Consumer watchdog group says insurance denial of autism treatment in California violates law

From The LA Times:

State regulators are violating mental health and other laws by allowing health insurers to deny effective treatment for children with autism, consumer advocates contend.

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 require insurers to provide 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.

Insurers also insist that they are following the law and reimbursing policyholders for most autism care. The dispute centers on certain kinds of expensive therapy and whether a 1999 law requires insurers to pay for them.

Autism impairs communication and socialization and is often accompanied by repetitive, injurious behavior.

Insurers have long declined to pay for a variety of behavior-modification therapies, such as applied behavior analysis, 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 applied behavior analysis, through the state. Because the state's limited budget for such children is rationed according to the neediest, thousands more suffer debilitating problems but are ineligible for state aid.

Applied behavior analysis 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 behavioral problems at the same level as they do for physical illnesses.

Still, insurers continued to avoid paying for applied behavior analysis -- one of the most expensive autism therapies -- by denying requests on the grounds that it hadn't been proved effective.

Families complained to the Department of Managed Health Care, which submitted the disputes to independent medical review panels. These panels, composed of physicians working anonymously, review paperwork and issue individual, binding decisions.

Over the last two years, as the medical literature on the effectiveness of applied behavior analysis 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, in letters and presentations to the department, urged it to change the way it handled such disputes and suggested that they no longer be sent first to the independent review panels.

The insurers began denying the treatment, saying it was educational -- not a covered medical service. And they suggested that the department, in deciding disputes, should first determine whether applied behavior analysis 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 the department would route 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 Tuesday 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.