Featured Health Business Daily Story, Aug. 17, 2011
Reprinted from THE AIS REPORT ON BLUE CROSS AND BLUE SHIELD PLANS, a hard-hitting independent monthly newsletter on new products, market share, strategies, conversions, financing, profitability and strategic alliances of BC/BS plans. (Not affiliated with the Blue Cross and Blue Shield Association or its member companies.)
At least four Blues plans are in legal or regulatory hot water over their refusal to cover the cost of applied behavior analytics (ABA) — a common form of treatment for children with autism spectrum disorder — in their standard policies. The controversy could reach a climax in 2014 when the health reform law will require health plans to cover behavioral therapies on par with other medical treatments in all policies.
At issue is what ABA actually is and who’s eligible to provide it. On the one hand, mental health professionals, including the National Institute of Mental Health, government programs including Medicaid, the U.S. Surgeon General, the American Academy of Pediatrics, the American Psychological Association, the American Society of Pediatrics and more than half of all states consider ABA to be, as the California Department of Insurance (CDI) puts it, “a common and proven approach toward improving the lives of children with autism” and a “proven transformative therapy.”
ABA therapy is based on behavioral conditioning techniques, CDI points out, “and reinforcement of positive behaviors to shape behaviors and teach new skills.” It adds, “Decades of research show it to be a successful and well-established treatment for autism and not an experimental or investigational treatment.”
But many health plans, including Blues plans, question that. Some call the therapy experimental, and others say it’s an educational service, not medical treatment. And many plans say they just can’t cover services provided by non-licensed professionals. For example, Empire Blue Cross and Blue Shield, which is owned by WellPoint, Inc., “takes into account the terms of the member’s policy,” says spokesperson Sally Kweskin. “Many policies only provide benefits for services rendered by licensed clinicians, and many benefit contracts exclude coverage for services that are educational in nature.”
Similarly, Blue Shield of California (BSC) says that it “does cover appropriate autism treatment provided by properly licensed providers. However, ABA has historically been considered an educational service, not a medical service, and is therefore not covered by our policies. In addition, most ABA practitioners are not licensed, and our contracts also limit coverage to services delivered by licensed providers.”
A new law in Virginia that was intended to expand coverage of ABA was sidetracked by a last-minute amendment that requires ABA providers to be licensed by the state — a process that takes 18 months to two years. ABA proponents note that national certification is generally considered a suitable alternative to state licensure when the latter doesn’t exist.
And last year, legislation was introduced in North Carolina to cover ABA, even though Blue Cross and Blue Shield of North Carolina claimed the therapy was scientifically unproven (The AIS Report 4/10, p. 8).
The real issue, ABA backers say, is health plans just don’t want to cover the costs of what can be an expensive therapy. It’s hard to say what “typical” ABA coverage is because employee benefits companies and health plans, as a rule, decline to comment on their coverage specifics.
According to the National Conference of State Legislatures, 33 states and the District of Columbia have autism-treatment-related laws on the books, and 26 of them specifically require coverage. Coverage mandates in those states vary.
Here’s a look at the Blues plans caught up in the debate:
• Blue Shield of California: CDI last month issued an order to show cause against BSC Life and Health Insurance Company for failing to comply with the California Mental Health Parity Act, which requires private insurance plans to provide equal coverage for selected mental health conditions and physical conditions. The agency filed an enforcement action alleging that the Blues plan violated the law by denying coverage on the grounds that ABA isn’t medically necessary and that it is experimental, among other things — including denying coverage on the grounds that ABA providers are not licensed.
The action came after Blue Shield refused to cover ABA therapy recommended by two pediatric patients’ physicians. Even after CDI determined that ABA therapy was medically necessary, the Blues plan “refused to comply with the binding determinations” and, when CDI sent out a request to all insurers to identify their provider networks, as required by law, “Blue Shield refused to submit a provider report and roster.” In response, the CDI issued a cease and desist order.
Steve Shivinsky, vice president for corporate communications at BSC, says “California courts are already considering these issues and we will follow their guidance.” He notes the plan is “just beginning the process of discussing the situation with the CDI.” Separately, BSC “completed an agreement with the California Department of Managed Health Care (DMHC) that commits us to pay for disputed services if they are provided or supervised by a licensed provider, while retaining our legal right to challenge the department’s interpretation of the law.” In California, HMOs fall under the jurisdiction of the DMHC, while PPOs are regulated by the CDI.
• WellPoint unit Anthem Blue Cross: As a California health plan operator, Anthem is also subject to the state’s mental health parity law and recently concluded negotiations with both regulatory bodies there. Regarding autism and the settlement the plan reached with the DMHC, WellPoint spokesperson Tony Felts comments that “Anthem supports efforts that would bring additional clarity and consistency to help guide coverage decisions for those suffering from autism and related disorders. In the interim, to reduce uncertainty for families trying to access behavioral and medical treatments for autism and related disorders, Anthem is putting into place procedures approved by the DMHC that would provide coverage in most situations for ABA services.”
• Blue Cross Blue Shield of Michigan: A federal judge in Detroit recently granted a motion for class certification in a suit filed by the families of children denied ABA therapy coverage, according to plaintiffs’ attorney John Conway. The suit alleges that the Blues plan “has illegally characterized ABA therapy as ‘experimental,’” he says, “even though it is validated by overwhelming medical and scientific authorities.” Conway says the Michigan plan has faced similar legal actions more than once already, including paying out a $1 million settlement and a $125,000 settlement just last year.
Michigan Blues spokesperson Helen Stojic says that the ruling is “a decision to continue the case and is not a ruling on the merits of the case.” She adds: “We believe that we have been more progressive than other Michigan insurance companies in addressing autism. In 2009, we became the first insurer in the state to offer businesses with our coverage the option to purchase coverage for autism treatment programs that provide intensive early intervention. To the best of our knowledge, we are the only insurer in Michigan to offer this coverage option to businesses.”
• Empire Blue Cross and Blue Shield of New York: A federal judge also refused to dismiss a class-action suit against Empire. “Empire is committed to keeping abreast of the medical research regarding treatment for autism, including ABA therapy,” Kweskin says. “Decisions regarding whether therapies for autism are medically necessary are made by a review committee, the members of which include physicians and other experts.”
Specifically, she adds, “when considering a claim for ABA therapy, Empire takes into account all information that is submitted to support the claim, including any medical records, correspondence and therapy session notes.” Also, she says, “Empire is aware of laws enacted in New York regarding coverage for autism therapies, and is in full compliance with all of these laws. While Empire has been sued regarding coverage for ABA therapy, the laws, members’ policies and facts in each case are different.”