outside the scope or exceeds the stated limits. The prepayment plan approach, however, fails to promote adoption
of potential scientific and technologic advancements in determining covered benefits. In managing financial risk
and bypassing dental necessity as the standard by which benefits are determined, commercial dental benefit plans
have little incentive to modify benefit designs to respond to advances in dental science. Consequently, this model
perpetuates a standard of care that should be discarded in favor of new, more effective standards that are based on
individual risk and the best scientific evidence.
Fostering Prevention in the Definition of Care
Ms. Booth noted that better oral health outcomes are achieved at a lower cost if dentally necessary care is
initiated in early childhood (Jokela and Pienihakken, 2003; Ramos-Gomez and Shepard, 1999; Zavras et al., 2000).
Oral health risk assessments and disease management are the standards of care for determining the appropriateness
and necessity of particular procedures. The American Dental Association (ADA) and the American Academy of
Pediatric Dentistry (AAPD) have promoted early intervention, risk-based individualized care, and behavioral and
pharmacological management of dental disease. Nonetheless, adoption of these standards by dentists “remains
modest.” Ms. Booth argued that the current coverage and financing of dental care continues to reward surgical
treatment over pharmaco-behavioral disease management.
Models of oral health coverage provided under the EPSDT program and CHIP provide a “foundation that
can be drawn upon to realign payment with a focus on prevention and disease management.” These programs, she
said, provide some insight for how dental necessity could be implemented in the commercial market. Commercial
insurers that participate in Medicaid and CHIP typically have specialized subsidiaries that provide dental benefits.
Consequently, these private insurers have experience with the administration of dental benefit design.
The Children’s Health Insurance Program Reauthorization Act of 2009 (CHIPRA) 4 defined a dental benefit
that was specific to the needs of children and could be used by state programs:
coverage of dental services necessary to prevent disease and promote oral health, restore oral structures to health and
function, and treat emergency conditions.
3 Patient Protection and Affordable Care Act of 2010 as amended. Public Law 111-148 § 1302(b)(1)(J), 111th Cong., 2d sess.
4 The Children’s Health Insurance Program Reauthorization Act of 2009. Public Law 111-3, 111th Cong., 1st sess. (February 4, 2009).
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ADDITIONAL STAKEHOLDER PERSPECTIVES
CDHP recommends that the CHIPRA definition serve as a minimum standard for the essential pediatric dental
benefits and suggested that the committee institute a dental necessity definition for the essential pediatric benefits
that parallels a medical necessity definition and provides the opportunity to maintain parity in benefits.
CDHP aims to ensure access to affordable, comprehensive pediatric services that include a dental benefit. In
designing dental benefits, Ms. Booth said, it is difficult and likely irrelevant to dictate whether a dental benefit is
provided as part of a medical benefit or if it is provided through a separate limited scope dental plan. The market-
place, Ms. Booth said, “will serve as the judge in that arena.” What remains critically important, however, is that
regardless of the coverage structure, the system should make use of the best available research to address the unique
needs of children and incentivize prevention and wellness.
PRESENTATION BY DR. ANDREW RACINE, AMERICAN ACADEMY OF PEDIATRICS
Dr. Racine, Director of General Pediatrics at the Children’s Hospital at Montefiore, spoke on behalf of the
American Academy of Pediatrics (AAP). He emphasized that the health care needs of infants, children, and adoles -
cents are sufficiently distinct from those of adults and that a health care system designed for adults “will not meet
the needs of America’s children and should not be imposed upon them.” He urged the committee to recommend
comprehensive benefits modeled on the EPSDT and the recommendations contained in Bright Futures: Guidelines
for Health Supervision of Infants, Children, and Adolescents (Hagan et al., 2008). These latter recommendations
are stipulated in Section 2713 of the ACA.5 As infants and children are in constant stages of development, their
capabilities, physiology, size, cognitive abilities, judgment, and response to interventions must be continuously
monitored to ensure that these changes are proceeding within an acceptable trajectory.
Medical Necessity and Evidence Development
Dr. Racine proceeded to emphasize several points from the AAP’s “Policy Statement on Contractual Language
for Medical Necessity for Children”:
• Medically necessary services include age-appropriate prevention, diagnosis, treatment, amelioration or
palliation of physical, mental, behavioral, genetic or congenital conditions, injuries, or disabilities.
• Interventions should be evidence-based but because large-scale randomized controlled trials (RCTs) are
“significantly less plentiful” for children than for adults, observational studies, professional standards of
care, and the consensus of pediatric experts must serve as acceptable substitutes.
Dr. Racine advised the committee that when considering coverage for experimental or investigational treat -
ments for which no RCTs have been conducted, “individuals with the requisite knowledge of pediatric medical
necessity” should be consulted to review the protocols or interventions. The “inescapable actuarial reality,” he said,
is that the “benefits of certain interventions in children become manifest only with a significant time lag.” This
time lag incentivizes plans with limited time horizons to minimize the importance of these interventions. Such
incentives, he said, place children at a distinct disadvantage when coverage decisions are being made.
When committee member Dr. Selby asked for additional details about the evidence-base in pediatrics and
whether the application of observational data has interfered with coverage for individual children, Dr. Racine
responded that observational studies are often—and indeed have to be—used because few RCTs exist. However,
Dr. Racine noted that that while there is a lot of off-label use of medications for children, most health plans will
not cover these uses because the use is not supported by a RCT. Furthermore, he said, health plans have denied
habilitative services on the grounds that occupational therapy for children with cerebral palsy is not supported by
evidence.
