Health Insurance: Coverage of Autologous Bone Marrow Transplantation for
Breast Cancer (Letter Report, 04/24/96, GAO/HEHS-96-83).

Although many insurers now cover the cost of autologous bone marrow
transplantation, a new and expensive treatment for breast cancer, issues
surrounding the procedure have put several goals of the U.S. health care
systems in conflict: access to the best, most advanced care; cost
containment; and research adequate to assess the value of new
treatments. Proponents of insurance coverage argue that autologous bone
marrow transplantation provides breast cancer patients with a promising,
potentially life-saving treatment. Critics say that the proliferation of
such unproven treatments is costly and harmful, potentially hindering
clinical research to determine whether the treatment is effective. This
report discusses (1) the factors that have influenced insurers'
decisions on whether to cover the treatment, (2) the status of research
on autologous bone marrow transplantation for breast cancer and the
consensus on what is known about its effectiveness, and (3) the
consequences of increased use and insurance coverage of the treatment
while it is still being evaluated in clinical trials.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  HEHS-96-83
     TITLE:  Health Insurance: Coverage of Autologous Bone Marrow 
             Transplantation for Breast Cancer
      DATE:  04/24/96
   SUBJECT:  Breast cancer
             Cancer research
             Radiation exposure hazards
             Health research programs
             Health care cost control
             Health insurance cost control
             Women
             Health care services
             Medical services rates
             Health insurance
IDENTIFIER:  Medicaid Program
             Medicare Program
             CHAMPUS
             Civilian Health and Medical Program of the Uniformed 
             Services
             Federal Employees Health Benefits Program
             
Health Insurance: Coverage of Autologous Bone Marrow Transplantation for
Breast Cancer (Letter Report, 04/24/96, GAO/HEHS-96-83).

Pursuant to a congressional request, GAO reviewed insurance coverage of
autologous bone marrow transplantation (ABMT) for breast cancer,
focusing on: (1) the factors insurers consider when deciding whether to
cover treatment; (2) the effectiveness of the treatment; and (3) the
consequences of the increased use and insurance coverage of the
treatment while it is still in clinical trials.

GAO found that: (1) the use of ABMT has become widespread and many
insurers cover ABMT; (2) sufficient data do not exist to establish that
ABMT is more effective than traditional chemotherapy; (3) despite the
lack of data, many insurers cover ABMT because the research results of
its effectiveness are promising, its use is widespread, and they fear
costly litigation battles with their customers; (4) as of June 1995,
seven states had enacted a law that mandates insurance coverage for ABMT
and seven other states have similar laws pending; (5) of the federally
funded health insurance programs, Medicaid coverage for ABMT varies by
state, Medicare does not cover ABMT for solid tumors such as breast
cancer, the Civilian Health and Medical Program of the Uniformed
Services covers ABMT through a demonstration project in which
beneficiaries may receive the treatment by enrolling in a randomized
clinical trial; and (6) the widespread use of ABMT prior to conclusive
data about its effectiveness may jeopardize patients unresponsive to the
treatment, raise health care costs, and deter participation in
randomized clinical trials.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  HEHS-96-83
     TITLE:  Health Insurance: Coverage of Autologous Bone Marrow 
             Transplantation for Breast Cancer
      DATE:  04/24/96
   SUBJECT:  Breast cancer
             Cancer research
             Radiation exposure hazards
             Health research programs
             Health care cost control
             Health insurance cost control
             Women
             Health care services
             Medical services rates
             Health insurance
IDENTIFIER:  Medicaid Program
             Medicare Program
             CHAMPUS
             Civilian Health and Medical Program of the Uniformed 
             Services
             Federal Employees Health Benefits Program
             
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Cover
================================================================ COVER


Report to the Honorable
Ron Wyden, U.S.  Senate

April 1996

HEALTH INSURANCE - COVERAGE OF
AUTOLOGOUS BONE MARROW
TRANSPLANTATION FOR BREAST CANCER

GAO/HEHS-96-83

Coverage of ABMT for Breast Cancer

(108219)


Abbreviations
=============================================================== ABBREV

  ABMT - autologous bone marrow transplantation
  CHAMPUS - Civilian Health and Medical Program of the Uniformed
     Services
  FDA - Food and Drug Administration
  FEHBP - Federal Employees Health Benefits Program
  NAIC - National Association of Insurance Commissioners
  NCI - National Cancer Institute
  NIH - National Institutes of Health
  OPM - Office of Personnel Management

Letter
=============================================================== LETTER


B-260550

April 24, 1996

The Honorable Ron Wyden
United States Senate

Dear Senator Wyden: 

Rapid advances in biomedical research and technology are producing a
continuous stream of new, and often expensive, medical devices,
drugs, and therapies.  Health insurers' decisions about whether and
when to provide coverage for these new medical products and
treatments play a pivotal role in determining their availability for
use in general medical practice.  In recent years, conflict over
insurers' coverage decisions of new medical treatments has led to
litigation and to a variety of federal and state legislation and
regulations that mandates insurance coverage of some new medical
treatments. 

Some of the most visible and contentious coverage decisions have
involved the treatment of breast cancer with high-dose chemotherapy
supported by autologous bone marrow transplantation (ABMT).  In this
procedure, bone marrow or stem cells from the blood are taken from
the patient and then reinfused after high doses of chemotherapy have
been administered.  The high-dose chemotherapy is toxic to the bone
marrow which produces the blood cells that fight infections.  ABMT
following the chemotherapy treatment helps restore the patient's
ability to produce the blood cells that fight infection. 

