Hendricks v. Central Reserve Life Ins. Co., 39 F.3d 507 (4th Cir. 1994) – decided November 9, 1994 – United States Court of Appeals for the Fourth Circuit – Robert E. Hoskins

I represented Hendricks. This case was one of many that I handled in the 1990s where a person sought health insurance coverage for the treatment known as high dose chemotherapy supported by a peripheral stem cell rescue (HDC/PSCR). Hendricks was different than all of the other cases involving HDC/PSCR which I handled in the 1990s because it involved the proposed treatment for lung cancer (as opposed to breast cancer which was at issue in most of my other cases). In Hendricks, the district court ruled against me from the bench after a several day trial. We appealed to the United States Court of Appeals for the Fourth Circuit. The Hendricks opinion provided an excellent description of HDC/PSCR as follows:

“The protocol for the proposed treatment utilizing high-dose chemotherapy outlines a number of phases. The first is the “induction phase” which qualifies the patient for the proposed high-dose chemotherapy and consists of standard-dose chemotherapy to determine whether the patient responds positively. Only a patient’s positive response to standard-dose chemotherapy could indicate any success with respect to high-dose chemotherapy. In the second phase, “mobilization,” the dosage level of chemotherapy is raised in order to mobilize “stem cells” from the bone marrow into peripheral blood. Stem cells are generally found in the bone marrow, and they can develop into white blood cells, which are the body’s mechanisms for fighting infection. Mobilization is done in preparation for leukapheresis, during which blood is taken out of the body and centrifuged to separate and “rescue” the stem cells, and the remainder of the blood is returned to the body. The stem cells are maintained in a cold environment so that they remain viable for later return to the bloodstream after high-dose chemotherapy.

The next phase, the actual high-dose chemotherapy, is a radical attack on the lung cancer itself. Mobilization and leukapheresis are necessary precursors to high-dose chemotherapy since the high level of chemotherapy kills not only the cancer but also the body’s white blood cells, leaving the body largely defenseless against infections. Following the high-dose chemotherapy, the preserved stem cells are reinfused into the bloodstream with the hope that they will grow into healthy white blood cells.

The final phase consists of a two-week hospitalization period, during which the patient is monitored for inevitable infections while the stem cells are growing into white blood cells.”

The language of the specific ERISA governed plan document which was applicable to Hendricks’ claim was very difficult to overcome in my view. Therefore, I tried to “get around” the language rather than taking it head-on. I argued that the court should not apply the very restrictive definitions of “experimental” and “investigative” that were contained in the official insurance plan document because those definitions were not recited in the summary plan description which was provided to Mr. Hendricks. I relied upon a Fourth Circuit case, Aiken v. Policy Management Systems Corp., 13 F.3d 138 (4th Cir. 1993); click here to view Aiken. The court reaffirmed Aiken, but rejected its applicability in my case holding:

“A summary plan description must be provided to participants and beneficiaries of the plan and must be “written in a manner calculated to be understood by the average plan participant, and shall be sufficiently accurate and comprehensive to reasonably apprise such participants and beneficiaries of their rights and obligations under the plan.” 29 U.S.C. § 1022(a)(1). Because the summary plan description in this case contains no definitions of “experimental” or “investigative,” Hendricks argues that the district court should have relied upon the common understandings of these terms. If it had done so, he maintains, the court would have been more likely to rule in his favor and provide coverage for his treatment.

In Aiken v. Policy Management Systems Corp., 13 F.3d 138 (4th Cir. 1993), we held that “‘if there was a conflict between the complexities of the plan’s language and the simple language of the [summary plan description], the latter would control’” if the participant relied on the summary plan description or was prejudiced by it. Id. at 140-41 (quoting Pierce v. Security Trust Life Ins. Co., 979 F.2d 23, 27 (4th Cir. 1992)). See also Fuller v. FMC Corp., 4 F.3d 255, 262 (4th Cir. 1993). The reason for this principle is drawn from the reality that the summary plan description is “‘the statutorily established means of informing participants of the terms of the plan and its benefits,’ and the ‘employee’s primary source of information regarding employee benefits.’” Aiken, 13 F.3d at 140 (quoting Pierce, 979 F.2d at 27). In Aiken, for example, the summary plan description allowed a retiring employee to obtain a vested interest in a pension account if he had completed 20 years of service with the firm, while the official plan document required 20 years of service and the attainment of age 60. With this type of conflict, we ruled that the summary plan description controls. 13 F.3d at 142. Where, however, the summary plan description and the plan itself do not conflict, our cases provide no prohibition against review of the official plan itself for a fuller understanding of the plan’s terms. Indeed, in those circumstances the plan is the controlling document for determining the scope of benefits provided.

