- Insurance Commissioner announces enforcement against insurers for autism violations
- The critical need for ongoing enforcement
- Legislation for 2017
- Next Steps
Insurance Commissioner announces enforcement against insurers for autism violations
On Thursday March 2nd, Oregon Insurance Commissioner Laura Cali Robison announced that she was taking enforcement action against four health insurers for failure to comply with laws mandating coverage of treatment for autism.
To quote the Division of Financial Regulation’s (DoFR) press release:
- “Pioneer Educators Health Trust, which provides health plans to local universities, is fined a proposed $100,000 for several violations, including:
o Applying an annual visitation limit for neurodevelopmental therapy, a mental health treatment, when there was not a similar limit for other medical or surgical benefits.
o Excluding ABA therapy in its 2015 health benefit plan and issuing the plan without receiving approval from the state.
o Denying a consumer’s pre-authorization request for ABA therapy and not providing a written response with information about the consumer’s right to appeal.
o Denying a claim for ABA therapy with no basis for that denial.
- Regence BlueCross BlueShield of Oregon, in its role as third-party administrator for Pioneer Educators Health Trust, is fined a proposed $100,000. In particular, Regence provided incorrect information to Pioneer and at least one consumer about whether it was required to cover ABA therapy.
- United Healthcare Insurance Company is fined a proposed $110,000 for denying 22 speech therapy claims for children who have been diagnosed with a pervasive developmental disorder (such as autism). Oregon law requires insurers to cover all medical services for a child enrolled in the plan who is younger than 18 years old and who has been diagnosed with a pervasive developmental disorder. Those services include rehabilitation services, such as speech therapy, that are medically necessary and are otherwise covered under the plan.
- Kaiser Foundation Health Plan of the Northwest is fined a proposed $250,000 for providing incorrect and misleading information in its member documents about whether it would pay for members’ attorney fees in a lawsuit. Kaiser’s documents stated that members would bear their own attorney fees, but Oregon law requires insurers to honor a court award for attorney fees. This order was the result of a complaint from a consumer who has filed a lawsuit against Kaiser related to mental health parity issues.”
Regence / Pioneer Educators Health Trust (PEHT)
I have been working on the Regence / Pioneer Educators Health Trust (PEHT) issues since July, 2015, when a plan member contacted me seeking help with ABA coverage. Regence had told her that the plan was exempt from state regulation, didn’t have to comply with Oregon’s autism health insurance reform laws or the Insurance Commissioner’s bulletins on autism and mental health, and that ABA was specifically excluded from the plan. When I reviewed her plan documents, however, I couldn’t find any reference to the alleged ABA exclusion, and found that PEHT was licensed by the State of Oregon as a “Multiple Employer Welfare Agreement” (MEWA) – which is subject to the same insurance regulations as any other insurance company. The member went through a long series of phone calls in which Regence repeatedly insisted that ABA was excluded, and refused to respond to preauthorization requests or even to issue a denial, saying that it didn’t have to respond to preauthorization requests for services that weren’t covered.
As the DoFR eventually found in its investigation, after the Insurance Commissioner published her bulletins in November 2014 declaring that no health insurer in Oregon could arbitrarily exclude coverage any therapy that could be medically necessary for treatment of mental health conditions – including Applied Behavior Analysis (ABA) for autism – Regence contacted PEHT to inform them that they were exempt from the bulletins and encouraged them to add an ABA exclusion to their plan. The revised plan – with the ABA exclusion – was apparently not submitted to the DoFR for approval and wasn’t even distributed to the plan members, who had no notification that ABA was now being excluded.
[As an aside, long-term readers of these messages may recall that in March 2011, Dr. Csaba Mera, Executive Medical Director for Regence, told a legislative workgroup in the Capitol that “there is sufficient evidence that children between ages 3 and 11 are helped (by ABA) – we’re not arguing about that…. It works in younger children – it really does make a difference in their lives.” It’s very disappointing that Regence was encouraging its corporate clients to oppose ABA therapy several years after concluding that “it really does make a difference.” Regence also continued issuing “experimental” denials of ABA therapy until directed to stop by DoFR in 2014]
After two and a half months of appeals and discussions with the DoFR Consumer Advocacy unit, PEHT acknowledged and apologized for the error, and began covering ABA therapy for the member in September, 2015. PEHT agreed to identify any other plan members who may have been impacted, and to remedy the error. However, the very next month, in October 2015, another plan member requested ABA therapy – and was again denied coverage.