5 Section 1001 of the Affordable Care Act, amending the Public Health Service Act by inserting Section 2713 outlines specific preventive
services each health plan must provide without any cost sharing, including specific services for children, like screenings and immunizations
supported by CDC and HRSA.
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96 PERSPECTIVES ON ESSENTIAL HEALTH BENEFITS
Full Range of Care
Children are uniquely dependent on caregivers to detect medical problems, provide access to health care,
translate the nature of their symptoms to clinicians, receive recommendations for care, and arrange for and moni -
tor ongoing treatments. As most children are healthy, the epidemiology of disease is different than in the adult
population. Nevertheless, Dr. Racine said, an “important segment of children” suffer from chronic conditions that
affect their development and require specific attention to generating, maintaining, and restoring age appropriate
functioning. He also noted that children differ from adults in that the economic, ethnic, and racial demographics
of the U.S. pediatric population put children at risk of adverse outcomes due to existing health care disparities.
To account for these differences between children and adults, Dr. Racine argued that EHB for infants, chil -
dren, and adolescents must include not only preventive care, but “the full range of diagnostic, therapeutic, and
ongoing counseling and monitoring” for both healthy children and children with developmental disorders, chronic
conditions, and behavioral, emotional, and learning disabilities. Dr. Racine concluded by advising the committee
that the mechanisms created to update the EHB package should include input from physicians. Furthermore, he
said, the EHB package should be periodically reviewed to ensure that it appropriately reflects ongoing changes
in clinical science.
PRESENTATION BY DR. GERALD HARMON,
COUNCIL ON MEDICAL SERVICE, AMERICAN MEDICAL ASSOCIATION (AMA)
Dr. Harmon began by emphasizing that AMA policy is that the EHB should maximize patient choice of health
plans and benefit packages and that the AMA supports the use of health savings accounts (HSAs). The AMA, he
noted, believes that the interpretation of “essential” in the context of an EHB package should align with existing
federal guidelines regarding types of health insurance coverage. Existing regulations, such as those governing the
operation of the Federal Employees Health Benefit Program (FEHBP), for instance, reflect the reality that patients
define “essential” based on individual health care needs and budgetary restrictions. The AMA believes that health
insurance should provide coverage for hospital care, surgical and medical care, and catastrophic medical expenses,
as defined in the tax code.6 Section 9832 of the tax code refers to “medical care” as care for the
diagnosis, cure, mitigation, treatment, or prevention of disease, or for the purpose of affecting any structure or func -
tion of the body and for transportation essential to medical care.
Secondly, AMA supports using the existing FEHBP as a reference “when considering if a given plan” would
provide meaningful coverage. Dr. Harmon noted that all FEHBP plans cover basic hospital, physician, surgical and
emergency care, even though the program does not require a standard benefit package. FEHBP follows existing
evidence-based guidelines for preventive care for children and adults, and plans are required to cover additional
benefits including child immunizations, prescription drugs, mental health services (with parity to medical care
coverage), and a catastrophic limit for out-of-pocket (OOP) costs. It is important to note, he said, that even with
these requirements, FEHBP “is able to offer high-deductible health plans coupled with HSAs, as well as consumer-
driven health plans.”
Third, the AMA “firmly believes” that the development of an EHB package should not “undercut the vital
role in the health insurance marketplace of high-deductible health insurance plans issued to individuals and fami -
lies in conjunction with HSAs.” Offering a range of health plan choices, including high-deductible health plans
(HDHPs) coupled with HSAs, will enable patients to select health plans that meet their health care needs and
budgetary realities.
Medical Necessity
In response to the committee’s inquiry about how insurers apply medical necessity, Dr. Harmon provided the
AMA definition of medical necessity:
U.S. Code, Title 26 § 213.
6
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ADDITIONAL STAKEHOLDER PERSPECTIVES
Health care services or products that a prudent physician would provide to a patient for the purpose of preventing,
diagnosing or treating an illness, injury, disease or its symptoms in a manner that is: (a) in accordance with gener -
ally accepted standards of medical practice; (b) clinically appropriate in terms of type, frequency, extent, site, and
duration; and (c) not primarily for the economic benefit of the health plans and purchasers or for the convenience of
the patient, treating physician, or other health care provider.
He noted that the “prudent physician” standard of medical necessity ensures that physicians are able to use their
expertise and to exercise discretion, consistent with good medical care, in determining the medical necessity of
care provided to individual patients.
Furthermore, Dr. Harmon argued that the “prudent physician” standard will only be strengthened by results of
comparative effectiveness research (CER). Such research, he said, has the potential to have a “profoundly positive
impact on the quality of the information available to physicians and patients” by fostering the delivery of patient-
centered care and enhancing physician clinical decision making. Dr. Harmon argued that strong physician-patient
relationships allow physicians and patients to jointly participate in making value-based health care decisions. At
the point of decision making, physicians should have access to the best available evidence. Clinical information
about health conditions, treatment options, and potential outcomes can then be discussed with patients.
The AMA has historically opposed definitions of medical necessity that emphasize cost and resource utilization
above quality and clinical effectiveness. Such definitions of medical necessity, Dr. Harmon argued, interfere with
the patient-physician relationship and prevent patients from getting needed medical care. To determine medical
necessity, health plans should develop formal protocols that distinguish between when in-house medical expertise
is sufficient and when outside consultation is necessary. Medical necessity determination processes should include
an opportunity for the treating physician to provide additional evidence before a final coverage decision is made.
