Health Insurance Law: Experimental Treatment Denials

You decided to bite the bullet, and get the surgery your doctor recommended. God knows, you don’t want the surgery, but it’s your well-being, and you need it. Your doctor says it will help you, and you believe him. You schedule the surgery, tell your spouse, and make arrangements with work. You’ll be out of commission for a few days, but after that things will improve, and in the long run, it’s the best choice. Let’s do this.

But then you get a call from your doctor’s office. There’s a problem. Your insurance company won’t approve the surgery. Huh? You mean the insurance company I pay thousands of dollars each year to won’t do the one thing they’re supposed to do?

After the initial shock wears off, you consider your options. You could not get the surgery you need, but that’s not really an option, it’s giving up. You can pay for the surgery yourself, but unless you exhaust your retirement savings or are fairly well-off, this isn’t a realistic option. All that remains is to force the insurance company to do what they’re supposed to do: pay for your healthcare. So you sue your insurer. 

In one case, a patient needed an organ transplant to treat his cancer. The patient requested authorization for the procedure from his insurer. They advised him that the transplant would not be covered because it was “considered experimental.” After an unsatisfactory exchange of correspondence between his attorney and his medical plan, he filed a lawsuit against his requesting an order directing his insurer to authorize the transplant.

The court eventually found that the transplant was not an “experimental procedure” and that the insurer had breached its fiduciary duty by denying coverage. It directed the insurer to pay the medical provider the full cost of the transplant. The insurer appealed. In the meantime, the insurer paid a total of $ 279,000 for the treatment and the patient received his transplant. Unfortunately, the patient died from complications of the surgery.

On appeal, the case took an unusual turn. The appellate court vacated the district court’s order and remanded the case for further proceedings consistent with its opinion enumerating a set of three non-exclusive factors from which to determine whether the procedure was “experimental.”

The three factors were:

1. The Judgment of Other Insurers and Medical Bodies
2. The Amount of Experience with the Procedure
3. The Demonstrated Effectiveness of the Procedure

Next week, we’ll delve into these factors, and learn what must be demonstrated to beat an “experimental” denial.