It's time for Medical Insurance Companies in Oregon to cover Autism Treatment

Autism Health Insurance Reform: Judge declares Providence violated state and federal law in denying autism treatment

Contents:

  • U.S. District Court finds Providence has violated Oregon and Federal Law
  • State of Oregon renounces Mental Health Parity for Public Employees
  • Action Alert:  ask your legislators to tell Governor Kitzhaber to comply with Mental Health Parity – and stop discriminating against individuals with autism

U.S. District Court finds Providence has violated Oregon and Federal Law

On Friday August 8, U.S. District Court Judge Michael Simon issued his opinion and order in AF v Providence – a class action lawsuit – and declared that Providence had violated both Oregon and Federal law in its’ denials of Applied Behavior Analysis (ABA) therapy as a treatment for autism.  You can find a copy of his opinion here.

Willamette Week broke the story with an article here.

Providence had been using a “developmental disabilities” exclusion to deny coverage of ABA therapy; its’ denial letters typically say:

“Under the language of the Oregon Group Member Handbook … mental health services “related to developmental disabilities, developmental delays or learning disabilities” are specifically excluded from coverage under this plan. …. There is no question that autism spectrum disorder is a “developmental disability” …. Because ABA services are mental health services related to autism spectrum disorder, they are therefore not benefits covered under the plan.

(emphasis added)

Judge Simon concluded that this practice violated Oregon’s Mental Health Parity Act (ORS 743A.168), Oregon’s Children with Pervasive Developmental Disabilities Act (ORS 743A.190); and the Federal Wellstone-Domenici Mental Health Parity and Addiction Equity Act.

The decision is a class action applying to all of Providence’s fully-insured commercial group plans, but the conclusions should apply to many of Providence’s self-insured plans, including PEBB, and to some other insurers excluding ABA therapy.  Since Providence has amended its’ contract with its’ own employees to completely exclude all coverage for autism (which it can do, since it’s exempt from Oregon’s insurance code), this would not help Providence employees.

Oregon’s Mental Health Parity Act (ORS 743A.168)

Judge Simon concluded that Oregon’s Mental Health Parity Act (ORS 743A.168) “requires insurance companies to cover medically necessary services for covered mental health conditions” and that “…autism is a ‘mental and nervous condition’ under the Oregon Mental Health Parity Act.

This basic conclusion – that Oregon law “requires insurance companies to cover medically necessary services for covered mental health conditions” – was actually in contention, despite a very clear statute and decades of legislative history and enforcement.  Providence – and some government officials (like, say, Governor Kitzhaber’s senior health policy advisors – see below) – had argued that the law required the insurer to cover the conditions, but didn’t actually require coverage of services that were medically necessary.  Judge Simon declared that interpretation to be “absurd”:

“The Court finds the statute’s meaning to be clear after considering the text and context of the law. The Court notes, however, that if it were to proceed to … consider maxims of statutory interpretation, the maxim that statutes should be interpreted to avoid an absurd result would be persuasive on this point. … The Court would interpret § 743A.168 to avoid the absurd result that insurance companies could decide not to cover medically necessary services for covered mental health conditions (thus obliterating parity) and still be in technical compliance with the Mental Health Parity Act.”

(emphasis added)

Although the question of whether or not ABA therapy was an evidence-based treatment didn’t really figure into the suit, Judge Simon noted that:

“ABA is a widely accepted therapy that is ‘firmly supported by decades of research and application and is a well-established treatment modality of autism and other [pervasive developmental disorders].’” (citing McHenry v PacificSource)

And observed that:

“Providence cannot provide any examples of a medical condition where an exclusion was used to deny coverage of the primary and widely-respected medically necessary treatment for that medical condition.”

Judge Simon concluded his review of Oregon’s Mental Health Parity Act by declaring:

“Thus, looking to the text and context of § 743A.168 as well as the persuasive case law, the Court finds that 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.”

(emphasis added)

Some other Oregon insurers and plans also have explicit exclusions for ABA therapy, including United Health Care and the OHSU Employee Benefit Plan.  This decision would appear to declare those exclusions to be illegal, as we have been arguing for many years.

Oregon’s Children with Pervasive Developmental Disorders Act (ORS 743A.190)

As Judge Simon wrote,

“In 2007, the Oregon Legislature passed House Bill 2918, which requires health benefit plans to cover treatment of pervasive developmental disorders for children.”

The statute says:

743A.190 (1) A health benefit plan, as defined in ORS 743.730, must cover for a child enrolled in the plan who is under 18 years of age and who has been diagnosed with a pervasive developmental disorder all medical services, including rehabilitation services, that are medically necessary and are otherwise covered under the plan.

