Insurance Coverage for Clinical Trial Costs: Beyond the Recent New Jersey Agreement

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Kristine Conner and Carolyn Vachani MSN, RN, OCN
Last Modified: November 1, 2001

New Jersey's ten largest health insurers, all members of the New Jersey Association of Health Plans (NJAHP), recently agreed to cover routine care costs for patients enrolled in Phase I and II cancer clinical trials, extending an earlier agreement to cover Phase III trials. This makes New Jersey the first state in which insurers have voluntarily agreed to provide such coverage. The agreement was achieved through the efforts of the New Jersey Working Group to Improve Clinical Outcomes in Cancer Patients, a voluntary statewide coalition consisting of health insurers, health care providers, pharmaceutical companies, cancer researchers, ethicists, legislators, and patients. Other participating organizations besides the NJAHP included the New Jersey Commission on Cancer Research, the Cancer Institute of New Jersey, and the American Cancer Society, Eastern Division, New Jersey.

Governor Christine Todd Whitman, who formed the Working Group last February, officially announced the agreement on December 16th. Her announcement came just one day after the Institute of Medicine issued a report entitled "Extending Medicare Reimbursement in Clinical Trials," which urged the Health Care Financing Administration-the federal agency that administers Medicare-to establish clear rules that would end widespread uncertainties about what should or should not be reimbursed.

Clinical trials often provide access to promising new cancer treatments and ways of reducing treatment side effects. In some cases, they offer the best or even the only option for treating patients and improving their quality of life. Furthermore, clinical trials are essential in making progress against cancer. However, many health insurance plans automatically define them as "experimental" or "investigational" procedures and exclude them from coverage-making it difficult, if not impossible, for many people to participate.

To understand the New Jersey agreement, it's important to understand the two types of costs associated with clinical trials: research costs and routine care costs. Research costs are those associated with conducting the trial, such as the experimental therapy or medication itself, data collection and management, physician and nurse time, and analysis of results. Typically, these are covered by the organization sponsoring the trial, whether that be a research institution, pharmaceutical company, or government agency such as the National Cancer Institute. Routine care costs; include doctor visits, hospital stays, and laboratory tests. Many health insurers refuse to cover these if they are associated with a clinical trial.

The ten New Jersey health insurers will now cover these costs for plan members who enroll in cancer clinical trials that are administered or approved by the National Institutes of Health (which includes the National Cancer Institute), the U.S. Food and Drug Administration, the Department of Defense, and the Department of Veterans Affairs. The insurers included in the agreement are Aetna U.S. Healthcare, AMERICAID Community Care, AmeriHealth HMO, Inc., CIGNA HealthCare of New Jersey, Inc., Horizon Blue Cross Blue Shield of New Jersey, Managed Healthcare Systems of New Jersey, Oxford Health Plans, Physicians Health Services, Prudential HealthCare, and United Healthcare of New Jersey. Together they provide health plan coverage or administration to 4.8 million state residents.

Several states, including Maryland and Virginia, already have laws mandating insurers to cover the costs of cancer clinical trials, or are considering bills to the same effect. The New Jersey agreement is especially noteworthy because it represents the first voluntary agreement by insurers. Furthermore, it resulted from a collaborative effort by an independent Working Group that represented the interests of insurers, consumers, and the medical community. Back in September, the group issued a report of its findings, which included the following:

Most major improvements in cancer treatment have been accomplished through controlled clinical trials despite the difficulty in recruiting patients due to a number of barriers, including financial concerns. If more patients participated, clinical trials would be completed in a more timely fashion and critical treatment questions would be answered, resulting in improved care for all patients.

Studies indicate that clinical trials do not cost much more than standard care and may in many instances cost less.

Patients faced with life-threatening illnesses should have the increased choice afforded by access to the promising new therapies offered in clinical trials.

The report also notes that many insurance companies will cover whatever is considered "standard" treatment, even if it is often ineffective (such as chemotherapy for recurrent lung cancer). "In contrast," the authors write, "if a new treatment becomes available which shows promising results in pre-clinical trials and has shown to be safe in early clinical trials, insurers frequently will not pay for the care associated with receiving this new promising treatment because it is only available through a clinical trial. This is true even though the costs of the new treatment may be similar or even less than standard therapy. Therefore, payors are commonly reimbursing for therapies that do not work, instead of paying for new therapies that may or may not work, but which have potential." It is this type of faulty logic that the agreement is designed to remedy.

