More on the California Managed-Care Settlement

Shaun Heasley reports at Disability Scoop:

California officials claimed a win earlier this month after striking deals with two private insurers to cover behavior therapy for children with autism, but now some advocates are calling the settlements a “sham.”

In recent weeks, the California Department of Managed Health Care announced agreements with Anthem Blue Cross and Blue Shield of California under which the insurers said they would provide coverage of applied behavioral analysis, or ABA, therapy.

State officials said the agreements would “provide immediate coverage upfront to potentially thousands of additional children annually” when they announced the plans.

Now, however, some advocates are crying foul. In a joint letter to California Gov. Jerry Brown, six autism and consumer groups said that the settlement reached with Blue Shield — which was soon followed by a similar agreement with Anthem Blue Cross — is inherently flawed.

Specifically, they cite a requirement under the agreements that ABA be administered under the supervision of a licensed provider. This is a problem, they say, because California does not license ABA providers, making finding an approved therapist unlikely for families.

A news release from Consumer Watchdog:

In a letter this week, Consumer Watchdog called on Governor Brown to replace Schwarzenegger-era regulators at the Department of Managed Health Care (DMHC) after DMHC officials misrepresented the details of an autism settlement with Blue Shield at a legislative hearing last week, and then signed a similar settlement with Blue Cross. Ten of eleven top DMHC officials were either appointed by Governor Schwarzenegger or joined the DMHC during the Schwarzenegger administration. Download the letter here: http://www.consumerwatchdog.org/resources/govbrownletter.pdf.

The DMHC misrepresented the settlement over Blue Shield's denial of coverage for a key autism treatment, Applied Behavioral Analysis (ABA), assuring legislators that the deal would provide autistic children the care they need. However, the fine print of the settlement reveals that the settlement is in reality "a sham that provides no solution and continues to allow Blue Shield to violate the law, " according to the letter to Governor Brown from parents of autistic children and consumer advocates. The groups urged Governor Brown to block any additional settlements. However, yesterday the DMHC announced it had signed a similar deal with Blue Cross.

In the letter, Consumer Watchdog, the Alliance of California Autism Organizations, Autism Deserves Equal Coverage, the Special Needs Network, Inc., Autism Health Advocates, Autism Health Insurance Project, and Sally Brammell, the mother of an autistic child enrolled in a Blue Cross policy regulated by the DMHC, wrote:

"Remarkably, the agreement appears to have been entered into without discussion or consultation with the Department of Insurance (CDI) or the autism providers or advocacy community, and was misleadingly portrayed in a positive light by DMHC officials at a legislative hearing last week held to review DMHC practices. The same DMHC regulators who folded on access to ABA under the pressure of insurance company lobbyists during the Schwarzenegger administration appear to be responsible for negotiating the settlement with Blue Shield. As Consumer Watchdog warned your staff months ago, the governor's office must be directly involved in establishing the state's autism policy going forward, and needs to replace the current leadership at the DMHC as soon as possible."

Under pressure from the insurance industry, during the Schwarzenegger administration the DMHC made a policy change to allow insurance companies it regulates to refuse to pay for ABA on the grounds that ABA is "educational" and not "medically effective," and paradoxically on the grounds that ABA providers are not "licensed" even though no such state license exists. The policy change was lobbied for by the health insurance industry, which gave Governor Schwarzenegger $1,349,850 campaign contributions.

The CDI, led by Insurance Commissioner Dave Jones and enforcing the same state law as the DMHC – the Mental Health Parity Act – unequivocally requires health insurers it regulates to pay for ABA, citing overwhelming medical literature that ABA is the most effective medical treatment for autism, and finding that ABA providers are not required to be licensed as a condition for coverage under insurance contracts.

Consumer Watchdog and co-counsel Strumwasser & Woocher sued the DMHC, in part, over its requirement that ABA providers must be licensed as a condition to be covered under insurance contracts. Consumer Watchdog said the fact that the DMHC continues to fight that lawsuit underscores its refusal to embrace a systemic fix.