United States General Accounting Office

GAO Report to the Honorable

Ron Wyden, U.S. Senate

April 1996 HEALTH INSURANCE

Coverage of

Autologous Bone

Marrow

Transplantation for

Breast Cancer

G O A

years

1921 - 1996

GAO/HEHS-96-83

GAO United States

General Accounting Office

Washington, D.C. 20548

Health, Education, and

Human Services Division

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

Page 1 GAO/HEHS-96-83 Coverage of ABMT for Breast Cancer
B-260550 

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.

Results in Brief 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.

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.

Page 2 GAO/HEHS-96-83 Coverage of ABMT for Breast Cancer
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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 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

Page 3 GAO/HEHS-96-83 Coverage of ABMT for Breast Cancer
B-260550 

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

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.

Page 4 GAO/HEHS-96-83 Coverage of ABMT for Breast Cancer
B-260550 

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.

Use of ABMT for

Breast Cancer Has

Become Widespread

Even Though Its

Effectiveness Is

Uncertain

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

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

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.

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.

Page 5 GAO/HEHS-96-83 Coverage of ABMT for Breast Cancer
B-260550 

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

Treatment’s Effectiveness

Is Still Unknown

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

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.

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.

Page 6 GAO/HEHS-96-83 Coverage of ABMT for Breast Cancer
B-260550 

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

Insurers Cite

Promising but

Inconclusive Research

and Outside Pressures

in Covering ABMT

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.

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).

10Blue 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).

11Autologous 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).

Page 7 GAO/HEHS-96-83 Coverage of ABMT for Breast Cancer
B-260550 

Insurers’ Technology

Assessment and Coverage

Decision Process

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

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.

Page 8 GAO/HEHS-96-83 Coverage of ABMT for Breast Cancer
B-260550 

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

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

Page 9 GAO/HEHS-96-83 Coverage of ABMT for Breast Cancer
B-260550 

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.

12Denise 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.

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

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ABMT Coverage Is

Mandated by at Least

Seven States

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.

14The 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.

Page 11 GAO/HEHS-96-83 Coverage of ABMT for Breast Cancer
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ABMT Coverage by

Federally Funded Health

Insurance Programs

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.

15Florida, Georgia, Massachusetts, New Jersey, and Texas provided coverage, while Minnesota, New

Hampshire, Tennessee, and Virginia did not.

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Physicians, Insurers,

and Advocates Raise

Concerns About

Widespread Diffusion

of ABMT

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

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.

Page 13 GAO/HEHS-96-83 Coverage of ABMT for Breast Cancer
B-260550 

Implications for Health

Care Costs

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

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.

Page 14 GAO/HEHS-96-83 Coverage of ABMT for Breast Cancer
B-260550 

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

Page 15 GAO/HEHS-96-83 Coverage of ABMT for Breast Cancer
B-260550 

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 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

Page 16 GAO/HEHS-96-83 Coverage of ABMT for Breast Cancer
B-260550 

“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 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.)

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

Page 17 GAO/HEHS-96-83 Coverage of ABMT for Breast Cancer
B-260550 

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

Page 18 GAO/HEHS-96-83 Coverage of ABMT for Breast Cancer
Page 19 GAO/HEHS-96-83 Coverage of ABMT for Breast Cancer
Contents

Letter 1

Appendix I 

Comments From the

National Institutes of

Health

22

Appendix II 

Comments From the

Office of Personnel

Management

24

Abbreviations

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

Page 20 GAO/HEHS-96-83 Coverage of ABMT for Breast Cancer
Page 21 GAO/HEHS-96-83 Coverage of ABMT for Breast Cancer
Appendix I 

Comments From the National Institutes of

Health

Now Health Insurance:

Coverage of Autologous

Bone Marrow

Transplantation for Breast

Cancer

Page 22 GAO/HEHS-96-83 Coverage of ABMT for Breast Cancer
Appendix I 

Comments From the National Institutes of

Health

Page 23 GAO/HEHS-96-83 Coverage of ABMT for Breast Cancer
Appendix II 

Comments From the Office of Personnel

Management

Now Health Insurance:

Coverage of Autologous

Bone Marrow

Transplantation for Breast

Cancer

Page 24 GAO/HEHS-96-83 Coverage of ABMT for Breast Cancer
Appendix II 

Comments From the Office of Personnel

Management

(108219) Page 25 GAO/HEHS-96-83 Coverage of ABMT for Breast Cancer
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