Mandated Benefits Review - Senate Bill 1198 - Other Policy Considerations

Council staff have identified the following policy considerations to be of concern in the analysis of Senate Bill 1198:

This bill will benefit a very small number of individuals. Fox Chase stated that 2,400 Pennsylvanians insured by third party payers participate in cancer clinical trials every year. Applying the percent of ERISA exempt insured in the general population (50%) to these 2,400 cancer patients, Council staff estimates that approximately 1,200 patients could be affected by this legislation. Fox Chase further stated that one cancer center has 80% to 85% percent of patients approved for insurance coverage of clinical trials and that "many" of the denials are reversed upon appeal. This suggests that ultimately anywhere from 90% to 95% of patients already have insurance coverage for cancer clinical trials. If 90% to 95% of the 1,200 eligible cancer patients already have insurance coverage for cancer clinical trials, Senate Bill 1198 would benefit approximately 60 to 120 individuals each year.

Working from a different perspective, we arrive at approximately the same figure. In their submission, the Insurance Federation states that 1,050 new cancer patients (who are Pennsylvania residents) receive therapy through a cancer clinical trial every year. Using this figure, we can estimate that 50% percent of these people are insured through ERISA exempt employers. Therefore, approximately 525 individuals every year would qualify for benefits under Senate Bill 1198. However, some already have insurance coverage. Senate Bill 1334 (of 1995) estimated that 70 percent of cancer clinical trials are reimbursed. If we assume the 30 percent of patients are not reimbursed for cancer clinical trials, Senate Bill would affect approximately 157 people each year.

Whatever the exact number of people affected by Senate Bill 1198, the information available to the Council suggests that the population would be relatively small.

It is unclear what implications this bill will have for managed care organizations. It is unclear to Council staff whether or not managed care organizations would be required to cover the costs of cancer clinical trials if such trials are conducted outside their provider networks. Senate Bill 1198 states that cancer clinical trials would be covered in the same manner any other disease is covered if the patient is referred to such treatment by two oncologists. Since managed care patients are typically provided with standard cancer treatment within a specific provider network, it may be assumed that cancer clinical trials will be covered only if they are also within the provider network. If the intent is to require managed care organizations to cover costs outside their provider networks, it should be recognized that this would also require them to incur significant costs.

Clinical trials are investigational in nature. Senate Bill 1198 states that one criteria for coverage of clinical trials is that available data indicate that the treatment provided in the clinical trial "will be at least as effective as the standard therapy and is anticipated to constitute an improvement in the therapeutic effectiveness for the treatment of the disease." Until the trial is completed, it is not known whether the investigational treatment is as effective as the standard treatment. Comparing the two treatments is the purpose of a clinical trial.

This bill would create a new oversight board within the state government. Senate Bill 1198 would create the Cancer Clinical Trial Review Board within the Department of Health. The purpose of the Board would be to adjudicate disputes involving third-party reimbursement for cancer clinical trials. It would require financial resources for administrative staffing within the Department of Health.

The Cancer Clinical Trials Review Board is constructed mainly of physicians. There is a great concern among the insurance community that there is no provider representation of the Review Board. Insurers believe that the Board is "oriented to find in favor of coverage."

Little has changed since the Council's review of Senate Bill 1334 of 1995. Senate Bill 1198 is the same as Senate Bill 1334 in its intent. Only minor modifications have been made to the language of the bill. Furthermore, the submissions which the Council received for Senate Bill 1198 did not differ substantially from the information we reviewed for Senate Bill 1334. In brief, the Council was not provided with any information that has changed our position.