Kaiser Agrees to Cover In-Vitro Fertilization

In a breakthrough for infertile couples, the Kaiser Foundation Health Plan of California has agreed to pay millions of dollars for in-vitro fertilization treatments to help some of its members conceive so-called “test-tube” babies.

The agreement will bring an end to a unique class-action lawsuit filed by more than a dozen Kaiser patients who were denied coverage of the infertility treatment several years ago on the grounds the procedure was “experimental.”

More than 1 million Kaiser women of childbearing age will be notified that they are eligible for coverage, according to Kaiser spokesman Daniel Danzig. Thousands are expected to seek treatment.

‘Debatable’ Issue

He also said on Tuesday that Kaiser now concedes that in-vitro fertilization is not experimental, although the issue in the past has been “debatable.”

Attorney Lauren Poplack Hallinan, who filed the lawsuit, estimated that about 10,000 women may qualify for coverage at a potential cost to Kaiser of between $50 million and $100 million. These are women who were denied coverage during a recent two-year period.

The settlement is expected to be approved soon by a San Francisco Superior Court judge.

Attorneys and health consumer groups called the case a landmark with national ramifications for infertile couples. They said the suit also dramatizes a continuing tug-of-war between consumers and health providers over what new medical treatments should be covered by health insurers.

In-vitro fertilization involves removing a woman’s eggs from her ovaries, fertilizing them outside her body and then implanting the embryo in her uterus.

The technique is one of many new medical technologies that the health insurance industry has resisted paying for. That reluctance generally stems both from a conviction that the new technology is not widely accepted medical practice and from efforts to curb skyrocketing medical costs.

Compounding the problem for both consumers and insurers is the absence of any central authority to determine when an experimental procedure becomes insurable as a proven medical practice.

Thus disputes often are resolved on a case-by-case basis in the courts.

Class-action lawsuits, which are a vehicle for resolving widespread disputes, are difficult to bring for complicated, technical reasons in the medical field, according to Hallinan.

She said this may be the first class-action lawsuit to challenge the denial of a medical benefit by a health provider. “It is definitely the first that challenges a health care provider’s refusal to pay for in-vitro fertilization treatment,” she said.

Settlement’s Impact

As for the settlement’s impact, Hallinan said, “When people see thousands of women at Kaiser getting coverage, they’re going to ask, ‘Why not my insurance company?’ ”

Women eligible for treatment are those between the ages of 18 and 45 who were enrolled in Kaiser and suffering from infertility between July, 1983, and about July, 1985. These women, Hallinan said, were unjustly denied treatment on the grounds that in-vitro fertilization was experimental, when in fact it was not.

Kaiser is not agreeing in the settlement to provide in-vitro fertilization for all its infertile members.

This in itself illustrates, according to Pomona attorney William Shernoff, how “insurance companies always shift ground so that when you get one door open, they close another.”

According to the settlement agreement, Kaiser enrollees seeking in-vitro fertilization treatment after 1985 are not eligible for coverage because about that time, Hallinan said, Kaiser found “a new basis” for denying the treatment. Kaiser began notifying policyholders that coverage specifically excluded in-vitro fertilization--not on the debatable ground that it was experimental--but on the ground that the U.S. Department of Health and Human Services had ruled the procedure to be “unusual, infrequently provided and unnecessary to the health of the patient.” Sex changes and reversal of sterilizations are the only two other operations that also fall into this category, she said.

Several health providers pushed for this ruling, contending that in-vitro fertilization is no more worthy of coverage than other elective therapies, such as cosmetic surgery.

“Smoothing the wrinkles, bobbing the nose or conceiving a child may have a tremendously positive psychological effect but it does not enhance or diminish the individual’s health,” wrote Blue Cross/Blue Shield attorney Mary Lynn Buss in a letter that became a part of the Kaiser lawsuit.

Blue Shield decided three years ago not to cover in-vitro fertilization as well as a number of other infertility treatments. The company’s decision was based on the relatively low success rate compared with the high cost of these procedures.

Beverly Freeman of Resolve Inc. in Boston, which represents thousands of infertile couples nationwide said: “This case is a landmark in the sense that a very large health maintenance organization has essentially conceded that in-vitro fertilization is not experimental. And in order to get out of more trouble, they’re settling.”

She said she is concerned that insurance companies will now try to skirt in-vitro fertilization coverage by categorically excluding all fertility treatment from coverage.

“But I also think that people shopping for insurance carriers will demand infertility coverage and the marketplace will have to respond to them,” Freeman said.

Resolve has successfully pushed for legislation in two states that requires health insurers to cover in-vitro fertilization as part of their pregnancy care.

Danzig said that Kaiser has chosen to exclude in-vitro fertilization from coverage because “it’s a rather esoteric operation that benefits very few people. . . . We believe our broadest obligation is to use our resources in a most efficient way to provide basic health maintenance and prevention of disease.” Kaiser is one of the area’s largest insurers, with 1.8 million members.

The American Fertility Society in Alabama, which includes about 7,500 physicians, estimates that one in seven couples in the U.S. have an infertility problem, and about 1 million people between ages 25 and 39 are candidates for in-vitro fertilization. A spokesman said there are about 160 centers in the country that perform in-vitro fertilization.

“When people find they can’t have a child it becomes a driving issue and force in their lives,” said Hallinan. It is cruel, she said, for these people to be told that in-vitro fertilization is their only hope, and then that the insurance company won’t pay for it.