- AF v Providence Settlement victory
- Next Steps on HB2858 – Insurance Enforcement Process
AF v Providence Settlement victory
On Tuesday 3/14/2017, U.S. District Court approved a class action settlement in AF v Providence, in which Providence agreed that to cover ABA therapy without discrimination against individuals with autism.
The AF v Providence case is the reason that health insurance plans in Oregon cover treatment for autism. Beginning in 2005, we passed law after law mandating coverage of medically necessary care for autism and other mental health conditions –but they were honored primarily in the breach, and never enforced.
Ten years ago, Providence would deny coverage of ABA therapy for autism by asserting that it was “experimental.” When autism families appealed to External Review – in which the Insurance Commissioner appoints an outside medical expert to review insurer assertions that treatments are experimental or not medically necessary – the families won, and Providence was forced to pay for their care. When Kaiser was faced with this situation, it ultimately conceded and agreed to start covering ABA therapy for all families.
Providence, on the other hand, devised a legal strategy to deny coverage of ABA therapy on a contractual argument that didn’t allow an appeal to External Review. It issued denial letters saying:
“… 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” or involves “developmental delay,” and PHP here has so interpreted it, in this case as it has in other cases seeking ABA services for autism spectrum disorder. Because ABA services are related to autism spectrum disorder, they are therefore not benefits covered under the plan.“
(Providence was very clear – even proud — in legal filings to the court that this strategy was done for the purpose of evading the legally mandated External Review process, and was specifically intended to provoke litigation by consumers).
Providence argued that Oregon’s mental health parity law – ORS 743A.168 – didn’t require it to actually cover any services for any mental health conditions, and that ABA wasn’t a medical service and was therefore not covered by ORS 743A.190, which requires coverage for all medically necessary “medical services, including rehabilitation services” for treatment of autism in children.
In a landmark decision in August, 2014, Judge Simon disagreed – concluding that Providence’s argument that Oregon’s mental health parity law didn’t actually require coverage of any service was “absurd;” that ABA is a medical service required by ORS 743A.190; and that Providence also violated the Federal Mental Health Parity and Addiction Equity Act.
Years ago, when Providence filed its plan language for approval, the Insurance Division questioned this developmental disabilities exclusion; Providence responded at the time that they were aware it couldn’t legally be applied to autism. In using this language to block coverage of autism treatment, it wasn’t just violating state and federal law, it was directly violating a written commitment to the Insurance Commissioner.
We had been making all of these arguments for years, and brought this issue to the Insurance Commissioner’s attention several times, but no action was taken.
By May of 2013, after very lengthy discussions, we successfully persuaded the attorneys and policy analysts at the Insurance Division, Cover Oregon, Legislative Counsel’s Office, Department of Justice (DoJ), and Federal Center for Medicare and Medicaid Services (CMS) that ABA therapy was already included in Oregon’s “Essential Health Benefits” package and should be covered by insurance even without new legislation. After Rocky King, head of Cover Oregon, informed Governor Kitzhaber’s Chief of Staff of this conclusion, the Kitzhaber administration intervened on behalf of a major campaign contributor who was an insurance industry executive – and countermanded that decision. Even though the Insurance Commissioner sent the Governor’s office a reply warning that the industry executive they had met with was providing such “inconsistent and contradictory information” about coverage of ABA therapy that the Division could “consider enforcement action,” the Insurance Division and Cover Oregon were compelled to back off of plans to acknowledge that it was already legally required for coverage in Oregon.
Senator Bates attempted to resolve this by adding an amendment to SB365 expressly declaring the opinion of the Oregon Legislature that ABA was already required in the Essential Health Benefits package. Governor Kitzhaber’s Chief of Staff joined several insurance industry executives and lobbyists in a meeting with Senator Bates and warned him that SB365 would be vetoed if it included any language to that effect, on grounds that it would be bad for the industry.
Under a legal technicality in the Affordable Care Act, the Federal Government would pick up the cost of subsidizing any care that was already required by Oregon law – but the State was required to pick up the cost of any new insurance mandates. This meant that when Governor Kitzhaber overruled the conclusion of the Insurance Division, Cover Oregon, DoJ, and CMS that ABA therapy coverage was already required, he wasn’t just postponing the date at which our children could get medically necessary care – he was also rejecting millions of dollars in federal subsidies to cover the cost of that treatment, solely to give a small break to his friends in the insurance industry.
Senator Bates was so angry with this interference on behalf of insurers and against families that he immediately tracked me down in a Capitol hallway and urged me to file a class action lawsuit against the State of Oregon in addition to this Providence lawsuit. (We did – and PS v PEBB settled over a year ago, including compensation from the State of Oregon for violating the civil rights of our lead plaintiff).
