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Successful litigation against insurers leads to state order
SALEM, OR (August 14, 2014) -- Acting in response to a string of successful lawsuits against the insurance industry, an Oregon state agency announced today that it would prepare a directive requiring all private health insurers to cover applied behavior analysis (ABA) for autism.
“Recent court decisions have brought clarity that coverage for ABA therapy should be required of all insurers,” said Insurance Commissioner Laura Cali. “After evaluating the latest ruling made in Oregon last week, we have determined there are limited circumstances in which denial of coverage for ABA therapy as a treatment for autism may be reasonable. We hope the bulletin will provide more certainty to Oregon families who seek this treatment.”
Cali was referring to last week's decision by U.S. District Court Judge Michael Simon striking down the use of a "developmental disability exclusion" by insurers to deny claims for ABA treatment for autism. The ruling came in a class action lawsuit brought by two families against Providence Health Plans.
Simon found that the disabilities exclusion violated federal and state mental health parity law.
In a previous case, McHenry v PacificSource Health Plans, the court struck down the insurer's claims that ABA was "experimental" and "educational," rather than medical, in nature. The health plan administered by theOregon Public Employees Benefits Board (PEBB)is currently beingsuedfor its refusal to cover ABA, while in neighboring Washington state a series of decisions in class action suits have run against insurers.
Last year, Gov. John Kitzhaber signed legislation requiring state-regulated health plans to cover ABA, but the requirement would not take effect until 2016.
The Oregon Insurance Division, which is part of the state Department of Consumer and Business Services,has the authority to issue bulletins to clarify requirements of insurance companies under the Oregon Insurance Code and other state and federal laws.
"This bulletin will explain that insurers cannot exclude coverage of ABA therapy for autism from their policies," the Insurance Division announced in a statement. "As with other types of medical services, insurers can make coverage decisions based on whether the therapy is deemed appropriate and medically necessary for an individual patient, but they cannot broadly deny payment for ABA therapy."
The statewill begin drafting the bulletin "immediately" and share the draft withconsumers, advocates, insurers, and other interested parties, for comment and feedback. The division also promised todevelop a "transparent and consistent approach" for resolving current and future consumer complaints and enforcing the bulletin.
The Insurance Division has drawn fire in the mediafor purportedly maintaining a cozy relationship withthe state's insurance industry.As reported by The Oregonian, adraft memo analyzing the 2013 autism insurance reform bill was shared with a lobbyist for Regence Blue Cross Blue Shield while the bill was still before the Legislature.
Cali took over as director shortly after the episode and told The Oregonian she was making improved autism insurance coverage a priority for the Insurance Division.
In Oregon class action suit, judge rejects 'developmental disability exclusion' widely used to deny claims
PORTLAND, OR (August 13, 2014) -- A "developmental disabilityexclusion" widely used by insurers to deny claims for applied behavior analysis (ABA) therapy for autism has been rejected in Oregon by a federal judge as a violation of federal and state mental health parity law.
Ruling in a class action lawsuit brought against Oregon's Providence Health Plan, U.S. District Court Judge Michael Simon ruled that "an insurer cannot provide coverage for a service for one child and deny coverage for the same service for another child solely because the second child suffers from a developmental disability."
The complaint, A.F. and A.P. v Providence Health Plan,was brought by two families raising children with autism and was certified as aclass action covering all Providence policyholders earlier this year.
Simon ruled that the blanket exclusionviolated the federal 2008 Wellstone Domenici Mental Health Parity and Addiction Equity Act, Oregon's Mental Health Parity Act and a 2007 Oregon statute regarding medical coverage for autism. According to the decision, "Providence cannot simultaneously purport to cover autism and yet deny coverage for medically necessary ABA therapy through its Developmental Disability Exclusion consistent with the Oregon Mental Health Parity Act."
Simon also made clear he considers ABA to be medical treatment, as opposed to a service provided by schools.
"The case is significant in holding that developmental disabilities exclusions are prohibited as'separate treatment limitations' applicable only with respect to mental health benefits," said Dan Unumb, executive director of the Autism Speaks Legal Resource Center. "The case is also useful in its discussion of othertreatment limitations, such as 'experimental' exclusions and 'medical necessity' exclusions that are often more restrictivelyapplied to exclude ABA coverage for autism.
"Finally, it is important just for making clear that coverage of ABA treatment for autism is a benefit with respect to a service for a mental health condition covered under mental health parity," he said. "Even if autism or related treatment may also be characterized as “developmental,”this does not in any way remove thiscondition from the protections of the mental health parity act."
In the course of the litigation, questions arose over the enforcement practices of the Oregon Insurance Division. External review boards over the course of several years ordered private insurers more than 20 times to cover autism treatment, but the state agency failed to enforce compliance, as reported by Willamette Week.
The report cited efforts by Paul Terdal, an Autism Speaks volunteer advocate, to improve the state's enforcement efforts.