Most experts say that more research is needed before definitive
conclusions can be reached about the treatment's effectiveness
compared with conventional chemotherapy.  Proponents of insurance
coverage of the procedure say it provides breast cancer patients with
access to a promising, potentially life-saving treatment.  Critics
say that the public is not well-served by the proliferation of an
unproven treatment that is costly and possibly harmful, and that such
proliferation hinders clinical research to determine if the treatment
is effective. 

To illustrate the issues raised when demand grows for coverage of a
new treatment in advanced clinical trials, you asked that we provide
you with information regarding insurance coverage of ABMT for breast
cancer.  Specifically, you asked that we address (1) the factors that
have influenced insurers in deciding whether to cover the treatment,
(2) the status of the research on ABMT for breast cancer and the
consensus on what is known about its effectiveness, and (3) the
consequences of the increased use and insurance coverage of the
treatment while it is still being evaluated in clinical trials. 

To develop this information, we conducted structured interviews with
officials responsible for medical coverage decisions at 12 health
insurance companies, including some of the nation's largest
insurers.\1 These companies also included a mix of indemnity and
managed care plans.  We also obtained information from researchers
and oncologists at major research centers, large urban hospitals, and
community hospitals.  Others we obtained information from included
the American Society of Clinical Oncology; the National Association
of Insurance Commissioners; patient and women's health advocates,
including the National Breast Cancer Coalition; state health
officials; technology assessment organizations; and the National
Cancer Institute (NCI).  We also reviewed state and federal
legislation and regulations regarding insurance coverage of ABMT, as
well as relevant scientific literature, and visited a large, private
transplant center.  The National Institutes of Health (NIH) and the
Office of Personnel Management (OPM) provided formal comments on a
draft of this report.\2 We did our fieldwork and analysis from April
to December 1995 in accordance with generally accepted government
auditing standards. 


--------------------
\1 The 12 health insurers were Aetna Health Plans, Anthem Health Plan
of Florida, Blue Cross and Blue Shield of Oregon, CNA Insurance,
Harvard Pilgrim Health Care, HealthGuard of Lancaster,
HealthPartners, Kaiser Permanente, Mutual of Omaha, Prudential
HealthCare Group, United HealthCare (formerly Meta Health), and
United HealthCare of Ohio. 

\2 Also, Martin S.  Tallman, M.D., Assistant Professor of Medicine at
Northwestern University Medical School, assisted us by providing a
technical review of a draft of this report. 


   RESULTS IN BRIEF
------------------------------------------------------------ Letter :1

Although it is widely considered an experimental therapy, many health
insurers are covering ABMT following high-dose chemotherapy for
breast cancer.  The 12 insurers we spoke with said they based their
decision to cover the treatment on the preliminary clinical evidence,
but also on factors like fear of litigation and adverse public
relations. 

The use of ABMT for breast cancer has increased rapidly in recent
years, from an estimated 522 patients in 1989 to an estimated 4,000
in 1994.  At least seven states now require insurers to cover ABMT
for breast cancer, and other states have such legislation under
consideration.  Medicaid covers the treatment in some states, and OPM
has required that all beneficiaries of the Federal Employees Health
Benefits Program be covered. 

Despite its increased coverage and use, most experts say they do not
yet know whether ABMT for breast cancer is effective, and for which
patients, compared with conventional therapy.  Randomized clinical
trials sponsored by NCI are expected to provide the most definitive
answers, but these will not be completed for several years.  In the
meantime, there have been sharp disagreements among researchers,
physicians, NCI, insurers, and patients about the appropriate use of
the treatment before definitive research results are available.  At
one end are those who argue that the preliminary evidence supports a
policy of widespread use and universal insurance coverage of the
treatment.  At the other end are those who feel that the treatment
should largely be restricted to patients enrolled in randomized
clinical trials until the treatment's effectiveness has been
clinically proven. 

The NCI-sponsored trials have been slow to accrue patients.  Many
experts expressed concern to us that the wide availability of ABMT
has impeded the ability to complete these randomized clinical trials,
which require a control group of patients who receive conventional
therapy.  There is also concern that a substantial portion of
patients receiving ABMT are doing so outside of any research setting,
which may further slow down the effort to learn whether the treatment
is effective. 

If ABMT is ultimately shown to be preferable to conventional therapy
for some groups of breast cancer patients, then those patients will
have benefited from the early diffusion of this technology.  If it is
not, however, then the widespread availability of the treatment
before its effectiveness has been established will mean that many
patients may have been unnecessarily subjected to an aggressive and
toxic treatment.  The diffusion of the treatment also has
implications for health care costs:  ABMT typically costs anywhere
from $80,000 to over $150,000, compared with approximately $15,000 to
$40,000 for conventional chemotherapy. 


   BACKGROUND
------------------------------------------------------------ Letter :2

Breast cancer is the second leading cause of cancer deaths among
American women.  The American Cancer Society estimates that there
will be 184,300 new cases of breast cancer diagnosed in U.S.  women
in 1996 and that 44,300 women will die from the disease.  One in
eight women will develop breast cancer during her lifetime. 

Breast cancer is generally classified into four main stages based on
the size of the tumor and the spread of the cancer at the time of
diagnosis.  Mortality rates are strongly related to the stage of the
disease at the time of detection.  Stage I patients have an excellent
chance of long-term survival, while stage IV (metastatic) breast
cancer is usually fatal.  A wide variety of treatments exists for
breast cancer patients, including surgery, chemotherapy, radiation
therapy, and hormone therapy.  The particular treatments used depend
on the stage and characteristics of the cancer and other aspects of
the patient and her health. 