In January 2016, PEHT began working on a revision to its plan documents. According to records in the NAIC SERFF database, DoFR again instructed them to remove the ABA exclusion from the plan, along with limits on speech and occupational therapy when used to treat autism or other mental health conditions, and PEHT agreed. PEHT provided DoFR with redlined copies of plan documents showing that these errors had been corrected.
In October 2016, the member contacted me again about an unrelated issue. In reviewing the plan documentation, I discovered that the ABA exclusion – which PEHT had been repeatedly ordered to remove – had actually been inserted back in to the plan documents, and that the visit limits on speech and occupational therapy for autism were still there. (This may have been an accidental clerical error, because this time Regence appears to have had the correct versions without the limits or exclusions).
Nevertheless, the member and her Occupational Therapist relied upon the published plan documents – with the visit limit on OT – and claims for additional services beyond the limit were denied by Regence because they were following outdated claims procedures from the older plan.
Regence and PEHT have since fixed the plan documents, removing the ABA exclusion and visit limits on rehabilitative care for autism and other mental health conditions.
Nevertheless, this is one of the most egregious insurance errors I have ever seen, and I fully agree with Commissioner Cali Robison’s action to pursue significant enforcement action against Regence and PEHT. PEHT and Regence were given warning after warning over a 2-year period, and repeatedly failed to take corrective action. I wish enforcement action had been taken much more swiftly after we reported the errors in mid-2015: it is likely that other members were deterred from seeking services in the past year out of the mistaken belief that they weren’t covered, and lost access to medically necessary care leading to potentially permanent harm.
The Kaiser enforcement action is in response to my own Consumer Complaint.
In 2009, Kaiser began including a clause in individual plan contracts, including mine, asserting that we couldn’t recover our attorney’s fees in a lawsuit even if we won. Litigation over insurance disputes can be extraordinarily expensive; in McHenry v PacificSource, plaintiff legal fees were over $200,000. Autism Litigation against Regence in Washington State over autism issues was even more expensive, with plaintiff legal fees exceeding $2 million. Although I began considering litigation against Kaiser several years ago to resolve an intractable dispute, my apparent inability to recover attorney fees even if successful forced me to delay action, and may have resulted in the loss of some of my legal rights by exceeding the statute of limitations. When I did ultimately file a lawsuit against Kaiser, I did so on my own without help from an attorney.
After nearly a year of litigation without legal representation, it became clear that I couldn’t continue on my own – and that Kaiser’s clause prohibiting recovery of attorney’s fees was probably in violation of Oregon law.
I submitted a Consumer Complaint about this issue in September 2016, and Kaiser immediately agreed with the Insurance Commissioner’s request to revise its contract to comply with Oregon law. However, in December 2016, after I had hired legal representation, Kaiser submitted a “Rule 21” motion to the court, seeking to dismiss my claim for attorney’s fees – and cited the illegal clause in the contract as part of its justification. Although the court denied Kaiser’s motion, I was forced to spend thousands of dollars on legal fees to overcome it – after Kaiser had promised the Insurance Commissioner that they would fix it.
The $250,000 civil penalty that DoFR has proposed for this violation is one of the largest ever issued against an insurer in Oregon. As DoFR spokeswoman Lisa Morawkski told the Oregonian, “On the Kaiser case, we believe it affect lots of people over a long period of time. It may have dissuaded consumers from pursuing a lawsuit because they thought they could not recover attorney fees.” The cost of litigation is so high that if even one consumer was dissuaded from pursuing a lawsuit against Kaiser since the illegal language was inserted in 2009, Kaiser would probably have come out ahead despite this very large civil penalty.
- KATU did an excellent story on the Regence / PEHT case. They were working on it for several months, and it is an amazing coincidence that enforcement action by DoFR was taken just as they were preparing their story to air on TV.