Ann Marie Hill, Executive Director of the New Jersey Commission on Cancer Research, is optimistic about the potential impact of the new agreement. "The New Jersey program provides a model for other states to implement similar programs," she says. "Basically it means that insurers' exclusion of cancer trials as investigational treatments no longer exists."

While this is a step in the right direction, Hill urges patients and their families not to assume that any clinical trial they want to participate in will be covered.

"First of all, patients have to be insured by one of these plans in New Jersey," she says. "We're actually getting more calls from across the country than from people in New Jersey." Furthermore, if the trial is not associated with one of the four government agencies mentioned above, it is not included in the agreement. That is meant to protect patients, she adds, because these federal agencies subject researchers to strict scientific and ethical standards. However, other plan limitations may affect coverage as well.

"People in certain HMOs may still be limited to certain hospitals and providers under contract with that plan," she notes. And then there's the issue of coverage for out-of-state clinical trials. That too will depend on the particulars of the contract, she stresses. In other words, individuals will still have to spend some time and energy hammering out coverage specifics with their own insurance providers.

According to Cecelia Gray, Radiation Oncology Social Work Manager at the Abramson Cancer Center of the University of Pennsylvania, many patients face difficulties in getting coverage for clinical trials participation. Generally, Phase I and II trials present the biggest problems, because the usefulness of the treatment under evaluation is still relatively uncertain.

"Each insurance company deals with this differently," Gray says, "and they have different reasons for classifying some treatments as 'experimental' and others not." While she applauds the New Jersey agreement and other states' legislation regarding coverage for clinical trials, she also emphasizes the need for a system of checks. "There has to be some mechanism in place for checking on the insurance companies," she notes.

The Working Group is currently putting together a Web site that should ease the transition for insurers, physicians, and state residents. It will feature a database of clinical trials to which the agreement applies, information about the approval process, and general information about cancer. In the meantime, patients can work with their insurance plans to get more specific information, or call the New Jersey Commission on Cancer Research (609-633-6552), The Cancer Institute of New Jersey (732-235-6777), or The American Cancer Society, Eastern Division (732-297-8000).

The New Jersey Commission on Cancer Research estimates that forty hospitals in New Jersey offer some form of cancer clinical trials. Many are affiliated with national cooperative groups that enroll participants throughout the country, such as the National Surgical Adjuvant Breast & Bowel Project (NSABP), The Eastern Cooperative Oncology Group (ECOG), Radiation Therapy Oncology Group (RTOG), Cancer & Leukemia B Group (CALBG), Gynecological Oncology Group (GOG), and Southwest Oncology Group (SWOG). There are ten pediatric cancer centers in New Jersey that have affiliations with the Children's Oncology Group, a newly formed alliance of the Pediatric Oncology Group (POG) and the Children's Cancer Group (CCG).

The New Jersey Working Group to Improve Cancer Clinical Trials Questions and Answers about the Agreement to Provide Health Insurance Coverage for Cancer Clinical Trials

The Working Group compiled the following information to answer the most commonly asked questions about the agreement.

What is the status of the Consensus Agreement to cover cancer clinical trials?

As of December 16, 1999, members of the New Jersey Association of Health Plans, which represents the state's ten largest health insurers, have agreed to voluntarily cover the routine health care costs of any of their members enrolled in Phase I, II, and III approved cancer clinical trials. NJAHP members provide health plan coverage or administration to 4.8 million New Jerseyans and 98% of the state's HMO market.

What is an approved cancer clinical trial as defined under this agreement?

An approved cancer clinical trial is a trial authorized or approved by one of the following:

  • The National Institutes of Health (NIH)
  • The U.S. Food and Drug Administration (FDA)
  • The U.S. Department of Defense (DOD)
  • The U.S. Department of Veterans Affairs (VA)

What costs are covered by this agreement?

Routine medical costs will be borne by the health plans. All other costs (administrative, additional tests mandated by protocol, monitoring) will be paid for either by the investigating company, the institution at which the trial is being conducted, or some other sponsoring party.

