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.
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Harvey Rosenfield, Pamela M. Pressley, 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 for California Association for Behavior Analysis as Amicus Curiae on behalf of Plaintiffs and Appellants.
Daniel R. Unumb; Kaye Scholer and Robert Barnes for Autism Speaks and Autism Deserves Equal Coverage as Amici Curiae on behalf of Plaintiffs and Appellants.
Holly Pearson, Debra L. Denton, Drew A. Brereton; Kamala D. Harris, Attorney General, Julie Wend-Gutierrez, Assistant Attorney General, Leslie P. McElroy and Carmen D. Snuggs, Deputy Attorneys General, for Defendants and Respondents.
Dave Jones and Patricia Sturdevant for Department of Insurance as Amicus Curiae, upon the request of the Court of Appeal.
Applied behavior analysis (ABA) is an intensive form of therapy which has had documented success 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) 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. DMHC contends that it may require plans to cover ABA therapy only when it is 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 plan member grievances challenging a denial of coverage for ABA therapy provided by a BACB-certified therapist by ordering the plan to cover such therapy. The trial court denied the petition.
We conclude that a statute recently enacted by the Legislature authorizes BACB-certified providers to perform ABA therapy under state licensing laws and, therefore, DMHC can no longer uphold a plan’s denial of coverage on the basis that a BACB-certified provider is not licensed. We also hold that the trial court correctly resolved Consumer Watchdog’s challenge to a DMHC policy as violative of the Administrative Procedures Act (Gov. Code, § 11340 et seq.)
The judgment is reversed in part and modified to enjoin DMHC from upholding a plan’s denial of ABA services where the basis for the denial is that a BACB-certified provider is not licensed. In all other respects the judgment is affirmed.
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 [104 Cal.Rptr.3d 545], 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. Neither party in this case disputes 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, a paraprofessional may actually deliver the services.
The field of ABA is relatively new. The landmark study often cited as the first to establish the effectiveness of ABA in autistic children was published in 1987. (Lovaas, Behavioral Treatment and
Normal Educational and Intellectual Functioning in Young Autistic Children, (1987) 55 J. Consulting Clinical Psychol. 3.) 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 April 23, 2014].) 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, informally known as the Knox Keene Act (Knox Keene). (Health & Saf. Code, § 1340 et seq.) Under Knox-Keene, 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).)
Knox Keene directs plans to provide all “basic health care services” to their subscribers and enrollees. (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 concerns the identity of the proper ABA provider.
Licensure requirements are addressed in Knox Keene. Health and Safety Code section 1367, subdivision (d) provides that a plan shall furnish “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) requires the plan to “employ and utilize allied health manpower for the furnishing of services to the extent permitted by law and consistent with good medical practice.” In short, Knox Keene requires the use of licensed individuals when a license is required by law.
In 1999, the Legislature enacted Health and Safety Code section 1374.72, commonly referred to as the Mental Health Parity Act (MHPA). 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 & Saf. Code, §1374.72, subd. (a), italics added.) The statute specifically itemizes the “severe mental illnesses” that must be covered, including “[p]ervasive developmental disorder or autism.” (Health & Saf. Code, § 1374.72, subd. (d)(7).) Thus, the MHPA requires all plans providing coverage under Knox Keene to cover 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 [74 Cal.Rptr.3d 215].) The independent medical review (IMR) grievance system resolves “disputed health care services.” (Health & Saf. Code, § 1374.30.) The other system, which we refer to as the “standard grievance” system, resolves all other grievances, including coverage disputes.
To be resolved under IMR, a grievance must concern 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... 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), italics added.)
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, § 1374.33, 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).)
4. DMHC’s Practice Regarding ABA Grievances - The March 2009 Memo
Plan denials of ABA could involve both issues—i.e., whether ABA is medically necessary and whether ABA is covered by the plan. