In the last several years, there has been considerable legislative
activity at the state and federal levels regarding reform of the
health insurance system, especially after President Clinton made
federal legislation a top priority 2 years ago. A matter that
is relatively minor in the overall constellation of issues, but
which is of particular importance to oncology, is insurance coverage
of, and patient access to, clinical trials.
This article reviews current coverage of clinical trials, discusses
how health care reform may affect insurance coverage of clinical
trials, and summarizes how the issue was treated in the intensive
debate on health care reform during the past 2 years. While the
congressional debate failed to produce federal reform legislation
in 1994, the topic is certain to be revisited in the future.
Insurance coverage of clinical trials is an aspect of broader
policy on coverage of new technologies. Both private health insurance
plans and such public programs as Medicare and Medicaid typically
exclude coverage of "experimental" or "investigational"
A drug or device is usually considered investigational for insurance
purposes if it has not been approved for marketing by the FDA.
Thus, drugs and devices subject to investigational new drug or
device exemptions (INDs and IDEs) are typically not covered by
insurance. A procedure is usually considered investigational if
it is not accepted as safe and effective by the medical community.
The use of an informed consent form is often seen by insurers
as evidence that a particular procedure is investigational. The
result of these policies is that clinical trials are usually excluded
from insurance coverage.
Although insurance plans exclude experimental or investigational
treatment, they cannot necessarily enforce their views regarding
whether particular procedures lack coverage. Insurance plans can
be sued by beneficiaries on the ground that the plan administrators
are misinterpreting the coverage rules. In the last few years,
the major issue litigated in this area has been coverage of autologous
bone marrow transplants for breast cancer and other conditions
that many insurers regard as unproven.
The courts have often been sympathetic to plaintiffs seeking access
to coverage of bone marrow transplants. Courts have often overruled
coverage denials by concluding that the plan's exclusionary language
was unclear, or by directly holding that the bone marrow transplant
procedures were not experimental. The decided cases have split
between those that have upheld insurers excluding coverage of
bone marrow transplants for certain conditions and those that
have sided with patients.
The tide seems generally to be turning in favor of upholding insurer
decisions, as insurers have revised contract- ual language in
response to early decisions holding that particular language was
unclear . There is also anecdotal evidence, however, that insurers
are increasingly extending coverage to what they regard as experimental
procedures out of fear of punitive judicial judgments, such as
the recent $89 million verdict against a health maintenance organization
for denial of coverage .
Although clinical trials are ostensibly not covered by insurance,
insurance plans have nevertheless unknowingly often paid many
of the costs. Insurance claim forms frequently do not require
information that would disclose whether the patient was enrolled
in a clinical trial, and as a result, insurers often cannot tell
from the face of a claim that a patient received an investigational
The Inspector General of the Department of Health and Human Services
recently initiated an investigation that may, especially depending
on its outcome, change the way health care providers bill for
patient care costs associated with investigational procedures
[4 ]. As part of an investigation under the False Claims Act,
the Inspector General issued subpoenas to over 100 hospitals regarding
claims submitted to Medicare for certain investigational cardiovascular
procedures. The unstated premise of the investigation is that
the submission of a claim to Medicare for costs associated with
an investigational procedure may not be simply a claim that Medicare
may deny, but may also constitute a false claim. The theory of
the investigation seems to be that health care providers may commit
a criminal offense when they submit a claim for costs associated
with clinical trials, since they know Medicare does not pay for
Even in programs that deny coverage of clinical trials, however,
there may be some intentional limited coverage. For example, in
the case of in-patients, Medicare, which pays a fixed amount based
on the patient's DRG, attempts, to some extent, to separate the
costs related to the investigational service from costs that would
have been incurred in any event. Thus, if a patient is admitted
to a hospital without enrollment in a clinical trial having been
decided in advance, and once admitted is enrolled in a surgical
trial, Medicare will pay for the admission as if the patient had
been admitted for nonsurgical treatment. On the other hand, if
the admission was for the sole purpose of enrolling the patient
in a clinical trial, Medicare will deny payment of the admission
in its entirety.
A similar distinction is drawn with respect to treatment of adverse
effects from a clinical trial. Even though Medicare will not pay
for treatment costs in a clinical trial itself, if the patient
subsequently develops a complication requiring treatment, Medicare
will fully cover the costs of the subsequent treatment, even though
the need for treatment can be traced directly to treatment in
a noncovered clinical trial.
There are several types of costs that are incurred in clinical
The cost of the investigational drug, device, or procedure.
The cost of collection and analysis of trial data.
The costs of patient care, including hospital, physician, laboratory,
and other services.
Each of these categories is treated somewhat differently under
the current system.
FDA regulations generally prohibit manufacturers from charging
for investigational drugs, and manufacturers therefore supply
free drugs to investigators conducting clinical trials. FDA rules
are more liberal in allowing charges for investigational devices,
however, with the result that patients (or some other party) may
incur the cost of the device used in a clinical trial.
Data collection and analysis are ordinarily paid for by the sponsor
of the clinical trial. For example, funds may come from a pharmaceutical
or medical device manufacturer or from the National Institutes
Patient care costs are generally the responsibility of the patient,
or are borne by the institution at which the clinical trial is
conducted. Because these costs are the outgrowth of an investigational
service, insurers typically will not cover them. This is the case
even though the patient might have incurred substantially similar
costs if the patient had undergone standard therapy instead of
being enrolled in the clinical trial.
Although public debate about coverage of clinical trials sometimes
suggests that the focus of interest is coverage of the investigational
procedure itself, in reality the principal source of costs is
frequently patient care, most or all of which might have been
necessary even if the patient had undergone standard therapy.
High-cost experimental procedures, such as bone marrow transplants
dominate the discussion, but almost certainly do not accurately
reflect the added costs of clinical trials in general.
1. Physician Payment Review Commission: Coverage decisions and
technology assessment. Annual Rep Congress 219-236, 1994.
2. Herrington E: Experimental healthcare reimbursement: A case
survey. The Health Lawyer. 6(4):1, 3-9, 1993.
3. Anders G: More insurers pay for care that's in trials. Wall
Street Journal, p B-1, Feb. 15, 1994.
4. IG nationwide hospital investigation seeks data on non-FDA
approved devices. BNA's Medicare Rep 5:732-734, June 24, 1994.
5. Blumenthal D, Meyer G: The future of the academic medical center
under health care reform. N Eng J Med 329:1812-1814, 1993.