The Price of Progress

Getting Insurers to Cover New Procedures Is Often Difficult

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Medical Economics Feature -- June 2001  

By Walt Borges
Associate Editor

Since 1989, San Antonio pediatric orthopedist Robert Campbell, MD, and a team of specialists at Christus Santa Rosa Children's Hospital have implanted adjustable titanium ribs in 130 children to treat a range of potentially lethal conditions.

Several titanium ribs are implanted to create a cavity wall, expanding lung capacity and allowing organ growth that, if not accommodated, would lead to critical medical problems and ultimately to death. Follow-up surgeries are performed at five- or six-month intervals thereafter to adjust the length of the ribs.

While no longer rare, Dr. Campbell's procedures aren't everyday occurrences either. And they are not cheap. The initial implant surgery alone costs an estimated $100,000 to $200,000.

For parents who want to use the implants for their critically ill children and for physicians like Dr. Campbell, the biggest hurdle in that decision is often whether the patient's health insurance will pay for the procedure. The rib implant is classified as experimental under most health plan contracts, and experimental and investigative procedures are excluded from insurance coverage under most contracts.

"We were successful in getting all of the treatments funded eventually," Dr. Campbell said. "But a majority of those cases had to go through the appeals process to be paid by insurers."

Insurance coverage for experimental and investigative treatments is a concern these days in the medical profession, and the topic occasionally breaks into the public consciousness through news stories about new procedures and drugs for treating cancer, HIV/AIDS, and infertility. But insurers require that procedures, drugs, and new techniques undergo thorough testing and peer review before being labeled as effective. Testing and peer review are lengthy processes and often depend on a substantial number of treatments, and people with life-threatening illnesses don't have the time to wait patiently for approval.

Two of Dr. Campbell's patients in the last year faced just such a hurdle. One case involved a Humana denial of coverage for a 2-year-old Austin boy who suffered from scoliosis; the other, a 21-month-old Kansas boy whose implant coverage was denied by Kansas City-based Coventry Health Care Inc. and whose spondylothoracic dysplasia, a condition known also as Jarcho-Levin syndrome, usually leads to death by age 2.

Enter Austin attorney Robert Provan, JD, who until last year saw little value in appealing to insurers and health plans to overturn adverse coverage decisions involving experimental and investigative treatments.

Mr. Provan successfully argued both appeals for coverage of the titanium rib implants and also persuaded Humana, in an unrelated case, to pay for a bone marrow transplant (a treatment specifically excluded under Humana's contract) for a 7-year-old Austin girl with sickle cell anemia.

Mr. Provan, by his own admission, now is one of the converted.

"I've been skeptical of the grievance and appeals procedures -- until last year," he said. "Then I appealed three denials and found, that with good advocacy, patients and physicians can win."

Investigational or cutting edge?  

Choosing what to cover is a key choice for health plans, says Charles M. Cutler, MD, chief medical officer of the American Association of Health Plans.

The underlying rationale for excluding experimental and investigative treatments is that "employers and individuals want to pay for health care that is safe and effective," Dr. Cutler said. "They don't want to pay for unsafe and ineffective treatments."

Because investigational treatments can't be categorized either way, the tendency among health plans is to exclude them from coverage. Many states require insurers to specifically exclude therapies from coverage or pay the claims involving the treatment.

Dr. Cutler says contracts must include generic exclusions, but every health plan crafts contract terms based on its experiences. The result is that every plan has different contract language for covering investigational treatments.

Aetna provides one example of how insurers' determinations are made. As the only major insurer that places coverage policy information on the Internet, Aetna issues bulletins on the company's Web site governing experimental and investigational procedures. Aetna policy bulletin No. 162 states that "as a matter of discretionary internal policy, we will not enforce the exclusion" if three conditions are met:

  • The patient must first have a disease that is expected to cause death within one year in the absence of effective treatment;
  • Conventional and standard treatments must have been unsuccessful; and
  • The proposed treatment is promising and likely to be effective. The effectiveness assessment must be supported either by credible peer review literature or by the opinion of independent medical experts in a relevant specialty as designated by Aetna.

Aetna will pay claims for clinical trials if:

  • The drug, device, therapy, or procedure is under current review by the U.S. Food and Drug Administration and has been determined safe for human use;
  • The clinical trial is approved by the institutional review board that oversees the investigation;
  • Credible peer-reviewed literature shows benefits of the proposed treatment; and
  • The trial is sponsored by the National Cancer Institute (NCI) or a similar body and conforms to independent oversight criteria as defined by NCI.

