Ruling Deals A Blow To Denials Of Autism Treatment

Published on

Refusing to cover a costly behavioral therapy because the care provider lacks a state license violates California law, a Los Angeles County judge finds.

A tactic used by insurance companies to deny expensive behavioral therapy
to autistic children has been deemed illegal by a Los Angeles judge.

a preliminary ruling, Los Angeles County Superior Court Judge James C.
Chalfant found that Kaiser Permanente’s refusal to pay for a child’s
autism treatment because the provider was not licensed by the state
runs counter to California’s Mental Health Parity Act. That act
requires insurers to cover care for mental and behavioral problems at
the same levels they do for physical illnesses.

“A refusal to
pay for… services based on the fact that the provider is not
licensed is inconsistent with the intent of parity,” Chalfant wrote in
his Oct. 20 ruling.

It’s the latest development in a
long-running battle by parents nationwide to require insurers to pay
for treatment of their autistic children. One of the most promising —
and expensive — treatments is known as applied behavioral analysis.
Therapists break down tasks such as feeding and dressing into tiny
steps, then teach their autistic patients to master them through
repeated drilling and rewards.

The ruling came as part of a
lawsuit filed by Consumer Watchdog, a Santa Monica advocacy
organization, against the California Department of Managed Health Care
to require the agency to side with consumers when insurers refuse to
pay for the autism therapy. The ruling clears the way for a trial to
determine whether the department, which is responsible for regulating
health plans, is doing enough to require insurers to cover such

A spokeswoman for the department said the ruling would not change the way it handled disputes over autism therapy.

“This first procedural ruling has provided nothing conclusive other
than offering a road map on where the [department] must concentrate our
legal arguments as we proceed to trial,” spokeswoman Lynne Randolph
said Monday. “Any other conclusion on what may become future rulings is

Still, the two main findings in the 11-page ruling went squarely against the agency.

The first was on the question of whether insurers could refuse coverage
for autism therapy because the providers were unlicensed. Most autism
therapists are certified through a national program but do not hold
state licenses.

The department argued that state law requires
medical services to be provided only by licensed professionals. But the
court said that would allow private insurers to avoid paying for autism
therapy at all, shifting the burden to state-run treatment centers.

second finding involved a March 9 memo the department wrote to insurers
giving them guidance on when and how it would consider autism therapy a
service they must cover. The suit alleges that the memo amounts to an
“underground regulation,” a rule adopted by a government agency without
proper public notice or hearing.

The court agreed, describing the memo as “the very essence of a regulation.”

Fred Woocher, a lawyer for the group that brought the suit, said that
the ruling was a warning to insurers that a therapist’s lack of a
license was not an excuse to deny coverage. He said it also sent a
strong message to the Department of Managed Health Care to stop
allowing insurers to get away with it.

“Hopefully now the
health plans will know they can’t deny on those grounds,” Woocher said.
“We would hope that the word would get out that anybody who has been
denied on these grounds can resubmit their claims.”

But the
California Assn. of Health Plans, a trade group monitoring the suit,
said that it might not make sense for parents of autistic children to
resubmit claims until the case was finally resolved.

“Because no
final ruling has been made, it would be most appropriate for health
plans to follow the guidance provided by their state regulator,” said
Nicole Kasabian Evans, a spokeswoman for the group.

Watchdog President Jamie Court said the ruling was reason enough for
Gov. Arnold Schwarzenegger to order the department to stop fighting the
suit and start ordering insurers to provide the treatment to their
autistic members.

“For an administration that is so involved
with the Special Olympics to not understand the harm it’s causing every
day that an autistic child doesn’t get the care they need, is not only
legally inexcusable, but morally reprehensible,” Court said.

Contact the author at: [email protected]

Consumer Watchdog
Consumer Watchdog
Providing an effective voice for American consumers in an era when special interests dominate public discourse, government and politics. Non-partisan.

Other Litigation Areas

Latest Litigation Articles

Litigation In The News

Support Consumer Watchdog

Subscribe to our newsletter

To be updated with all the latest news, press releases and special reports.

More Litigation articles