Santa Monica, CA – A Los Angeles County Superior Court judge issued a ruling finding that the Schwarzenegger Administration has illegally sided with health insurance companies that deny access to care for autistic children. A memo circulated by the Schwarzenegger Administration to health insurers was also ruled to be an illegal “underground regulation” because it violated state law requiring a public process for changing insurance regulations.
Read the ruling here.
“This is a really extraordinary ruling. The writing is on wall. The DMHC has to change its practices going forward, and the Department should immediately reverse its previous denials,” said Pam Pressley, Litigation Director for Consumer Watchdog. “Governor Schwarzenegger, a longtime and vocal supporter of the Special Olympics and developmentally disabled children, should require his regulators to abide by the law.”
The ruling comes in response to an attempt by the Department of Managed Health Care (DMHC) to dismiss a lawsuit brought by Consumer Watchdog against the HMO regulator over denials of an essential treatment for autism, known as Applied Behavioral Analysis (“ABA”).
The suit, filed by Consumer Watchdog and Strumwasser & Woocher LLP, alleges that the DMHC, and its Director Cindy Ehnes, illegally changed the agency’s policy to permit insurers to deny coverage for medically necessary ABA treatments on the ground that the health care professionals who administer the treatments are not licensed by the state but by a nationwide certification board. This is one of several justifications recently cited by the insurers to deny coverage for ABA therapy in plain violation of the California Mental Health Parity Act.
As a result of the ruling, according to Consumer Watchdog, regulators will have to stop denying coverage on the grounds of licensure, or their conduct will expose the Schwarzenegger Administration to legal damages.
“This is the first victory in a crucial fight to ensure that the Schwarzenegger Administration and the insurance companies provide autistic children with the health care services to which they are entitled under their policies and under state law,” said Fredric D. Woocher, lead counsel in the suit, of Strumwasser & Woocher LLP. “We will continue to push forward to ensure that the Department of Managed Health Care follows the law and does not cave to industry pressure.”
The ruling was issued on October 20 but was not available until Friday because the court was closed due to state-mandated furloughs.
According to the judge’s decision, “a refusal to pay for any ABA services based on the fact that the provider is not licensed is inconsistent with the intent of the [Mental Health Parity Act].” In addition, the court ruled, the DMHC’s interpretation of the Mental Health Parity Act as requiring licensure “is not the only legally tenable one. Indeed, it is not the correct one.”
The Consumer Watchdog suit also seeks to compel the DMHC to turn over records that would expose the full extent of the DMHC’s violations of the California Mental Health Parity Act and the Knox-Keene Act, the law that governs HMOs and some of the largest PPOs.
Governor Schwarzenegger, who appointed the current Director of the DMHC, has received $1.3 million in campaign contributions from health insurance companies.
The DMHC’s actions upholding heath insurance denials for medically necessary autism treatment puts children at risk by forcing parents to seek treatment through over-stretched taxpayer-funded programs, or to forgo treatment altogether.
A new study published October 5, 2009 in the American Academy of Pediatrics’ journal Pediatrics found an autism prevalence rate of 1 in every 91 American children, including 1 in 58 boys. As of December 2007, the California Department of Developmental Services provided care to nearly 37,000 Californians with autism.
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Consumer Watchdog is a nonpartisan consumer advocacy organization with offices in Washington, D.C. and Santa Monica, CA. Find us on the web at: www.ConsumerWatchdog.org
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: www.StrumWooch.com.