Even as SB365 – our Autism Health Insurance Reform bill – was being enacted in mid-2013, the implementation date was postponed until 2016 expressly to give us time to complete our litigation – and ensure that Oregon received the federal subsidies for ABA therapy that it was entitled to. We were told that if we couldn’t prove that ABA therapy was already required for coverage under Oregon law, that SB365 may be repealed or scaled back before taking effect. All of the appeals and enforcement action under investigation by the Insurance Division were put on hold – until we could get our own legal opinion, at our own expense, reconfirming what the State of Oregon’s attorneys already knew, that ABA therapy was required for coverage under Oregon law.
Without the work of Stoll Berne and Megan Glor Associates on the AF v Providence case, we would never have been able to overcome this institutional resistance. The attorneys all did the work on “contingency” – meaning that they assumed all of the financial risk, worked without pay for nearly 3 years, and even advanced nearly $100,000 in expenses for outside experts with their own money. They did this knowing that there would be no massive “jackpot” and that their only payoff would be getting their time and expense reimbursed.
The Oregonian reported yesterday on the settlement in the Class Action portion of the lawsuit, which sought only an injunction prohibiting Providence from using the “developmental disability” exclusion to deny ABA coverage. In a separate component of the case, the five named plaintiffs also sought compensation for the value of ABA services that they should have received but didn’t. Unlike the Class Action suit, any settlement on that individual case would be confidential so there is no way of knowing what the terms were, if any.
Next Steps on HB2858 – Insurance Enforcement Process
Our experience with the AF v Providence case demonstrates the need for HB2858 – which establishes a clear and straightforward process for consumers to get the Insurance Commissioner to enforce the law. If the Insurance Commissioner doesn’t resolve a complaint within a year, then the consumer would get the right to enforce the insurance code themselves in court. (Currently, you can sue an insurer for breach of contract – but not for violating the law. In AF v Providence, the court concluded that some portions of the insurance code were incorporated into the contract). It would also allow consumers to recover punitive damages, making it much easier to recruit an attorney to help with a worthy case.
In the past few years, attempts to put insurance under the “Unfair Trade Practices Act” – Oregon’s anti-fraud statute – have always failed very narrowly. This bill is a compromise – it requires consumers to work through the Insurance Commissioner first, and allows private litigation only if the Insurance Commissioner can’t resolve an issue within a year.
In our hearing on HB2858 on Wednesday 3/15/2017, however, the industry’s objections were as strong as ever.
During my testimony, I told the story of one consumer whose coverage of ABA therapy was improperly denied in 2014. As I told the legislators, the Insurance Division actually called their insurer in July of 2014 and told the insurer that their denial of ABA coverage was illegal. The insurer refused a direct request from the Insurance Division to honor the claim. The consumer had to sell their car to raise money to pay for ABA therapy, then had to quit their job and move across the state to find an employer with a health plan that was willing to comply with the law. Even though it is now unambiguously clear that the insurer’s denial was illegal, the family still hasn’t had their claim paid, and – three years later – the Insurance Commissioner is still “investigating” the issue.
Right after telling this story, an Insurance Industry attorney spoke out against the bill – asserting that my story somehow illustrated that “the system worked” and that consumers just didn’t need the ability to enforce their rights in any way, either through the Insurance Division or in court with a lawyer.
That’s what this really comes down to – do we as consumers have any way to get our rights enforced, or not? The insurers are clear – they just don’t want us to have any way to enforce our rights.
There will be another hearing on HB2858 on Monday 3/20/2017. If you haven’t written to the committee yet, I encourage you to do so – see the sample e-mail, below. If you are interested in testifying in Monday’s hearing or would like to help pass the bill, please contact me by e-mail.
Like every other attempt over the past few years to improve consumer rights under the insurance code, this will probably be very close – but I’m optimistic that we may get it through this year with this compromise approach.
Sample message in support of HB2858 – Enforcement of the Insurance Code
Here’s a short, simple 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.
Members of the House Business and Labor committee:
Please Support HB2858 – Enforcement of the Insurance Code
Dear members of the House Business and Labor Committee,
I’m writing in support of HB2858 on remedies for violations of the Insurance Code.
HB2858 establishes transparent and efficient procedures for the Insurance Commissioner to use in adjudicating consumer requests for restitution or enforcement of the insurance code, based on the BOLI Civil Rights Division’s process for adjudicating civil rights complaints. Consumers who are unsuccessful in resolving their complaints through the Insurance Commissioner within a year would gain a private right of action.
While the Insurance Commissioner’s consumer advocacy unit can be very helpful, consumers are often left in the lurch when insurers don’t agree to fix issues voluntarily – there are no laws or administrative rules governing the complaints and enforcement process. The Commissioner’s restitution authority under 2013’s SB414 has been used only once in all the years it has been in effect.
Please support this bill to give insurance consumers an effective process to resolve their issues through the Insurance Commissioner.
[*** If you can, please insert a brief personal story here. If you can add a personal story about insurance violations or issues with the Insurance Division’s management of your complaints that would be especially helpful. ***]
123 SW Main
Hometown, OR 97201