A Cloud of Uncertainty Hangs over Claims Tied to Vaping
The news is full of stories about health-related vaping incidents. At this point, medical professionals haven’t even determined all the ways in which e-cigarettes can injure the human body – and vaping was initially promoted (somewhat innocently) as “an alternative to cigarettes.” But there have been issues ranging from breathing challenges to lengthy hospital stays for life-threatening lung conditions to a shocking number of deaths now being tied to the ingredients in vaping products.
In the fall of 2019, the Centers for Disease Control and Prevention (CDC) released official medical coding guidelines for e-cigarette/vaping product use and adopted the term “EVALI” to categorize the national outbreak of health care encounters tied to vaping. (EVALI stands for e-cigarette/vaping product use associated with lung injury.) The coding guidance was intended for use in conjunction with current ICD-10-CM classification and covers lung-related complications; poisoning and toxicity; and substance use, abuse and dependence.
Following that release, the CDC has been publishing updates addressing a nationwide outbreak of EVALI. In particular, the updates shared that the CDC is in the process of investigating lung injury associated with vitamin E acetate, which is an additive used as a thickening ingredient in some e-liquids. It often is found in products containing tetrahydrocannabinol (THC) – particularly those that are attained from unlicensed, non-regulated sources like in-person or online dealers. While vitamin E acetate is associated with EVALI, there is not yet sufficient evidence to rule out the contribution of other chemicals as well.
You might be wondering how this topic relates to the business of HM Insurance Group (HM). Well, we provide reinsurance products (Stop Loss, Provider Excess of Loss and HMO Reinsurance) that help to protect employers, providers and payers from the financial impact of catastrophic claims – an example of which would be a multimillion-dollar double lung transplant necessitated by a vaping incident. So, claims with diagnoses tied to vaping are on our radar as a potential threat to the financial well-being of all involved.
The reality is that covered persons may experience medical issues after vaping with regulated cartridges that can be purchased in gas stations, grocery stores, etc. But research is showing that more of the catastrophic hospitalizations are being linked to the use of vaping products that have been obtained through sources that are considered unlicensed, non-regulated and illegal.
Generally speaking, most insurance policies don’t cover claims that have resulted from illegal activity – it’s typically noted as such in plan documents. However, due to the relative newness of the issues related to vaping, some policy language may not be clear enough in its current state. Given the alarming statistics we are seeing with medical incidents tied to vaping, employer groups may want to consider clearly addressing what is, or is not, specifically covered under their plan documents as it relates to EVALI claims.
When you consider that the CDC has received 2,602 reports of hospitalized EVALI cases from all 50 states, the District Columbia and two U.S. territories (as of January 7, 2020), there clearly has been an outbreak of incidents. That same report also shared that there have been 57 deaths associated with EVALI that were confirmed in 27 states and the District of Columbia.
Claims tied to the use of substances often come as the biggest surprises. Less can be done to predict their cost trends. However, these types of incidents may be reduced by educating members about the risks involved. While the importance of proper care and treatment for patients experiencing life-threatening medical events tied to vaping should not be diminished by controversy, the fact remains that the use of substances and/or products obtained through non-retail, “street” level purchases could be classified as illegal activity.
The best protection for the group’s finances may be a clear-cut stance on what is or isn’t covered by the plan. Groups may wish to consider including plan document language that clearly addresses this issue. As such, the resulting high-cost claims may not be the responsibility of the plans or their reinsurers – their responsibility lies in addressing the topic long before an incident takes place by plainly stating parameters in their plan document language and by clearing the air with member education.
This is an informational article only and is not intended to provide legal advice, tax advice or advice on your health plan’s content and design. This article is not meant to address federal or other applicable laws for health plans. This article only includes HM’s suggested best practices for certain provisions in a health plan. You should consult with your legal counsel and/or a qualified plan design professional.
Sources: “ICD-10-CM Official Coding Guidelines – Supplement; Coding Encounters Related to E-Cigarette, or Vaping, Product Use, Centers for Disease Control and Prevention, October 17, 2019; “Outbreak of Lung Injury Associated with the Use of E-Cigarette, or Vaping, Products, Centers for Disease Control and Prevention, January 9, 2020.