A nonprofit consumer group has filed a lawsuit against state regulators alleging they allow insurance companies to deny necessary but expensive treatment for autistic children in violation of state law.

Santa Monica-based Consumer Watchdog filed the lawsuit against the California Department of Managed Health Care Tuesday in Los Angeles Superior Court.

It seeks to compel the agency to require health plans to cover applied behavioral analysis (ABA) if a member complains the treatment was denied even though it is deemed medically necessary and is provided by licensed personnel or under the supervision of licensed personnel.

Agency spokeswoman Lynne Randolph said in a prepared statement that the department is holding health plans responsible for a range of health care services for people with autism.

The stakes are huge.

The disputed therapy, which teaches young children how to eat, play and learn, can cost more than $1,000 a week. Most health plans consider it educational therapy and don’t cover it.

The lawsuit alleges consumers were able to appeal denial of this kind of treatment to an independent medical review system until March 2009 – and many were overturned. Since then, DMHC changed its procedures to process the complaints through its own internal grievance system, prompting different results, court documents allege.

This is a violation of the California Mental Health Parity Act, which requires health insurers to cover all medically necessary treatments for autism, the consumer group alleges.

“Californians, including those stricken with autism and their parents and caregivers, expect regulators to enforce the law, not side with insurance companies seeking to boost their profits by denying patients the care they need,” Consumer Watchdog founder Harvey Rosenfield said in a press release.

The issue is complicated because some ABA treatments are considered medically necessary – speech, physical and occupational therapies, for example – while others are not.

“We have explicitly told health plans that they may not exclude any particular therapies or treatments for Autism Spectrum Disorder that have been determined to be health care services and (we) are administering the consumer complaint process according to law,” Randolph said in a prepared statement.