Schwarzenegger veto harms kids with Autism

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Californians, including those stricken by autism, and their parents and caregivers, expect regulators to enforce the law, not to side with insurance companies seeking to boost their profits by denying patients the care they need.

Governor Schwarzenegger, however, a longtime and vocal supporter of the Special Olympics and developmentally disabled children, is allowing health insurers to evade state mental health laws and shift health care costs to already beleaguered taxpayers. Last Friday, Governor Schwarzenegger vetoed SB 1283 by Senate President pro Tem Darrell Steinberg (D-Sacramento). The bill would have improved, but not fixed, a broken regulatory system.

SB 1283 would have set time limits on regulators at the California Department of Managed Health Care ("DMHC") when reviewing insurance company denials of treatments for autism. The bill is needed because regulators had been delaying such reviews for months in some cases, leaving autistic children without the care they need.

Schwarzenegger’s veto of SB 1283 is just the latest blow. Last July, Consumer Watchdog sued the DMHC, the Schwarzenegger Administration agency responsible for regulating many of California’s health insurers. The suit alleges that the DMHC has wrongfully allowed insurance companies to refuse to pay for autism treatments, resulting in the denial of Applied Behavioral Analysis ("ABA"), an essential treatment for autism, in plain violation of the California Mental Health Parity Act. That law requires health insurers to cover and pay for all medically necessary treatments for autism, including ABA.

Until March of last year, health care consumers were able to appeal an insurer¿s denial of ABA through the DMHC’s Independent Medical Review ("IMR") system, in which a treatment denial is reviewed by a team of doctors that is unaffiliated with the insurance company that denied the treatment and independent of the DMHC.

However, as the IMR doctors increasingly overturned insurer ABA denials, compelling the insurers to pay for ABA, insurers privately urged the Schwarzenneger Administration to change its procedures and process the treatment denials through the DMHC’s own internal grievance review system. Last March, the DMHC issued a memo indicating that the agency would review ABA and other autism treatment denials through the DMHC’s internal grievance system as urged by insurers. In a key interim decision, a Superior Court judge ruled that memo to be an illegal "underground regulation" because it violated state law requiring a public process for changing insurance regulations.

Unlike the IMR system, in which independent doctors evaluate whether a treatment should be provided on the basis of whether it is medically necessary and effective, the grievance system is conducted by DMHC staff, who are not doctors and who simply defer to the insurers’ determination of whether the claim is even covered by their health care policies.

Why would the Schwarzenegger Administration make the change the insurer’s wanted? 1,324,850 reasons–that’s the amount of money the governor has received from health insurers in the form of campaign contributions.

SB 1283 would have helped families improperly side-tracked into the DMHC grievance system by reining in outrageous delays by regulators. But only Consumer Watchdog’s lawsuit will ensure that independent doctors, not politically-motivated regulators, get to decide whether or not kids get the treatments that their doctors say they need. We go to trial in December. Stay tuned.

Consumer Watchdog
Consumer Watchdog
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