Thus, in this case, if we were to find that the generally accepted definitions of “experimental” and “investigational” as used in the summary plan description differed substantially from the definitions of those terms given in the official plan document, the resulting conflict might require us to apply our Aiken line of cases. But, in consulting the official plan document to determine whether its definitions allow for Hendricks’ proposed treatment, the district court concluded that the plan’s definitions are not in conflict with commonly understood meanings for those terms:

Whether the court utilizes the plan itself or just the summary, it makes no difference, because if only the summary is used, the ordinary . . . meaning of those terms would be utilized, and they are not inconsistent with the plan document itself.

* * *

The definition in the plan document is the same as the ordinary meaning of those two terms which are under review.

These conclusions by the district court are confirmed by comparing the definitions given in the plan document with definitions obtained from any current dictionary. The plan defines “experimental treatment” as a treatment performed “under controlled conditions in order to discover an unknown effect or to test a theory.” This is substantively identical to Webster’s Ninth New College Dictionary’s definition of “experiment,” i.e., “an operation carried out under controlled conditions in order to discover an unknown effect or law, to test or establish a hypothesis, or to illustrate a known law.” Webster’s Ninth New College Dictionary, 437 (1988). See also Random House Dictionary of the English Language, 681 (2d ed. Unabridged 1987). The plan defines “investigative treatment” as that performed “when the service, procedure, drug or treatment has limited human application but has not achieved general acceptance in medicine.” The Random 8 House Dictionary states similarly that an “investigative new drug” is “a regulatory classification assigned by the U.S. Food and Drug Administration to an unproven drug, allowing its use in approved studies with human patients.” Id. at 1004.

We agree with the district court that the definitions of “experimental” and “investigative” given in the official plan document are not so different from common understandings of the terms that they can be thought to conflict with those understandings. Accordingly, we find no error in the district court’s reliance on the definitions given in the plan document, even though these definitions were not provided in the summary plan description.”

The court found that given the very specific definitions of “experimental” and “investigative” in the insurance plan document that there was just no doubt that the proposed treatment, which was to be administered as a part of a clinical trial to Hendricks, was “experimental” and, therefore, excluded from coverage. Again, trying to get around the very specific plan language, I tried a different tactic. I argued that the court should fragment the treatment for purposes of analyzing whether there was coverage. I argued that separate parts or plans of the treatment should be viewed independently to determine whether there would be coverage. Unfortunately, that tactic did not work in Hendricks (although it did work a year later in Bailey v. Blue Cross Blue Shield of Virginia, 67 F.3d 53 (4th Cir. 1995); click here to see this site’s discussion of Bailey). The court rejected my argument holding:

“A fragmented analysis, however, is not appropriate here because according to the policy the scope of the exclusion is defined by the scope of the excluded treatment. Thus if the experimental treatment is high-dose chemotherapy with peripheral stem cell rescue for small cell lung cancer, then it is that entire treatment which is excluded, not just certain phases or aspects of it. If we were to accept the logic of a fragmented analysis, virtually any treatment, no matter how inconsistent with good medical practice, could be broken down into component parts, with a great majority of them covered under a policy like the one at issue here. We have no reason to conclude that the parties to the policy or the employee welfare benefit plan intended this approach.

In pressing his point on appeal, Hendricks relies heavily on our decision in Doe v. Group Hospitalization & Medical Services, 3 F.3d 80 (4th Cir. 1993). In Doe, we addressed the question of whether the policy in question covered any or all of the costs associated with highdose chemotherapy treatment. Plaintiff was stricken with multiple myeloma, a form of blood cancer, and his doctor recommended highdose chemotherapy in conjunction with an autologous bone marrow transplant. The policy specifically covered “chemotherapy for treatment of a malignant condition,” but it also excluded coverage for autologous bone marrow transplants to attack this condition, along with “services or supplies for or related to” such transplants. 3 F.3d at 87, 88. We concluded that the exclusion of bone marrow transplant and related services should not mandate exclusion of the chemotherapy, as the chemotherapy was specifically covered by the policy.

