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In California, Autism Coverage Precedes Specific Legislation

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Insurers’ denial of autism and pervasive development disorder (PDD) and other behavioral health treatment coverage will be stopped in its tracks, according to California Insurance Commissioner Dave Jones, who announced Tuesday he had procured a settlement agreement with Blue Shield of California Life and Health Insurance Co. to get immediate coverage of behavioral therapy for autism as a medical benefit.

The agreement made clear that coverage applies retroactively, which some insurers had tried to challenge.

The California Department of Insurance (CDI) consistently has overturned health insurer denials of autism coverage for several years now, enforcing the existing Mental Health Parity Act.

The settlement today confirms that autism coverage was required even before last year’s enacted legislation, SB 946, which reinforced the parity Act. Commissioner Jones will continue to require health insurers to provide such coverage to those families and individuals seeking it prior to the effective date of SB 946, the CDI stated.

On Oct.9, 2011, after the filing of the CDI’s Order to Show Cause sent to Blue Shield, the state legislature enacted SB 946, which require coverage for ABA Services for PDD or autism, and establishment of an ABA Services network, effective July 1, 2012. But that doesn’t mean that treatment wasn’t already required to be covered, according to regulators.

The settlement was dated Jan. 26 and signed by Blue Shield CEO Duncan Ross.

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This agreement does not constitute an admission of liability, violation, wrongdoing or improper conduct, it states. The CDI had filed an enforcement action against Blue Shield in July 2011 seeking compliance with the state’s Mental Health Parity Law, which requires coverage for medically necessary behavioral therapies, including Applied Behavior Analysis Therapy (ABA), a well- recognized treatment for autism. 

The Department had served Blue Shield with an Order to Show Cause and Statement of Charges and Notice of Monetary Penalty, which appears to have been avoided under the terms of the settlement.

Blue Shield agreed to stop denying ABA therapy as a non-covered service, challenging the medical necessity of ABA therapy and to stop forcing parents into an unnecessary Independent Medical Review to secure treatment

 Blue Shield has agreed to establish a dedicated customer service unit to respond quickly to inquiries from families seeking approval of medically necessary ABA therapy, and to pay for services at the higher in-network benefit levels.

“By taking this action, the Department of Insurance has put the entire health insurance industry in California on notice that denials of coverage for behavioral health treatment, including ABA therapy, must stop,” said Commissioner Jones. “Existing state law requires and has required health insurers to provide coverage for autism—we will continue to vigorously enforce that law and expect other health insurers to comply immediately.”

Health insurers had sought to recharacterize the Legislature’s intent in passing SB 946 by arguing that its passage means they were not required previously to provide autism coverage, the Department charged.