Derms respond to cosmetic tax proposals

May 1, 2005

The New Jersey legislature instituted a 6 percent sales tax on cosmetic procedures so quickly last fall that doctors say organized opposition had little time to form. The state has been collecting the levy for several months.

The New Jersey legislature instituted a 6 percent sales tax on cosmetic procedures so quickly last fall that doctors say organized opposition had little time to form. The state has been collecting the levy for several months. Now, a number of other states are considering similar legislation. Illinois has proposed a 6 percent tax on elective cosmetic surgeries. The state of Washington was considering a 6.5 percent tax, but no action was expected before the Legislature adjourned in late April. The Texas House recently approved a proposed 7.5 percent tax as part of a plan to overhaul school funding; at press time, that measure was in the Senate finance committee.

On Call wondered how dermatologists view the possibility of such a tax passing in their states, how they think it might affect their patients, and whether it might impact the decision to perform cosmetic procedures.

Defining 'cosmetic': luxury versus necessity While opponents immediately said it was wrong to tax medical procedures, several dermatologists say that while they are not enamored of the idea and may not agree with it, they can understand the rationale.

Elizabeth D. Westly, M.D., practices in Arden, N.C., one of the states where the idea of a sales tax on cosmetic procedures has spread.

"Obviously, the patient will have to pay for the tax, and when you equate it with a luxury car or luxury boat, this could be considered a luxury in life you have to pay for," she says. "I guess it could be justified."

She says there could be a problem, however, with defining which procedures are cosmetic and which are medically necessary.

Timothy G. Woodall, M.D., who practices in Rock Hill, S.C., shares this concern. He says, "Some procedures fall into an ambiguous category. For example, if someone comes in with a lesion on their face, and I'm not sure whether it's benign or malignant, I'll recommend doing a shave biopsy on it. I have to tell them up front that I don't know whether their insurance will pay for it or not - they look at me like I'm an idiot for it or not knowing something that should be so simple, but I tell them the insurance companies do keep changing their guidelines. But then I also tell them we have to go ahead with the procedure because we don't know what the lesion is.

"When the results come back, if the lesion is benign, the insurance company refuses to pay because it wasn't malignant, so it's deemed to be a cosmetic procedure.

"If cosmetic procedures are taxed, the patient will then be hit with paying a tax on top of having to pay for the price of removing the lesion."

In Yakima, Wash., Marvin J. Scotvold, M.D., is semi-retired and spends his time consulting and teaching residents at the University of Washington. He says he finds the idea of a tax "grossly inappropriate," since dermatologic surgeons won't be the ones deciding whether a procedure is cosmetic.

"It will be a nurse or someone else looking up the category of a procedure in some book," he says. "There are too many problems with that. For example, if a patient comes in with a lesion on their neck that gets irritated by their shirt collar or with shaving, and we remove it - some would consider that to be a cosmetic procedure because it's not medically indicated. On the other hand, it is certainly functionally indicated."

Cheapening the profession?

Dr. Woodall, an adjunct professor for the Carolinas Medical Center in Charlotte, has been in practice for four years. Thirty to 40 percent of his practice is cosmetic. He believes a sales tax will do more than financial harm to the medical field.