Skip navigation

Calls to Action

Licensing Struck Down As Basis For ABA Denials in California

April 25, 2014

(April 25, 2014) -- Demanding that providers of applied behavior analysis (ABA) hold a state license cannot be used to deny insurance coverage of medically necessary treatment for autism, a California appeals court has ruled, citing the state's 2011 autism insurance reform law as its basis.

In addition, the court found that licensing also cannot be used to deny ABA claims filed by members of the state employees health plan (CalPERS), which was not covered under SB.946, the Calfornia autism insurance law. The Autism Speaks Legal Resource Center filed a friend-of-the-court brief in the case, which was brought by Consumer Watchdog against the state Department of Managed Health Care (DMHC).

"Californians now finally have a definitive statement from the court that state regulators cannot allow health insurers to discriminate against autistic children merely because treatment providers do not possess a state license," said Fredric D. Woocher of Strumwasser & Woocher LLP, lead attorney in the case.

"Families of firefighters, school employees and others covered by CalPERS-sponsored health plans will now be able to secure coverage for critical and effective treatment for autism," he added. "Health insurers can no longer deny coverage on the pretext that a treatment provider does not hold a state license, a practice which has been conclusively held to be illegal."

The licensing issue has been raised in a host of states following the enactment of autism insurance reform laws. Implementation of New York state's 2011 law was delayed for months until lawmakers addressed the issue through new legislation.

"While there can be no doubt that the treatment plan for providing ABA to any autistic child must be established, modified, and supervised by a qualified expert in ABA, the evidence in this case indicates that the actual delivery of services to the child may be performed by a non-expert," wrote Associate Justice Patti Kitching in the majority opinion.

"It appears that ABA, and similar behavior therapies, are somewhat unique among medical treatments in this respect," the court found. "While the treatment plan must be created, modified, and supervised by a professional, a paraprofessional may actually deliver the services."

Autism Speaks argued that unlicensed providers delivered care for years in California abiding by national standards and with no objection from the state, specifically citing the Regional Centers. "As reflected by SB946, the Legislature has concluded that BCBAs are appropriate and necessary providers to meet these healthcare needs," according to the brief, which was prepared by Dan Unumb, executive director of the Legal Resource Center.

Consumer Watchdog originally brought the case in 2009, arguing that health plans were obligated to cover ABA for autism when prescribed as a medically necessary treatment. DMHC countered that it could not under state law require health plans to cover ABA services provided by unlicensed providers, even if they were certified by the national Behavior Analyst Certification Board.

The appeals court found that the licensing issue was resolved by SB.946, the 2011 law, which clearly stated BACB certification would be sufficient for services to qualify for coverage. SB.946, however, exempted Medi-Cal, the Healthy Families Program and CalPERS. (Healthy Families was subsequently discontinued with beneficiaries transferred into Medi-Cal.)

The appeals court said DMHC could not use licensure as a reason to deny claims filed by CalPERS members.

"We stress that we are not concluding that the health plans exempted from the ABA statute are, in fact, subject to its terms," the appeals court ruled. "The ABA statute does not require these plans to provide ABA; we do not require them to do so, either.  We simply hold that DMHC’s practice of upholding denials of coverage on the basis that BACB‑certified therapists are unlicensed is no longer legally justified."

However, the appeals court noted that CalPERS was still obligated to cover “basic health care services” as well as “medically necessary treatment of severe mental illnesses” under existing California law, such as its Mental Health Parity Act. Medi-Cal, on the other hand, is not covered under the Mental Health Parity Act.