Ruling bolsters autism therapy

A tactic used by insurance companies to deny expensive behavioral therapy to autistic children has been deemed illegal by a Los Angeles judge.

In a preliminary ruling, Los Angeles County Superior Court Judge James C. Chalfant found that Kaiser Permanente’s refusal to pay for a child’s autism treatment because the provider was not licensed by the state runs counter to California’s Mental Health Parity Act. That act requires insurers to cover care for mental and behavioral problems at the same levels they do for physical illnesses.

“A refusal to pay for . . . services based on the fact that the provider is not licensed is inconsistent with the intent of parity,” Chalfant wrote in his Oct. 20 ruling.

It’s the latest development in a long-running battle by parents nationwide to require insurers to pay for treatment of their autistic children. One of the most promising -- and expensive -- treatments is known as applied behavioral analysis. Therapists break down tasks such as feeding and dressing into tiny steps, then teach their autistic patients to master them through repeated drilling and rewards.

The ruling came as part of a lawsuit filed by Consumer Watchdog, a Santa Monica advocacy organization, against the California Department of Managed Health Care to require the agency to side with consumers when insurers refuse to pay for the autism therapy. The ruling clears the way for a trial to determine whether the department, which is responsible for regulating health plans, is doing enough to require insurers to cover such treatment.

A spokeswoman for the department said the ruling would not change the way it handled disputes over autism therapy.

“This first procedural ruling has provided nothing conclusive other than offering a road map on where the [department] must concentrate our legal arguments as we proceed to trial,” spokeswoman Lynne Randolph said Monday. “Any other conclusion on what may become future rulings is premature.”

Still, the two main findings in the 11-page ruling went squarely against the agency.

The first was on the question of whether insurers could refuse coverage for autism therapy because the providers were unlicensed. Most autism therapists are certified through a national program but do not hold state licenses.

The department argued that state law requires medical services to be provided only by licensed professionals. But the court said that would allow private insurers to avoid paying for autism therapy at all, shifting the burden to state-run treatment centers.

The second finding involved a March 9 memo the department wrote to insurers giving them guidance on when and how it would consider autism therapy a service they must cover. The suit alleges that the memo amounts to an “underground regulation,” a rule adopted by a government agency without proper public notice or hearing.

The court agreed, describing the memo as “the very essence of a regulation.”

Fred Woocher, a lawyer for the group that brought the suit, said that the ruling was a warning to insurers that a therapist’s lack of a license was not an excuse to deny coverage. He said it also sent a strong message to the Department of Managed Health Care to stop allowing insurers to get away with it.

“Hopefully now the health plans will know they can’t deny on those grounds,” Woocher said. “We would hope that the word would get out that anybody who has been denied on these grounds can resubmit their claims.”

But the California Assn. of Health Plans, a trade group monitoring the suit, said that it might not make sense for parents of autistic children to resubmit claims until the case was finally resolved.

“Because no final ruling has been made, it would be most appropriate for health plans to follow the guidance provided by their state regulator,” said Nicole Kasabian Evans, a spokeswoman for the group.

Consumer Watchdog President Jamie Court said the ruling was reason enough for Gov. Arnold Schwarzenegger to order the department to stop fighting the suit and start ordering insurers to provide the treatment to their autistic members.

“For an administration that is so involved with the Special Olympics to not understand the harm it’s causing every day that an autistic child doesn’t get the care they need is not only legally inexcusable but morally reprehensible,” Court said.

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lisa.girion@latimes.com