Additionally, when health plans deny coverage for reasons of medical necessity, the plan needs to facilitate the
expeditious handling of requests for reconsideration and appeal.
Required Elements for Consideration
Rather than striving for an “appropriate balance” among the 10 categories of care included in the ACA,
Dr. Harmon urged the committee “that the goal instead should be to ensure parity in terms of access and coverage
among the ten categories listed.” In ensuring parity among these categories, factors such as OOP costs and benefit
limits must be considered. A “prudent physician” standard could be applied, he said, as physicians have the “unique
ability” to help ensure that patients “get the right care, at the right time, in the right place.”
In deciding what is medically necessary, age and disability have to be taken into consideration by the “prudent
physician,” Dr. Harmon stated. EHB, like any other health insurance benefit, need to be age-appropriate. Individuals
within each age group should have a wide variety of coverage options from which to choose, including coverage
options more comprehensive than the EHB package. The EPSDT program can be used as a model to account
for the health care needs of diverse segments of the population. Under EPSDT, if a medical treatment or service
will help a child, the treatment can be authorized by the Medicaid medical director even when the state Medicaid
program does not specifically cover the treatment.
When committee member Dr. Michael Chernew asked Dr. Harmon how to deal with situations in which a service
is covered, but not necessarily for every patient, Dr. Harmon reiterated the importance of the “prudent physician”
standard. It is difficult, he said, “to micromanage each individual patient that has his or her own requirements,” but
standards (including those based on CER) should be established. Dr. Harmon noted that individuals with congenital
or acquired disabilities should have access to appropriate and affordable medical care throughout their lives. Further-
more, benefits deemed to be essential for individuals with disabilities may need to be more comprehensive than those
for individuals without disabilities. High-risk pools, Dr. Harmon suggested, could be used to provide affordable
care for individuals with additional health care needs. Additionally, he said, the AMA supports the coverage of care,
services, treatments, and interventions uniquely for women. Furthermore, the AMA believes an appeals process
should be established in every state (through the state department of insurance or other state agency) to ensure fair
and non-discriminatory practices in the application of the EHB package.
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98 PERSPECTIVES ON ESSENTIAL HEALTH BENEFITS
Updating the EHB Package
To assess whether and how enrollees are facing difficulty accessing needed services for reasons of cost or
coverage, Dr. Harmon suggested that HHS establish surveys, a hotline, and a website to receive information from
patients, physicians, hospitals, and other stakeholders. Dr. Harmon also advocated for the inclusion of patient
groups (e.g., AARP and Families USA) and physician organizations when assessing the experiences of enrollees
with the EHB package. To update the EHB package, Dr. Harmon said HHS should convene an advisory committee
that includes practicing physicians and patient representatives.
PRESENTATION BY DR. ROBERT MURPHY,
AMERICAN SOCIETY OF PLASTIC SURGEONS (ASPS)
Dr. Murphy, Vice President of Health Policy and Advocacy for ASPS, insisted that Section 1302 needs further
clarification regarding medical and surgical care. For instance, ambulatory patient services, he said, should include
surgical care (e.g., anesthesia, minimally invasive and noninvasive procedures). He proceeded to argue that the EHB
package should cover reconstructive surgery when the surgery meets the AMA definition of reconstructive surgery:
surgery performed on abnormal structures of the body, caused by congenital defects, developmental abnormalities,
trauma, infection, tumors or disease. It is generally performed to improve function, but may also be done to approxi -
mate a normal appearance. (ASPS, 2005)
This definition was included in the Children’s Access to Reconstructive Evaluation and Surgery (CARES)
Act of 2009,7 which distinguished between cosmetic and reconstructive surgery (using the AMA definition) and
specifically excluded cosmetic surgery (defined as surgery performed to reshape normal structures of the body to
improve appearance or self-esteem).
Denials of Care on an Insurer-Deemed Cosmetic Basis
According to the March of Dimes, 3 percent of babies born annually (120,000) suffer from birth defects 8 and
approximately 40,000 require reconstructive surgery (ASPS, 2009). Although surgeons are able to correct many of
these problems, Dr. Murphy noted that an increasing number of insurers deny coverage by labeling the procedures
“cosmetic” or “non-functional” in nature. An ASPS survey found that 54 percent of respondents had pediatric
patients who had been denied coverage or who experienced “significant and deleterious obstacles in obtaining
approval for coverage” of surgical procedures (ASPS, 2009). Furthermore, although insurers may provide coverage
for the initial procedure, Dr. Murphy said, they “regularly resist coverage of the later stage procedures,” claiming
the procedures are cosmetic and not medically necessary. He argued that “too many American families are expe -
riencing delays or denials to health care that would prevent long-term physical and psychological injuries.” He
reiterated that the procedures used to treat these children are, by definition, reconstructive, and should be covered
by insurance. When committee member Dr. Santa asked which services should be covered, Dr. Murphy indicated
the need for consumer involvement in these decisions and that the ASPS believes decisions should be based on
the strength of evidence supporting a procedure.
7 Children’s Access to Reconstructive Evaluation and Surgery (CARES) Act of 2009, HR 1339, 1st sess. (March 5, 2009).
8 Defined as an abnormality of structure, function, or body metabolism present at birth that results in physical or mental disabilities or is
fatal (e.g., cleft lip, cleft palate, skin lesions, vascular anomalies, malformations of the ear, hand, or foot, and other more profound craniofacial
deformities).
