A new state law intended to shift the cost of behavioral health therapies for autism from the state to private insurance companies is causing turmoil and hardship among families with autistic children.
The law, which went into effect July 1, is designed to move the cost of much-needed therapies from a state-funded agency system for the developmentally disabled to family insurance policies, thereby potentially saving the state at least $140 million annually.
But what state insurance regulators said are systematic insurance company barriers to services have caused families from throughout Orange County to lose access to therapies, incur unnecessarily high bills and face myriad conflicts regarding who is responsible for bills.
Prior to July 1, the Regional Center of Orange County in Santa Ana paid for these behavioral services for about 1,000 families in the region. The agency is one of 21 statewide that cover a host of services for the developmentally disabled from birth through at least 18.
The primary autistic service in question is called applied behavior analysis (ABA), which involves intensive and regular hourly sessions. Other therapies like speech and occupational aid also can be required. State authorities estimate ABA annual costs at $40,000 to $50,000 per year for a child. Individuals can progress from being withdrawn, nonverbal children to functioning normally.
Before the change in law, regional center officials said they typically had six-month agreements approving ABA or other services for the autistic, which offered continuity of care. But with the switch to private insurance, they said, families faced a system where limiting access to therapy can be the rule. To ease the transition, the regional center provided a 90-day grace period to Oct. 1 for those having difficulties.
Last week, California Insurance Commissioner Dave Jones won approval of emergency regulations, effective immediately, that are intended to force insurance companies to cease employing tactics that delay care for people with autism and related disorders.
In a Feb. 28 statement, he wrote that since July 1 the department had received 1,600 complaints statewide regarding delays of service from families transitioning from regional centers to private insurance .
Calling the situation a “crisis,” Jones said: “These delays can cause severe consequences. These emergency regulations will ensure that insurance companies cover medically necessary treatments.”
Interviews with state officials, families and advocates of the autistic showed the following:
- Several of California’s largest insurers systematically denied coverage or payments for services, sent families to providers who can’t or don’t provide a much-sought service and disrupted relationships between families and their individual behavioral practitioners.
- Some families have ceased seeking the behavioral services because their insurance companies haven’t paid their behavioral practitioner for provided services. A Garden Grove provider group has $100,000 in delayed payments on insurance claims, which has forced it now to charge affected families upfront for new services.
- Confusion over financial responsibility for copays and deductibles has led to hardships for families and in some cases conflicts with the Santa Ana regional center. Regional officials now say it will reimburse for copays if a family is in financial hardship. Yet a regional center can’t require a family to pay copays nor test a family’s economic ability to pay, according to a legal opinion by the regional centers’ association.
- Some families have become so frustrated they have pulled their children from their private insurance policies and enrolled them in the state Medi-Cal program. While the maneuver is legal, even though the families themselves don’t qualify for the program for indigents, it shifts the cost back to the state.
These realities threaten the future of the autistic and behaviorally challenged because the therapies sought must start in the first years of life and continue vigorously to be effective, authorities said.
“Over the lifetime of an untreated child, the cost of care can be $3.2 million,” said Patricia Sturdevant, the state deputy insurance commissioner for policy and planning. “If an insurance company provides the required treatment, it is a good investment for the health of the insured individual.”
The current problems compound already existing difficulties when it comes to have insurance companies pay for treatment of autism. Statewide, Sturdevant’s agency has 71 individual cases of enforcement actions from 2009 to 2011, some of which are complete, against insurance companies for problems associated with autistic access to care. Of those, 21 came from Orange County.
In an interview, an Anaheim family described an example of the obstacle course they ran through the governmental bureaucracy and insurance requirements as they sought service for their 7-year-old son.
“The delays were pretty drastic,” said the father, an engineer who requested anonymity to prevent retaliation. “We were a little frustrated, then things smoothed out.”
Like many families, he ended up in multiple conflicts, some with his school district. Under state and federal laws, school districts must pay for educationally related ABA services and associated therapy needs, while regional centers pay for home and lifestyle ABA services.