- The Oregonian reported on my own issues with Kaiser. They have been following this issue closely for several years.
- OPB covered the story on air on Friday, including a brief interview with the DoFR.
- The Portland Business Journal also covered the story.
The critical need for ongoing enforcement
As welcome as these enforcement actions are, they are only a first step towards resolving many, many outstanding issues that we have brought to DoFR’s attention over the years, and which remain under active investigation.
Here are some examples of other issues that really should be addressed by DoFR enforcement:
- In 2014, after we established a reputation for overturning nearly every “medical necessity” denial for ABA therapy, an insurer began denying coverage solely on grounds that the ABA providers weren’t licensed in the state of Oregon. However, the “grandfather” clause in SB365 took effect in August 2013, which immediately granted all existing ABA providers the right to continue to practice and bill insurance until the Behavior Analysis Regulatory Board could begin the licensing process. When a manager at the Insurance Division contacted the insurer and informed them that their denials were improper, the insurer replied that it wouldn’t comply with the law without a written order. No written order was given until the bulletins were issued in November 2014, clearly emphasizing the grandfathering provision in SB365. By that time, one consumer had been forced to sell their house and car to pay for treatment, and to move across the state to find a job with an employer who could provide insurance coverage that complied with Oregon law. To this date, there has been no enforcement and no compensation for the harm that the family suffered. (See this presentation to the House / Senate Judiciary committees on 9/30/2015, slides 4-5).
- Another insurer included an explicit exclusion of ABA therapy in all circumstances without regard to medical necessity. As described in the Insurance Commissioner’s bulletins INS 2014-1 and INS 2014-2, ORS 743A.168 – which has been in effect since 2007 – requires coverage of medically necessary care for mental health conditions, and permits only a few specific exceptions, which don’t include ABA therapy. The plan member was forced to purchase another insurance plan that complied with the law as a backup, and to pay extra premium payments for several years, even though the insurer’s plan should have covered the treatment all along. The consumer has never been compensated for the cost of the extra insurance (nor has the other insurer – which did comply with the law – been compensated for picking up the expense for the noncompliant insurer).
- Documentation from another insurer confirms that it continued issuing “experimental / investigational” denials of ABA therapy for several months after its staff had concluded that ABA was an effective, evidence-based treatment for autism while it “evaluated cost and pricing.” Nothing in the insurers definition of “experimental / investigational” references “cost and pricing.”
- An insurer has stated that it intentionally raised legal arguments to deny coverage of ABA therapy that have since been found to be illegal because it knew that it would never win an appeal to “external review” of a denial claiming that ABA was “experimental / investigational” or “not medically necessary.”
- An insurer has stated that once it realized it would never win any appeals to External Review by independent medical experts appointed by DoFR regarding denials of ABA therapy, it developed legal strategies to prevent consumers from using the External Review process, even though that process was mandated by state and federal law.
- An insurer provided plan members with a statement asserting that essentially all forms of treatment for autism –including speech therapy, occupational therapy, and Applied Behavior Analysis – were educational services to be provided by schools, and not medical services to be covered by the plan, even though Oregon law requires insurers to cover medical care for autism, and specifically includes speech therapy and occupational therapy as covered medical services. (The courts, Insurance Division, and Department of Justice have all since concluded that the same law also applies to ABA therapy as a medical service).
- In arguing that ABA therapy wasn’t medically necessary, an insurer made numerous false statements that misrepresented the positions of U.S. government agencies and professional associations, asserting that they didn’t support ABA therapy; in fact, all had issued position papers in support of ABA therapy.
Aside from autism issues, the TriCounty Behavioral Health Providers Association has also asked DoFR to examine insurer conduct related to mental health parity issues, citing concerns about a lack of transparency in coverage decisions; unlawful quantitative treatment limits; and non-quantitative treatment limitations (like utilization management or “fail first” policies) that are more restrictive for mental health conditions than medical / surgical conditions, in violation of state and federal mental health parity laws.