Judge Simon concluded “that ABA therapy is a medical service” for the purposes of this statute:

“Based on the text and context of the statute—including the statutory definition of ‘rehabilitation services’—the Court agrees that ABA therapy fits within the ordinary definition of medical services.”

Although his decision ultimately didn’t rest on this, this conclusion is very important, for two reasons:

First, some insurers in Oregon – especially Moda – continue to deny coverage of ABA therapy on grounds that it isn’t a “medical service” but is instead an “educational service.”  As a result, the insurers argue that it can be automatically denied for coverage.  This very clear ruling, based on a globally applicable law rather than the language of a specific insurance contract, and which follows similar rulings in other courts across the country, should put an end to that practice.

Second, insurers have argued in other situations that mental health services (like ABA) weren’t medical services and were therefore outside the scope of 743A.190.  There is, however, no definition of “medical service” anywhere in Oregon law. This would appear to confirm that “mental health services” are a subcategory within “medical service” rather than a separate category.

Judge Simon concluded that:

“The text, context, and legislative history thus make it clear 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 Developmental Disability Exclusion, however, would allow just that. …. On its face, the Developmental Disability Exclusion violates Or. Rev. Stat. § 743A.190.”

Federal Mental Health Parity and Addiction Equity Act:

Unlike Oregon’s Mental Health Parity Act, which clearly does require insurers to cover specific mental health conditions, the Federal law allows an insurer to pick and choose which mental health conditions to cover – but then requires any treatment limitations for covered conditions to be in parity with medical / surgical conditions.

Judge Simon determined that:

“… the Developmental Disability Exemption … is a ‘treatment limitation’ within the meaning of the Federal Parity Act.”

Since Providence applies the Developmental Disability Exclusion only to mental health conditions, Judge Simon concluded:

“…under the plain text of the statute, Providence’s Developmental Disability Exclusion is prohibited.”

Discussion:

Having found that Providence was in violation of ORS 743A.168, ORS 743A.190, and Federal Mental Health Parity, Judge Simon granted the plaintiff’s motion to declare the Developmental Disabilities exclusion illegal.

It is important to note that Providence very literally brought this suit upon itself.  In a filing on 11/1/2013, Providence explained to Judge Simon that it had intentionally structured its’ autism denials so as to provoke litigation by consumers out of frustration with decisions by physicians in Independent Review Organizations (IRO) appointed by the Insurance Division that consistently overturned Providence’ position that ABA was “experimental / investigational.”  Providence wrote:

“It had become apparent, therefore, that access to a decision by a judge (rather than by physicians) on the federal ERISA issues of law presented by these cases was going to require one of three things: (a) resting a final grievance decision solely on grounds not authorized for IRO review under Oregon’s statute; (b) waiting until a member elected to sue in federal court rather than appeal to an IRO physician; or (c) finding an IRO reviewer that would agree with Providence’s reading of the clinical literature and waiting for the member to appeal from that decision. Of those choices, only (a) was within Providence’s control. In short, Providence was effectively being denied the opportunity for federal judicial review under ERISA of the soundness of its conclusion that ABA services are “experimental/investigational,” presumably until such time as either (b) or (c) occurred. Providence therefore decided, for a time, to implement strategy (a), in order to attempt to resolve what it could before a judge rather than a physician.

And:

“… Providence has done what it can to place these issues before this Court by relying on the exclusions other than that relating to services that are “experimental / investigational.””

(emphasis added)

Having intentionally provoked this case to get the “opportunity for federal judicial review … of the soundness of its conclusion that ABA services are ‘experimental/investigational,’” “before a judge rather than a physician”, the case took an exceptionally ironic turn at its’ midpoint last January, when Providence unilaterally announced that it had concluded on its’ own that ABA really was a well-proven technique that should be covered for at least some patients, and would immediately begin providing ABA therapy on its’ fully insured plans for patients who meet the SB365 criteria – those who begin treatment prior to age 8 and seek no more than 25 hours per week – even though SB365 won’t take effect until 2016.

As the Judge explained:

In response to the passage of Oregon Senate Bill 365, Providence decided voluntarily to implement the coverage sooner than required. The parties agree that because the issue in this case is whether the Developmental Disability Exclusion is lawful and because plan members often seek coverage for ABA therapy for more than 25 hours per week and for children over age eight, Providence’s decision to implement Oregon Senate Bill 365 early does not render moot the issues raised in this lawsuit.

(emphasis added)

This makes the decision is critical for several reasons.