To minimize fighting, the father said, he is paying for ABA out of pocket after encountering difficulties winning other services. “We can afford it, but it hurts,” he added. But the climate remains so contentious, he said, that the family is planning to move to another school district.
Forced to Use Medi-Cal
Other families with children suffering from autism have followed a similar course. Consider a family who moved to Irvine five years ago in hopes of better schools and service for their high-functioning, 10-year-old daughter.
Describing the transfer to private insurance as “a huge battle,” the mother received hints from an underground network last summer about a method to secure Medi-Cal for her child. Her husband has a good job, so they wouldn’t qualify as a family for Medi-Cal.
Regional centers pay for ABA and other therapy needs for families that meet Medi-Cal program economic criteria. Now her child’s ABA therapy is being paid out of the regional center’s state-funded budget, which amounts to about $265 million annually.
By withdrawing her child from their insurance, the family can win a Medi-Cal designation for the girl under a category called “institutional deeming,” which is for the severely disabled who may need placement in an institution. But when used for autistic children, the children live with their families.
Sturdevant said she was unaware that this maneuver was occurring. “That is totally inconsistent with the intent of the legislation, but you can’t blame the parent. The bottom line is the insurance companies are avoiding their responsibilities,” she said.
Regional center officials say the method for such use of Medi-Cal is described on the agency’s website. The number of individuals who have used this method couldn’t readily be determined, said Larry Landauer, the agency’s executive director.
Big Jumps in Copays
Another Anaheim father described how an insurance company tried to limit therapy for his 11-year-old moderately autistic son, who remains virtually nonverbal. When the family sought a speech therapist in the insurance company’s network, the only one made available was in the northwest San Fernando Valley, a 90-minute drive from their home, the father said.
The family’s copays and deductibles also would rise to as much as $20,000 this year under his private insurance plan, said the father, an executive who requested anonymity because of his job. Working with the regional center, he says, he expects to reduce the new costs to about $10,000.
But he noted that last June, attorneys for the Association of Regional Center Agencies in Sacramento issued a legal opinion stating a regional center “cannot require families who have insurance to pay the co-pay.” The opinion adds: “Hardship or financial need are not relevant.”
Therefore, the opinion declares, requiring families to pay copays violates the very law that created the regional centers and also improperly constitutes unequal treatment for those families with autistic children.
Because of his fight over speech therapy with his insurance company, he was paying for ABA therapy out of his personal health account, the father said.
Landauer said that in dealing with families, his agency sought to meet the requirements of law while fulfilling its legislatively directed “stewardship” to cut costs. The regional center association’s legal opinion complicated matters, he said.
As the state budget process begins, various forces are lining up to pass legislation on the switch to private insurance, which families and regional centers hope will clarify who is responsible for how much of what costs.
But the politically powerful insurance companies and their lobbyists will be major players in rewriting the law.
For instance, the Association of California Life & Health Insurance Companies in Sacramento opposed the recently enacted emergency regulations in a March 5 letter to the state Department of Insurance. The association objected to the state’s attempt to conform with a 2012 state appellate court decision that prohibited limiting barriers to therapy.
But state officials argued in a March 8 letter to the insurance company association that it posited a “nonsensical” argument to not follow a precedential court ruling.
In a recent statement, the insurance company association wrote: Emergency regulations shortcut the public comment process and deny stakeholders an opportunity to contribute their expertise and viewpoints. Given the existing consumer protections that govern medical necessity determinations, the regulations should allow medical science to evolve rather than dictate specific terms.
Looking to the future, Sturdevant said: “We are engaged in a series of stopgap actions because insurance companies won’t comply with their contractual and statutory obligations. Children with autism are the worst example of people suffering, and that is not right. I think once the federal affordable health care act takes effect, these issues may evaporate.”
Rex Dalton is a San Diego-based journalist who has worked for the San Diego Union-Tribune and the journal Nature. You can reach him directly at email@example.com.