ABMT is a therapy that allows a patient to receive much higher
dosages of chemotherapy than is ordinarily possible.  Because
high-dose chemotherapy is toxic to the bone marrow (which supports
the immune system), methods have been developed for restoring the
bone marrow by reinfusing stem cells (the bone marrow cells that
mature into blood cells) taken from the patient before chemotherapy. 
Stem cells are removed from the patient's blood or bone marrow, then
concentrated, frozen, and sometimes purged in an attempt to remove
any cancerous cells.  The patient then undergoes chemotherapy at
dosages 2 to 10 times the standard dosage.  To restore the ability to
produce normal blood cells and fight infections, the patient's
concentrated stem cells are thawed and reinfused after chemotherapy. 
When the transplant is done from the blood rather than the bone
marrow, the procedure is often referred to as peripheral blood stem
cell transplantation.\3

ABMT is an expensive treatment although the cost per patient has been
falling in recent years.  Aside from financial costs, the treatment
is usually very unpleasant for the patient and may pose significant
risks.  The high doses of chemotherapy are very toxic, leading to
treatment-related morbidity and mortality rates that, while
declining, are still higher than for conventional chemotherapy. 
There may also be problems in restoring the patient's ability to
produce normal blood cells and thereby fight infections.  ABMT is
being evaluated in the treatment of a number of types of cancer other
than breast cancer and is considered standard therapy for treating
certain types of leukemia and lymphoma under certain conditions. 

Many clinical trials have been conducted to assess ABMT for breast
cancer, but most of these studies have been phase I and phase II
trials, which most experts agree have been of limited use in firmly
establishing the effectiveness of ABMT compared with conventional
therapy.\4 NCI is currently sponsoring three randomized clinical
trials that seek to determine whether ABMT is better than current
standard therapy in comparable breast cancer patients.  These trials
seek to ultimately involve a total of about 2,000 women at more than
70 institutions around the country. 


--------------------
\3 In this report we refer to autologous bone marrow transplantation
(ABMT), which is commonly used to refer to all autologous stem cell
rescue, whether the transplant is of the bone marrow or the
peripheral stem cells of the blood.  "Autologous" transplants refer
to transplants through which patients receive their own marrow or
peripheral stem cells.  "Allogenic" transplants refer to transplants
through which patients receive marrow donated by another person. 
This report addresses only autologous transplants for breast cancer. 

\4 A clinical trial is a medical experiment in which procedures or
drugs are tested on human subjects to assess their safety or
effectiveness.  Phase I trials are designed to determine the dose
that can be given with an acceptable level of toxicity.  Phase II
trials seek to evaluate the response in specific tumor types.  Phase
III trials seek to assess a treatment's effectiveness by comparing
patients receiving the experimental treatment with patients receiving
a conventional treatment.  In a randomized phase III trial, patients
are randomly assigned either to a control group receiving standard
treatment or to one or more experimental groups receiving the
treatment being tested. 


   USE OF ABMT FOR BREAST CANCER
   HAS BECOME WIDESPREAD EVEN
   THOUGH ITS EFFECTIVENESS IS
   UNCERTAIN
------------------------------------------------------------ Letter :3

Although most experts believe the clinical research has not yet
established that ABMT is superior to conventional therapy, and for
which patients, insurance coverage of the treatment has become
relatively common and use of the treatment is diffusing rapidly. 


      USE AND COVERAGE OF THE
      TREATMENT HAS BECOME
      RELATIVELY COMMON
---------------------------------------------------------- Letter :3.1

According to the Autologous Blood and Marrow Transplant
Registry-North America, the number of breast cancer patients
receiving ABMT has increased rapidly, growing from an estimated 522
in 1989 to an estimated 4,000 in 1994.\5 About one-third of all ABMTs
reported to the Registry in 1992 were for breast cancer, making it
the most common cancer being treated with this therapy.  The Registry
reports that although the treatment is most commonly used in women
with advanced disease, there is a growing trend to use it more
frequently on patients with earlier stages of breast cancer.  There
has also been a dramatic increase in the number of patients
undergoing this treatment in Europe. 

Many insurers, including some of the nation's largest, now routinely
cover ABMT for breast cancer both inside and outside of clinical
trials, although some still deny coverage for the treatment because
they consider it experimental.  One study looked at 533 breast cancer
patients in clinical trials who requested coverage for ABMT from 1989
through 1992.  It found that 77 percent of them received approval for
coverage of the treatment after their initial request.\6


--------------------
\5 The Autologous Blood and Marrow Transplant Registry-North America,
begun in 1991, collects treatment information on ABMT recipients from
128 participating centers, primarily in North and South America.  The
database is used to help identify trends in the use and outcomes of
ABMT for several types of cancer, including breast cancer.  The
estimates of ABMT use given here extrapolate from Registry data,
which the Registry estimates represent about half of all breast
cancer ABMTs in the United States. 

\6 W.P.  Peters and M.C.  Rogers, "Variation in Approval by Insurance
Companies of Coverage for Autologous Bone Marrow Transplantation for
Breast Cancer," New England Journal of Medicine, Vol.  330, No.  7
(1994), pp.  473-77. 


      TREATMENT'S EFFECTIVENESS IS
      STILL UNKNOWN
---------------------------------------------------------- Letter :3.2

We reviewed the current medical literature and spoke with several
leading oncologists and technology assessment experts regarding ABMT
for breast cancer.\7 While there were differences of opinion, the
consensus of most of the experts and the literature was that current
data indicate ABMT may be beneficial for some breast cancer patients
but that there is not yet enough information to establish that it is
more effective than standard chemotherapy. 

