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Father of Autistic Kids Sues Kaiser under Unlawful Trade Act for Denied Claims

Paul Terdal is arguing that Kaiser Foundation Health Plan is a healthcare services contractor as opposed to an insurer, which might expose Kaiser to the liabilities of the Unlawful Trade Act which otherwise exempts insurers. The dispute arises from old claims for autism treatment which Terdal paid himself.
November 24, 2015

It’s long been assumed that Oregon’s health insurers are beyond the reach of most civil litigation -- the insurance industry is specifically exempt from the Unlawful Trade Practices Act, the state’s primary civil fraud protection, and plaintiffs can only recoup actual monetary damages from a handful of other torts.

But now Paul Terdal, the father of two sons with autism, has filed an unlawful trade suit against Kaiser Foundation Health Plan of the Northwest, arguing that the company is not an insurer at all but a “healthcare services contractor” -- and therefore loses its immunity to the act.

Terdal told The Lund Report that he’s suing Kaiser because, prior to 2011, he paid for his sons’   autism treatment -- applied behavior analysis -- with cash, when his insurance policy and a 2007 state autism law should have required the healthcare organization to pay those claims. “We couldn’t get him as much as he needed,” Terdal said. The Portland father also took time off work to assist with his sons’ therapy needs.

“When my boys were diagnosed with autism in 2008 and 2009, Kaiser recommended ABA therapy – but informed me (incorrectly) that it wouldn’t be covered,” Terdal wrote in a follow-up email. “I’m asserting that Kaiser should reimburse my actual expenses for ABA therapy – and also for the amount that Kaiser should have been spending all along, but for its failure to comply with Oregon law and the terms of the contract.”

He’s also suing Kaiser for breach of contract, and said he has been working with the Insurance Division to resolve the disagreement, but filed the tort before the statute of limitations would have expired on the oldest claims, since the Insurance Division informed him they would not make a decision until next year.

Whether Terdal’s unlawful trade case gets anywhere in the courts is hard to say -- as far as he could tell, nobody has ever gone after a health plan like this before, but he said he got the idea from previous autism lawsuits, including the landmark federal ruling against Providence Health Plan -- which argued in the proceedings that, like Kaiser, it also was a healthcare services contractor and not an insurer.

The exclusion of insurers from the Unlawful Trade Practices Act was hotly contested in the 2013 Legislature, and divided the majority Democratic Party. With Republican help, the House passed a bill from Rep. Paul Holvey, D-Eugene, to remove the exclusion. But Sen. Chip Shields, D-Portland, ran into a buzzsaw trying to get anywhere in the Senate, where Democrats held only a one-seat majority.

Kaiser does not comment on pending litigation.

Chris can be reached at [email protected]