How can one determine whether or not a trial is approved?

The Working Group is currently engaged in a project to establish a web site, which provide lists of approved trials included in the Consensus Agreement. Ultimately, it is hoped that funding can be obtained to maintain the web site and enhance its capabilities to allow easy access to such information for health care providers, health plan medical groups, and patients.

How will this affect coverage for other clinical trials not related to cancer?

This agreement covers cancer only. It should not be construed to offer coverage for noncancer-related clinical trials.

Why is this agreement only covering cancer and not other life-threatening diseases?

The infrastructure developed nationally for cancer clinical trials is the most established and comprehensive among all life-threatening diseases. The National Cancer Institute has an extensive network of designated cancer centers (including The Cancer Institute of New Jersey) that offer state-of-the-art research in all areas of cancer. National Cooperative Groups have research partnerships that extend to sites throughout the country including New Jersey and Community Clinical Oncology Programs exist to bring clinical studies to the community level (e.g., Hackensack Medical Center). There are more controls, monitoring, and oversight for cancer studies than any other disease. For these reasons, cancer represents an ideal vehicle for taking the first steps in establishing a fair system of cost reimbursement for clinical trials.

How will the cost of "routine patient costs" be determined?

Routine patient care costs will be determined by the health plan in accordance with the definition of these costs contained in the Consensus Agreement.

Does the agreement cover only the HMO business of a health plan or other lines of business as well?

Because the agreement is voluntary, each individual health plan will make the determination as to the lines of business the agreement will cover. Health plans may find it advantageous to make an across-the-board decision with respect to all fully insured or self-funded business in order to simplify benefit administration and network issues for the company.

Currently, the five NJAHP HMOs that participate in the Medicaid program will offer this coverage to beneficiaries. In addition, it is anticipated that the year 2000 Medicaid contract will include this service for Medicaid beneficiaries. However, Medicare is controlled by the federal government through HCFA (Health Care Financing Administration) and is not included at this time. The Working Group will serve as strong advocates to address this issue at the federal level and among self-insured entities.

How can a cancer patient find out more about this agreement?

A Web site is being developed that will let patients, physicians, and medical directors from health plans have access to information about approved clinical trials by disease, sponsor, and investigator sites. In addition, educational information and resources will be provided. Until the Web site is on line, a patient can call The New Jersey Commission on Cancer Research (609-633-6552), The Cancer Institute of New Jersey (732-235-6777), and The American Cancer Society, Eastern Division (732-297-8000) for more information.

Why is this agreement so important?

This is the nation's largest and most comprehensive voluntary agreement by ten of New Jersey's leading health insurers to provide coverage for the routine costs of cancer clinical trials. It will serve as a model for other states and may have national implications.

What if I do not have any insurance?

Medicaid beneficiaries may be covered by participating NJAHP HMOs under the agreement. Some hospitals in New Jersey will provide access to clinical trials for uninsured patients on a case-by-case basis. In addition, the Working Group is committed to work to increase access to cancer clinical trials through education, advocacy, and innovative interventions.

What if my doctor is not involved with clinical trials?

The New Jersey Commission on Cancer Research can provide information about hospitals in New Jersey where physicians offer access to clinical trials.

Will this increase the cost of insurance in New Jersey?

The Mayo Study released in May 1999 indicated little or no additional costs for routine care of cancer patients participating in clinical trials (Chute et al, No. 10, May 19, 1999). In addition, the Working Group will include a cost analysis of approved clinical trials as part of its database.

Are all cancers included in this agreement? Are prevention and supportive care trials also covered?

All cancers are included within the agreement. Prevention, treatment, and supportive care studies are included within the agreement as long as they fulfill the approval requirements.

How have other states handled this issue? What mandates have been adopted and how are they working?

Some states have relied upon legislation and regulation to deal with insurance coverage for the routine care of clinical trials. According to the National Conference of State Legislatures, Rhode Island has mandated coverage for Phase II & III trials. In 1998, Maryland mandated insurance coverage for Phase II & III of clinical research involving a life-threatening disease and Phase I coverage for cancer. In April 1999, Virginia mandated insurance coverage for Phase II and Phase III clinical trials. Other states, including New York, Pennsylvania, and Vermont, have bills pending that would mandate coverage. Studies indicate that mandates increase costs and result in adversarial relationships between health insurers and providers.