The medical literature includes several studies showing longer
periods before relapse and improved survival for some poor prognosis,
high-risk breast cancer patients receiving ABMT rather than
conventional therapy.\8 However, it is unclear whether the superior
outcomes of patients receiving ABMT in these studies were the result
of the treatment itself or the result of bias caused by the selection
of patients chosen to receive the treatment.  Most of the medical
literature and nearly all of the experts we spoke with said that the
current data are not yet sufficient to make definitive conclusions
about the effectiveness of ABMT and about which groups of breast
cancer patients would be most likely to benefit.  Although there are
wide differences of opinion about the appropriate use of ABMT, nearly
all sides of the debate agree that the results of randomized clinical
trials are needed to provide definitive data on the treatment's
effectiveness. 

Several studies have reviewed and analyzed the extensive medical
literature related to ABMT for breast cancer.  In 1995, ECRI, an
independent, nonprofit technology assessment organization, published
an analysis stating that the weight of the evidence in the medical
literature did not indicate greater overall survival for metastatic
breast cancer patients receiving ABMT compared with conventional
therapy.\9

The Blue Cross and Blue Shield Association's Technology Evaluation
Center, after reviewing the available data in 1994, concluded that
the evidence was not yet sufficient to draw conclusions about the
effectiveness of ABMT compared with conventional therapy for breast
cancer patients.\10

Similarly, NCI, at a congressional hearing, said that while ABMT has
shown promise in some clinical studies, the results of the NCI
randomized clinical trials were needed before conclusions could be
reached about whether and for whom the treatment is more beneficial
than conventional therapy.\11


--------------------
\7 Some of the oncology experts we spoke with included Karen Antman,
M.D., Columbia University; Lois Ayash, M.D., the Dana Farber Cancer
Institute; Craig Henderson, M.D., the University of California, San
Francisco; Roy Jones, M.D., the University of Colorado Cancer Center;
William Peters, M.D., the Karmanos Cancer Institute; Edward
Stadtmauer, M.D., the University of Pennsylvania; and James
Vredenburgh, M.D., Duke University Medical Center.  We also spoke
with researchers at other large and small cancer centers around the
country.  Technology assessment experts we consulted included Naomi
Aronson, Ph.D., the Blue Cross and Blue Shield Association's
Technology Evaluation Center; Jeffrey Lerner, Ph.D., ECRI; and
William McGivney, Ph.D., Aetna. 

\8 For example, W.P.  Peters, M.  Ross, J.J.  Vredenburgh, and
others, "High-Dose Chemotherapy and Autologous Bone Marrow Support as
Consolidation After Standard-Dose Adjuvant Therapy for High-Risk
Primary Breast Cancer," Journal of Clinical Oncology, Vol.  11, No. 
6 (1993), pp.  1132-43. 

\9 ECRI, High-Dose Chemotherapy With Autologous Bone Marrow
Transplantation and/or Blood Cell Transplantation for the Treatment
of Metastatic Breast Cancer (Plymouth Meeting, Pa.:  Health
Technology Assessment Service, ECRI, 1995). 

\10 Blue Cross and Blue Shield Association Technology Evaluation
Center, High-Dose Chemotherapy With Autologous Stem Cell Support in
the Treatment of Breast Cancer,TEC Assessments, Vol.  9, No.  33
(Chicago:  Blue Cross and Blue Shield Association Technology
Evaluation Center, Assessment Program, Nov.  1994). 

\11 Autologous Bone Marrow Transplantation as a Treatment for Breast
Cancer, statement of Dr.  Bruce Cheson, Head of the Medicine Section,
Clinical Investigations Branch, Division of Cancer Treatment, NCI,
NIH, Department of Health and Human Services, before the House of
Representatives, Committee on Post Office and Civil Service,
Subcommittee on Compensation and Employee Benefits (Aug.  11, 1994). 


   INSURERS CITE PROMISING BUT
   INCONCLUSIVE RESEARCH AND
   OUTSIDE PRESSURES IN COVERING
   ABMT
------------------------------------------------------------ Letter :4

We interviewed the medical director, or another official who makes
coverage decisions, at 12 U.S.  health insurance companies.  We
discussed the insurer's coverage policies and the factors that
influenced their coverage policy with regard to ABMT for breast
cancer.  The insurers' coverage policies regarding ABMT for breast
cancer reflected some incongruity.  In general, the insurers said
they did not normally cover experimental or unproven treatments and
that they believed ABMT for breast cancer fell into this category. 
Yet, with some restrictions, all 12 insurers nonetheless covered ABMT
for breast cancer with only one requiring that patients enroll in
clinical trials. 

In explaining this, most cited as the primary influence the fact that
although until recently the treatment had not been tested in
randomized trials, it has become widely used and that the existing
research suggests it may be beneficial to certain patients.  But
insurers told us that a variety of nonclinical factors also strongly
influenced their coverage policy, such as the threat of litigation,
public relations concerns, and government mandates. 


      INSURERS' TECHNOLOGY
      ASSESSMENT AND COVERAGE
      DECISION PROCESS
---------------------------------------------------------- Letter :4.1

All health insurers must decide whether and when they will cover a
new or experimental treatment.  To do this, they engage in some form
of technology assessment, a process that seeks to assess the safety
and effectiveness of a medical technology based on the best available
information.  For the most part, health insurers do not gather
primary data but, rather, rely heavily on peer-reviewed medical
literature and on the assessment of experts inside and outside of
their companies. 

