The double-edged sword of investigational treatment

It can be hard convincing people that insurance shouldn't pay for all healthcare services. Investigational or experimental treatment is a prime example. Most insurers have medical policies excluding this category of services from coverage because their effectiveness is unproven. Investigational services can pose serious health risks, not all of which are known to patients and practitioners in advance. And the proliferation of expensive new technologies can drive up healthcare costs without improving outcomes, FierceHealthPayer previously reported.

Some providers try to cheat the system by billing for investigational treatment under procedure codes for covered services. Intentionally misrepresenting services is a common example of health insurance fraud; because if the claims were coded truthfully, they'd be denied.  

Gilbert Lederman, M.D., the New York oncologist famous for his radio ads and treating the late, great George Harrison, agreed last week to pay $2.35 million to settle Medicare fraud allegations. A whistleblower accused Lederman of inappropriately claiming payment for experimental cancer treatment, Reuters reported. Lederman was accused of wrongfully seeking payment for stereotactic body radiosurgery treatments between 1996 and 2003. The lawsuit dragged on for 10 years.

Because Medicare coverage of these services was limited at that time to treatment of cancers above the neck, Lederman's services were considered investigational or experimental. But the doctor reportedly miscoded claims and collected millions improperly. Lederman denied all wrongdoing in this matter, saying he blazed a trail for the use of these treatments in the United States.  

Staten Island University Hospital agreed to pay $25 million to resolve related claims six years ago as part of a group of settlements totaling $88.9 million, Reuters reported.  

"Providers who misrepresent their services--whether for the purpose of obtaining greater reimbursement or in an effort to conceal the fact that a treatment was deemed investigational--continue to pose a threat to Medicare," said U.S. Attorney (and U.S. Attorney General nominee) Loretta Lynch in a statement.

Cases like Lederman's show the importance of documentation audits to verify that claims were filed accurately and processed correctly. The case is also a reminder that a small subset of providers will try to make end runs around payment safeguards. SIUs must anticipate this risk or at least work to find these schemes before too much money is lost.

But besides the fraud risks of misrepresented services, the other issue for insurers with experimental or investigational treatment is the fairness of benefit denials. Knowing that today's experimental procedure might become tomorrow's standard medical practice, is there an equitable process in place to make decisions on coverage requests for new procedures? By what criteria do payers determine that a service is experimental, and how is a service's experimental status monitored over time?

Health insurance doesn't and shouldn't pay for everything. And there will always be those who steal from it at the expense of programs, taxpayers and subscribers. But even though insurers must keep a watchful eye on claims and act decisively against criminals, payment policies should also align with advances in medicine so customers have access to leading-edge care as soon as its value becomes clear. - Jane (@HealthPayer)

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