Aetna allows appeals of coverage determinations through its National Medical Excellence Unit.

The surest sign that a treatment is investigational is when the therapy is available only in clinical trials, Dr. Cutler says. But he noted that insurers often will pay for patients involved in clinical trials if they are evaluating the effectiveness of competing new treatments.

Physicians and patients who seek payment for investigational treatment do best when the treatment is supported by peer-reviewed literature in medical and research journals that indicates a treatment is safe and effective, Dr. Cutler says, but in the absence of data, insurers reluctantly accept expert opinion.

"That's the least favored choice," he said. "Opinions can be wrong."

One example of such a bad opinion was the groundswell produced by medical experts in support of using bone marrow transplants to treat breast cancer. While a growing number of experts endorsed the treatment, scientific studies soon raised questions about its effectiveness.

Genesis of a high-tech rib  

In 1989, Dr. Campbell received a call from Melvin Smith, MD, a pediatric surgeon. He was treating a 2-year-old child who was missing ribs and confined to a ventilator and who had been sent home to die. In what Dr. Campbell describes as a last-ditch effort to save the boy, he and Dr. Smith surgically implanted fracture pins in the boy to create a chest wall. The operation was a success.

"A week later, he was off the ventilator," Dr. Campbell recalled. "But we knew there was more to be done. The fracture pins weren't going to grow with him."

Dr. Campbell quickly designed adjustable ribs made of titanium, a lightweight material that could be used in infants and that would not affect MRI scans because they were nonmagnetic.

The ribs are installed longitudinally, parallel to the spine, but occasional outpatient surgery is required to lengthen the ribs and relock them, Dr. Campbell says. The process has cost as much as $5 million for a single child, he says.

Was it a success? "The boy was 8 months old when he came to us. He's 13 years old now," Dr. Campbell said.

Since the first operation, Dr. Campbell, Dr. Smith, and pediatric pulmonologist Donna Beth Willey-Courand, MD, have evaluated more than 500 children from across the nation and performed 130 implants.

"Once we had some publicity, children with these lethal conditions were sent to us from all over the country," Dr. Campbell explained.

Because of the low numbers of implants, no peer-reviewed research was available to cite to the insurers in their reviews. Even now, Dr. Campbell and the Christus Santa Rosa team are still accumulating data and preparing manuscripts that will test the technique in a peer-reviewed setting.

"We are treating rare diseases," Dr. Campbell said. "We have only sporadic case histories on these diseases for use in studies, and there is rarely follow-up when someone dies of those diseases."

But the patients and Dr. Campbell had something better: Expert opinion was on their side. "A majority of the insurers realized that it was the leading specialists who were making the referrals to us," Dr. Campbell said. "The approval of coverage went on as an exception to the policy."

Dr. Campbell recalls his first billing experience with the implant.

"In 1989, after the first surgery, we billed this new procedure for the very first time. The insurer (I can't remember who it was) paid the claim, but noted on the bottom of the paper that it was discounting our fee because the bill exceeded the usual and customary charges for the procedure -- a procedure that had never been done before," Dr. Campbell said.

"I have to say that there's often an air of unreality with these companies," he added. 

Advocacy unbound  

Mr. Provan was called into the appeal for the Austin boy after his parents contacted a national patients assistance group. Mr. Provan learned that Humana would cover a spinal fusion procedure that equaled the six-figure cost of the rib implant. He said the boy's doctors believed the child was too small for fusion treatment, which would leave his spine with no opportunity to grow and keep pace with the rest of his body.

"The rib implant was the only thing that made sense if he was to be given a chance at life," Mr. Provan said.

When Mr. Provan and the family appeared before the Humana appeals panel (Dr. Campbell testified by phone), Mr. Provan turned the family's request into his own personal plea.

The lawyer has restrictive lung disease and scoliosis, a by-product of polio in his youth that was treated by then-innovative treatments, including spinal fusion.

"The first doctors I saw said I would not last until I was 21. I'm 56 now. At the [appeals] hearing, I asked the panel to give this boy the same chance at life that I have had," Mr. Provan said.

Equally persuasive, Mr. Provan says, was Dr. Campbell's example of a Florida girl who received the implants and went from being respirator-dependent to playing soccer. The girl was covered by a Humana plan in Florida, which paid for the implant.

Mr. Provan says the Humana appeals panel checked out the Florida case and approved the procedure for the boy. "He's had the surgery and he's doing great," Mr. Provan said.