Some large health insurers have elaborate technology assessment
units.  One example is the Technology Evaluation Center, a
collaboration of the Blue Cross and Blue Shield Association and
Kaiser Permanente.  The Center's staff includes physicians, research
scientists, and other experts who review and synthesize existing
scientific evidence to assess the safety and efficacy of specific
medical technologies.  The Center has published assessments for over
200 technologies since 1985, including several for ABMT for breast
cancer.  Other large insurers, including Aetna and Prudential, also
have special programs that do formal assessments of specific
technologies.  Smaller insurers also do technology assessment, but on
a smaller scale; for instance, they may have a small office that does
literature searches or reviews the findings of larger technology
assessment organizations. 

Using their assessments, insurers then decide whether they will cover
a particular treatment and under what conditions.  Whatever the
overall policy, coverage of costly and complicated procedures may
require special preapproval before they are covered.  Among the
insurers we spoke with, preapproval for ABMT was generally required
by the office of the medical director or some other office that
reviews claims for medical appropriateness.  They said they wanted to
ensure that a case meets any coverage restrictions and that ABMT is
medically appropriate for that particular patient.  For certain
difficult cases, some insurers also use an outside panel of experts,
serving as a mediation service, to determine whether ABMT is the
appropriate treatment. 


      PROMISING RESEARCH,
      WIDESPREAD USE CITED FOR
      COVERAGE POLICY
---------------------------------------------------------- Letter :4.2

Seven of the 12 insurers we spoke with explicitly characterized ABMT
for breast cancer as experimental.  Four others did not specifically
term the treatment "experimental" but nonetheless said that ABMT for
breast cancer should not yet be considered standard therapy since its
effectiveness over conventional therapy had not yet been proven.  One
insurer did not express an opinion on the issue. 

Yet while the insurers said they typically do not cover experimental
therapies, many said that in this case there was enough preliminary
evidence that ABMT may be effective to justify covering it.  Seven of
the 12 insurers cited the clinical evidence as one of the primary
reasons that they decided to cover ABMT.  These insurers said that
the existing data indicate that ABMT may hold promise for certain
breast cancer patients and that flexibility was needed in paying for
experimental treatments for seriously or terminally ill patients. 

Two insurers also said that they cover ABMT for breast cancer since,
although its efficacy has not been established, it has become
generally accepted medical practice in that it has become a common
treatment for breast cancer throughout the United States and is
covered by many other insurers.  They said they would receive
pressure from their beneficiaries if they were to deny coverage for a
treatment that other insurers cover. 


      COURT DECISIONS AND THE
      THREAT OF LITIGATION HAVE
      INFLUENCED MANY INSURERS
---------------------------------------------------------- Letter :4.3

While the medical evidence was an important factor in the coverage
policy of a majority of the insurers, other factors were also clearly
at work, with the threat of litigation being among the most
important.  When an insurer refuses to pay for a treatment requested
by the patient or the patient's physician, coverage may ultimately be
decided in the court system.  Over the past several years, many
breast cancer patients have sued their insurers after being denied
coverage for ABMT. 

Nine of the 12 insurers that we spoke with specifically mentioned
litigation, or the threat of litigation, as a factor in their ABMT
coverage policy.  For five of these insurers, legal concerns were
characterized as among the most important reasons for choosing to
cover ABMT for breast cancer.  Before changing their policies to
cover ABMT for breast cancer, six of the insurers we spoke with had
been sued after denying coverage for the treatment. 

Overall, the insurers had not been very successful in these cases and
had often either settled before judgment was rendered or had a
judgment rendered against them.  The insurers who had been sued on
the issue said the financial costs of legal fees, settlements, and
damages were high.  For the most part, the insurers said they found
different courts to be widely inconsistent in ruling whether ABMT is
experimental and should be covered, a point also made in reviews of
case law on the issue.  In addition to the financial costs, insurers
said the lawsuits were harmful to their public relations.  Publicity
of their coverage policy led to the impression that they were denying
a gravely ill patient a beneficial therapy for economic reasons.  The
insurers we spoke with no longer face many lawsuits on the issue
since they now generally cover ABMT. 

Court decisions on health insurance coverage disputes have usually
turned on the language of the insurance contracts, which generally
bar coverage for experimental treatments but are often ambiguous with
regard to what is defined as "experimental." A recent review of such
litigation noted that state courts have tended to favor policyholders
in these coverage disputes, although federal courts, where disputes
for self-insured companies are often decided, have been split on
whether insurers must cover ABMT for breast cancer.\12

The courts, in ruling whether an insurer must provide coverage for
ABMT for breast cancer, have based their decisions on a number of
factors.  These have included whether ABMT is generally accepted in
the medical community for the treatment of breast cancer, whether
"experimental treatment" is defined clearly in the insurance policy,
whether the treatment was intended primarily to benefit the patient
or to further medical research, and whether the insurer's denial of
coverage was influenced by its own economic self-interest.  This last
argument was the focus of Fox v.  Health Net of California, a highly
publicized case in which a California jury awarded $89 million in
damages to a policyholder whose deceased wife had been denied
coverage of ABMT for breast cancer.\13 Plaintiffs in a number of
recent cases have alleged that denial of coverage for ABMT
constitutes discrimination against women in violation of civil rights
laws or discrimination against a specific disease in violation of the
Americans With Disabilities Act.  Most of these cases are still
pending. 

Insurers have had some success in court as well.  Some state courts
have ruled that ABMT is still widely considered to be experimental
and that the health insurance contract clearly precluded coverage of
experimental treatments.  Courts in at least three federal circuits
have also upheld insurers' coverage denials for ABMT to treat breast
cancer.  Courts in many of these cases permitted insurers wide
discretion in making coverage decisions as long as the decisions were
not arbitrary or capricious. 


