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Oregon Sued Over Denying Autism Benefits to State Employees

April 30, 2014

Portland (April 30, 2014) -- The state of Oregon has been sued over its blanket exclusion of insurance benefits for developmental disabilities in its state employees health plan by the parents of a six-year-old girl with autism who was denied coverage for applied behavior analysis (ABA). The complaint seeks certification as a class action on behalf of all Oregon state employees enrolled in the Oregon Public Employees Benefits Board (PEBB) health plan.

The plaintiffs are represented by attorneys Megan Glor and Ele Hamburger, a Seattle attorney who successfully litigated a similar class action brought against the Washington State Health Care Authority. The lawsuit charges that the PEBB developmental disability exclusion violates Oregon’s Unlawful Discrimination Against Persons with Disabilities Act, as well as the state and federal Mental Health Parity Acts.

“This case sends a message that all employers must cover essential health services for individuals with developmental disabilities, including children with autism,” said Glor. “Exclusions like the one in the PEBB plan are nothing more than rank discrimination.”

Paul Terdal, a volunteer autism advocate who helped lead passage of Oregon's 2013 autism insurance reform law and worked with the plaintiffs, said the state was discriminating against its employees. "Not only does the State, as an employer, violate its own laws and public policy, it sets a bad example for other employers and insurers, and weakens the rule of law,” he said.

The suit marks the latest twist in the state's efforts to implement autism insurance reform. The 2013 law was written to cover the state employee health plan, but the state then dropped PEBB after determining it was exempt as a self-funded plan regulated under federal law. Followup legislation this year to cover state employees died in committee last month.

The complaint, P.S. v PEBB, alleges that the state refused to cover P.S.’s ABA therapy solely because it was “related to autism” – even though Oregon’s Mental Health Parity law has required treatment of autism since 2005.  Providence Health Plans, which administers the PEBB health plan, issued a denial letter stating that:

“Under Providence's Plan, services ‘related to developmental disabilities, developmental delays or learning disabilities’ are specifically excluded from coverage. Because ABA services are related to Autism Spectrum Disorder, they are therefore not benefits covered by your plan.”

PEBB’s contract promises that it complies with Oregon’s Mental Health Parity law, which requires insurance plans to “provide coverage for expenses arising from treatment … mental or nervous conditions” – including autism “at the same level as, and subject to limitations no more restrictive than, those imposed on coverage or reimbursement of expenses arising from treatment for other medical conditions.”

P.S. charges that the PEBB developmental disability exclusion and exclusion of all ABA therapy as “experimental/investigational” breaches the PEBB contract, as modified by the state and federal Mental Health Parity Acts.

P.S. v. PEBB is the latest in a string of cases nationwide challenging exclusions and limitations on coverage of treatment for autism, including McHenry v PacificSource and A.F. v Providence in Oregon. It is the first case in Oregon, however, to involve a self-funded health benefit plan.

The Washington State case resulted in a landmark decision that blanket exclusions of medically necessary mental health services, such as ABA for autism, violated Washington’s Mental Health Parity Act. The case eventually settled after the Washington State Health Care Authority removed its ABA therapy exclusion and provided a $3.5 million settlement fund for public employees who had paid out-of-pocket for medically necessary ABA therapy services.

The Oregon complaint was brought in state circuit court in Marion County.