Face-lifts, tummy tucks, nose jobs and other cosmetic surgeries cost thousands of dollars that health insurance doesn't cover. But some health plans are now offering a new type of benefit -- access to a list of plastic surgeons who have agreed to reduce their fees.
The price-cutting plastic surgeons are part of something called the American Cosmetic Surgery Network, owned by United Networks of America Inc., which also runs discount programs for prescription drugs, hearing aids, dental care and vision-correction surgery. The cosmetic network offers discounts for surgeries, as well as some nonsurgical procedures including laser hair removal and skin resurfacing. Botox, the popular antiwrinkle drug, is excluded for now.
The network prices -- such as $6,449 for a face-lift -- can be much lower than comparable local rates. The national average cost of a face-lift is $6,532, according to the American Society for Aesthetic Plastic Surgery, but because fees vary widely by doctor and geographic region, these rates can often be significantly higher. United Networks says its prices represent either a 20 percent discount off each doctor's typical rate, or a fixed below-market rate, with a cap of $999 set on additional facility fees.
The network sells access to its doctor lists to individuals for $90 a year. But, increasingly, insurance companies, looking for ways to stand out, are buying the benefit to offer their members access to the discounts. Members present their insurance ID card to qualify for the lower rates. They pay the physician out of their own pocket.
Blue Cross/Blue Shield of South Carolina and Humana Inc.'s (NYSE: HUM) and Coventry Health Care Inc.'s (NYSE: CVH) plans in Louisiana are among the insurers offering discounts through the network. In February, South Carolina BlueCross BlueShield introduced a benefit that gives members discounts of 20 percent or more on cosmetic procedures when they use a participating doctor. So far, more than 100 of the health plan's members have scheduled appointments with surgeons around the United States, says David Boucher, the insurer's assistant vice president for health care services. The discounts "aren't insurance, but they make our plan more attractive to employers and members," he says.
AmeriPlan Corp., which sells supplemental health-benefit programs with discounts on services such as vision care, also offers its plan members access to United Networks' physicians. About 30 members a month use the cosmetic-surgery benefit, about the same as for vision-correction surgery, says Julia Baker, senior vice president of provider relations for the Plano, Texas, company.
Ryan Jumonville, owner of United Networks, which is based in Baton Rouge, La., says the 17-year-old company is finally seeing the plastic-surgery network gain traction after a five-year struggle. In March, at a national conference of Blue Cross/Blue Shield insurers, United Networks was one of several vendors who made a pitch to more than a dozen participating plans. United says it expects much of its growth in coming years to come from its cosmetic surgery network.
Interest in such networks comes as the number of cosmetic procedures and the number of practitioners offering them has grown in recent years. At the same time, insurance and other medical-payment options such as tax-favored flexible-spending accounts won't pay for purely cosmetic procedures.
For some people, a cosmetic-surgery benefit can be a deal maker. Susan Stott, 45, started shopping for a new individual health-insurance policy after the cost of her old coverage went up. Coventry caught her eye because its brochure featured several "value added" programs, including the cosmetic-surgery discount network, which gave it "a little sparkle," she says.
After becoming a Coventry member, she underwent breast-augmentation surgery last year. The cost was $3,600, about 60 percent of the market rate, says Stott, who lives near Baton Rouge.
Discount networks are a tough sell to plastic surgeons, who seldom sign the sort of business contracts that are common in managed care. They say discount programs tend to attract the least qualified surgeons who can't find enough patients on their own.
"Those that are experts and leaders in these various areas don't feel like they have to participate because of the value they give in terms of their patient outcomes," says Mark Jewell, a Eugene, Ore., plastic surgeon and past president of the American Society for Aesthetic Plastic Surgery, a professional group.
Jumonville says United Networks targets "only board-certified plastic surgeons" and has a rigorous credentialing process. The company tries to persuade doctors that the lower fees they receive will be offset by reduced costs for marketing and administration. "Surgeons don't want to affiliate themselves with a discount program -- that is a term that is almost taboo -- so we have to sell it to them as more of a marketing fee," Jumonville says.
Jumonville says his company seeks to protect surgeons by keeping the physicians' names confidential until a prospective patient is screened. The company vets callers to weed out those who are price-shopping or fishing for information. That helps keep the surgeons' fee schedules from public view, and guards against the threat of fee-cut demands from other patients. United staff members also discuss surgery costs and help arrange financing with lenders, if needed.
The company says about 2,000 procedures have been performed so far through referrals to its network, which includes roughly 600 physicians.