Costs of New Back Surgery Procedure Disputed by Auto Insurers

A growing number of claims for a procedure called plasma disc decompression are leading some insurers to challenge the medical benefit of the surgery and the tens of thousands of dollars it costs to have it done.

Insurance companies have found that the surgery, which is a minimally invasive surgical procedure that can be performed under local anesthesia and light sedation, is being used more frequently on automobile accident victims and insurers say it remains debatable whether it has a proven medical gain for the patient.

"It has its proponents and its opponents," said attorney Richard Adams, of Adams and Baca in Miami. Adams said he has represented Allstate, American International Group Inc. and Progressive in fighting PDD claims.

"All insurers have had at least a good number of these kinds of cases within the last 12 to 18 months" said Adams, who added that PDD claims have really become a major point of contention within the last two years, though procedures similar to PDD are not new. Adams tried his first case against the use of a procedure like PDD in 1984.

What first drew negative attention to PDD, Adams said, was how it was classified in the bill.

"When it first came out, it was not classified as an alternative to surgery but an alternative to injection therapy," Adams said. When a medical procedure is done via needle-puncture, it is also called a percutaneous procedure. "Somewhere along the line -- from 2002 to 2004 -- the thought shifted and it began to be equated to full-blown back surgery, or open surgery."

Adams explained there was once one group of doctors who believed PDD was appropriate for a select few at a cost of $1,500 to $3,500, then another group of doctors began prescribing the treatment for a larger group, and charging $35,000 to $65,000 or more.

"That's when insurers said, 'This is something we have to look into,'" Adams said.

Allstate spokesman Mike Siemienas said the company is aware of the procedure but released a more general statement that the company "believes cases exists where unnecessary medical treatments are being performed. We look at each case individually and make a determination based on facts provided to us."

Adams said facts include a recent report from Medicare and Medicaid, which labels PDD as an experimental treatment with no clear health care outcome. A noncoverage statement from Oxford reads, "Due to insufficient clinical evidence to support medical efficacy, minimally invasive spinal procedures used in the treatment of pain associated with disc diseases and/or lower back pain will not be reimbursed by Oxford or CMS (Centers for Medicare and Medicaid Services)."

State Farm frequently refuses to pay for PDD-related medical expenses, according to a lawsuit filed in U.S. District Court in West Palm Beach, Fla., by Palm Beach Lakes Surgery Center. The center performs hundreds of PDD surgeries. The lawsuit seeks to "put an end to State Farm's alleged "misrepresentations and intimidation of its policyholders designed to direct injured parties to less expensive, less effective treatments."

State Farm thus far has no response to the lawsuit. In a recent statement Oct. 29, the insurer said it was served with the lawsuit "about a week ago. Our attorney's are still examining it," said spokesman Jeff McCollum.

According to court documents, PDD is an alternative to more invasive surgery such as fusion of vertebrae. Patients can go home the same day as the 15-minute surgery, which uses ArthroCare's device, the SpineWand, to dissolve unwanted tissue within a herniated disc. The technology, called Coblation technology, has been approved by the Food and Drug Administration. On its Web site, ArthroCare says PDD is recognized by the National Institute of Clinical Excellence and studies by numerous medical professionals from around the world have demonstrated its effectiveness.

Adams said the insurance industry would line up for a back procedure like PDD "if, number one, it worked, and number two, it was cost-effective. Right now, there's too many questions in the industry about either of those, and they are receiving claims for tens of thousands of dollars in bills."

(By Chad Hemenway, associate editor, BestWeek: [email protected])