American Journal of Law & Medicine

Genetic predispositions, prophylactic treatments and private health insurance: nothing is better than a good pair of genes.

1. INTRODUCTION

Discovering the genetic basis of a particular disease is not only of great interest to the medical community; private health insurers are also anxiously awaiting the results of genetic linkage studies. Apart from the scientific value of DNA studies, the results of genetic linkage research are relevant to health care delivery in two principal ways. First, identifying the genetic origin of a disease may allow doctors to detect the disease earlier. If doctors know that an individual is genetically predisposed to a particular disease, then health care providers can increase screening efforts and watch for early symptoms.(1) Second, if an individual has a genetic predisposition to a particular disease, health care providers may employ preventive or "prophylactic" measures to reduce or eliminate the risk of developing the disease or condition to which the individual is genetically predisposed.(2) Genetic linkage studies will soon allow more individuals to learn of their own genetic predispositions to certain diseases.(3) Currently genetic predisposition tests (both pedigrees of family history and DNA analysis) can indicate that an individual is at high risk for developing a disease.(4) The availability of this information may increase the demand for prophylactic treatment and consequently increase the demand for insurance coverage of such treatment.

New to the legal landscape is the issue of whether private health insurance contracts cover expenses for prophylactic treatment. Because many insurance policies only provide benefits for the treatment of disease, the precise legal question is whether a genetic predisposition to a disease is itself a disease as that term is defined in health insurance policies.(5) There are three logical possibilities: a genetic predisposition alone is not a disease; a genetic risk of disease is itself a disease; or the deleterious gene responsible for creating the increased risk is a disease. By defining disease to include genetic predisposition, prophylactic treatments may be a covered benefit even under insurance policies that distinguish between preventive care and treatment of disease.(6) This result is desirable from a public policy standpoint, because individuals who may become very sick would have access to preventive treatment.

However, even if courts, upon hearing this issue, interpret the term disease to include genetic predisposition to a disease, private insurance companies still may be able to limit coverage for treatment without modifying existing contract language. This is because treatment for preexisting conditions is excluded from coverage under most private health insurance policies.(7) If a genetic predisposition is defined legally as included in the term disease, insurance companies could deny coverage by claiming that the genetic predisposition is a "preexisting condition."(8) This undesirable result would be difficult to avoid, depending on how genetic risk is treated under the definition of disease.

This Article addresses three main issues: (1) whether the law should consider genetic predisposition a disease; (2) if so, whether this disease is the actual gene or the risk itself; and (3) whether a genetic predisposition, as a disease, constitutes a preexisting condition. Part I considers whether a genetic predisposition is a disease and examines in depth the contractual analysis employed by courts to define disease in relation to genetic risk for the purposes of determining whether prophylactic treatments are covered expenses.

Part II discusses whether it is the defective gene itself or the resulting risk of disease that makes a genetic predisposition a disease and analyzes the legal consequences flowing from these two possibilities. Defining the disease as the genetic defect itself rather than as the risk associated with genetic predisposition influences which treatments will be considered medically necessary and therefore covered by insurance. Part II argues that a limiting principle is needed to allow individuals clearly at risk to receive coverage for prophylactic treatment without swamping the health insurance industry with new demands for expensive and possibly ineffective treatment.

Part III examines whether a genetic predisposition constitutes a preexisting condition. This Part reviews the legal development of preexisting condition coverage exclusions in private health insurance contracts and addresses the legal implications of defining genetic predispositions as disease in this area. This analysis reveals that the way disease is defined affects whether genetic predisposition constitutes a preexisting condition.

Part IV argues that for policy reasons, courts should adopt a different framework than that now used to interpret the language of private health insurance contracts. This Part presents a proposal for an alternative definition of disease in the genetic context. This proposal would make prophylactic treatment a covered benefit when individuals are at an extremely high risk of developing a genetically based disease but would not require insurance coverage for prophylactic treatments for everyone who is genetically predisposed.

II. GENETIC PREDISPOSITION AS DISEASE

A. INSURANCE COVERAGE: THE COLLISION OF CONTRACTS AND PUBLIC POLICY

The development of new technologies for detection of genetic predispositions has increased the public demand that health insurance cover the cost of these new detection methods.(9) Generally, private health insurers have no clear incentive to exclude from coverage methods for early detection of disease. Early detection is usually inexpensive, and coverage for such testing is viewed favorably by the public.(10) However, private insurers' financial interests are burdened by the growing demand for potentially costly prophylactic treatments.(11)

Private insurance policies commonly cover only "medically necessary" treatment.(12) Generally, insurance policies do not consider prophylactic measures medically necessary because prophylactic measures do not treat an actual disease.(13) Private health insurers try to narrow the range of "medically necessary" measures by creating a distinction between treatment and prevention. A treatment is medically necessary if it treats an actual, existing disease.(14) Private insurance companies cover the expense of treatments that are medically necessary under the terms of their policies.(15) Therefore, private health insurers have a significant incentive to limit what the medical community considers disease. If the definition of disease is limited to exclude certain conditions, then the issue of medical necessity is avoided completely for those conditions. The most direct route for private insurers to limit covered expenses is thus to limit what constitutes disease.