--------------------
\12 Denise S.  Wolf, "Who Should Pay for `Experimental' Treatments? 
Breast Cancer Patients v.  Their Insurers," American University Law
Review, Vol.  44, No.  5 (June 1995), pp.  2029-2107. 

\13 Case No.  219692 (California Superior Court, Dec.  28, 1993). 


      ABMT COVERAGE IS MANDATED BY
      AT LEAST SEVEN STATES
---------------------------------------------------------- Letter :4.4

The controversy over access to ABMT for breast cancer patients has
led several states to propose or enact legislation regarding
insurance coverage of the treatment.  As of June 1995, at least seven
states had enacted legislation that, under certain parameters,
requires that insurers provide coverage for ABMT for breast cancer. 
At least seven additional states have similar legislation pending.\14
Some of these laws are mandates requiring that coverage of ABMT for
breast cancer be part of any basic package of health insurance. 
Other laws simply require that the treatment be made available as a
coverage option, at perhaps a higher premium.  The laws in six of the
states require coverage whether or not the patient is enrolled in a
clinical trial, while one state requires patients with certain types
of breast cancer to join well-designed randomized or nonrandomized
trials.  Three of the 12 insurers we spoke with said they were
required by a state mandate to cover ABMT for breast cancer for most
of their beneficiaries.  One of these three said it would not cover
the treatment if it were not for the mandate. 

Those who advocate passage of the state laws argue that they are
necessary to make a promising therapy available to breast cancer
patients.  Among the arguments used is that insurers classified ABMT
for breast cancer as "experimental" as much for economic as medical
reasons because ABMT is an expensive treatment.  Insurers respond
that ABMT for breast cancer is an experimental treatment still being
evaluated in clinical trials and they should not be in the business
of paying for research.  Furthermore, insurers say that legislation
mandating coverage of specific treatments is a poor way to make
medical policy and that it distorts the market because self-funded
plans are exempt from state mandates. 

The National Association of Insurance Commissioners (NAIC) is
considering a model act for states that would set minimum standards
of coverage for health insurers.  The model act, which has not yet
been approved by the full NAIC membership, would require insurers to
cover an experimental treatment if the peer-reviewed medical
literature has established that the treatment is an effective
alternative to conventional treatment.  A representative from NAIC
told us that in a state that passed such an act, insurers would
normally be required to cover ABMT for breast cancer if the treating
physician considered it the medically appropriate treatment. 


--------------------
\14 The states with legislation enacted were Florida, Georgia,
Massachusetts, Minnesota, New Hampshire, Rhode Island, and Virginia. 
The states where similar legislation is known to have been introduced
are California, Connecticut, Louisiana, Missouri, New Jersey, New
York, and Ohio. 


      ABMT COVERAGE BY FEDERALLY
      FUNDED HEALTH INSURANCE
      PROGRAMS
---------------------------------------------------------- Letter :4.5

Programs such as Medicaid, Medicare, and the Civilian Health and
Medical Program of the Uniformed Services (CHAMPUS) have varying
policies regarding coverage of ABMT for breast cancer.  Coverage
criteria for Medicaid, a jointly financed federal and state program
that provides medical care to the poor, varies by state, but some
states' Medicaid programs will cover ABMT for breast cancer under at
least some circumstances.  Of nine state Medicaid programs we
contacted, five provided coverage for ABMT for breast cancer.\15 The
Medicare program, which provides health coverage primarily for the
elderly, specifically excludes ABMT coverage for solid tumors such as
breast cancer because the Health Care Financing Administration, which
administers the Medicare program, considers the treatment
experimental.  The practical impact of the Medicare policy is limited
since the elderly are not normally appropriate candidates for ABMT
treatment.  CHAMPUS, the Department of Defense's health care program
for active duty and retired military personnel, and their dependents
and survivors, considers ABMT for breast cancer experimental but
provides coverage through a demonstration project in which
beneficiaries may receive ABMT by enrolling in one of three NCI
randomized clinical trials. 

The Federal Employees Health Benefits Program (FEHBP), run by OPM,
provides health insurance coverage for over 9 million federal
employees, retirees, and dependents through over 300 independent
health plans.  In September 1994, OPM imposed a requirement that
participating health insurers must cover ABMT for breast cancer for
all FEHBP beneficiaries both in and outside of clinical trials.  OPM
acknowledged to us that the evidence is mixed on the effectiveness of
ABMT for breast cancer.  They said they decided to mandate coverage
largely because so many insurers were already covering the procedure
and they wanted to make the benefit uniform across all of their
carriers. 

Insurers we spoke with said they complied with the OPM mandate,
although they criticized the mandate as a political rather than
clinical decision.  Two of the 12 insurers we spoke with specifically
mentioned the OPM decision as having influenced their own coverage
policy, largely because it brought so much publicity to the issue. 


--------------------
\15 Florida, Georgia, Massachusetts, New Jersey, and Texas provided
coverage, while Minnesota, New Hampshire, Tennessee, and Virginia did
not. 


   PHYSICIANS, INSURERS, AND
   ADVOCATES RAISE CONCERNS ABOUT
   WIDESPREAD DIFFUSION OF ABMT
------------------------------------------------------------ Letter :5

Medical experts, insurers, and others have debated whether ABMT has
become too widely used before there is convincing evidence of its
efficacy.  While the medical community seeks to learn whether ABMT is
more effective for some breast cancer patients than conventional
chemotherapy, the number of patients receiving the treatment and the
number of facilities providing it continue to grow.  If ABMT were a
new drug, it would be restricted mostly to patients on clinical
trials until its efficacy were established and the Food and Drug
Administration (FDA) had approved its use in general medical
practice.  Yet because ABMT is a procedure, rather than a drug, it
does not require approval from FDA, making it easier for it to be
widely used while its effectiveness is still being tested in clinical
trials.  The rapid diffusion of ABMT for breast cancer has
implications for patient care, health care costs, and research. 


