Recent Court Decisions
Stempel, Jeff, Journal of Risk and Insurance
HEALTH PLANS EXCLUSION FOR ORGAN TRANSPLANTS DOES NOT EXCLUDE COVERAGE FOR HIGH DOSE CHEMOTHERAPY WITH PERIPHERAL STEM CELL RESCUE To ATTACK BREAST CANCER
Simkins v. NevadaCare, Inc., 229 EM 729 (9th Cir. 2000) (applying federal common law)
Ruby Simkins worked for M & K Enterprises, her husband's company. In October 1996, she was diagnosed with Stage I breast cancer, which her doctors treated with radiation. The treatment was initially successful, but she was advised that she would not be considered "cured" unless she remained free of cancer for five years. In late 1997, M & K switched healthcare providers and signed on with NevadaCare, with Simkins enrolling as a participant effective January 1, 1998. In 1998, Simkins was diagnosed with Stage IV breast cancer, as doctors discovered "at least 12 nodules in her lungs and a plum-sized mass on her liver." She went to UCLA Medical Center for treatment. 229 F.3d at 731.
Simkins's doctor recommended that she undergo high dose chemotherapy with peripheral stem cell rescue (HDC/PSCR). Stem cells are immature cells in bone marrow that mature to produce blood cells that then circulate throughout the body. Under the HDC/PSCR procedure, a patient is given an injection of drugs to stimulate stem cell reproduction and mobilization out of bone marrow and into circulating blood.
Then, through a series of transfusions, blood is removed from the patient's body and, after passing through a machine that filters out the stem cells, it is returned to the body. This "harvesting" procedure may be performed multiple times to collect enough stem cells. During the next phase of the procedure, the patient is given extremely high doses of chemotherapy (HDQ to try to kill off all of the cancer cells, a process that also kills off many of the patient's healthy cells. To help the patient recover more rapidly from the HDC, she is given a transfusion of the previously collected stem cells, which will migrate through the bloodstream into the bone marrow with the hope that they will take hold, grow, and produce mature red and white blood cells and platelets. 229 F.3d at 732.
Simkins sought coverage of the HDC/PSCR treatment from NevadaCare, which denied coverage, invoking the exclusion in the group health plan for "organ transplants." In the wake of the denial, she secured other funds, underwent the procedure, and was doing well as of the time of the court's opinion. Her suit was one for reimbursement of treatment costs under the NevadaCare plan. The trial court granted summary judgment for NevadaCare, but the court of appeals reversed, finding coverage for Simkins.
The health policy in question specifically provided coverage for blood transfusions and chemotherapy but excluded coverage for most organ transplants (except for limited exceptions set forth in the policy). The policy stated that "[t]issue transplant coverage is limited to allogenic bone marrow only." Simkins argued that she was not seeking an organ transplant but rather a transfusion of her own stem cells, which was akin to only a blood transfusion or bone marrow infusion. See 229 RM at 735. The Court of Appeals concluded as follows:
We hold that the district court erred in not considering whether a person of average intelligence and experience would construe the term "tissue transplant" to encompass HDC/PSCR. We believe the average person would not understand the term "tissue transplant" to encompass HDC/ PSCR, because she would not understand stem cells to be "tissue." Instead, the average person would focus on the fact that stem cells in this procedure are a component of the patient's blood. Indeed, the research study consent form Simkins signed specifically mentions that the stem cells would be collected from her blood stream. The average person is not likely to understand blood to be tissue .... Because stem cells would not be understood to be tissue, the average person would have no reason to believe the tissue transplant exclusion extended to HDC/PSCR. …