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ADDITIONAL STAKEHOLDER PERSPECTIVES
PRESENTATION BY MS. LINDA FISHMAN, AMERICAN HOSPITAL ASSOCIATION (AHA)
Ms. Fishman, Vice President of Public Policy Analysis and Development for the AHA, proposed that the EHB
package cover a broad range of services including medical, psychiatric, rehabilitative, dental, vision, preventive
and hospice services, as well as pharmaceuticals. The package, she said, should be patient-centered, accessible,
and adhere to accepted professional guidelines. She suggested a three-pronged framework for assessing which
benefits to include:
• Are the benefits responsive to individual needs?
• Do the benefits take affordability into account?
• Are the benefits easily understood and transparent?
Furthermore, she argued that any limits placed on the EHB package be “grounded in clinical best practices.” Such
limits, she said, could focus on services that are marginally effective and could change as underlying scientific
evidence or CER informs clinical best practices. However, “particular types of services should not be eliminated
wholesale.” Rather, limits could include the number or frequency of diagnostic tests or procedures. Ms. Fishman
concluded by arguing that the lack of a consistent and recognized standard for essential benefits “allows insurers
to control not only coverage decisions but also treatment decisions, sometimes overriding clinical standards and
the patient’s needs.” The rules and decision processes that govern EHB and medical necessity should, she said, be
transparent so that enrollees understand in advance the limitations of their coverage.
PRESENTATION BY MR. JOHN FALARDEAU, AMERICAN CHIROPRACTIC ASSOCIATION
Mr. Falardeau, Vice President of Government Relations for the American Chiropractic Association, outlined
principles for the committee’s consideration. Care that increases health and reduces health care costs must be
considered in designing the EHB package, he said. To achieve cost reductions, HHS should focus on covering
“more conservative, low-risk, outpatient services that emphasize partnering with patients.” More invasive, high-
risk, inpatient procedures “should be used sparingly” and only if they have “a very strong evidence base of com -
parative clinical effectiveness and relative safety.” Ensuring transparency and creating greater patient involvement
are two overarching goals of the ACA, he noted. Those same principles should be applied to the EHB package.
Mr. Falardeau advised the committee to include all benefits that are mandated by at least 25 states in the EHB.
Mr. Falardeau argued that “the [committee’s] top priority should be to ensure a complete” EHB package, as
opposed to having “an equal number of services in each of the 10 categories.” He also cautioned the committee
to “guard against the possibility” of the EHB being denied against the wishes of patients based on age, expected
length of life, and other considerations. To “protect” these benefits, he said, determinations cannot solely be left
to individual or collective health plans. If an EHB is denied, patients should have the right to an independent,
third-party review of the claim. This process, he said, could be similar to the regulations that require all new group
plans to have a straightforward and independent appeals process.9
Certification of Coverage
Mr. Falardeau advised HHS to develop a template certificate of coverage or summary plan description for
health insurers. This could be similar, he said, to Blue Cross Blue Shield’s FEHBP brochure and could list the 10
categories of services outlined in the ACA with the EHB mandated by HHS outlined beneath each category. By
requiring plans to use a template certificate of coverage, HHS and health insurance exchanges could more easily
determine if the benefits offered by the plan meet the requirements of the law. Additionally, the template would
be helpful to consumers as they compare coverage and would ensure plans are clearly communicating to patients
that the services listed under “essential benefits” must be made available to them (provided the patient is receiv -
9Patient Protection and Affordable Care Act of 2010 as amended. Public Law 111-148 § 10101(g) and (h), amending the Public Health
Service Act by inserting §2719, 111th Cong., 2d sess.
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100 PERSPECTIVES ON ESSENTIAL HEALTH BENEFITS
ing the service from a licensed health care provider acting within their scope of practice), without discriminatory
restrictions or limitations.
PRESENTATION BY DR. ARNOLD COHEN,
AMERICAN CONGRESS OF OBSTETRICIANS AND GYNECOLOGISTS (ACOG)
Dr. Cohen, Chairman of the Department of Obstetrics and Gynecology at Albert Einstein Medical Center,
spoke on behalf of ACOG. He began by asking the committee to look to ACOG’s clinical and practice guidelines
when determining the EHB related to women’s health. He also remarked that defining the EHB as specifically as
possible “is the surest way to protect our patients against potential conflict or debate regarding medical necessity.”
Every pregnant woman should have the ability to determine for herself whether first-trimester ultrasounds or
screening for Down syndrome, for instance, are appropriate. Plans should not decide whether a specific screening
is “right or wrong, or medically necessary.” Furthermore, as the ACA guarantees direct access to obstetricians/
gynecologists (OB/GYNs), pregnant women should not have to rely on referrals for pregnancy-related services
such as maternal/fetal medicine consultations or ultrasounds. Dr. Cohen also argued that plans should not limit
contraceptive choices. Currently, he said, some plans cover only one type of contraceptive pill or intrauterine device
(IUD), despite that there are many alternatives available.
Medical Necessity
The definition of medical necessity, he said, should ensure quality of care while safeguarding insurers from
unexpected circumstances. He asked the committee to adopt the definition of medical necessity developed by the
AMA, but advised that some terms in the definition need further clarification. For instance, a physician practice
should be deemed “in accordance with generally accepted standards” if s/he adheres to the guidelines developed
and adopted by the practice’s medical specialty. For example, an OB/GYN would be considered a prudent physi -
cian if s/he followed ACOG guidelines, such as when non-medically indicated elective inductions of labor before
39 weeks of gestation are and are not appropriate.