      IMPLICATIONS FOR PATIENT
      CARE
---------------------------------------------------------- Letter :5.1

There is debate over whether patients benefit from the rapid
diffusion of a new technology that is still being tested in clinical
trials.  In the case of ABMT, the high doses of chemotherapy
administered in conjunction with the treatment can make it a
particularly difficult treatment for patients.  This is evidenced
both by the extreme sickness and side effects that patients may
experience and by the higher rate of treatment mortality for ABMT
than for conventional chemotherapy.  If the clinical research
ultimately shows ABMT to be preferable than conventional therapy for
some groups of patients, then some of those patients will have
benefited from the early diffusion of this technology.  If it is
shown not to be more effective, however, or if it is shown to be
effective for a much smaller subset of patients than are currently
being treated with the therapy, then many patients will have been
unnecessarily subjected to an aggressive treatment that can be risky
and produce many severe side effects. 

In addition, while ABMT formerly was available only at a select
number of cancer research centers across the country, it is now being
performed by a rapidly growing number of smaller hospitals and bone
marrow transplant centers.  Many physicians we talked with, including
researchers and insurance company medical directors, expressed
concerns that there may be some facilities that perform too few
transplants to ensure sufficient staff expertise or that do not have
the infrastructure needed to support this complicated procedure. 
Partly to address these concerns, several medical societies have
developed guidelines that set out specific criteria for facilities
that perform bone marrow transplants. 


      IMPLICATIONS FOR HEALTH CARE
      COSTS
---------------------------------------------------------- Letter :5.2

ABMT is an expensive treatment, costing anywhere from $80,000 to over
$150,000 per treatment, depending on the drugs used, any medical
complications, and the length of hospital stay required. 
Conventional chemotherapy, by contrast, typically costs between about
$15,000 and $40,000.  The cost of ABMT has been decreasing over the
years and is expected to decrease further as the technology is
refined and becomes more common.  Some medical centers have already
been able to reduce the cost of the procedure by offering the
treatment on more of an outpatient basis. 

While the cost per individual treatment is likely to decrease, total
spending nationwide on the procedure is likely to increase.  More
patients in different stages of breast cancer are being treated with
ABMT, a trend that is expected to continue.  The fact that ABMT can
be a highly profitable procedure for the institution that performs
it, many experts say, has created further incentive for the diffusion
of the treatment. 

Virtually all sides of the debate agree that ABMT is worth the cost
if it is shown to be the best available treatment.  But some worry
that the research has not yet established which breast cancer
patients, if any, are likely to benefit from ABMT and that the rapid
diffusion of this costly treatment outside of research settings
before its effectiveness has been proven may not be the best use of
health care resources. 


      IMPLICATIONS FOR CLINICAL
      RESEARCH
---------------------------------------------------------- Letter :5.3

There is clear consensus among the scientific community that, if
possible, the best way to compare the effectiveness of a new
treatment with conventional treatment is through randomized clinical
trials.  A randomized trial assigns patients either to a control
group receiving conventional treatment or to one or more experimental
groups receiving the treatment being tested.  Random allocation helps
ensure that differences in the outcome of the groups can be
attributed to differences in the treatment and not differences in
patient characteristics.  In the case of ABMT, some experts have
argued that early research showing favorable results for ABMT may
have been due to the fact that the breast cancer patients receiving
ABMT had more favorable characteristics than those who were not
receiving the treatment.  NCI has three large-scale randomized
clinical trials ongoing to compare ABMT with conventional therapy for
breast cancer.  These trials randomly assign patients who fit certain
criteria either to an experimental group that receives ABMT or to a
control group that instead receives a more conventional form of
therapy. 

NCI has had difficulty accruing enough patients to its randomized
trials.  Two of the three ongoing NCI trials are accruing patients at
about half the rate researchers originally anticipated, and a fourth
trial was closed because of low enrollment.  NCI expanded the
enrollment goal of the third trial to improve the statistical power
of the results, and results from all three trials are not expected
until nearly the turn of the century.  NCI says patient accrual to
the trials, although slow, appears to be progressing adequately, but
many experts we spoke with questioned whether the NCI trials will
ever be completed as planned. 

Many medical experts believe that the wide availability of the
treatment is one reason researchers are having problems accruing
patients to the randomized trials.  ABMT is now widely available to
many breast cancer patients either through other clinical trials or
outside of a research trial.  Under most circumstances, insurers that
cover ABMT do not require that the patient enter a randomized trial,
and many patients are reluctant to do so.  Patients who believe ABMT
is their best hope for survival may not be willing to enter a trial
where they may be randomly assigned to a group receiving conventional
chemotherapy.  The ABMT Registry estimates that only about 5 percent
of all breast cancer patients receiving ABMT are enrolled in the
randomized clinical trials. 

Proponents of ABMT that we spoke with pointed out that most
procedures in common medical practice today have not been subjected
to the strict scrutiny of randomized trials and that this potentially
lifesaving therapy should not be withheld until the NCI trials are
completed many years from now.  Other medical experts, insurers, and
patient advocates we spoke with said that ABMT for breast cancer
should only be available to patients enrolled in clinical trials,
possibly only randomized trials.  They argued that the proliferation
of ABMT outside of randomized trials--or outside of any research
setting at all--is making it difficult to gather the data necessary
to assess whether and for whom ABMT may be a beneficial treatment. 