First, the conclusion that “Providence cannot simultaneously purport to cover autism and yet deny coverage for medically necessary ABA therapy … consistent with the Oregon Mental Health Parity Act” – which was passed way back in 2005 – confirms what we have been saying all along: SB365 wasn’t a “new” mandate, it was a clarification of an existing mandate.  Under the Affordable Care Act (“Obamacare”), if SB365 had been a “new” mandate, the State would have been required to pay subsidies to insurance companies for providing ABA therapy, potentially totaling tens of millions of dollars per year – which would likely have forced the legislature to scale it back in 2015 before it ever took effect.  The ruling essentially saves SB365 from repeal.

Second, it also confirms that the putative “limits” in SB365 – limiting ABA therapy to patients who begin treatment before age 9 or who seek more than 25 hours per week – are moot, since Oregon’s Mental Health Parity Act continues to apply in such cases.  We made this argument to the insurers and legislators during the drafting of SB365, but the insurers insisted on including the language anyway.  (It’s worth noting that in oral argument, Providence acknowledged that it considered the putative age limit in SB365 to be in violation of Federal law and didn’t intend to enforce its’ age restriction).

This decision was reached after an enormous amount of effort by advocates, individual Providence consumers, the attorneys for both the plaintiffs (huge thanks to everyone at Stoll Berne and Megan Glor Associates!!!) and for Providence, and by Judge Simon.  The case file is at around 5,000 pages of documentation.  Judge Simon spent more than 2 months deliberating, researching, and writing after the close of oral arguments in May before issuing this decision – an unusually long amount of time, illustrating his thoroughness and desire to get this right.

We’ve been making the exact same arguments that Judge Simon has made for years – and it is absolutely wonderful to see them in print in a formal court order.  Many lawyers in the insurance industry have been arguing for a long time about the meaning of these laws, and until now the state government has largely stayed out of the fight due to internal disagreements over interpretation, defaulting to positions most favorable to the insurers.  It is to be hoped that, now that we have completed this process and reached a very thoroughly researched decision, that the State of Oregon will step up to the plate to protect consumers.

State of Oregon renounces Mental Health Parity for Public Employees

While the AF v Providence case has taken a major step forward – with a clear, solid decision declaring that they have violated state and federal law – the State of Oregon continues to deny coverage of ABA therapy as a treatment for autism in exactly the same way, through a self-insured PEBB plan administered by Providence.  When challenged by PEBB members to comply with the law and provide medically necessary ABA services, the State of Oregon has responded by declaring “sovereign immunity” and renouncing compliance with Mental Health Parity.

PEBB’s denial letters state:

Because ABA services are related to Autism Spectrum Disorder, they are therefore not benefits covered by your plan.

PEBB does this even though Oregon’s Mental Health Parity law – and the plain language of PEBB’s contract – requires plans to “provide coverage for expenses arising from treatment … mental or nervous conditions” – including autism – “at the same level as, and subject to limitations no more restrictive than, those imposed on coverage or reimbursement of expenses arising from treatment for other medical conditions.”

After several years of attempts to get PEBB to comply with the law and honor its’ contracts, a class action lawsuit was filed against PEBB (“PS v PEBB” – see here for information) charging that the PEBB developmental disability exclusion violates the Oregon and Federal Mental Health Parity Acts (exactly as AF v Providence, above) – and also Oregon’s Unlawful Discrimination Against Persons with Disabilities Act, for singling out those with a protected disability for unlawful and discriminatory treatment.

Rather than reaching out to the families or their attorneys to attempt to resolve the matter, the State has empowered a Providence contract attorney, Medora Marisseau, as a “Special Assistant Attorney General” to represent the State. Ms. Marisseau is also defending Regence in Washington State against a similar suit, and has appealed that case to the Washington Supreme Court once or twice already.  She has also published an article lamenting how courts keep expanding access to mental health care for individuals with autism.

Having empowered Providence and its’ contract attorney to manage its’ defense and establish the State of Oregon’s position on public employee access to mental health care, they filed a very aggressive defense – renouncing compliance with mental health parity altogether:

“SIXTH AFFIRMATIVE DEFENSE

(Sovereign Immunity)

Some or all of Plaintiffs’ claims are barred by sovereign immunity, including performance or failure to perform a discretionary duty (ORS 30.265(6)(c), and Defendants’ good faith action taken. under apparent authority of law (ORS 30.265(6)(±)). The provision of plan benefits by PEBB is subject to discretion and the Oregon Insurance Commissioner has opined that PEBB is not required to comply with the OMHPA” [ORS 743A.168] “or PDD statute” [ORS 743A.190] and the Oregon legislature has determined the effective date for PEBB to provide ABA services to be January 1, 2015.”

(emphasis added)

As I myself testified to the Senate last February, this would be true – except that the Member Handbook itself clearly promises compliance, as Commissioner Cali wrote to me on 10/31/2013:

PEBB is not required to comply with ORS 743A.168 and ORS 743A.190 because it is exempt from the Insurance Code. However, the PEBB benefit handbook for 2013, states: “This plan complies with Oregon and Federal Mental Health Parity” . This requirement is part of their contract and not part of our statutes or federal law, but contractually PEBB would be subject to mental health parity laws both Oregon and Federal.”