I have worked in regulated industries for more than 30 years; regulatory enforcement is essential to ensure that regulated entities proactively monitor their own conduct to ensure that they are in compliance, and that they find, fix and self-report any violations before a regulator uncovers them. Oregon’s lack of enforcement has emboldened insurers into sloppy compliance practices (as with the Regence / PEHT issue enforced last week) or, worse, into taking “edgy” positions pushing the boundaries of the law, confident that they are unlikely to ever be punished if they step across the line.
Legislation for 2017
While our primary legislative goals for Autism Health Insurance Reform in Oregon have been achieved, we are continuing to work on legislation this year to assist with implementation and enforcement, and address related issues. Here are four bills that we have introduced into the legislature this year:
HB2858 Insurance Consumer Complaints and Enforcement Process:
Establishes transparent and efficient procedures to adjudicate consumer requests for restitution or enforcement of the insurance code, based on the BOLI Civil Rights Division process for adjudicating civil rights complaints.
As welcome as last week’s enforcement actions were, our experience has shown that the DoFR’s process for enforcing consumer complaints about insurance violations is very limited and has room for improvement.
Every other industry in Oregon is covered by the Unfair Trade Practices Act (UTPA), Oregon’s anti-fraud statute – but insurance is exempt. As a result, there is no private right of action in Oregon to sue an insurer for violating the insurance code or engaging in deceptive business practices – you can sue for breach of contract terms only. In recent years, there have been several attempts to amend the UTPA to apply it to insurance – and give consumers the right to sue insurance companies for fraud – but they have always failed narrowly, with arguments that consumers should go to the DoFR for help instead of suing on their own.
The problem is that while the DoFR’s consumer advocacy unit can be very helpful, actual enforcement is very rare. Worse, when insurers don’t agree to fix issues voluntarily, consumers are left in the lurch. Out of the 4,000 Consumer Complaints that the DoFR typically receives each year, there are only a few enforcement actions (in 2016, there were 5; in 2014 there were 4, and in 2015 none at all). In fact, the DoFR doesn’t normally pursue enforcement from an individual complaint – it will typically wait to see if other consumers have been impacted before taking any action. For a consumer with a rare or unusual problem, this means that actual enforcement is highly unlikely.
In 2013, we wrote and passed SB414, giving the Insurance Commissioner the authority to seek restitution on behalf of a consumer as a part of an enforcement action, to require an insurer to compensate the consumer for the actual damages that they suffered as a result of a violation. In the 3 years that it has been in effect, it has been used only once – last November.
I have seen many cases in which the DoFR has encouraged consumers to pursue litigation rather than waiting for enforcement – even though litigation is extraordinarily difficult and expensive.
HB2858 would enable consumers to do what the Legislature has consistently urged – work through the DoFR for enforcement of our rights under the Insurance Code. It would establish a specific process for DoFR to follow in response to a Consumer Complaint, based on the process that the Civil Rights Division uses to act on Civil Rights complaints. The DoFR would be encouraged to involve the consumer in settlement discussions and to seek consumer input on restitution. In the event that a consumer attempted to use the DoFR enforcement process, but wasn’t able to get a resolution within a year, then the consumer would gain a private right of action to sue on their own for violation of the Insurance Code (instead of just breach of contract).
SB917 CCO External Review:
Implements Federal regulations (42 CFR 438.402) on External Review of medical necessity determinations by CCO.
When a consumer with a commercial insurance plan is denied coverage on grounds that it is “not medically necessary” or is “experimental,” the consumer can appeal to “External Review” in which the State of Oregon (DoFR) appoints a qualified medical expert to review the case and make an independent, binding decision about whether the care really is necessary. With our autism cases, we have found this process to be extremely useful – it is fast and fair; free to consumers; and inexpensive for insurers.
For consumers on the Oregon Health Plan (Medicaid), however, there is no opportunity for External Review – if the CCO denies coverage, the only appeal is to an Administrative Law Judge with no medical expertise, to review the case in a legal proceeding. In some cases, the consumer is pitted against a CCO attorney.
Federal regulations (42 CFR 438.402) permit states to establish an External Review process for Medicaid enrollees – but don’t require it, and Oregon hasn’t done it yet.
SB917 would implement this Federal regulation, to allow Medicaid enrollees to establish the same External Review process that consumers with commercial insurance use.
