Plans Can Place Reasonable Limits on Breast Reconstruction Benefits

April 15, 2008

Breast cancer is a significant health care concern, and many employers provide mastectomy and related benefits through their health plans. While these benefits are subject to federal law, namely, the Women's Health and Cancer Rights Act (WHCRA), this does not obligate employers to pay for everything, as one court recently pointed out.

In Krauss v. Oxford Health Plans, the participant had a mastectomy and then double breast reconstruction. The doctors who performed the procedures were out-of-network. After the reconstructive surgery, she received care from private-duty nurses. The plan controlled costs in three ways: limiting benefits, using deductibles and copayments and paying benefits on a "usual, customary, and reasonable" basis.

The participant's claim for double reconstruction was $40,000. The plan paid only $30,000, based on its practice of paying for double reconstruction at the rate of 150 percent of one breast reconstruction, which was $20,000. The plan denied all of the private-duty nursing fees, which totaled $8,300.

The court upheld the plan's payment of these benefits. First, a plan is permitted to pay only what is usual, customary, and reasonable as long as that is clearly communicated to participants as it was in this case. Second, a plan is not obligated to pay ancillary benefits related to breast reconstruction. In this case, one of the plan’s stated exclusions was "[p]rivate or special duty nursing."

WHCRA does not require plans to provide breast reconstruction benefits. Instead, it provides that a group health plan offering mastectomy coverage must also offer coverage for all stages of breast reconstruction.

WHCRA also requires employers to provide notices at enrollment and on an annual basis as to the availability of such benefits. Infinisource offers a blanket mailing service that can assist employers with this ongoing notice obligation. For more information, you may contact our Blanket Mailing Notice team at 800-300-3838 or look under the Products and Services section of our website at www.infinisource.net.