California Court of Appeals, Second District, Third Division
APPEAL from a judgment of the Superior Court of Los Angeles County, No. BS121397 Robert H. O’Brien and James C. Chalfant, Judges.
Consumer Watchdog, Harvey Rosenfield, Pamela M. Pressley and Jerry Flanagan; Strumwasser & Woocher, Fredric D. Woocher, Beverly Grossman and Byron F. Kahr for Plaintiffs and Appellants.
Law Office of Stephen P. Sommers, Stephen P. Sommers and Una Lee Jost as Amicus Curiae for California Association for Behavior Analysis on behalf of Consumer Watchdog.
Autism Speaks and Daniel R. Unumb; Kaye Scholer and Robert Barnes for Autism Speaks and Autism Deserves Equal Coverage as Amicus Curiae on behalf of Plaintiffs and Appellants.
California Department of Managed Health Care, Holly Pearson, General Counsel, Debra L. Denton, Assistant Chief Counsel and Drew A. Brereton, Senior Counsel; Attorney General of California, Kamala D. Harris, Attorney General, Julie Wend-Gutierrez, Senior Assistant Attorney General, Leslie P. McElroy, Supervising Deputy Attorney General and Carmen D. Snuggs, Deputy Attorney General.
Department of Insurance, Dave Jones, Insurance Commissioner and Patricia Sturdevant, Deputy Commissioner & Health Enforcement Advisor as Amicus Curiae upon the request of the Court of Appeal.
Applied Behavioral Analysis (ABA) is an intensive form of therapy which has indisputably been documented to be successful in treating the symptoms of autism in young children. While ABA can be performed by a licensed physician or psychologist, it is often performed, or supervised, by an individual certified by the private Behavior Analyst Certification Board (BACB). The issue raised by this case is whether the Department of Managed Health Care (DMHC), which has jurisdiction over health plans commonly known as health maintenance organizations,  is required, by law, to direct health plans within its jurisdiction to provide coverage for ABA when provided, or supervised, by BACB-certified therapists who are not otherwise licensed to practice medicine or psychology. DMHC contends that it may require plans to cover ABA therapy only when it was provided by someone licensed to practice medicine or psychology. Plaintiff, Consumer Watchdog,  argues that non-licensed, but BACB certified, ABA therapists are, in fact, recognized by the medical community as proper providers and supervisors of ABA therapy. Thus, their services should be covered by the plans. Consumer Watchdog sought a writ of mandate directing DMHC to respond to any plan member’s grievance challenging a denial of coverage for ABA therapy to be provided or supervised by a BACB-certified therapist by ordering the plan to cover such therapy.
We conclude that, under a statute recently enacted by the Legislature, BACB certification has implicitly been recognized as an exception to the licensing laws and, therefore, DMHC can no longer uphold a plan’s denial of coverage for ABA on the basis that a BACB-certified provider is not licensed. However, to the limited extent the issue of DMHC decisions prior to the effective date of the new statute are before us, we hold that DMHC had, prior to July 1, 2012, no clear, ministerial duty to order plans to provide coverage for therapy provided or supervised by BACB-certified providers. Thus, the trial court had no authority to issue the requested writ of mandate with respect to such claims. Additionally, we hold that the trial court correctly resolved Consumer Watchdog’s challenge to a DMHC policy as violative of the Administrative Procedures Act. We therefore affirm in part and reverse in part the trial court’s judgment denying Consumer Watchdog’s petition for writ.
FACTUAL AND PROCEDURAL BACKGROUND
In addition to discussing the factual and procedural background of the instant litigation, we also consider the relevant legislative framework. Additionally, we discuss statutory developments which occurred after the trial court issued its judgment.
1. Autism and ABA
“According to a 2007 report of the California Legislative Blue Ribbon Commission on Autism, ‘[a]utism spectrum disorders are complex neurological disorders of development that onset in early childhood.’ [Citation.] These disorders, which include full spectrum autism, ‘affect the functioning of the brain to cause mild to severe difficulties, including language delays, communication problems, limited social skills, and repetitive and other unusual behaviors.’ [Citation.] Nationally, autism spectrum disorders affect an estimated one in every 150 children across all racial, ethnic, and socioeconomic backgrounds. [Citation.]” (Arce v. Kaiser Foundation Health Plan, Inc. (2010) 181 Cal.App.4th 471, 478, fn. omitted.) Amici Curiae Autism Speaks and Autism Deserves Equal Coverage represent that, under more current data, the prevalence rate for autism is approximately 1 in every 88 children.