The definition of medical necessity, Dr. Cohen argued, must allow for medically appropriate off-label use of
FDA-approved drugs and devices, a common practice in OB/GYN. For example, he noted that although the FDA
does not approve the use of terbutaline to delay delivery for the purposes of enhancing fetal maturation, its use
for this purpose is accepted medical practice. Similarly, misoprostol, which is FDA approved for use in peptic
ulcer disease, is not approved to treat incomplete or missed abortions. The drug, though, is commonly used by
OB/GYNs for this purpose.
Furthermore, the definition of medical necessity should allow for coverage of preventive interventions and
counseling services that are often not covered (e.g., nutrition counseling, weight-loss management, smoking cessa -
tion, and counseling for postpartum depression). While these services are supported by varying levels of scientific
evidence, ACOG has reviewed this evidence to develop guidelines that can serve as the standard for coverage, he
said. Dr. Cohen closed by stating that ACOG believes medical necessity decisions should be made through peer-
review processes that include expert specialists and sub-specialists.
PRESENTATION BY MR. THOMAS SELLERS,
NATIONAL COALITION FOR CANCER SURVIVORSHIP (NCCS)
Mr. Sellers, President and CEO of the NCCS, presented his organization’s recommendations for the EHB
related to cancer care. The committee, he urged, should recognize the multidisciplinary nature and complexity of
cancer care, rapid changes in evidence-based care as a result of clinical investigation, the evolution of cancer as
a chronic disease, and the importance of facilitating patient decision making. Well-planned and well-coordinated
cancer care, he said, is in the best interest of patients and is “best for the health care system because it ensures
the appropriate utilization of the health care resources.” NCCS recommends coverage of cancer care planning
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ADDITIONAL STAKEHOLDER PERSPECTIVES
and coordination, coverage of off-label uses for cancer therapies, and coverage of routine patient care costs for
patients enrolled in clinical trials.
For the purposes of defining EHB, cancer should be considered a chronic disease so that cancer patients can
access care planning and coordination services. Specific elements of planning and coordination services and the
frequency of these services should be included. Additionally, Mr. Sellers noted that “the frequency of access to
cancer care planning services should be defined to ensure that the service is available across the continuum of
care.” Specifically, access to the service should be available for treatment planning, treatment plan modifications,
creation and communication of a summary of treatment, and follow-up survivorship care. Greater specificity,
Mr. Sellers said, is necessary to ensure that cancer care plans adequately define all the elements of active treatment,
symptom management, and survivorship care, and encourage care coordination among all providers across all
sites of care. Including such services as a part of the EHB package is, Mr. Sellers said, “an important investment
in quality care, and it goes a long way towards implementing the recommendations of the Institute of Medicine’s
2006 report, From Cancer Patient to Cancer Survivor: Lost in Transition ” (IOM, 2006a).
Off-Label Drug Use
Mr. Sellers reiterated that “it is critically important” that the definition of EHB include access to off-label
uses of cancer drugs. Between 50 and 75 percent of all uses of cancer drugs are off-label use, according to the
National Comprehensive Cancer Network (ASCO, 2005). Although cancer research attempts to rapidly define
supplemental uses of drugs approved by the FDA, this research does not necessarily or rapidly lead to changes in
product labeling. To ensure patient access to evidence-based therapies, plans should not be permitted to prohibit
payment for off-label uses of cancer drugs.
Medicare statutes, Mr. Sellers said, balance the need to ensure access to off-label use with reliance on evi -
dence. According to Medicare statutes, off-label use of a cancer drug must be covered if the use is listed in a
CMS-approved medical compendium. Furthermore, off-label use may be covered if the use is supported by peer
reviewed medical literature.10 These standards, Mr. Sellers said, have “worked well and have generally been fol -
lowed by private third-party payers.” To protect access to quality cancer care and all appropriate treatment options,
NCCS recommends the definition of off-label use coverage standards in the EHB package.
Clinical Trials
The ACA includes a provision requiring the coverage of routine patient care costs for patients enrolled in clini -
cal trials for cancer or other life-threatening diseases or conditions. 11 NCCS, Mr. Sellers said, recommends that the
EHB package clearly reflect this standard and that HHS consider expanding coverage to routine patient care costs
for individuals enrolled in all clinical trials (i.e., not just clinical trials related to cancer or other life-threatening
diseases). Mr. Sellers concluded by noting that cancer advocates “worked for many years to establish a standard
for coverage of cancer trials through the Medicare program” and that when CMS established a policy of coverage
of routine patient care costs in clinical trials, the agency made the policy applicable to trials in all diseases (CMS,
2007). This Medicare policy, he said, has “yielded significant benefits for individual patients and for the health
care system” because patients are permitted to enroll in trials without fear that their routine costs will be denied.
PRESENTATION BY MR. TROY ZIMMERMAN, NATIONAL KIDNEY FOUNDATION (NKF)
Mr. Zimmerman, Vice President for Government Relations at the NKF, noted that medical coverage is typi -
cally determined by what is reasonable and necessary, a “vague definition” that can inhibit innovation and patient
choice. For example, Medicare’s dialysis reimbursement policy, which reimburses three treatments weekly, has
10 Social Security Act, 42 U.S.C. 1395w-102§ 1860D-2(e).
11 Patient Protection and Affordable Care Act of 2010 as amended. Public Law 111-148 § 1201, amending the Public Health Service Act by
inserting § 2709 as added by § 10103(c), 111th Cong., 2d sess.
