California Court of Appeals Ends State Regulator’s Discrimination Against Autistic Children

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Santa Monica, CA – Parents of autistic children scored a major victory in a California Court of Appeal decision issued late yesterday, which now bars state regulators and health insurers from discriminating against children on the basis of whether treatment providers hold state licenses.  The state regulator’s discriminatory policy led to long delays, and often denials, of treatment for autistic children.

Download the decision here:

The lawsuit, filed in 2009 by the non-profit Consumer Watchdog and Strumwasser & Woocher LLP, was also the catalyst for a landmark state autism law, SB 946, authored by Senate President Darrell Steinberg in 2011.

The treatment at issue, known as Applied Behavioral Analysis (ABA), is the most effective treatment for autistic children, as yesterday’s decision acknowledged.

Responding to concerns raised in the lawsuit, the California Legislature agreed with Consumer Watchdog and Strumwasser & Woocher LLP by passing SB 946, which clarified that health insurers must pay for ABA provided by individuals certified by a national board, even if they do not hold a state license.  However, the legislation did not cover health plans for public employees enrolled in CalPERS and other state-sponsored programs.

Yesterday’s California Court of Appeal decision now also bars the Department of Managed Health Care (DMHC) from allowing health insurers to deny treatment for autistic children of government employees, including police officers, firefighters, and school teachers, on the basis that such treatment can only be administered through state-licensed providers.  As Consumer Watchdog and Strumwasser & Woocher LLP pointed out in the lawsuit, no state license currently exists for ABA therapists.

“Californians now finally have a definitive statement from the court that state regulators cannot allow health insurers to discriminate against autistic children merely because treatment providers do not possess a state license,” said Fredric D. Woocher of Strumwasser & Woocher LLP, lead attorney in the case.  “Families of firefighters, school employees and others covered by CalPERS-sponsored health plans will now be able to secure coverage for critical and effective treatment for autism.  Health insurers can no longer deny coverage on the pretext that a treatment provider does not hold a state license, a practice which has been conclusively held to be illegal.”

Read a letter from public employee unions, including the California Professional Firefighters, urging the court to end the DMHC’s discriminatory rule:

The California Department of Insurance, which oversees a different segment of the health insurance market, supported Consumer Watchdog’s position that a state license is not required to administer ABA, and that practitioners privately certified by the Behavioral Analyst Certification Board (BACB) can legally provide the treatment regardless of whether a child is covered under a private or state-sponsored health plan.  The California Department of Insurance, Autism Speaks, Autism Deserves Equal Coverage, and the California Association for Behavior Analysis contributed amicus briefs supporting Consumer Watchdog.  No supporting briefs were filed on behalf of the DMHC.

The Court agreed with Consumer Watchdog, Strumwasser & Woocher LLP, and advocates, writing in the decision issued yesterday:

“The judgment is reversed in part and modified to enjoin DMHC from upholding a plan’s denial of coverage for ABA services to be provided or supervised by a BACB-certified individual made on the basis that the provider is not licensed.  This applies to all plans within DMHC’s jurisdiction, including plans exempted from [SB 946].  The judgment is otherwise affirmed. DMHC’s cross-appeal is dismissed as untimely.”

In the same decision, the Court of Appeal affirmed a trial court ruling that the DMHC had illegally adopted its discriminatory rule in 2009 in violation of the Administrative Procedures Act.

The case, Consumer Watchdog et. al. v. Department of Managed Health Care et. al. (2d Civ. No. B232338), was decided by a panel of three judges in Division 3 of the California Court of Appeal’s Second District.  The majority opinion was written by Justice Kitching, Justice Klein concurred, and Justice Croskey authored a concurring and dissenting opinion.

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Consumer Watchdog is a national non-partisan and non-profit public interest organization.  For more information, go to:

Strumwasser & Woocher LLP is known for its successful litigation and resolution of major public policy matters.  The firm’s trial and appellate civil litigation practice focuses on government and electoral law, consumer law, environmental protection, land use, and administrative law.  For more information, go to:

Jerry Flanagan
Jerry Flanagan
Jerry Flanagan is Consumer Watchdog's Litigation Director. Flanagan leads Consumer Watchdog’s litigation efforts in the areas of health insurance coverage and access to treatments. He has over 20 years experience working in public interest and health care policy, legislation and litigation.

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