ABA is a form of behavioral health treatment which develops or restores, to the maximum extent practicable, the functioning of an individual with autism. (Health & Saf. Code, § 1374.73, subd. (c)(1).) Numerous studies indicate that ABA is the most effective treatment known for autistic children. Studies also demonstrate that ABA has lasting results. Autism is understood to be a brain-based neurological disorder. ABA therapy can create new brain connections in a child with autism; these new connections are to be contrasted with the abnormal connections caused by autism. This is not to say that ABA is always successful. Some children show dramatic improvements with ABA, while others make modest or few gains. Studies show that some 10% of children make few or no improvements despite intensive ABA. Evidence indicates that ABA is most effective when begun when the child is very young. There is a “relatively narrow ‘window of opportunity’ for young autistic children during which [ABA] can mean the difference for many between lifelong severe disability and some approximation to normal functioning.” There is no real dispute in this case that ABA is an effective medical treatment for many young autistic children.
ABA is a time-intensive treatment. It is often prescribed for 26 to 40 hours per week. 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. A publication by the BACB suggests that a front-line behavioral technician need only be a high school graduate, who has subsequently received training in basic ABA procedures and demonstrated competency. (BACB, Guidelines: Health Plan coverage of Applied Behavior Analysis Treatment for Autism Spectrum Disorder (ver. 1.1, 2012) p. 27.) It appears that ABA, and similar behavior therapies, are somewhat unique among medical treatments in this respect. While the treatment plan must be created, modified, and supervised by a professional, the actual delivery of services may be done by a paraprofessional.
The field of ABA is relatively new. The study often cited as the landmark study which first established the effectiveness of ABA in autistic children was published in 1987. (O. Ivar Lovaas, Behavioral Treatment and Normal Educational and Intellectual Functioning in Young Autistic Children, 55 J. Consult. Clin. Psychol. 3 (1987).) The BACB, a private organization established to grant national credentials to ABA professionals (not front-line providers), was established in 1998. (<http://www.bacb.com/index.php?page=1> [as of Sept. 6, 2013].) When health plan members first sought coverage for ABA, plan denials were upheld on the basis that ABA was experimental. Independent medical review panels did not uniformly recognize ABA as a medically necessary treatment until 2007.
The BACB has three levels of certification: (1) Board Certified Behavior Analyst (requires a Master’s degree in a related field, 225 hours of graduate coursework in behavior analysis, substantial supervised experience, and passing an examination); (2) Board Certified Behavior Assistant Analyst (requires a Bachelor’s degree, 135 hours undergraduate or graduate coursework in behavior analysis, a lesser amount of supervised experience, and passing an examination); and (3) Board Certified Behavior Analyst-Doctoral (requires a Board Certified Behavior Analyst certification and a doctorate degree in a related field).
2. The Knox-Keene Act and Mental Health Parity Act
In 1975, the Legislature enacted the Knox-Keene Health Care Service Plan Act of 1975. (Health & Saf. Code, § 1340.) The Act is informally known as the Knox Keene Act (Knox Keene). That Act provides that DMHC “has charge of the execution of the laws of this state relating to health care service plans and the health care service plan business including, but not limited to, those laws directing the department to ensure that health care service plans provide enrollees with access to quality health care services and protect and promote the interests of enrollees.” (Health & Saf. Code, § 1341, subd. (a).)
Under Knox Keene, plans shall provide to their subscribers and enrollees all “basic health care services.” (Health & Saf. Code, § 1367, subd. (i).) Basic health care services are defined to include: physician services; hospital inpatient services; diagnostic laboratory services; home health services; and preventive health services. (Health & Saf. Code, § 1345, subd. (b).) DMHC’s director is authorized to define the scope of required basic health care services. (Health & Saf. Code, § 1367, subd. (i).) By regulation, home health services (as part of basic health care services) are defined to include “where medically appropriate, health services provided at the home of an enrollee as prescribed or directed by a physician.... ” (Cal. Code Regs., tit. 28, § 1300.67, subd. (e).) The parties agree that ABA can constitute a home health service; the dispute in this case revolves around the identity of the proper providers of ABA.
