Autism Patients in California Dealt Insurance Setback

The Department of Managed Health Care declines to require carriers to pay for applied behavior analysis, an expensive therapy that insurers contend is an educational service, not medicine.

By Lisa Girion, LA Times

California regulators said Monday that insurers must provide speech, occupational and physical therapies to their autistic members but rejected pleas to require insurers to cover the cost of behavior therapy that aims to help patients live in society.

At issue is so-called applied behavior analysis, a therapy that teaches patients skills such as self-feeding and stopping injurious behaviors such as head banging. The therapy can cost as much as $70,000 a year per patient.

Parents of children with autism have argued in lawsuits and in complaints to regulators that insurers, by refusing to pay for an array of autism care, are ignoring the Mental Health Parity Act. The 2000 state law requires insurers to treat mental conditions the same as medical conditions.

Autism is the fastest-growing serious developmental disability in the U.S., more prevalent than childhood cancer, juvenile diabetes and pediatric AIDS combined. There are an estimated 185,000 Californians with autism.

The state now treats about 37,000 significantly impaired autistic children, delivering a variety of services, including applied behavior analysis — at a cost of more than $320 million a year.

The disorder impairs communication and socialization and is often marked by repetitive behaviors such as rocking and head banging. Its cause is unknown, and there is no cure.

The state’s major insurers and HMOs routinely refuse to pay for applied behavior analysis, arguing, most recently, that it is an educational service, not medicine. The insurers also say that covering applied behavioral analysis will drive up premiums for everyone, although studies from other states have found such increases to be minimal.

Parents disputing the denials have been winning appeals to regulators in recent months as research on the effectiveness of the therapy has become more widely recognized.

In 15 of 16 recent disputes over insurance denials of applied behavior analysis for individual children, state-impaneled physician-reviewers have declared the therapy to be medically necessary. Those decisions required the insurers to pay for the treatment. The 16th case is pending.

The Department of Managed Health Care stepped into the controversy Monday, sending insurers a letter seeking to clarify their coverage obligations to cover autism and related disorders.

Parents lauded the department for making it clear that insurers must cover speech, physical and occupational therapies for their autistic members. But they were disappointed by its failure to address applied behavioral analysis.

Some said the letter set up the likelihood that parents would have to fight case by case to convince the department that the therapy should be covered. Only if they won that round would parents be able to take their case to an independent medical review panel, where they have been winning.

If not, it could be game over for parents.

“I have a problem with their staying silent on the most effective therapy,” said Bay Area parent advocate Kristin Jacobson.

“Does every child who needs insulin — or cancer treatment — have to take it all the way to the Department of Managed Health Care?” she said. “This is the only thing where every family has to fight it every time. And that didn’t stop today.”

Applied behavior analysis teaches skills by breaking them down into numerous steps and drilling them with positive reinforcement.

Some studies have shown that as much as 47% of children who receive the therapy are able to enter school with no further intervention and few, if any, symptoms of the condition, said Gina Green, executive director of the National Assn. of Professional Behavior Analysts.

Eight states have laws that explicitly require insurers to cover certain autism treatments. In California there is no specific autism law. But autism is one of the conditions that was supposed to be addressed by the Mental Health Parity Act.

State officials defended the plan. “We’re doing all we can within the limits of the law to make sure what should be covered is covered,” said Tim LeBas, assistant director of the Department of Managed Health Care’s Office of Health Plan Oversight.

Department spokeswoman Lynne Randolph acknowledged that the department would review coverage denials for applied behavior analysis case by case, trying to distinguish medical applications of the therapy from educational ones.

“We would say yes in certain instances,” she said.

Kaiser Permanente and other insurers have vigorously opposed an interpretation of the law requiring them to cover the therapy.

The department’s letter said it would develop regulations to formalize the requirements on insurers and to “provide additional clarity through an open and public process.”

Kaiser said Monday’s letter was “a step forward” but left some issues unresolved.

Charles Bacchi, interim president of the California Assn. of Health Plans, said the trade group looked forward to gaining further guidance through ongoing regulatory audits with individual insurers, as well as through the development of new regulations.

The courts may influence the course of autism coverage as well. Kaiser is the target of two proposed class-action lawsuits that accuse the company of violating the Mental Health Parity Act and other laws by routinely denying medical care, including applied behavior analysis, to its members.

Scott Glovsky, a Pasadena lawyer representing Kaiser members in one of the suits, said it was a shame that the department failed to address applied behavior analysis therapy.

“ABA is what children with autism spectrum disorders need the most,” he said.

The decision applies to insurance policies held by more than 21 million Californians and supervised by the Department of Managed Health Care. That includes health maintenance organizations and some preferred-provider organizations offered by several companies, including Kaiser, Anthem Blue Cross, Blue Shield, Health Net and PacifiCare.

Harvey Rosenfield, founder of Consumer Watchdog, a Santa Monica advocacy organization, said the department might have crossed the line on “underground rule-making” by trying to change the rules by letter rather than through the formal adoption of regulations, which is a public process.

“This is a state agency winking at the HMOs and inviting them to deny claims to autistic children,” Rosenfield said. “This is going to be a license to steal for the HMOs, and they are giving it away without even holding a hearing, which is just an outrage, and also, I think, illegal.”

What do you think about this latest development?
Share your comments below.

Comments

  1. For me, I feel the need for the therapy but the price you have to pay for this is outrageous! I think, a little government intervention on the matter is required, so as to keep things streamlined and focused in the real issue.

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