(emphasis added)

During those Senate hearings, PEBB responded by swearing to comply with mental health parity whether the law required it or not:

Contracts for medical coverage in health plans offered by PEBB have included mental health parity since 2003 – both before and since self-insuring. This coverage has been, and will continue to be, specifically included in PEBB’s member handbooks (certificates of coverage), the third party contracts between PEBB’s medical carrier(s)/administrator(s) and our members.  PEBB has contracted with Providence Health Plan, a licensed health care service contractor, to administer benefits for PEBB’s self – insurance plan in compliance with all applicable laws and regulations.”

(emphasis added)

It is very troubling that the State of Oregon would respond to this suit by declaring “sovereign immunity” and renouncing its’ commitment to comply with Mental Health Parity – such a position is clearly against the interests of the State as it seeks to expand access to mental health care.  It’s also a very strange position to take as the state is responding to an inquiry from the U.S. Department of Justice over its’ itself against a Federal investigation into provision of mental health services.  Finally, it’s just plain illegal – the PEBB contract clearly promises compliance as Commissioner Cali wrote.  The State of Oregon may be free to write a new contract that doesn’t agree to comply with Mental Health Parity, or doesn’t cover ABA therapy as a treatment for autism, but until it does it must comply.

Action Alert:  ask your legislators to tell Governor Kitzhaber to comply with Mental Health Parity – and stop discriminating against individuals with autism

Please contact your State Representative and State Senator to let them know about this huge win in U.S. District Court – and ask them to tell Governor Kitzhaber and PEBB that it’s time for the State of Oregon to comply with the same rules.

I have included a sample e-mail message at bottom – but please personalize the message as much as possible, to show the impact that this issue has on you.

 

Sincerely,

 

Paul Terdal

——–

 

Sample message to legislators about PEBB compliance with Mental Health Parity:

Here’s a sample e-mail message that you can use to get started.  Revise the last paragraph to describe how this affects you, your family, or your patients, and update the greeting and address.

To:

Your own State Senator and State Representative.  You can find their contact information at:  http://www.leg.state.or.us/findlegsltr/

Subject:

Please ask Governor Kitzhaber and PEBB to comply with Mental Health Parity

Body:

Dear [Senator / Representative x],

I am a constituent in your district.

Last Friday, U.S. District Court Judge Michael Simon declared that Providence had violated both Oregon and Federal Mental Health Parity laws by refusing to cover Applied Behavior Analysis (ABA) therapy as a treatment for autism – solely because it was “related to autism.”

(The case was “AF v Providence” – you can read about it in Willamette Week:  http://www.wweek.com/portland/blog-32003-providence_cant_exclude_autism_treatments_from_coverage_judge_rules.html).

As Judge Simon wrote, “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.”  This decision was based on laws that have been in effect since 2007 – long before the recent SB365, which was intended to streamline the approval process for this treatment.

The State of Oregon – through its’ Providence-administered PEBB plan – continues to do exactly the same thing that Judge Simon has just declared illegal – denying coverage for ABA therapy solely because it is “related to autism.”

After years of fruitless negotiations, a class action lawsuit was filed against PEBB in April (“PS v PEBB”) charging that the PEBB developmental disability exclusion violates the Oregon and Federal Mental Health Parity Acts (exactly as in the AF v Providence case, above) – and also Oregon’s Unlawful Discrimination Against Persons with Disabilities Act, for singling out those with a protected disability for unlawful and discriminatory treatment.

Rather than reaching out to the families or their attorneys to attempt to resolve the matter, the State has empowered a Providence contract attorney as a “Special Assistant Attorney General” – and they have mounted a very aggressive defense by declaring “Sovereign Immunity” and asserting that “PEBB is not required to comply with the OMHPA” [Oregon Mental Health Parity Act, ORS 743A.168].

Not only is this in breach of contract – since the PEBB Member Handbook specifically states that “This plan complies with Oregon and Federal Mental Health Parity” – it is also very disappointing that PEBB and the Kitzhaber administration would even attempt to renounce support for Mental Health Parity in this way.

Please contact PEBB and the Governor’s office to ask them to honor their commitment to Oregon’s landmark Mental Health Parity Act – and respect the U.S. District Court decision that they “cannot simultaneously purport to cover autism and yet deny coverage for medically necessary ABA therapy.”

[*** If you wish, you can insert a brief personal story here.  This is especially important if you yourself are on a PEBB plan. ***]

Thank you,

 

Your Name

123 SW Main

Hometown, OR  97201

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