Insurance Availability for Obesity Surgeons Could Thin

One of the riskiest medical procedures is bariatric surgery, which is designed to help very obese people lose weight.

Insuring these surgeons takes specialized knowledge about underwriting, which is perhaps a reason that bariatric specialist RRG NOVUS Insurance Co. has been successful.

Most medical professional liability companies insure these doctors, but following recent negative publicity and claims in this area, some insurers could pull back, especially if they don't have specific understanding of the risks.

Doctors take a few different approaches when performing these types of procedures. Surgeons can place a band around the stomach, perform gastric bypass surgery or even remove part of the stomach.

None of these tasks is particularly safe, but in some situations for morbidly obese people the surgery can be lifesaving. However, due to the dangerous nature of the operations and the already poor conditions of bodies they are performed on, they can also be life threatening. They should not be performed for cosmetic reasons.

In December, the Food and Drug Administration sent warning letters to eight surgical centers in Southern California and a marketing group called 1-800-GET-THIN claiming that the firm's Lap-Band is a restricted medical device that is being "misbranded as a result of misleading advertising" by the 1-800 group.

In response, 1-800-GET-THIN has said it is working with the FDA to resolve any outstanding issues with disclosure. This is not the first time this company has caught the attention of the public.

The Los Angeles Times has reported that at least five Lap-Band patients have died following procedure performed by organizations affiliated with 1-800-GET-THIN per a variety of sources.

In the wake of the 1-800-GET-THIN findings, a group of weight-loss surgeons is asking Congress to investigate the ad campaign for the Lap-Band. In addition, Reps. Henry A. Waxman (D-Calif.), John Dingell (D-Mich.) and Diana DeGette (D-Colo.) have sent a letter to the House Energy and Commerce Committee calling for hearings into 1-800-GET-THIN.

A 2005 study in the Journal of the American Medical Association reported that a 0.5 percent rate of perioperative mortality could be achieved but that the actual 30-day mortality rate for the procedure was two percent when high-risk patients were factored in. Men were more likely to die than women, and the older age was also a major factor.

Jenan A. Frederick, the program administrator of the NOVUS Insurance Program, said that she has heard of some claims related to the 1-800 number programs but that her organization had not seen any.

"We haven't seen anything dramatic," Frederick said. "We're very careful with our underwriting. It really comes back to looking at each individual physician."

NOVUS started writing business for bariatric surgeons in July 2005 after a group of specialists decided to found the company to meet an insurance need for this field.

"These doctors knew first-hand what the risks were and what they weren't," Frederick said. "When you're specializing in a certain industry it's very easy to be good at it because that's all we do."

The company is endorsed by the 1,800-member American Society for Metabolic & Bariatric Surgery. The company writes business in all states except Alaska, Minnesota and Wisconsin. The company's administrative offices are based out of Tampa, Fla., and the company is domiciled in South Carolina.

Its policy limits range from $100,000/$300,000 to $2 million/$6 million.

NOVUS was founded to be directly owned by its doctor members, which is still the case today. In July 2011, the company was restructured for the purpose of recapitalizing the company and to modify its reinsurance program.

Now Novus has the financial backing of NORCAL Mutual Insurance Co., one of the largest writers of physician liability insurance in the U.S. with approximately 23,000 physician insureds, more than $1.4 billion in assets and approximately $580 million in policyholder surplus. Novus has written premiums of roughly $8 million and insures several hundred physicians.

The specialization of the company has helped it to be successful in writing something that has traditionally been considered a very difficult risk.

"There are definitely carriers that have an aversion to insuring bariatric surgeons," Frederick said. "One of the issues with other companies is that they may not insure very many of them. When insurance companies don't understand the risk, that can be challenging."

Medical liability providers from Chartis to MLMIC cover bariatric surgeons, but they often require supplements and do not have specialized programs for the doctors.

However, if more claims come in to companies that are not extremely selective in whom they insure, the number of carriers offering this coverage could dramatically shrink over the next few years.

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