Medicare wants limits for weight loss surgery

NEW YORK (Reuters) - Medicare, the U.S. government's largest payer of health care, said on Monday it does not plan to cover weight-loss surgery in diabetic patients who are not dangerously overweight, saying there is not enough evidence to show it can improve their health.

Medicare and some private insurers already pay for the surgery, which ranges from $15,000 to $35,000 for more complicated gastric bypass, for severely obese people.

But the agency said it will evaluate whether to expand the coverage after a small study earlier this year found the surgery can completely reverse type 2 diabetes, a metabolic condition spurred by weight gain and suffered by millions of Americans.

Expanding payments for such surgeries to people who are not overweight but have diabetes could boost device makers such as Johnson & Johnson and Allergan Inc that make bands surgically placed around the stomach to help patients feel fuller. Other surgical procedures reduce the size of the stomach itself.

The agency, which provides health insurance for the nation's roughly 44 million elderly and disabled, said its own review of available data found no overwhelming benefit.

"While recent medical reports claimed that bariatric surgery may be helpful for these patients, CMS (the Centers for Medicare and Medicaid Services) did not find convincing medical evidence that bariatric surgery improved health outcomes for non-morbidly obese individuals," it said in a proposal.

To be considered for Medicare coverage, patients must have a body mass index -- a measure of weight in relation to height -- of 35 or higher and have other complications, such as heart problems or arthritis, the agency said.

The agency said it will review public comments on the draft ruling before making a final decision, which is likely to weighed by many private insurers in setting their own policies.

(Reporting by Susan Heavey; editing by Richard Chang/Jeffrey Benkoe)