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102 PERSPECTIVES ON ESSENTIAL HEALTH BENEFITS
remained virtually unchanged over 40 years. Such a rigid policy, he said, inhibits utilization of new modalities.
For example, despite the convenience of home daily dialysis, its use has remained low over the past few decades.
Ninety percent of dialysis patients receive traditional in-center dialysis.
The NKF, Mr. Zimmerman said, believes dialysis therapy should “best fit the needs of the individual patient.”
Home therapies may be more convenient for patients in the workforce, and they eliminate transportation challenges.
Furthermore, a recent study demonstrated that frequent dialysis consisting of six weekly hemodialysis treatments
improved left ventricular mass and self-reported health (The FHN Trial Group, 2010). As a result of this finding
and others, Mr. Zimmerman urged HHS to include all dialysis modalities in the EHB package.
Similarly, coverage limitations may be a barrier to kidney transplantation, which is often the most cost-effective
alternative for candidates with kidney failure. Private insurance will often only cover a prospective living organ
donor’s medical tests if that individual becomes a donor. In many instances, however, a patient with kidney failure
must go through several prospective living organ donors before one is identified as appropriate. As the gap between
the number of individuals on the kidney waiting list and the number of available organs continues to widen, living
donation is an increasingly important mode of transplantation.
Mr. Zimmerman noted that the NKF argues against limits on specific benefits such as limits on the modality
or number of dialysis sessions for a patient, or limits on access to repeated transplants for failed grafts. Addition -
ally, to ensure the best outcomes for individual transplant recipients, the EHB package, he said, should cover the
necessary immunosuppressive drugs, laboratory tests, and post-transplant examinations.
Prevention in High-Risk Populations
An individual with advanced chronic kidney disease is likely to die of complications prior to needing renal
replacement therapy. Stage 4 kidney patients, for example, are more likely to die of congestive heart failure than
to progress to dialysis (Foley et al., 2005; Keith et al., 2004). The 2010 U.S. Renal Data System (USRDS) Annual
Report notes that because a patient with chronic kidney disease is more likely to have a cardiovascular event and
die than to reach end-stage renal disease, it is imperative to identify chronic kidney disease among individuals
who have been diagnosed with diabetes and/or hypertension, the two leading causes of chronic kidney disease
and end-stage renal failure. This identification would allow patients and their providers to monitor risk factors
for cardiovascular events and address the progression of kidney disease (USRDS, 2010). Mr. Zimmerman noted
that group health plan enrollees are less likely to see a nephrologist prior to end-stage kidney failure than their
Medicare counterparts (USRDS, 2010).12
In conclusion, Mr. Zimmerman stated that virtually all end-stage renal disease patients, regardless of age, are
covered by Medicare 30 months after the start of their kidney-replacement therapy or, in the case of those who do
not have group health insurance, three months after the start of kidney-replacement therapy. Therefore, he said,
insurers may be reluctant to cover preventive and early detection for chronic kidney disease, expending resources
on interventions only to see those policyholders move to another insurer.
PRESENTATION BY MR. RICHARD SMITH,
PHARMACEUTICAL RESEARCH AND MANUFACTURERS OF AMERICA (PhRMA)
Mr. Smith, Senior Vice President for Policy and Research at PhRMA, noted that his organization represents
the nation’s biotechnology and pharmaceutical research companies and believes the definition of EHB plays “an
important role in assuring” support for needed treatments across the benefit categories, regardless of the treatment
setting or mode. Furthermore, the design of the EHB package, he said, plays a role in providing adequate financial
protection for all patients, “whether they live with a chronic condition or have acute health care needs.”
12 The data reported here have been supplied by the U.S. Renal Data System (USRDS). The interpretation and reporting of these data are
the responsibility of the author(s) and in no way should be seen as an official policy or interpretation of the U.S. government.
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ADDITIONAL STAKEHOLDER PERSPECTIVES
Design Principles
The committee, Mr. Smith argued, should consider four principles:
• Coverage should provide access to needed medical treatment across benefit categories, regardless of the
setting or mode of treatment.
• Risks should be spread broadly rather than concentrated on patients with high costs.
• The needs of patients with chronic as well as acute conditions should be recognized.
• Providers and patients should have choices among therapeutic options, and new treatments should be
incorporated into coverage.
Provider and patient choice is essential to ensuring that the EHB meet patients’ diverse health care needs. Insur-
ers should have flexibility to manage costs but must provide patients and providers with a “meaningful choice of
treatment options,” including brand medicines and generic drugs. Employer-sponsored insurance typically features
a tiered cost-sharing formula that includes broad coverage for preferred-brand drugs on the second tier and uses
various management tools. These tools, he noted, must allow for meaningful access to needed care and focus on
the full range of benefits rather than simply on costs.
Cost-Sharing Barriers
Extensive evidence shows that high cost sharing discourages patients from taking needed medications
(DiMatteo, 2004) and plays a role in what Mr. Smith called “the non-adherence problem.” This problem is esti -
mated to generate $100 to $300 billion in higher health care costs and lost productivity annually (Shorter, 1993).
Because the impact of high cost sharing is most pronounced for low-income patients, cost sharing has been cited
as a contributing factor to increasing health disparities (Chernew et al., 2008). In recognition of the problems cre -
ated by high cost sharing, Mr. Smith said, employers have begun to introduce innovative programs that reduce or
eliminate cost sharing for medicines. These programs improve adherence, enhance productivity, and reduce overall
costs (Freudenheim, 2007; Fuhrmans, 2007).