The holding in Doe does not apply here to provide coverage for phases of the high-dose chemotherapy treatment other than the high-dose chemotherapy phase itself because, unlike Doe, the exclusion in this policy is defined by the entire treatment and not by a particular phase of it. In Doe, only the autologous bone marrow transplant procedure and the services and supplies relating thereto were excluded by the language of the policy. High-dose chemotherapy was not an excluded treatment. In the case before us, the exclusion applies to any treatment that is “experimental” or “investigative”. Since the treatment which is experimental or investigative includes the high-dose chemotherapy as well as the preparational and recovery phases of treatment, the scope of the exclusion here is broader.”

In 1995, I made the same argument in Bailey v. Blue Cross Blue Shield of Virginia and, based upon the language of the plan, at issue in that case, the court did analyze the treatment based upon its component phases rather than as a whole. Hendricks has been cited many times (over 76 times by other courts or law review articles as of March 2008) including by the United States Courts of Appeals for the Ninth and Tenth Circuits.

As an interesting end note to this case and all of the cases where I represented individuals seeking health insurance coverage for individuals to undergo HDC/PSCR in the 1990s, I would highly recommend the article “We Were All Sold A Bill of Goods: “Litigating the Science of Breast Cancer Treatment””, Jacobson and Doebler, 52 Wayne L. Rev. 43, Spring 2006. In that article, the authors provide an excellent discussion about the litigation boom over HDC/PSCR for breast cancer in the late 1980s and particularly in the 1990s. They cite to six or seven of my cases which are discussed in this case log in analyzing the causation of the 1990s litigation boom. The article begins:

“In the late 1980s and 1990s, thousands of women elected to undergo high-dose chemotherapy with autologous bone marrow transplant (HDC-ABMT) as a last chance treatment for breast cancer, despite the fact that the procedure cost upwards of $100,000 and was also expensive in terms of risks and side effects. When their health insurers refused to cover the treatment, many women sought payment through the judicial system. The result was a series of nearly a hundred courtroom battles, not to mention thousands of settlement negotiations, in which judges and juries were forced to determine whether women would have access to a new procedure that offered their only hope for survivial. Without it they would almost certainly die. By the time studies were published conclusively showing that the procedure was ineffective, more than 30,000 women had already received the treatment, which often shortened their lives and added to their suffering, at a total cost of approximately $3 billion.

What went wrong? Howe could so much money have been spent and such suffering imposed for no apparent benefit? The natural reaction to these devastating accounts is to assign blame. Depending on one’s political and philosophical views, blame might be apportioned in the following ways. First, in their quest to slash costs and raise the bottom-line, health insurers and managed care organizations ignored the needs of their policyholders. Second, physicians pressured their patients into undergoing a procedure with essentially unknown risks and benefits, in a desperate attempt to give them at least a few more years of life. Third, plaintiffs’ attorneys saw the opportunity to make the insurers pay - - both literally and figuratively - - for their cold-heartedness and pursued these cases aggressively. Finally, courts, moved by the plight of the dying women who came before them, let sympathy trump the law.

These attempts to apportion blame are certainly plausible and accord with the conventional wisdom which views lawyers and the courts as especially culpable. In this Article, we question the conventional system. We examine the role that attorneys and the court system played in this unfortunate set of outcomes and explores alternatives to avoid replicating these results in the future.” (52 Wayne L. Rev. 43, 44, 45)

Personally, I am very pleased that the authors concluded:

“In the end, it is hard to blame the attorneys for what occurred. Each attorney represented his or her client in a manner that professional ethics demands and each acted with the best of intentions. Was their advocacy overly aggressive under the circumstances? Arguably so. But keep in mind the reality that the patient had what amounted to a death sentence and chose to undertake a risky procedure as a last chance.

As a society, we have yet to reach a balance between individual access to last chance therapies and the costs to society. The nation’s culture of technology is embedded too deeply to accept limits very easily. Like it or not, the legal system performed as it is designed to do-to protect individual litigants - - even if the judiciary is not the best forum for resolving controversial clinical scientific disputes. Are we prepared instead to delegate that responsibility to insurers? We doubt it. A much better alternative is for policymakers to focus on improving the technology assessment process and funding randomized control trials to determine a procedure’s effectiveness before its widespread diffusion into medical practice.” (52 Wayne L. Rev. 43, 111, 112)