Jury Awards $312,000 to O.C. Cancer Patient

In a case that adds fuel to a national health care debate, a Superior Court jury in Los Angeles Thursday awarded damages of $312,000 to a Tustin woman whose insurer had refused to pay for an expensive breast cancer treatment that she believes saved her life.

The jury, voting 10 to 2, found that Blue Shield of California had acted unreasonably in adopting a blanket policy of rejecting such treatment--bone marrow transplantation in conjunction with high-dose chemotherapy--for women with metastatic breast cancer.

Judith Schoenburg, 50, who brought the lawsuit, said she felt overwhelming relief when the jury returned the verdict Thursday morning after seven weeks of trial.

“I just put my head down on the table and cried,” she said.

Although the decision does not change Blue Shield’s policy, the trial raised issues that are the subject of continuing controversy nationally.

At a time when employers, who control most health insurance purchasing, are pushing their insurers and health care providers to slash costs, pressure is also building to force insurers and health maintenance organizations to pay for a wider array of potentially life-saving treatments.

Insurers worry about having coverage decisions taken out of their hands, with both courts and legislatures intervening.

The Schoenburg case is at least the third of its kind to go to trial in California. Last December, a Riverside County jury returned an $89-million verdict against Health Net, the large, Woodland Hills-based health maintenance organization, for denying the treatment to breast cancer patient Nelene Fox, who died at age 40 before the case reached trial.

Sen. Art Torres (D-Los Angeles), Democratic nominee for state insurance commissioner, is sponsoring a bill now before the California Senate that would require insurers to cover physician-recommended treatments for any life-threatening condition providing that the treatment is considered safe and effective by the relevant national medical body--the American Society of Clinical Oncologists, in the case of breast cancer.

Complicating the Schoenburg case is the fact that Blue Shield is not her direct insurer. Because her husband, Robert, is a lawyer for Caltrans, Judith Schoenburg is insured by the California Public Employees Retirement System. CalPERS hired Blue Shield to administer its health plan, and Blue Shield--with CalPERS approval--applied the same standards it uses in its own plans.

Judith Schoenburg underwent the bone marrow transplant and a high-dose chemotherapy regimen in 1992 and has had no recurrence of the cancer. However, the $312,000 in medical costs forced her and her husband to borrow against their home. Had the jury not decided as it did, “We’d have lost the house,” Robert Schoenburg said Thursday.

Blue Shield rejects the treatment for all breast cancer patients, contending that it has not been proven safe and effective.

During trial, a Blue Shield physician testified that the insurer receives--and rejects--about three requests per month for such treatment.

Jurors were told at the trial that numerous other insurers, including Blue Cross of California, cover the procedure on a case-by-case basis.

In interviews Thursday afternoon, most of the jurors said they believed that Blue Shield adopted the policy solely to save money rather than because it considered the treatment unproven.

Juror Diana Bailli of Rosemead said she was particularly upset by testimony that such treatment requests get only token consideration before being rejected.

“When you take someone’s file and give it a cursory, 15-minute review, that’s not right,” she said.

In fact, all seven jurors interviewed said they were disappointed by a judge’s ruling preventing them from assessing punitive damages against Blue Shield. The jury consisted of 10 women and two men; both men voted in Schoenberg’s favor.

Judge David A. Horowitz ruled out punitive damages on grounds that there was no evidence that Blue Shield had acted maliciously. He also dropped CalPERS as a defendant in the suit.

The Schoenburgs and their attorney, Michael J. Bidart, took several jurors to lunch after the verdict was returned.

Soft-spoken Judith Schoenburg said she was exhausted but elated. She said she felt strongly that she had been treated unjustly by CalPERS and Blue Shield.

“I know about 14 women who had this procedure, and all of them had it paid for,” she said. “I’m the only one who didn’t.”

Robert Schoenburg said he hoped the verdict would “send a message to Blue Shield that they can’t get away with this kind of policy.”

Blue Shield attorney A. Robert Singer said it was too early to speculate on whether the insurer would appeal, since several issues remain to be decided through post-trial motions. The judge could conceivably reverse the verdict based on the motions, Singer said. One issue to be decided is whether Blue Shield--as administrator rather than direct insurer--should be held responsible for a coverage policy that CalPERS approved.

Singer said the verdict also raises a fundamental question: “Are organizations involved in the provision of health care services going to be able to make informed and rational decisions regarding medical treatment, or will they be subject to second-guessing and perhaps serious financial penalties at the hands of people who--however well-intentioned they may be--do not bring a great deal of medical expertise or experience to the table?”