Mr. Smith urged the committee “to focus on the statutory standard,” and ensure benefits are not “unduly
weighted toward any one category, given the rapid changes in the patterns of care and the important role that oral,
injected, and infused medicines and vaccines play in effective prevention and management of conditions.” The
protection against high OOP costs is one of the principal functions of insurance—to broadly pool high- and low-
risk individuals in order to provide financial protection against catastrophic costs. “Simply put,” he said, “severely
and/or chronically ill patients should not bear a disproportionately high share of the cost of care.” Additionally, he
said, increasing cost sharing transfers a financial burden from the health plan to the patient and does little to reduce
overall health care spending (Goldman et al., 2006). Some tiered cost-sharing designs shift costs to sick patients
rather than creating meaningful incentives for high-quality care. Some Medicare Part D plans, for example, have
created a specialty tier that typically features high cost sharing for medicines to treat cancer, HIV/AIDS, multiple
sclerosis, and rheumatoid arthritis. PhRMA urges the IOM and HHS to carefully consider how to set guidelines
consistent with the goals of ACA. These goals, he said, include ensuring that policies do not unfairly shift burdens
to the sickest patients and create barriers to needed care.
Historically, most insurance was intended to provide protection for acute needs. Today, however, many treat -
ments allow for effective control of chronic conditions that have previously had few management options. The
needs of patients with chronic conditions, Mr. Smith said, “require focused attention.” Quality health insurance
should reflect these needs and provide adequate protection to all patients, including those whose costs are spread
out over time rather than concentrated in a single episode of care.
Mr. Smith closed by noting that access to new treatments is important to improving quality of life, reducing
costs, and preventing, treating, and potentially curing serious and chronic conditions. Therefore, standards for
formulary design and medical management should recognize the development of new treatments and therapies.
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104 PERSPECTIVES ON ESSENTIAL HEALTH BENEFITS
For example, some of the rules for implementing Medicare Part D recognized new therapies by building on best
practice formulary designs and medical management tools used in the private sector.
PRESENTATION BY MR. BRIAN GALLAGHER, AMERICAN PHARMACISTS ASSOCIATION
Mr. Gallagher, Senior Vice President for Government Affairs at the American Pharmacist Association (APhA),
stated that his organization represents over 62,000 pharmacists in a variety of settings. He began by defining medi -
cation therapy management (MTM) as a distinct service or group of services that optimizes therapeutic outcomes
for individual patients (Bluml, 2005). The focus of MTM, he said, is providing team-based, individualized care
to the patient. A foundational MTM service delivery model has specific “core elements” (i.e., medication therapy
review, personalized medication record, medication-related action plan, intervention and referral, documentation,
and follow-up) (APhA and NACDS, 2008).13 The goals of MTM are to improve collaboration among pharmacists,
physicians, and other health professionals; enhance communication between patients and the health care team; and
empower patients to optimize medication use for improved health care outcomes.
Mr. Gallagher noted that because services included in the definition of MTM are also included in the calcula -
tion of the medical loss ratio, these services should be included as an essential health benefit. Because MTM can
optimize the use of medications and decrease overall health care costs by preventing adverse events, reducing
hospital admissions, readmissions, and medical errors, Congress, he said, referenced MTM in Section 3503 of the
ACA,14 and is a required benefit for targeted beneficiaries through Medicare Part D. 15 Furthermore, Mr. Gallagher
emphasized that “inappropriate use of medications costs an estimated $177 billion” (Ernst and Grizzle, 2001)
and results in over 1.5 million preventable medication-related adverse events annually (IOM, 2006b). The Public
Health Service has successfully used MTM and pharmacist intervention since the 1960s and numerous studies
have documented the cost benefits of MTM to patients and health care systems (Chisholm-Burnes et al., 2010;
Moore and Abramek, 1992; Perez et al., 2008; Schumock et al., 2003).
APhA developed the definition and core elements service model for MTM by convening diverse stakeholder
groups (including physicians and other health care providers, policy makers, health plans, and quality organizations)
and continues the dialogue about MTM services with these stakeholders. While all patients using prescription,
nonprescription, herbal and other dietary supplements could potentially benefit from MTM, patients in transitions
of care, patients who have changed medication regimens, and patients who have multiple medications, multiple
chronic conditions, or a history of non-adherence are most likely to benefit. Patients who are empowered to take
an active role in medication self-management have improved health as a result of a better functioning health care
team. Mr. Gallagher noted that medication use can be optimized by removing barriers such as co-pays and deduct -
ibles (Bunting and Cranor, 2006). While medication spending may actually increase under MTM, overall medical
costs for hospitalizations can be reduced (Bunting and Cranor, 2006; Fera et al., 2009).
Mr. Gallagher concluded by reiterating that medications are central to managing many disease states. “If
the system is going to spend huge percentages of money for medications, we should be making sure that those
medications are used optimally.” He encouraged the committee to recommend that the EHB package include a
mechanism to optimize medication use through MTM services.
PRESENTATION BY BRUCE WOLFE, OBESITY CARE CONTINUUM (OCC)
Dr. Wolfe, President of the American Society for Metabolic and Bariatric Surgery (ASMBS), spoke on behalf
of the OCC. This coalition is comprised of the Obesity Action Coalition, American Dietetic Association, Obesity
Society, and ASMBS, and represents the interests of individuals affected by overweight and obesity and the health
care professionals and researchers who care and develop treatments for this growing population. The Congressional
13 A visual representation of MTM is presented in Appendix E of Medication therapy management in pharmacy practice: Core elements of
an MTM service model, available at: http://www.accp.com/docs/positions/misc/CoreElements.pdf (accessed August 18, 2011).
