State Cracks Down on Denied Disability Insurance for Autistic Kids

Sacramento, CAThe state of California is invoking a hard stance based on California Insurance Law as well as moral grounds with regard to the denial of speech and occupational therapy to patients in need of services deemed medically necessary.

According to the Los Angeles Times (11/19/13), Health Net Inc., Anthem Blue Cross, and Blue Shield are the villains in a story that appears to pit well-heeled and robust insurers against patients who suffer from autism, developmental disabilities or other medical conditions.

There have been a myriad of examples where disability insurers will deny legitimate claims, throwing a deserving policyholder waving a “long-term disability denied” notice into disarray and potential financial ruin. Whereas insurance companies need to be vigilant to root out bogus claims that could unnecessarily cost them in claim dollars - and thus having denied disability insurance payout dollars to claimants not legitimate or deserving of the assistance - critics continue to rail against the insurance industry for painting legitimate claims, based on real need and medical verification, with the same brush.

As a result, deserving claimants are denied ERISA disability, or delayed and stonewalled before arriving at a position where they can actually collect on insurance into which they have paid faithfully for years.

The denial of claims for speech therapy and other medically necessary aids for individuals with autism, developmental disabilities or other challenges is a new twist on an old problem. According to the Los Angeles Times, California’s Department of Managed Health Care has formally ordered Health Net, Anthem Blue Cross, and Blue Shield to cease and desist in their denials of such medically necessary therapy.

Health Net has also been fined $300,000 by the state for what were described as repeated violations.

There is often nowhere for these patients to go for California insurance claim help, other than the courts. Patients indeed may be in that position if the insurers do not comply.

“Medically necessary speech and occupational therapy are basic healthcare services that health plans must cover,” said Brent Barnhart, the state healthcare agency’s director, in comments made November 19. “Today’s actions will ensure that members receive the care required by law.”

According to the California insurance claim-denied story, the state healthcare agency received 41 complaints about Health Net’s coverage of speech and occupational therapy since January 2010. It was reported that Health Net reversed five of its initial denials following intervention by the state. Of the remaining 36 cases flagged by a complaint, all but one were deemed to be medically necessary by way of an independent review.

There were 24 complaints of California insurance claim denied against Anthem Blue Cross. Independent medical reviews determined all 24 cases were medically necessary.

A total of 14 cases denied by Blue Shield since 2011 were deemed medically necessary based on an independent review. Blue Shield is a not-for-profit based in San Francisco. Blue Shield and Anthem Blue Cross have pledged to work with the state over compliance.

Many of the patients denied medically necessary treatment under California Insurance Law were children. “These types of therapy are very important for kids in terms of their development,” said Beth Capell, a policy consultant for consumer group Health Access, in comments appearing in the Los Angeles Times.