Fevered Debate Over Inconsistent Coverage

Grace Rodela Fuja of Chicago, just 37 years old, was dying of cancer. Doctors thought only high-dosage chemotheraphy and a bone marrow transplant could save her life.

Grace worked all her life and carried insurance through her employer. She was glad to fall back on that now in her most desperate time of need. But, instead, her insurer, Benefit Trust Life Insurance Company, denied coverage, stating the $150,000 procedure was experimental.

She brought suit against the insurance carrier and an initial court order required Benefit Trust to pay for the treatment. Grace underwent the controversial procedure but died four months later.

The 7th U.S. Circuit Court of Appeals later reversed that court order and found the insurer was not required to pay for the treatment, yet stated, "The court will have to live with the haunting thought that ... others insured ... under similar plans, may not ultimately receive the treatment they need and deserve." Fuja v. Benefit Trust Life Insurance Company, 18 F.3d 1405, 1407, n. 2 (7th Cir.1994).

Tragic stories like these are becoming more and more commonplace. Adjusters and insurance company representatives are interpreting contracts with life and death consequences, yet with only the profit margin uppermost on their minds.

Certainly, health care and its cost to the individual have been an area of concern for the last several years as the country's health care bill soars over $900 billion annually. Yet, consumers legitimately expect that coverage will be provided and that insurance companies will not try to wriggle out of their duty to pay through vague exclusions.

Health insurers have zealously attempted to curb these escalating costs through broader and broader interpretations of exclusionary clauses in health care policies. And more and more insurers are wrongfully labeling what now are considered common medical treatments as "experimental" or "investigational," yet, no standard definition of these terms exists.

In the meantime, patients are being forced to forego necessary medical procedures. For example, AIDS treatment, liver and lung transplants, acupuncture, infertility workups and various cancer treatments often are not covered by insurance. But, how is a woman with blocked fallopian tubes seeking insurance coverage for in vitro fertilization any different than a skier having arthroscopic knee surgery to return to the slopes? Yet, coverage for one typically is denied while the other is routinely allowed.

The 8th Circuit recently was presented with a novel approach to this legal dilemma. In Henderson v. Bodine Aluminum, Inc., No. 95-2469 (Oct. 31, 1995), the plaintiff's lawyer, Sheldon Weinhaus of St. Louis, brought a discrimination claim under the Americans With Disabilities Act.

This time a 45-year-old woman with breast cancer was denied coverage for treatment. The 8th Circuit held on a motion for a preliminary injunction that an employer can be sued under the ADA when an insurance company policy doesn't comply with that statute.

"[I]f the evidence shows that a given treatment is non-experimental - that is, if it is widespread, safe, and a significant improvement on traditional therapies - and the plan provides the treatment for other conditions directly comparable to the one at issue, the denial of treatment violates the ADA," the court wrote.

What this means is that employers will be forced to police their health insurance policies in order to establish that their group policies do not violate the ADA.

Perhaps the 7th Circuit would follow this lead if presented with such a discrimination claim. The language in Fuja seems to cry out for attorneys to be creative and present the court with such an opportunity.

An estimated 70 percent of insured Americans carry insurance through employer-funded plans. Benefit determination claims generally are brought under the Employee Retirement Income Security Act (ERISA) if the health policy was sold as part of an employee benefit plan.

Under ERISA, to prove the wrongful denial of medical coverage, the plaintiff must demonstrate that the administrator of the insurance plan was "arbitrary and capricious" in denying coverage for a specific treatment. The new standard set by the 8th Circuit has made the plaintiff's burden of proof more palatable.

What Henderson means is that the plaintiff will be entitled to a jury trial and that damages - not merely injunctive relief - are possible. But, perhaps more significantly, the burden of proof shifts to the defendant to demonstrate that the treatment is, in fact, experimental.

While it is true that today's heresy may be tomorrow's scientific orthodoxy, the inconsistency of decisions and policymaking on the necessity of various medical treatments must end. Perhaps discrimination claims under the ADA and state law will create some order from this chaos.

In the meantime, the government should not take on the paternalistic role of determining just how resources are allocated. President Clinton learned of the enormous obstacles when his administration attempted such massive reform.

Instead, the government should focus on insurance fraud and perhaps even take a closer look at insurers' bottom lines. After having cried "wolf" in the 1980s, it is difficult to think that a true insurance crisis now exists. If insurance companies were forced to clean up their acts, then perhaps billions could be saved and coverage could be expanded to allow access to new, potentially life-saving, state-of-the-art therapies without even having to pay more.