14 Patient Protection and Affordable Care Act of 2010 as amended. Public Law 111-148 § 3503, amending Title IX of the Public Health
Service Act by inserting § 935, 111th Cong., 2d sess.
15 Medicare Prescription Drug, Improvement, and Modernization Act of 2003, § 1860D-4 (c)(2).
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ADDITIONAL STAKEHOLDER PERSPECTIVES
Budget Office estimated that over the past 20 years, the impact of obesity on health care expenditures has doubled
and that obese individuals have at least 20 percent higher costs than lean subjects (CBO, 2010).
Obesity is a disease with multiple co-morbidities. Behavior modification and surgery, Dr. Wolfe said, are
effective treatments for obesity and the prevention of obesity-related events, including death due to cardiovascular
disease, cancer, and diabetes (Adams et al., 2007; Knowler et al., 2002; Sjostrom et al., 2007). Epidemiologic
studies, he noted, demonstrate that mortality sharply increases when an individual’s body mass index (BMI) is
above 30, the threshold for diagnosing obesity (Calle et al., 1999; Prospective Studies Collaboration, 2009). As 5
percent of the U.S. population has a BMI exceeding 40, the need to prevent and treat obesity is “pressing” (Sturm,
2007). Co-morbidity data from the NIH Consortium on Bariatric Surgery (LABS) show that 35 percent of obese
individuals have diabetes and more than 50 percent have sleep apnea and hypertension (LABS Consortium, 2008).
Despite this high cardiovascular risk, bariatric surgery, Dr. Wolfe said, presents a “window of opportunity” (LABS
Consortium, 2008). However, access to obesity prevention and treatment is severely limited.
Behavioral Modification
Obesity treatment is clearly recognized as an important component of comprehensive health care services.
The U.S. Preventive Services Task Force recommends that clinicians screen adult patients for obesity and offer
intensive counseling and behavioral interventions to promote sustained weight loss for obese adults. Similarly,
the Oregon Medicaid prioritized list of health services defines obesity treatment as “intensive nutritional/physical
activity counseling and behavioral interventions” and lists it as the eighth highest priority (out of 679 conditions).
Dr. Wolfe noted that bariatric surgery is one treatment for certain obese individuals with Type II diabetes, which
ranks as thirty-third priority (OHSC, 2010). Intense behavior modification can result in a modest but definite
sustained weight loss of 5 percent after four years (Look AHEAD Research Group, 2010). This weight loss was
associated with a reduction in the need for diabetes and hypertension medication and improved control of these
chronic conditions.
Bariatric Surgery
Weight loss following bariatric surgery is substantially greater than the weight loss associated with usual care
(Sjostrom et al., 2007). Dr. Wolfe argued that bariatric surgery is safe, citing a mortality rate of 0.3 percent and
a complication rate of 4.3 percent among all patients undergoing laparoscopic gastric bypass, open surgery, and
laparoscopic adjustable gastric banding (LABS, 2009). Using data from a multi-year study conducted in Sweden,
Dr. Wolfe showed that after 13 years the survival gap between patients who had bariatric surgery and those who
received “the customary treatment for obesity at their centers of registration” widened (Sjostrom et al., 2007). This
gap occurred, Dr. Wolfe said, as the result of remission of diabetes, hypertension, hyperlipidemia, sleep apnea, and
a reduction in the incidence of cancer (Buchwald et al., 2004; Sjostrom et al., 2007).
Despite these demonstrated benefits of weight loss, intensive weight loss counseling is infrequently reimbursed
by insurers (Tsai et al., 2006), and less than 2 percent of eligible patients undergo bariatric surgery annually
(Kofman and Miller, 2010; Livingston, 2010). Dr. Wolfe argued that this lack of uptake results from a lack of
knowledge of the benefits of bariatric surgery and a lack of financial coverage (Lee et al., 2010). Insurers often do
not cover obesity treatment, he said, because (1) of the delay on return of investment of 2 years or more, result -
ing from the upfront cost of bariatric surgery and subsequent reduced health care costs associated with improved
outcomes (Crémieux et al., 2008), (2) employers reject obesity treatment riders (Blackstone, 2010), and (3) there is
a “bias against obesity” due to the perception that obesity results from self-induced inappropriate lifestyle, which
can and should be corrected by individual lifestyle changes (Puhl and Heuer, 2009).
When committee member Mr. Schaeffer asked about the costs of laparoscopic gastric bypass, open surgery, and
laparoscopic adjustable gastric banding, Dr. Wolfe noted that while the costs and complications vary, laparoscopic
bypass costs approximately $17,000 and open gastric bypass costs approximately $26,000, excluding complica-
tions (Crémieux et al., 2008). Open surgery, he said, is only done on patients who have complex problems from
previous surgery or hernias (approximately 10 percent of the population). Laparoscopic gastric banding, on the
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106 PERSPECTIVES ON ESSENTIAL HEALTH BENEFITS
other hand, is generally done on a same-day outpatient basis and costs between $10,000 and $15,000. Dr. Wolfe
concluded that reimbursement for the treatment of obesity requires special consideration due to the remarkable
health benefits achieved.
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