The issue of defining disease for the purpose of limiting insurance coverage arises in the context of private contract disputes. Nonetheless, the uniformity of contract language used by health insurers in the United States makes these individual disputes relevant to all persons with health insurance.(16) By relying on dictionary definitions and other lay definitions of disease, courts are developing a common law definition of disease for use in private health insurance contract disputes.(17) When the issue arises, state courts will undoubtedly look at how other jurisdictions have defined disease in the context of genetic risk.(18)

In the first case to directly address the issue of whether disease encompasses genetic risk, Katskee v. Blue Cross Blue Shield of Nebraska, the court interpreted the contractual term bodily illness or disease to include genetic risk for developing a disease.(19)

B. KATSKEE V. BLUE CROSS BLUE SHIELD OF NEBRASKA

1. Case Summary

In Katskee, the plaintiff had a greater than fifty percent chance of developing breast and/or ovarian cancer based on her hereditary genetic predisposition.(20) On the basis of Katskee's family history,(21) her physician, Dr. Lynch, diagnosed her as having "breast-ovarian carcinoma syndrome" and recommended prophylactic removal of her ovaries, fallopian tubes and uterus.(22) Before Katskee underwent the prophylactic surgery, she applied to her insurer for coverage of the procedure.(23) Blue Cross Blue Shield tentatively approved the surgery but then denied coverage two weeks before the scheduled surgery date because she was not suffering from a "disease" or a "bodily disorder" as required by the insurance contract.(24) Katskee went ahead with the recommended procedure, then sued Blue Cross Blue Shield for breach of contract.(25) The district court granted the insurance company's motion for summary judgment.(26) The court held that the plaintiff "did not suffer from cancer, and although her high risk condition warranted the surgery," her policy did not cover the procedure because the plaintiff did not have a "bodily illness" or "disease."(27) The court noted that Blue Cross Blue Shield held the discretionary authority to decide what procedures or treatments were "medically necessary."(28)

The Supreme Court of Nebraska removed the case while on appeal from the district court's ruling.(29) Accepting Katskee's argument that having a high risk of developing a disease based on genetic predisposition is a disease, the court found that the surgery was "medically necessary," and therefore a covered benefit under the contract.(30) Reversing the district court's grant of summary judgment, the court held that being genetically at risk for developing a disease is equivalent to having the disease for purposes of insurance coverage.(31) The court remanded the case for further proceedings.(32)

Insurance companies should be concerned by the result in Katskee. If other jurisdictions follow the Katskee court's determination that having a high genetic risk for developing a disease is equivalent to having the disease, then insurance companies with similar contracts will face a drastic increase in the treatments they are obliged to cover. As researchers decipher more of the human genetic code, the medical community will be better able to predict which individuals are genetically at risk for an increasing number of diseases. This is because genetic analysis conducted at both the micro (DNA analysis) and macro (family histories) levels helps experts determine whether an individual is at high risk for a particular disease.(33)

New advances at the micro level may lead to a variety of secondary effects.(34) For example, the results of genetic testing may cause insurance companies to increase premiums selectively in order to offset the increased cost of treating individuals with identified genetic anomalies.(35) Alternatively, insurance companies may attempt to avoid such increases in expenditures by denying insurance to individuals with genetic abnormalities.(36) An insurance company, however, may not be aware of an insured's genetic condition if no manifest symptoms exist.(37) Absent mandatory genetic testing, there would be no mechanism for insurance companies to screen out genetically affected individuals before agreeing to insure them.(38) However, once an insured individual requests coverage for prophylactic treatment based on genetic predisposition, the insurance company is alerted to the individual's genetic condition and may attempt to increase premiums or even cancel coverage.(39)

After Katskee, private health insurance companies may be forced either to cover prophylactic treatments for the ever-expanding number of "at risk" individuals, or to make dramatic changes in their insurance policies to exclude these treatments from coverage. If compelled to provide coverage, this situation would economically strain the private health insurance system, which is desperately seeking to cut costs rather than increase benefit pay-outs.(40) If a national health plan is ever implemented, similar concerns will arise regarding what treatments or procedures are "medically necessary." The question of whether prophylactic treatments for genetically at risk individuals should be covered by insurance will have to be addressed.(41)

2. Contract Interpretation

Because the issue of what constitutes a disease usually arises in the context of a breach of contract dispute,(42) the established common law rules for contract interpretation apply. First, the court has to decide whether the disputed contract term is ambiguous.(43) If so, the court will construe the term as a matter of law.(44) Ambiguous policies "will be construed in favor of the insured."(45) If the term is not ambiguous, then the plain and ordinary meaning is controlling, and the court will interpret the contract to effectuate the parties' intentions at the time the contract was made.(46)

The policy at issue in Katskee explicitly excluded benefits for "services, procedures, drugs, supplies, or durable medical equipment that are not medically necessary."(47) The policy further defined "medically necessary" as:

The services, procedures, drugs, supplies or Durable Medical Equipment

provided by the physician, Hospital or other health care provider,

in the diagnosis or treatment of the Covered person's Illness, Injury, or

pregnancy, which are: 1. Appropriate for the symptom and diagnosis

of the patient's Illness, Injury or Pregnancy. . . .(48)

The Katskee court framed the issue as a dispute over the meaning of the term "illness."(49) If Katskee's condition was an illness, then treatments would be medically necessary under the policy language.(50) Referring to Webster's Dictionary as well as to lay definitions of what constitutes an illness, sickness or disorder, the court determined that the lay definitions were consistent with those in Dorland's Illustrated Medical Dictionary. …

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