How many patients in NJ will be assisted by this agreement?

Under the agreement, it is estimated that between 150,000 and 175,000 of New Jersey's cancer patients will have increased choice and improved benefits. The American Cancer Society estimates that 40,000 people are diagnosed with cancer in New Jersey each year. Of this number, 25,000 will be covered under the agreement. The New Jersey Commission on Cancer Research has just updated its survey on clinical research in New Jersey and reports that 1,350 new patients were enrolled in clinical trials and 4,200 patients were continuing in follow-up or ongoing studies within New Jersey institutions in 1999. This represents approximately 3.3% of cancer patients in New Jersey. The Working Group hopes to expand participation to 15% of all cancer patients per year on nearly 6,000 patients in the next three years.

How many clinical trials will be included?

The Coalition of National Cancer Cooperative Groups estimates that 200 to 400 open trials are available to patients in New Jersey at any time. In addition, the Working Group estimates that The Cancer Institute of New Jersey has 70 NCI-approved trials open in New Jersey.

While the agreement includes the ten major health insurers in New Jersey, what about other insurers who are not members of the New Jersey Association of Health Plans?

All insurers offering coverage in New Jersey will be invited to participate in the Working Group.

If a patient is already participating in a clinical trial, will they still be covered?

All costs from the date of agreement will be covered. Costs prior to the agreement will not be retroactively covered.

Did any patients participate in Phase III clinical trials under the original agreement signed in February 1999?

One of the purposes of the Working Group is to track this type of information. At this time, there is not a system available to answer this question, but the Web site and database discussed above will allow us not only to know how many patients are on trial, but also evaluate costs and outcomes.

Facilitating Clinical Trial Coverage by Your Health Plan: Strategies from the National Cancer Institute

While some states are taking steps to expand insurance coverage for clinical trials, these decisions are usually left up to individual health plans. The National Cancer Institute suggests the following steps for dealing with coverage issues up front when deciding to enter a clinical trial.

Understand the costs associated with the trial. Ask your doctor or the trial's contact person about the costs that must be covered by you or your health plan. Are these costs significantly higher than those associated with standard care? Also, inquire about the experience of other patients in the trial. Have their plans paid for their care? Have there been any persistent problems with coverage? How often have the trial's administrators been successful in getting plans to cover patient care costs?

Understand your health plan. Be sure you know what's in your policy. Check it to see if there's a specific exclusion for "experimental treatment." Look closely at the policy to see how the plan defines such treatment and under what conditions it might be covered. If it is not clearly defined, call the plan's customer service line, consult their web site, and/or write to them. Ask for specific information about clinical trials coverage.

Work closely with your doctor. Talk to your doctor about the paperwork he or she submits to your insurer. Often the way the doctor describes the treatment affects the likelihood of coverage. You might ask your doctor or the hospital to send an information package to the insurer that includes studies supporting the procedure's safety, benefits, and acceptance by the medical community. This package might include:

  • publications from peer-reviewed literature that demonstrate patient benefits;
  • a letter that uses the insurance contract's own language to explain why the treatment, screening method, or preventive measure should be covered;
  • letters from researchers that explain the clinical trial;
  • support letters from patient advocacy groups.

Be sure to keep your own copy of any materials that the doctor sends to your health plan for future reference.

Give your health plan a deadline. Ask the hospital or cancer center to set a target date for the therapy. This will help to ensure that coverage decisions are made promptly.

If a claim is denied, read your policy to find out what steps you can follow to make an appeal. In What Cancer Survivors Need to Know about Health Insurance, the National Coalition for Cancer Survivorship suggests that you and your doctor demonstrate to the health plan that:

  • the therapy is not just a research study, but also a valid procedure that benefits patients;
  • your situation is similar to that of other patients who have responded well to this therapy;
  • possible complications have been anticipated and can be handled effectively.

You also may wish to contact the Health Insurance Association of Amercia for more help.

Additional Information Resources

On OncoLink

Press Releases About the New Jersey Agreement

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