Guest Article

Plan Barred From Denying 'Experimental' Treatment; Court Cites Plan Ambiguity, Degree of Harm

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Summary: A group health plan was required to cover a procedure that it had previously ruled was experimental and not medically necessary because a federal district court found that the plan language was ambiguous.

(March 13, 2001) - In noting that a group health plan will at worst "lose money," as opposed to a plan beneficiary whose life could end "expeditiously" due to a terminal illness, a federal district court approved a preliminary injunction that requires the plan to cover a procedure that it had previously held was excluded from coverage. The case is Kopicki v. Fitzgerald Automotive Family Employee Benefits Plan, 121 F. Supp. 2d 467 (S.D. Md., Nov. 22, 2000).

Facts of the Case

Chester Kopicki was a beneficiary under the Fitzgerald plan, a group health plan sponsored and administered by JJF Management Services, Inc. The Loomis Co. was the benefit services manager. Kopicki was given less than a year to live after being diagnosed with multiple myeloma, a fatal form of blood cancer. His doctors recommended that he undergo high dose chemotherapy followed by an autologous stem cell transplant (HDC-ASCT). Kopicki's doctors initially recommended a "tandem" HDC-ASCT treatment, where he would receive two doses of HDC and two ASCTs, but Kopicki decided instead to participate in a clinical trial at the medical facility, where he would receive the tandem procedure plus a dose of thalidomide. The facility sought a preauthorization of treatment. However, Loomis excluded the treatment as experimental.

Kopicki asked that the decision be reconsidered, and Loomis sent the case to a second review company, which called tandem HDC-ASCT the standard of care for multiple myeloma patients. After the UMC altered its recommendation to a single HDC-ASCT, Loomis recommended to JJF's attorney that the HDC-ASCT be covered. However, the attorney requested a further review to address whether the treatment: (1) is an organ or tissue transplant; (2) is truly "medically necessary"; and (3) as modified, or with drugs such as thalidomide, may be viewed as "experimental." Loomis denied coverage for the tandem HDC-ASCT procedure as "experimental." Kopicki then sued JJF and requested preliminary injunctive relief regarding the preauthorization denial.

In addressing the merits of the case, the court first noted that the explicit listing of a treatment within a plan is not an absolute prerequisite to coverage, and that an insurer should "clearly and unambiguously" state in the plan any intention to exclude all procedures not explicitly listed by name.

While JJF contended that its plan document language was explicit enough to exclude coverage, the court countered that the plan's exclusions section did not mention "stem cells" or "component of bloods" and only mentioned blood or blood plasma as it concerned "refunds or credits."

The court then clarified that actually, three procedures were at issue: (1) the single HDC-ASCT; (2) the tandem; and (3) the clinical trial.

In its analysis of these procedures, the court distinguished fragmenting the treatment to determine: (1) whether it is experimental; versus (2) the purpose of coverage.

The Single HDC-ASCT

The court noted that JJF was "attacking" the tandem and clinical trial treatments, but Kopicki's physician also requested preauthorization for single HDC-ASCT.

"The only response to this clear request for preauthorization was a broad-based denial of coverage," the court indicated. Therefore, it concluded that JJF denied coverage for all three procedures.

Regarding the single HDC-ASCT, the court noted that autologous transplants have been recognized as effective treatments for multiple myeloma, and cited supporting medical literature, expert opinions and data from the Health Care Financing Administration and Blue Cross/Blue Shield. Furthermore, the court noted that JJF's attorney also indicated to Loomis that if Kopicki qualified for the "basic ASCT procedure" it "would seem to qualify as effective."

In the face of "such overwhelming evidence," the court found that the Koplickis showed a strong likelihood of success in establishing that a fiduciary, in the absence a conflict of interest, would not reasonably deny coverage for the single HDC-ASCT, and that JJF's preauthorization denial was arbitrary and capricious.

The Tandem HDC-ASCT

Even if single HDC-ASCT is recognized as the standard of care for patients like Kopicki, JJF argued that the tandem HDC-ASCT is not and also is not a covered benefit. Therefore, it did not qualify as a medically necessary procedure.

The court noted that available medical opinions were generally split on the benefits of tandem HDC-ASCT; therefore, it was too early in the litigation process to definitely resolve whether the procedure was effective. However, the court later noted that in conditions similar to Kopicki's, published medical studies identify the tandem procedure as the most effective life-saving treatment.

In addition, it added that a plaintiff's entitlement to preliminary relief is not wholly conditioned upon a showing of a "likelihood of success." Rather, courts should balance who would suffer the most harm -- the plaintiff or the defendant. In this case, the odds weighed in favor of Kopicki.

On the other hand, "defendants will [only] lose money," the court noted. The court also noted that while Loomis' initial denial letter called the tandem procedure experimental, Loomis later expanded its denial reasons to include that the procedure was not medically necessary and was not an explicitly covered benefit. This "abrupt" shift in position -- along with aforementioned medical studies and the harm that a benefits denial would cause Kopicki -- weighed against JJF under the less deferential standard used for a conflict of interest. Therefore, the court determined that JJF's denial of the tandem procedure was unreasonable, and that the Kopickis were entitled to preliminary injunctive relief to prevent JJF from denying preauthorization for the tandem procedure.

Phase III Clinical Trial

The clinical trial involved a tandem HDC-ASCT along with thalidomide. The court noted that "Phase III" studies, which compare the effectiveness of the procedure to conventional treatment, have not been done. However, the court indicated that this does not mean that the trial is automatically experimental or investigational, particularly when it is harmless but has proven effective in prospective, randomized testing. Therefore, the key in assessing the procedure's status involves reviewing the plan language, the consent form, the protocol, the available medical literature and the number of prior patients subjected to the procedure.

Accordingly, the plan language provided that in reviewing whether a treatment is experimental or investigational, the plan administrator should consider if:

Reliable Evidence shows that the . . . medical treatment . . . is the research, experimental, study, or investigational arm of on-going phase III clinical trials, or is otherwise under study to determine its . . . safety, its efficacy or its efficacy as compared with a standard means of treatment or diagnosis.

Based upon this language, the court concluded that it was reasonable that JJF deemed the clinical trial procedure as experimental because: (1) a consent form described the trial as a "research study," that is designed to evaluate whether the procedure "will be beneficial"; and (2) the form also stated that the procedure may not be beneficial and could also be harmful. Furthermore, the court noted that it was undisputed that using thalidomide in treating multiple myeloma is new and no medical studies exist that tout its effectiveness. Therefore, the court held that Kopickis could not prove that JJF abused its discretion in finding that the clinical trial was experimental or investigational, and denied injunctive relief for that procedure.

No Fiduciary Breach

The Kopickis also alleged that JJF breached its fiduciary duties by improperly interceding in Loomis' investigation of the preauthorization request and denying him coverage without acting "solely in the interest of the participants and beneficiaries." Their claim was rejected for procedural reasons. Therefore, the court ruled in JJF's favor.

Excerpted from the March 2001 supplement to Employer's Guide to Self-Insuring Health Benefits, ©Thompson Publishing Group, Inc., 2001. All rights reserved.

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