For the Kansas boy with Jarcho-Levin syndrome, the appeals fight was tougher. The family was first told that no lawyers would be allowed to participate in the appeals hearing, then the panel recanted and offered Mr. Provan 10 minutes to present his case. Eventually, he was given an hour.

"I could understand the exclusion of experimental treatments when regular and conventional treatments exist," Mr. Provan said, noting that most who have the syndrome die by age 2. "But, here, the implant was the only hope."

Mr. Provan wryly notes that the family's appeal was aided by local television coverage, which raised the stakes of a public black eye for Coventry if it denied the appeal. The implants were approved.

Mr. Provan's third appeal was on behalf of 7-year-old Valerie Ogoh of Austin. Valerie, who had a stroke at age 2, had sickle cell anemia and was spending more than 40 hours a week undergoing drug infusions and blood transfusions. The annual cost of the treatments, which were covered by the Ogoh family's health insurance, was $170,000 a year.

"We discovered literature that suggests that bone marrow transplants yield a 90 percent chance to cure this disease," Mr. Provan said. "The transplant costs between $150,000 and $180,000. The transplant made the best medical sense, and it made the best financial sense, too. I told them [the Humana appeals panel], 'You pay one time and you have a 90 percent chance of curing Valerie.'"

Again, Mr. Provan notes that factors other than medical judgment may have been in play. Valerie's father, Anthan U. Ogoh, worked for the Texas Department of Health, and then-Texas Health Commissioner William R. Archer, MD, sent a letter to the Humana appeals panel supporting payment of the claim.

Valerie got her transplant with marrow taken from her brother, who was a perfect match.

Tough choices  

"One way to look at experimental treatment is as innovation," said Ray Werntz, president of the Consumer Health Education Council (CHEC), a fact-finding and educational organization on issues relating to the expansion of health insurance coverage for the uninsured. "It entails the application of new knowledge. We all like that, but the problem is that knowledge is accelerating. The challenge is to write language into an insurance contract today that governs what happens tomorrow."

Mr. Werntz says the reality of health care is that dollars are limited and those organizations that pay most of the costs of health care provided to individuals must draw a line for determining who is paid and for what. Still, for investigational drugs and treatments, most payers have a process for re-evaluating the constraints that determine coverage and payment based on new evidence of efficacy, he says.

"The tricky part is, how do you flex those constraints and who will enter into the discussion of how to flex them?" Mr. Werntz said. "You have the problem of the payers -- the insurers, the employers, or the government -- having a set of economic objectives and, in some cases, quality standards that may not correspond to the objectives of those who request payment for such treatments."


One problem is that news of investigational treatment in the popular news media expands the demand for such treatment even before its safety and effectiveness are validated.

The Internet has contributed to increased public expectations as the public visits medical Web sites to learn about new procedures and drugs, says Mr. Werntz

The CHEC president says that open communication between doctors and their patients, based on a full and shared understanding of the medical evidence, should, across a large population, eventually lead to a drop in the utilization of some investigational treatments popularized in the news media but later shown to be ineffective. That appears to have happened with the bone marrow transplants used to treat breast cancer when physicians became aware of the scientific studies and counseled their patients, Mr. Werntz says.

One of Mr. Provan's clients had another suggestion.

"The health plans could make the process more clear," said Stacey, the mother of the Austin boy who received the rib implant. "We're very intelligent and we still couldn't figure the process out. We couldn't have gone to the review committee and gotten the results we did without a lawyer."

Stacey, who asked that her last name not be used to preserve family privacy, says insurance documents fail to lay out the procedures for appealing denials of coverage in exceptional circumstances such as those involving experimental treatments. The insurer's process "was not friendly to our situation. There were steps to follow, but they were the same as if my son had sprained his ankle and payment had been denied for treating it."

Mr. Provan says he is now convinced that the major problem for patients and physicians seeking approval of investigational treatments is the lack of ability to navigate the appeals process.

"People don't know their rights under their health plans," he explained. "If they do, they are too ill and too stressed or too busy to do what has to be done. But I'm convinced that you can win these appeals with skillful advocates."

Rather than $200-an-hour lawyers, advocates could come from the ranks of retired physicians, teachers, nurses, paralegals, and other professionals, Mr. Provan says. Such advocates would have to be trained, and Mr. Provan says he is working on the idea of starting a nonprofit foundation to recruit and train such advocates.

"To win these appeals, you have to be fully armed," Mr. Provan said.

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