Knox Keene speaks to the issue of licensing. Health and Safety Code section 1367, subdivision (d) provides that a plan shall provide ready referral of patients “to other providers” as appropriate. Knox Keene defines a “provider” as “any professional person, organization, health facility, or other person or institution licensed by the state to deliver or furnish health care services.” (Health & Saf. Code, § 1345, subd. (i).) Health and Safety Code section 1367, subdivision (b) provides that “[p]ersonnel employed by or under contract to the plan shall be licensed or certified by their respective board or agency, where licensure or certification is required by law.” Subdivision (f) of that same section provides that the plan “shall employ and utilize allied health manpower for the furnishing of services to the extent permitted by law and consistent with good medical practice.” Each section confirms that Knox Keene requires the use of licensed individuals when the law otherwise requires it. (Cf. People v. Cole (2006) 38 Cal.4th 964, 969 [Knox Keene cannot override restrictions of the Business and Professions Code].)
Subsequently, the Legislature enacted the Mental Health Parity Act (MHPA). (Health & Saf. Code, § 1374.72.) That statute provides that, beginning in July 2000, every health plan providing hospital, medical or surgical coverage must also “provide coverage for the diagnosis and medically necessary treatment of severe mental illnesses of a person of any age, and of serious emotional disturbances of a child” as specified in the statute. (Health and Safety Code section 1374.72, subd. (a); italics added.) The statute specifically itemizes the “severe mental illnesses” which must be covered, including “[p]ervasive developmental disorder or autism.” (Health & Saf. Code, § 1374.72, subd. (d)(7).) Thus, the MHPA provides that all plans providing coverage under Knox Keene must provide coverage for the “medically necessary treatment” of autism. The MHPA does not specifically define the term “medically necessary treatment, ” although it does state that certain benefits – outpatient services, inpatient hospital services, partial hospital services, and prescription drugs (if the plan otherwise covers prescription drugs) – must be provided. (Health & Saf. Code, § 1374.72, subd. (b).)
3. Resolution of Grievances
“As part of its legislative mandate to ‘ensure’ access to quality care, the Department is required to establish a bifurcated grievance system and to ‘expeditiously’ and ‘thoroughly’ review patient grievances.” (California Consumer Health Care Council, Inc. v. Department of Managed Health Care (2008) 161 Cal.App.4th 684, 687.) One grievance system resolves “disputed health care services.” This is the independent medical review (IMR) system. (Health & Saf. Code, § 1374.30.) The second system, which resolves all other grievances, including coverage disputes, will be referred to as the “standard grievance” system.
To be resolved under IMR, a grievance must raise an issue regarding a “disputed health care service, ” which is defined as any service “eligible for coverage and payment under a health care service plan contract that has been denied, modified, or delayed by a decision of the plan... in whole or in part due to a finding that the service is not medically necessary. A decision regarding a disputed health care service relates to the practice of medicine and is not a coverage decision.” (Health & Saf. Code, § 1374.30, subd. (b).)
When a grievance is resolved pursuant to IMR, an independent medical reviewer (or reviewers) determines whether the disputed health care service is medically necessary based on the specific needs of the patient, and such information as peer reviewed scientific evidence, nationally recognized professional standards, and generally accepted standards of medical practice. (Health & Saf. Code, § 1374.22, subd. (b).) A plan must promptly implement the decision of an IMR. (Health & Saf. Code, § 1374.34, subd. (a).) If the IMR decision is in favor of the patient, the plan shall either promptly authorize the services, or reimburse the provider or the enrollee for services already rendered. (Ibid.)
In contrast, the standard grievance process is an administrative review conducted by DMHC. When a plan denies or delays services on the basis that the services are not covered under the plan, the plan is required to clearly specify the contract provisions that purportedly exclude coverage. (Health & Saf. Code, § 1368, subd. (a)(5).) If the patient disagrees, the patient may seek review by the DMHC, by means of a standard grievance. (Health & Saf. Code, § 1368, subd. (b)(1)(A).) The DMHC reviews the record and determines whether the challenged service is, in fact, covered. (Health & Saf. Code, § 1368, subd. (b)(5).)
This case concerns, among other things, the decision as to whether particular grievances (regarding ABA) should be resolved by IMR or through the standard grievance process. “All enrollee grievances involving a disputed health care service are eligible for review under the [IMR] [s]ystem.... ” (Health & Saf. Code, § 1374.30, subd. (d)(1), emphasis added.) “If there appears to be any medical necessity issue, the grievance shall be resolved pursuant to [IMR] or pursuant to [the standard grievance procedure].” (Health & Saf. Code, § 1374.30, subd. (d)(3), emphasis added.) “In any case in which an enrollee or provider asserts that a decision to deny, modify, or delay health care services was based, in whole or in part, on consideration of medical necessity, the department shall have the final authority to determine whether the grievance is more properly resolved pursuant to an [IMR] or [as a standard grievance].” (Health & Saf. Code, § 1374.30, subd. ...