Treatment for More Than 13,500 Autistic Children In California Hangs in Balance at Tuesday Court Hearing

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Santa Monica, CA– A California Appellate Court in Los Angeles will consider a long-running dispute at a Tuesday afternoon hearing about insurance companies’ obligations to cover a critical treatment for autistic children.  The case, brought by the non-profit Consumer Watchdog, will also determine if families previously forced to pay tens of thousands of dollars out-of-pocket for autism treatment should be reimbursed by their insurance companies.

The treatment at issue, known as Applied Behavioral Analysis (ABA), has been found to be the most effective treatment for autistic children. Yet, unless the Court of Appeal intervenes, a state agency will allow insurance companies that insure low-income families enrolled in state-sponsored programs (Medi-Cal and Healthy Families) and state employees enrolled in CalPERS to deny coverage for ABA.  Click here to read Consumer Watchdog’s recent briefing to the Court.

“We cannot imagine why a state agency would allow insurance companies to deny crucial treatment to some autistic children just because they are poor or are children of public employees, but the Court must step in and provide equal protection,” said Consumer Watchdog attorney Jerry Flanagan.

In 2009, Consumer Watchdog sued the California Department of Managed Health Care (DMHC) for illegally allowing insurers to deny this medically necessary therapy. Throughout the litigation, DMHC has continued to wrongfully insist that ABA therapy can be a covered “health care service” only if it is provided by a California-licensed health care professional, even though there is no state-licensure scheme for ABA providers. Subsequent legislation (SB 946 effective July 1, 2012), which clarified coverage requirements under existing law, requires insurers to cover ABA as long as it is provided by a person certified by the National Behavioral Analyst Certification Board or someone supervised by a person so certified. Despite this legislative action, the DMHC has told insurance companies that families who get their health coverage through Healthy Families or CalPERS are not protected by the new law and that the insurers can place the same roadblocks to treatment for those families that initially led to the Consumer Watchdog suit. The DMHC conservatively estimates that at least 13,500 autistic children are insured through these programs.

In addition to asking the Court to ensure access to ABA for the 13,500 children left in medical limbo by the DMHC’s unfair interpretation of California law, Consumer Watchdog wants the Court to require the DMHC to order insurance companies to repay families of autistic children for the costs of ABA therapy they have been forced to pay out of their own pockets when the DMHC illegally upheld the plans’ denials of medically necessary ABA treatments over the past several years.  

This portion of the lawsuit could amount to tens of thousands of dollars for families who were forced to pay out-of-pocket to care for their autistic child when they were improperly denied coverage by insurers. One such parent, Kevin Epstein, explains that he spent more than $40,000 in out-of-pocket costs during a two-year period between 2008-2009 when the DMHC allowed Blue Shield to refuse payment for his son’s ABA treatment.

“When my family was counting on Blue Shield to cover the treatment my son needed, Blue Shield turned its back on us and the DMHC let them get away with it,” said Epstein.  “We had to front $40,000 in treatment costs because there’s a short window when ABA is most effective and we couldn’t afford to miss it.  But the Court should make sure that the DMHC orders Blue Shield to live up to its contract and reimburse us for our son’s treatment.”  

Mr. Epstein’s experience, and that of many other families, was the result of the DMHC’s illegal practice of allowing insurance companies to deny coverage for this important but expensive treatment.  

“Unwarranted and illegal roadblocks to care foisted on consumers by the DMHC put children at risk by forcing parents to seek treatment through over-stretched taxpayer-funded programs, or to forgo treatment altogether,” said Pamela Pressley, Consumer Watchdog’s Litigation Director.  “Unfortunately, lost time often means lost chances for recovery.  For many children with autism, early intervention with ABA therapy provides the only hope that they might one day be able to live some semblance of a ‘normal’ life.”

The case, Consumer Watchdog et al v. Department of Managed Health Care et al (2d Civ. No. B232338), will be heard by a panel of three judges in Division 3 of the California Court of Appeal’s Second District, which includes Justices Klein, Croskey, Kitching and Aldrich.  The Los Angeles law firm of Strumwasser and Woocher, LLP serves as co-counsel with Consumer Watchdog attorneys on the case.

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