A large number of clinical trials are being conducted on ABMT for
breast cancer apart from the NCI randomized trials.  Many major
cancer research centers are conducting nonrandomized trials, and
numerous clinical trials are also under way at smaller hospitals and
private transplant centers.  Yet some experts have argued that many
of these trials will contribute little useful information because the
study population is too small, the trial is not sufficiently
well-designed, or because the results will not be published.  These
experts are concerned that the proliferation of smaller clinical
trials may be diverting patients from larger clinical trials,
including the NCI randomized clinical trials, that are more likely to
yield meaningful results about the effectiveness of ABMT for breast
cancer. 

The controversy over ABMT has also highlighted the issue of the
extent to which health insurers should pay for the costs of clinical
research.  Clinical research in the United States has been financed
primarily by the federal government, private research institutions,
the pharmaceutical industry, and insurers.  Insurers have often paid
the patient care costs for certain clinical trials.  But given
federal funding constraints and other economic pressures, many
researchers and other experts we spoke with believe that health
insurers should assume the costs of more clinical trials, especially
the patient care costs of well-designed trials that offer promising
treatments in an advanced stage of testing.  They say the insurers
would have to pay for patient care costs even if the patient were not
in a trial and that the trials will ultimately benefit everyone by
helping identify effective treatments.  The insurance industry's
position has been that insurers should pay only for standard medical
care and that insurers should not be in the business of financing
research.  But insurers have made exceptions, especially for clinical
trials involving promising treatments for patients with terminal
illnesses.  Many insurance industry officials we spoke with said they
would be open to paying the costs of some clinical trials for
promising treatments, as long as the costs were to be spread
equitably among all insurers and health providers, and as long as
there were strict standards to ensure that the research being funded
was of high quality. 


   CONCLUSIONS
------------------------------------------------------------ Letter :6

The controversy over insurance coverage of ABMT for breast cancer
illustrates several issues related to the dissemination and insurance
coverage of new technologies.  The rapid diffusion of new, often
expensive, medical technologies puts in conflict several goals of the
U.S.  health care system:  access to the best available care, the
ability to control health care costs, and the ability to conduct
research adequate to assess the efficacy of a new treatment. 

Specifically, the ABMT controversy illustrates the challenge health
insurers in the United States face in determining whether and when to
provide coverage for a new technology of unknown efficacy, given the
decentralized process for assessing new medical technologies. 
Insurers have less clear direction regarding coverage of medical
procedures than they do for drugs because of FDA's role in drug
approval.  Insurers thus have wide discretion, and little nationwide
guidance, in determining whether and when a medical procedure should
no longer be considered "experimental" and should be covered.  The
result can be great disparity in the coverage policies of insurers,
with coverage decisions being influenced not just by the medical data
and clinical judgments, but also by factors such as lawsuits and
public relations concerns. 

Furthermore, the lack of a systematic process for the dissemination
of new technologies in the United States raises issues for the health
care system.  Those who advocate widespread access to experimental
technologies argue that patients should not be denied access to
promising therapies, especially when clinical trials for those
therapies may take many years.  Those who advocate restricting access
to new technologies argue that the rapid diffusion of a new treatment
before its effectiveness has been definitively proven is not
ultimately beneficial to patient care, may waste resources, and may
impede controlled research on the treatment. 


   AGENCY COMMENTS
------------------------------------------------------------ Letter :7

NIH provided us with comments on a draft of this report.  They agreed
with the conclusions and stated that the report presented a balanced,
thoughtful discussion of the controversial issues.  NIH also noted
that in the past, many insurers provided coverage only in the context
of clinical trials, but this became untenable because of the factors
discussed in the report, particularly the OPM decision to require
FEHBP coverage of the treatment both inside and outside of clinical
trials.  NIH also recommended some technical changes, which we
incorporated in the report where appropriate.  (See app.  I for a
copy of the NIH comments.)

OPM also reviewed the draft report and provided comments regarding
the decision to require that all FEHBP health insurance plans provide
coverage for ABMT for breast cancer.  Their comments reemphasized
that (1) many FEHBP plans were already providing this coverage; (2)
the OPM decision was based on a desire to broaden coverage to all
FEHBP enrollees; and (3) each plan retains the flexibility to
determine when and how the treatment will be covered, but plans that
limit coverage to patients enrolled in clinical trials have to offer
coverage in nonrandomized as well as randomized trials.  (See app. 
II for a copy of OPM's comments.)


---------------------------------------------------------- Letter :7.1

As agreed with your office, unless you release its contents earlier,
we plan no further distribution of this report for 30 days.  At that
time, we will send copies to other congressional committees and
members with an interest in this matter, the Secretary of Health and
Human Services; the Director, NIH; and the Director, OPM. 

This report was prepared by William Reis, Assistant Director; Joan
Mahagan; and Jason Bromberg under the direction of Mark Nadel,
Associate Director.  Please contact me on (202) 512-7119 or Mr.  Reis
on (617) 565-7488 if you or your staff have any questions on this
report. 

Sincerely yours,

Sarah F.  Jaggar
Director, Health Financing
 and Public Health Issues




(See figure in printed edition.)APPENDIX I
COMMENTS FROM THE NATIONAL
INSTITUTES OF HEALTH
============================================================== Letter 

Transplantation for Breast Cancer



(See figure in printed edition.)




(See figure in printed edition.)APPENDIX II
COMMENTS FROM THE OFFICE OF
PERSONNEL MANAGEMENT
============================================================== Letter 

Transplantation for Breast Cancer



(See figure in printed edition.)


*** End of document. ***