A Framework of Adjusting Medical Claims Involving Possible Experimental Treatment

Modern health insurance policies and ERISA plans exclude coverage for experimental medical treatments. The question of what types of treatments qualify as experimental is problematic. Adjusting a claim for medical treatment which may be experimental can be a difficult exercise. This article briefly discusses key concepts which must be utilized in the adjustment process of medical claims where “experimental treatment” may be at issue.

Health insurance policies and ERISA plans usually deal with the experimental medical procedure problem by either enumerating specific medical procedures that are classified by the policy or plan as being experimental or by defining the term “experimental” by incorporating the classification schemes employed by other medical, governmental or regulatory bodies.

The problem with enumerating specific experimental procedures as being excluded from the policy or plan is that the list is inherently under-inclusive given the advancement of medical knowledge and technology. Because of this, many policies or plans utilize the second methodology by incorporating flexible and elastic classification schemes employed by other medical, governmental or regulatory bodies.

However, it is not uncommon for health policies and ERISA plans to not define the term “experimental” by using one of the two methodologies identified above. In those situations, the starting point for the claim analysis is the realization that the term “experimental” basically hinges on the safety and effectiveness of the procedure in question, as demonstrated by its use on an appreciable number of patients. There is increasing litigation over what constitutes an “experimental procedure” which requires a fact-intensive determination.

Absent an analytic framework for construing the term “experimental”, courts are forced to choose between the testimony of two sets of experts who often utilize a “floating standard which can rise or fall in any fact situation [and which is] not reviewable against identifiable criteria.” Bucci v. Blue Cross-Blue Shield of Connecticut, 764 F.Supp. 728, 733 (D. Conn. 1991).

The Court in Heasley v. Belden & Blake Corp., 2 F.3d 1249 (3rd Cir. 1993) has provided the most utilized analytic construct for this dilemma. The Court in Heasley adopted what are now commonly referred to as the Heasley factors.

The first factor looks to the judgment of other insurers and medical bodies regarding the specific medical procedure in question. Do other commercial and governmental insurers cover the procedure in question? Where those other commercial or governmental insurers provide coverage for the procedure in question at a time when their policies contain experimental procedure exclusions, the approval of coverage provides support for a finding that the procedure is not recognized as being experimental in the community. This would also be true to the extent other authoritative medical bodies have considered the procedure as not being experimental.

The second factor focuses on the amount of experience with the particular procedure. Usually this involves a simple calculation of the number of times the procedure has been performed. However, this factor can be more complicated than that. As an example, should a differentiation be made regarding the number of procedures performed in the United States versus Europe? The medical societies of the European union are more progressive than the FDA in the United States. If the numbers are drawn solely from the United States, the procedure is more likely to be considered experimental because of the lower numbers of procedures involved.

Some courts have looked to the studies performed outside the United States in making the determination regarding whether a treatment is experimental. See, e.g., Rollo v. Blue Cross-Blue Shield of New Jersey, 1990 WL 312647 at *6 (D. N.J. March 22, 1990) (relying on English studies in concluding autologous bone marrow transplant was not experimental for the patient’s tumor treatment).

Courts have grappled with the question of how to arrive at a specific number for the medical treatment as an indication for whether the procedure is no longer experimental. Some courts have expressed criticism with defense expert testimony which concludes that the number of questioned treatments was too small to determine whether the treatment was experimental when those experts were also unable to suggest a number of patients that would provide sufficient data. See, e.g., Pirozzi v. Blue Cross-Blue Shield of Virginia, 741 F.Supp. 586, 590 (E.D. Va. 1990).

Other courts have concluded that where the insurer chooses the number of treatments, artificially, the criteria may be arbitrary and capricious. See, e.g., Bucci v. Blue Cross-Blue Shield of Connecticut, 764 F.Supp. 728, 732 (D. Conn. 1991) (“To permit defendant to base a denial on the lack of cases of such treatment which it regards as sufficient to prove the efficacy of the treatment, when the number it would accept as sufficient is not ascertainable from the language of the policy nor testified to, would permit an arbitrary and capricious denial.”)

The third factor to be considered is the effectiveness of the procedure in question for treatment of the condition in question. Several criteria can bear on this inquiry including the long term survival rate associated with the procedure, the likelihood of recurrence, and the post-operative mortality rate. Effectiveness is a relative inquiry and usually the data on effectiveness rates must be compared to data associated with no treatment or with alternative treatments. Pirozzi, 741 F.Supp. at 590-91.

Uncommon methodology is the use of randomized double-blind studies. These studies track two groups of patients with the same condition, with only one group being given the disputed treatment and the other serving as the “control” group. These studies are generally reliable but they represent only one methodology for comparing two treatments. The significance of not having these type of studies depends upon the availability and quality of other comparative data, such as peer-reviewed medical journal articles or, in some cases, expert testimony.

It is not uncommon for medical science to utilize treatments that were once considered experimental, but which are now part of regular medical regimes newly adapted for use in other medical illnesses. In that type of situation the treatment in question is not considered experimental for the original application but may become experimental again for the new adaptation of the treatment to other conditions.
Plitt is a national legal expert on insurance law and insurance agent issues.