Consumer Watchdog asks a judge to order the state Department of Managed Health Care to enforce the law and require insurers to serve autistic members. The agency says it’s doing its job.
State regulators are violating mental health and other laws by allowing health insurers to deny effective treatment for children with autism, consumer advocates contended today.
In a lawsuit, Consumer Watchdog, a Santa Monica group that monitors insurance practices, is asking a judge to order the Department of Managed Health Care to enforce the law and require insurers to provide their autistic members with the services their physicians have ordered.
Without court action, the suit says, "California’s thousands of autistic children and their families will continue to suffer."
The department said it was "holding health plans accountable to provide a range of healthcare services for those with autism" and was handling consumer complaints according to the law.
Autism impairs communication and socialization and is often accompanied by repetitive, injurious behavior.
Insurers have long tried to avoid paying for a variety of behavior modification therapies, such as Applied Behavior Analysis therapy, because of the expense — as much as $70,000 a year per child.
More than 37,000 children with the most severe cases receive services, such as ABA, through the state. Because the state’s limited budget for such children is rationed according to the neediest, thousands more suffer serious and debilitating problems but are ineligible for state aid.
ABA involves a trained therapist working individually with a child for up to 40 hours a week. The therapist teaches skills, such as feeding oneself, by breaking them down into small steps and drilling them with positive reinforcement.
The battle over autism treatment is at least a decade old. In 1999, in response to widespread outrage over insurers’ refusal to cover such needs, the state legislature adopted the Mental Health Parity Act.
The law requires insurers to cover care for mental and behavior problems at the same level as they do for physical illnesses. Still, insurers continued to avoid paying for one of the most expensive elements of autism care — ABA therapy — by denying requests on the grounds that it hadn’t been proved effective.
Families complained to the department, which submitted the disputes to independent medical review panels. These panels, composed of independent and anonymous physicians, conduct paper reviews and issue individual binding decisions.
Over the last two years, as the medical literature on the effectiveness of ABA advanced, these independent review panels have decided every case in favor of the families seeking treatment. As a result, insurers, including Kaiser Permanente, were required to pay for the treatment.
Last year, however, Kaiser and other insurers wrote letters to the department and made presentations urging it to change the way it handled such disputes and suggesting that they no longer be sent first to the independent review panels.
The insurers began denying the treatment on the grounds that it was educational — not a covered medical service. And they suggested that the department, in deciding disputes, should first determine whether ABA was a covered medical service. If not, then it should uphold the denials and stop sending the disputes to independent medical panels.
In March, the department issued a memo that adopted much of what the insurers had sought. The memo said that the department would be routing autism treatment requests first to its coverage-dispute division.
In a statement, the department said, it has told insurers they may not exclude any treatments "that have been determined to be healthcare services."
But the suit, filed in Los Angeles County Superior Court, says the department’s new policy has resulted in a reversal of outcomes. Insurers now are winning and families are losing. The decisions are binding and leave families to pay for the treatment themselves or have their children go without.
"Californians, including those stricken with 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," said Harvey Rosenfield, founder of the nonprofit Consumer Watchdog and author of the landmark automobile insurance reform initiative Proposition 103.
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