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Federal Judge Removes Key Roadblock To ABA Insurance Coverage

August 13, 2014

PORTLAND, OR (August 13, 2014) -- A "developmental disability exclusion" widely used by insurers to deny claims for applied behavior analysis (ABA) therapy for autism has been rejected in Oregon by a federal judge as a violation of federal and state mental health parity law.

Ruling in a class action lawsuit brought against Oregon's Providence Health Plan, U.S. District Court Judge Michael Simon ruled that "an insurer cannot provide coverage for a service for one child and deny coverage for the same service for another child solely because the second child suffers from a developmental disability."

The complaint, A.F. and A.P. v Providence Health Plan, was brought by two families raising children with autism and was certified as a class action covering all Providence policyholders earlier this year.

Simon ruled that the blanket exclusion violated the federal 2008 Wellstone Domenici Mental Health Parity and Addiction Equity Act, Oregon's Mental Health Parity Act and a 2007 Oregon statute regarding medical coverage for autism. According to the decision, "Providence cannot simultaneously purport to cover autism and yet deny coverage for medically necessary ABA therapy through its Developmental Disability Exclusion consistent with the Oregon Mental Health Parity Act."

Simon also made clear he considers ABA to be medical treatment, as opposed to a service provided by schools.

"The case is significant in holding that developmental disabilities exclusions are prohibited as 'separate treatment limitations' applicable only with respect to mental health benefits," said Dan Unumb, executive director of the Autism Speaks Legal Resource Center. "The case is also useful in its discussion of other treatment limitations, such as 'experimental' exclusions and 'medical necessity' exclusions that are often more restrictively applied to exclude ABA coverage for autism.

"Finally, it is important just for making clear that coverage of ABA treatment for autism is a benefit with respect to a service for a mental health condition covered under mental health parity," he said. "Even if autism or related treatment may also be characterized as “developmental,” this does not in any way remove this condition from the protections of the mental health parity act."

In the course of the litigation, questions arose over the enforcement practices of the Oregon Insurance Division. External review boards over the course of several years ordered private insurers more than 20 times to cover autism treatment, but the state agency failed to enforce compliance, as reported by Willamette Week.

The report cited efforts by Paul Terdal, an Autism Speaks volunteer advocate, to improve the state's enforcement efforts.