Providence Moves to Stop Class-Action Suit Over Denied Autism Care

The Catholic health insurer is the first company in Oregon to argue that it can deny applied behavior analysis treatment based on its lack of coverage for developmental disabilities, contradicting earlier statements Providence made to the Oregon Insurance Division.
The Lund Report

Providence Health Plan may be making its last stand against paying for autism treatment as the defendant in a lawsuit that played out in the federal district court of Oregon this week.

In its latest volley, Providence asked Judge Michael H. Simon on Wednesday to deny a class-action status to plaintiffs suing the insurer for its denial of coverage. A class-action would allow the plaintiffs’ lawyers to represent all Oregon Providence members with autism spectrum disorder. If the plaintiffs win a class-action, Providence could be forced to pay for applied behavior analysis treatment cases for many more children than the two identified in the lawsuit.

The Catholic health insurance company is taking an increasingly lonely and losing stand against paying for this costly and intensive treatment. Two other Oregon insurers cover the treatment and a new law will bring all of them on board by 2016. Applied behavior analysis can mean the difference between regular school and a life of special education for some children with autism.

Kaiser Permanente now explicitly offers applied behavior analysis treatment after it lost a series of appeals with the Oregon Insurance Division, and PacificSource stopped fighting such claims after it lost a lawsuit over coverage.

Providence Health Plan, part of the Catholic non-profit ministry Providence Health & Services, has also lost twice before on appeals in front of an independent review board. An independent medical doctor twice rejected Providence’s assertion that the therapy was experimental and ordered it to pay for each child’s treatment.

The new Oregon law requires applied behavior analysis coverage by 2016 for private health insurance plans, but public employees qualify in 2015. Since Providence administers the primary health insurance plans for the Public Employees Benefit Board, it intends to voluntarily offer autism coverage for all its members on Jan. 1, 2015, according to its attorney, William Gary.

But Providence is clearly not ready to pay for the treatment today. And, in the insurance company’s latest gambit, it has denied two more claims for applied behavior analysis on the novel argument that the insurer simply doesn’t provide care for developmental disabilities — the issue now before the federal court.

Brenna Legaard, the mother of one of the children whom Providence has refused to provide treatment, took her case to federal court saying the insurer’s decision violates the federal Mental Health Parity Act as well as the federal employer-based insurance law, ERISA. An attorney herself, her family has Providence coverage through the Multnomah Bar Association.

Other insurance companies, such as Regence BlueCross BlueShield, have denied applied behavior analysis therapy on the assertion that the treatment is experimental — an allegation the faith-based Providence has also made, but Providence is alone in its latest argument.

If Providence loses the case, it could still deny coverage to children on the experimental premise, but a doctor could overrule that decision and order treatment as in the two earlier cases. Legaard said the insurer had waived this option in the case of her son and the other child named in the suit.

In his legal brief on behalf of Providence, attorney Arden Olsen wrote that Providence chose its current tactic because the insurer has no legal recourse if an independent review board physician rules against them on experimental grounds. The argument that Providence does not cover developmental disabilities is a legal question and not a medical question and gives them their day in court.

Oregon law does allow insurers to refuse coverage for many developmental disabilities, such as tutors and special education. But the law requires coverage for the treatment of autism spectrum disorder, as Providence itself noted in its 2011 rate filing with the Oregon Insurance Division:

“Providence believes we are able to exclude treatment for developmental and learning disabilities, other than autism spectrum disorders, under the mental health coverage of our plan because the statutory definition of mental health, OAR 836-053-1404, allows for such exclusion.”

The merits of the case will be debated next year. Simon only considered whether to grant the plaintiffs a class-action case on Wednesday.

The Providence attorneys argued that the plaintiffs were asking to represent far too many people in their suit, since their requested class, or affected group, includes autistic adults who have not been prescribed applied behavior analysis therapy and would likely never receive the treatment, since it is used primarily with children.

They also said that including anonymous plan members would cause those people to lose legal options if the plaintiffs lose a class-action case on their behalf, but Simon seemed to dismiss this second argument.

“I don’t see how they are in any way harmed if I grant the class status, regardless of how I rule on the merits,” said Simon, whom President Obama appointed to the Oregon federal district court in 2011. He is the husband of Portland Congresswoman Suzanne Bonamici.

Keith Dubanevich, the attorney for the autism advocates, argued that Providence could continue to deny claims for other children with autism if the class-action status is not granted, even if his clients win their case.

At the end of the hearing, Simon said he plans to rule on whether the case will proceed as a class action by Christmas.

Christopher David Gray can be reached at chris@thelundreport.org

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