Doctors are frequently asked to fill out a variety of forms. No one loves doing it. But it’s part of the job.

Two recent questions by our members highlighted situations when the “ask” goes beyond what is “allowed.”

The first situation addressed a patient wanting to tap into her FSA account. FSA stands for Flexible Spending Account. It lets an employee put away pre-tax dollars for qualified medical expenses. Employers may make contributions to FSA accounts. If you don’t use it, you lose it.

Qualified medical expenses seems like a straightforward term. But does it apply to an elective cosmetic surgery? Meaning, can a routine cosmetic surgery be covered by a FSA? If the surgery is performed strictly for cosmetic reasons, the answer is generally no. And since FSA are covered by IRS regulations, the same caveat applies to Health Savings Accounts (HSAs).

In accordance with IRS regulations regarding taxable medical deductions, IRC 213(d) is especially relevant in regards to the eligibility of certain medical expenses like cosmetic procedures. Under IRS 213(d), medical care refers to:

“The term “medical care” means amounts paid for the diagnosis, cure, mitigation, treatment or prevention of a disease, or for the purpose of affecting any structure or function of the body.”

This particular definition is vital in helping benefits administrators determine whether a specific medical procedure is eligible for reimbursement through consumer-directed healthcare accounts like FSAs, HSAs and HRAs. In the vast majority of cases, cosmetic procedures are not meant to prevent or treat a specific medical condition or are simply done for “general health” purposes, so therefore they are rarely covered by most consumer spending accounts.

A cosmetic surgery/procedure is any surgery/procedure that is directed at improving the patient’s appearance and does not meaningfully promote the proper function of the body or prevent or alleviate an illness or disease.

Are there exceptions to this rule?

Yes.

If the cosmetic procedure is performed to address a medical problem, such as a congenital abnormality, or reconstruction after an accident or disfiguring illness, it will likely be covered, assuming it is covered by a letter of medical necessity. This letter must outline how an account holder’s medical condition necessitates a specific cosmetic procedure, how the treatment will be used to alleviate the issue.

If the cosmetic procedure is elective and unrelated to an underlying medical condition, then no letter of medical necessity can/should be written. And such a procedure will likely not be covered by FSA or HSA.

Onward to paperwork for Family and Medical Leave Act (FMLA).

From the Department of Labor’s website:

The FMLA entitles eligible employees of covered employers to take unpaid, job-protected leave for specified family and medical reasons with continuation of group health insurance coverage under the same terms and conditions as if the employee had not taken leave. Eligible employees are entitled to:

• Twelve workweeks of leave in a 12-month period for:

• • the birth of a child and to care for the newborn child within one year of birth;
  • the placement with the employee of a child for adoption or foster care and to care for the newly placed child within one year of placement;
  • to care for the employee’s spouse, child, or parent who has a serious health condition;
  • a serious health condition that makes the employee unable to perform the essential functions of his or her job;
  • any qualifying exigency arising out of the fact that the employee’s spouse, son, daughter, or parent is a covered military member on “covered active duty;”

OK, is elective cosmetic surgery a serious health condition?

Again, from the Dept. Of Labor:

Serious health condition means an illness, injury, impairment or physical or mental condition that involves inpatient care as defined in § 825.114 or continuing treatment by a health care provider as defined in § 825.115. Conditions for which cosmetic treatments are administered (such as most treatments for acne or plastic surgery) are not “serious health conditions” unless inpatient hospital care is required or unless complications develop. Restorative dental or plastic surgery after an injury or removal of cancerous growths are serious health conditions provided all the other conditions of this regulation are met. Mental illness or allergies may be serious health conditions, but only if all the conditions of § 825.113 are met.

See a theme?

Elective cosmetic surgery not addressing some underlying medical condition generally does not warrant reimbursement under FSA accounts, HSA accounts, or protected leave under the Family and Medical Leave Act. That does not mean your patients will not ask. But be careful about certifying eligibility unless the core conditions are met.

What do you think?

Medical Justice provides free consultations to doctors facing medico-legal obstacles. We have solutions for doctor-patient conflicts, unwarranted demands for refunds, online defamation (patient review mischief), meritless litigation, and a gazillion other issues. If you are navigating a medico-legal obstacle, visit our booking page to schedule a free consultation – or use the tool shared below.

Jeffrey Segal, MD, JD

Chief Executive Officer and Founder

Dr. Jeffrey Segal, Chief Executive Officer and Founder of Medical Justice, is a board-certified neurosurgeon. Dr. Segal is a Fellow of the American College of Surgeons; the American College of Legal Medicine; and the American Association of Neurological Surgeons. He is also a member of the North American Spine Society. In the process of conceiving, funding, developing, and growing Medical Justice, Dr. Segal has established himself as one of the country’s leading authorities on medical malpractice issues, counterclaims, and internet-based assaults on reputation.

Dr. Segal was a practicing neurosurgeon for approximately ten years, during which time he also played an active role as a participant on various state-sanctioned medical review panels designed to decrease the incidence of meritless medical malpractice cases.

Dr. Segal holds a M.D. from Baylor College of Medicine, where he also completed a neurosurgical residency. Dr. Segal served as a Spinal Surgery Fellow at The University of South Florida Medical School. He is a member of Phi Beta Kappa as well as the AOA Medical Honor Society. Dr. Segal received his B.A. from the University of Texas and graduated with a J.D. from Concord Law School with highest honors.

In 2000, he co-founded and served as CEO of DarPharma, Inc, a biotechnology company in Chapel Hill, NC, focused on the discovery and development of first-of-class pharmaceuticals for neuropsychiatric disorders.

Dr. Segal is also a partner at Byrd Adatto, a national business and health care law firm. Byrd Adatto was selected as a Best Law Firm in the 2023 edition of the “Best Law Firms” list by U.S. News – Best Lawyers. With over 50 combined years of experience in serving doctors, dentists, and other providers, Byrd Adatto has a national pedigree to address most legal issues that arise in the business and practice of medicine.