HB2931 Behavior Analysis Interventionists with College Degrees:
Clarifies educational requirements for registration of behavior analysis interventionists.
Behavior Analysis Interventionists provide Applied Behavior Analysis (ABA) therapy services under the supervision of licensed providers, such as a Licensed Behavior Analyst (e.g., BCBA).
The current statute specifically requires either a high school diploma or GED certificate. Unfortunately, some qualified individuals with college degrees or even graduate degrees have been denied registration because they lack either a high school diploma or GED certificate – even though their education (college degree) actually exceeds the minimum requirement.
HB2931 would simply clarify that an interventionist with a degree from a post-secondary institution meets the educational requirement, even if they don’t have a high school diploma or GED certificate.
HB2839 Organ Transplants for People with Disabilities:
Prohibits discrimination against potential organ transplant recipient on basis of mental or physical disability.
People with disabilities often face discrimination when seeking potentially lifesaving organ transplants. Discrimination often happens at the point where someone is referred for evaluation by a transplant center, before they are ever placed on the official transplant waiting list.
In some cases, this discrimination is overt, with formal policies against providing transplants to individuals with intellectual or developmental disabilities. In other cases, discrimination is based on incorrect assumptions that individuals with disabilities are unable to manage complicated post-operative treatment plans.
Several years ago, Lief O’Niell – a 9 year old, non-verbal boy with autism from Eugene – contracted a viral infection that severely damaged his heart. His parents were informed that his death was imminent and that there was nothing that could be done. In fact, his condition was treatable with a heart transplant and equipment was available that could sustain his life for years while awaiting surgery. Given the severity of his autism, however, he wasn’t even considered and his parents weren’t informed or consulted on the treatment options. Fortunately, one of his physicians at OHSU made a series of urgent phone calls to Stanford Medical Center, which agreed to consider him for a transplant.
Today, Lief is a thriving 14-year old boy – with a new heart – who demonstrated that even a severely autistic child can comply with rigid transplant requirements with the right supports.
Yesterday, the Washington Post covered this issue with a description of a similar case in Pennsylvania.
- Clarify that doctors, hospitals, transplant centers, and other health care providers are prohibited from denying access to necessary organ transplants solely on the basis of a qualified individual’s disability;
- Require that health providers consider, in evaluating the likelihood of a transplant’s success, the full range of supports available to help a person with a disability manage their post-operative care; and
- Include a fast-track procedure for challenging discrimination to ensure that people in urgent need of an organ transplant can obtain timely resolutions to their claims.
Four other states (California, New Jersey, Massachusetts, and Maryland) have already passed similar legislation, and three more (Pennsylvania, Kansas, and Delaware) are considering it this year.
We had an excellent hearing on HB2839 on February 15th. While the bill is being supported by a number of disability rights advocates, it is currently being opposed by the transplant centers, including OHSU, Providence, Legacy Health, Lions, and the Pacific Northwest Transplant Bank.
Lief O’Niell and his mother, Jessica Bodey, provided outstanding testimony to describe their experience.
Here are Lief’s own comments to the legislature:
“Thank you for making this law. Autism is not a disease, it is a way of being. We are the same but different. I want you to see me as smart. Kids with autism deserve to live. Death is just a new beginning but I wanted to live. I am very grateful I received a heart.”
You can watch the testimony here, starting at 32:51.
The House Health Care committee members were very interested in the bill despite the heavy opposition from the industry. We will be holding workgroup meetings to attempt to resolve their concerns. Massachusetts’ bill was enacted in December 2016, and has some improvements that may address the industry’s technical concerns.
The National Down Syndrome Society has also posted information about this issue on their web page.
I am optimistic that we’ll be able to resolve the concerns and pass this bill.
I will follow up and keep you informed as we progress with both legislation and enforcement.
Please let me know if you have any questions about the legislation we’re working on, or are interested in helping with advocacy efforts.
In addition, if you have an open Consumer Complaint with the Insurance Commissioner that hasn’t been acted on in a while, I would be interested in hearing from you to discuss ways that we can work together to ensure that it is resolved.