One of the nation's largest health insurers has reversed a long-standing policy and decided to pay an estimated $10 million for the care of patients who receive an experimental treatment for breast cancer.

The Blue Cross and Blue Shield Association announced that about one-fifth of its member plans have agreed to underwrite the cost of an experimental bone-marrow transplant procedure for as many as 600 of the 1,200 women who will participate in a nationwide study directed by the National Cancer Institute.

Breast cancer develops in about 150,000 American women annually, and causes about 44,000 deaths, according to the American Cancer Society.

The decision is said to mark the first time a private insurer has agreed to fund studies of an experimental treatment. It is likely to provoke increasing patient demands for insurance payment of other costly experimental treatments for serious diseases such as cancer and AIDS.

"It was something the association decided to do very quickly, and we expect that more {plans} will sign on as time progresses," said Cheryl van Tilburg, a spokeswoman for the Chicago-based insurer.

Bruce A. Chabner, director of the NCI's cancer treatment unit, said yesterday the decision runs counter to a pattern in recent years of insurers refusing to pay for expensive and experimental therapies.

"And this happens to be a particularly expensive one," he added. "But it applies to a lot of women -- perhaps 30,000 or 40,000 a year -- who could benefit from it, maybe more."

Outside reviewers have concluded in recent months that the procedure -- called "autologous" bone-marrow transplant -- shows considerable promise. Earlier this year, it received a favorable evaluation by David Eddy of Duke University, whom Blue Cross-Blue Shield commissioned to review studies of the treatment. And last month, an NCI panel determined that the procedure merited controlled clinical trials.

The insurer's decision also follows a series of lawsuits around the nation in which patients demanded that Blue Cross-Blue Shield pay the cost of the treatment, which ranges from $100,000 to $150,000.

Van Tilburg said the insurer has faced more than a dozen such cases over the last three years and has lost more than half of them. "There are doctors who believe with all their hearts that this is the best therapy, and others who have reservations," she said.

In April, a U.S. district judge in Alexandria ordered Blue Cross-Blue Shield of Virginia to pay for the treatment for a 35-year-old mother of three on the grounds that waiting for definitive proof of the treatment's efficacy would mean "that plan members would be doomed to receive medical procedures that are not state-of-the-art."

Unlike the more familiar transplant procedure in which a patient receives bone marrow from a donor, an autologous transplant entails removing and storing as much as a quart of the patient's own marrow.

Women in the NCI trial will then receive very strong concentrations of anti-cancer drugs, designed to kill cancer cells that do not respond to conventional levels of chemotherapy. The doses are so high that they also kill healthy bone marrow, which produces oxygen-bearing red cells and the white cells that contribute to the body's immune system. When the chemotherapy is completed, the stored marrow is returned to the patient. Patients must then remain hospitalized for approximately 30 days to assure that the weakened immune system is not exposed to infection.

The NCI study, expected to last two to four years and involve 1,200 patients at about 50 hospitals, will enroll women with either metastatic breast cancer -- cancer that has already spread to other organs -- or early breast cancer that is judged to have a high risk of spreading.

Chabner said a preliminary trial of the procedure at Duke found that 90 percent of women who received it showed no sign of a relapse three years after treatment. Women in the study had cancers that involved 10 or more lymph nodes but had not spread to other organs.

"That's really much better than one might expect," he said, "since most {comparable patients} relapse within two years" after conventional chemotherapy. For metastatic breast cancers -- which are virtually incurable by conventional chemotherapy -- some studies have shown as many as 10 percent of patients to be free of cancer two or more years following the new treatment.

So far, Blue Cross-Blue Shield plans in New York City, Massachusetts and New Jersey, among others, have decided to pay for treatment in the NCI study. None of the regional plans serving the Washington metropolitan area has decided whether to participate in the NCI study.

Many of those that have approved payment, said Douglas Peters, Blue Cross-Blue Shield senior vice president, have concluded that debating treatment policy through lawsuits is not "the appropriate setting for medical policy-making. By funding some of the clinical care costs associated with the NCI trials, we're able to provide access to this treatment while contributing to the search for a definitive answer to the question of whether or not it works."