Transgender patients cannot pay due to medical coding

Last year, Tim Chevalier received the first of many denials of coverage from his insurance company for a hair removal procedure he needed as part of a phalloplasty, the creation of a penis.

Electrolysis is a common procedure among transgender people such as Chevalier, a software developer from Oakland, California. In some cases, it is used to remove unwanted hair from the face or body. But it is also required for phalloplasty or vaginoplasty, the creation of a vagina, because all hair must be removed from the tissues that will be moved during the operation.

Chevalier’s insurer, Anthem Blue Cross, told him he needed prior approval to have the procedure. According to him, even after Chevalier received permission, his claims for reimbursement continued to be rejected. According to Chevalier, Anthem said the procedure is considered cosmetic.

Many trans patients cannot get their insurance companies to cover gender verification services. One reason is transphobia in the US healthcare system, and the other has to do with how medical diagnoses and procedures are coded for insurance companies. Medical professionals throughout the country use the list of diagnostic codes provided by the International Classification of Diseases, Tenth Revision, or ICD-10. And many of them, transgender advocates say, do not meet the needs of patients. These diagnostic codes serve as the basis for determining which procedures, such as electrolysis or surgery, are covered by insurance.

“The convention is that ICD-10 codes are very limited,” says Dr. Joanna Olson-Kennedy, medical director of the Los Angeles Children’s Hospital’s Center for Young Adult Health and Development.

She advocates the transition to the 11th edition of the coding system, which was approved by the World Health Organization in 2019 and began to be used worldwide in February. Today, more than 34 countries use the ICD-11.

In the new edition, obsolete terms such as “transsexualism” and “gender identity disorder” have been replaced with “gender mismatch”, which is no longer classified as a mental health condition, but as a sexual health condition. According to Olson-Kennedy, this is critical to reducing the stigmatization of transgender people in healthcare.

The move away from the classification of mental health may also mean greater coverage of gender verification services by insurance companies, which sometimes question mental health claims more rigorously than physical illness claims. WHO officials said they hope adding a gender gap to the chapter on sexual health will “help expand access to health care” and “de-stigmatize the condition,” according to the WHO website.

However, history shows that the ICD-11 will most likely not be implemented in the US for many years. The WHO first approved the ICD-10 in 1990, but the US did not implement it for 25 years.

Meanwhile, patients who identify as transgender and their doctors spend hours trying to get insurance coverage or using crowdfunding to cover large out-of-pocket bills. Chevalier estimates he got 78 hours of electrolysis at $140 an hour, which cost $10,920.

Anthem spokesman Michael Bowman wrote in an email that “there were no medical or coverage denials” because Anthem “pre-approved coverage for these services.”

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However, even after pre-approval was given, Anthem responded to Chevalier’s claims by stating that electrolysis would not be reimbursed as the procedure was considered cosmetic and not medically necessary. This is despite Chevalier’s diagnosis of gender dysphoria — the psychological distress that occurs when someone’s biological sex and gender identity don’t match — that many doctors consider a medically legitimate reason for hair removal.

Bowman wrote that “once this issue was identified, Anthem implemented an internal process that included a manual override in the billing system.”

However, Chevalier filed a complaint with the California Department of Managed Health, and the state declared Anthem Blue Cross non-compliant. In addition, after KHN began questioning Anthem about Chevalier’s accounts, two lawsuits that had been pending since April were resolved in July. So far, Anthem has reimbursed Chevalier for about $8,000.

Some procedures that trans patients receive may also be excluded from coverage because they are considered “gender-specific” by insurance companies. For example, a transgender man’s gynecological visit may not be covered because his insurance plan only covers those visits for people registered as women.

“The question always arises: what gender should be reported to the insurance company?” said Dr. Nick Gorton, an emergency physician in Davis, California. Gorton, who is transgender, recommends that his patients with insurance plans that exclude transgender care calculate the out-of-pocket costs that will be required for certain procedures depending on whether the patient identifies as male or female on their insurance records. For example, according to Gorton, the question for a trans man is: “Which is more expensive, paying for testosterone or paying for a pap test?” Because insurance probably won’t cover both.

For years, some doctors have helped trans patients get insurance coverage by finding other medical reasons to care for them. Gorton said that if, for example, a transgender man wanted a hysterectomy but his insurance did not cover gender-affirming care, Gorton entered the ICD-10 code for pelvic pain, not gender dysphoria, on the patient’s payroll record. Pelvic pain is a legitimate reason for surgery and is usually accepted by insurance companies, Gorton said. But some insurance companies resisted, and he had to find other ways to help his patients.

In 2005, California passed the first law of its kind to prohibit discrimination in health insurance based on sex or gender identity. Now, 24 states and Washington DC are banning private insurance from excluding medical benefits for transgender people.

Consequently, Gorton no longer needs to use different codes for patients seeking care at his California clinic. But doctors in other states are still struggling.

When Dr. Eric Meininger, internist and pediatrician for the Gender Health Program at Indiana Health University, treats a transgender child in need of hormone therapy, he usually uses the ICD-10 code for “drug management” as the main reason for the patient’s visit. This is because there is no law in Indiana providing insurance coverage for LGBTQ+ people, and when gender dysphoria is listed as the underlying cause, insurance companies deny coverage.

“It’s frustrating,” Mininger said. On the patient’s payment card, he sometimes lists multiple diagnoses, including gender dysphoria, to increase the likelihood that the procedure will be covered. “It’s usually not hard to give someone five, seven or eight diagnoses because there are a lot of vague diagnoses.”

The implementation of ICD-11 will not solve all coding problems, as insurance companies may still refuse to cover procedures related to gender mismatch, even if it is listed as a sexual health condition. It also won’t change the fact that many states still allow insurance to exclude gender-proven care. But in terms of reducing stigma, it’s a step forward, Olson-Kennedy said.

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One of the reasons the US has taken so long to switch to ICD-10 is that the American Medical Association strongly opposed the move. It argued that the new system would place an incredible burden on physicians. Physicians will have to “handle 68,000 diagnostic codes – a fivefold increase from the roughly 13,000 diagnostic codes in use today,” the AMA wrote in a 2014 letter. The association argued that implementing software to update vendor coding systems would also be costly, dealing a financial blow to smaller healthcare facilities.

Unlike past coding systems, the ICD-11 is completely electronic, without a physical codebook, and can be incorporated into a healthcare facility’s current coding system without the need for a new deployment, WHO spokesman Christian Lindmeier said.

Whether these changes will make it easier for the new edition to be adopted in the US remains to be seen. For now, many trans patients in need of gender-affirming care must pay their own bills, fight with their insurance company for coverage, or rely on the generosity of others.

“Even though I eventually received compensation, the refund was delayed and it burned up a lot of my time,” Chevalier said. “Most people would just give up.”

Kaiser Health News is a national health policy news service. It is an editorial independent program of the Henry J. Kaiser Family Foundation and not affiliated with Kaiser Permanente.

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