Differing Interpretations Of Health Law At Heart of Autism Lawsuit

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LOS ANGELES – Two state agencies that regulate slightly different kinds of health insurance plans are taking dramatically different views on the same state law that requires mental health coverage.

Appellate court justices Wednesday heard arguments in the latest step of a four-year saga over a lawsuit that seeks to require the state Department of Managed Health Care to provide coverage to autistic children and reimburse insured families who have made out-of-pocket payments for autism treatments.

After the latest round of briefs requested by the justices of Division 3 of the 2nd District Court of Appeal, the differing opinions were clear. Justice H. Walter Croskey summed up the disparity in a question to counsel for the managed health care department: "How can these conflating positions be justified?"

The agency with the contrasting view is the Department of Insurance, which filed an amicus brief in support of plaintiff nonprofit Consumer Watchdog's suit, arguing that it's legally bound to cover treatment for autistic children and the managed health care department should have to play by the same rules.

Carmen D. Snuggs, a deputy state attorney general who represents the defendant, the Department of Managed Health Care, didn't shed light on why the agencies take different views. She argued that the Mental Health Parity Act doesn't mandate the agency should require state-funded HMO plans cover autism treatment. The department holds that autism treatments should be covered only when administered by state-licensed personnel, although no state license exists.

"It's a completely irrational position," Frederic D. Woocher, an attorney from Strumwasser & Woocher LLP, who represents the plaintiffs, told the justices. "We believe this is already covered."

A representative from the state Department of Insurance spoke on behalf of Consumer Watchdog.

Patricia Sturdevant, deputy commissioner, summed up the department's position in a letter submitted to the justices earlier this summer. "The issue before the court is whether [the Department of Managed Health Care] has erroneously interpreted the [Mental Health Parity Act] to require health plans to cover medically necessary [autism] therapy only when it is administered and supervised by licensed individuals, and not by nationally certified behavior analysts. [The insurance department] contends that such an interpretation has no support in statutory or decisional law, or in sound public policy."

The treatment at issue, Applied Behavior Analysis, is a mainstream therapy for autism spectrum disorders, illnesses that afflict about one in every 150 children. It entails intensive analysis of a child for up to 40 hours per week. It can be performed on children as young as two years of age and can last for years. The intensity and duration add up to a costly treatment.

It its letter to the court, the insurance department said the treatments were "efficacious, supported by decades of research, widely accepted as an effective treatment modality for young autistic patients, and consistent with the recommendations from numerous national governmental agencies, scientific institutions and professional organizations."

The Department of Managed Health Care regulates insurance plans for 21 million Californians by way of some of the biggest insurers, including Kaiser Foundation Health Plan Inc., Anthem Blue Cross, and Blue Shield of California. The plans it regulates cover many low income families as well as state employees and their families through HMOs funded by California Public Employees' Retirement System.

The original complaint, filed in 2009 in Los Angeles County Superior Court, stated that unless the courts ruled in the plaintiffs' favor, "California's thousands of autistic children and their families will continue to suffer."

At the trial court level, "there were three challenges [to the lawsuit]. We won on two and on third the court punted," said Consumer Watchdog attorney Jerry Flanagan.

Consumer Watchdog v. Department of Managed Health Care, B232338 (Cal. App. 2nd Dist., filed June 30, 2009).

Besides Croskey, the panel included Justice Patti S. Kitching and Presiding Justice Joan Dempsey Klein. The justices took the matter under submission Wednesday.

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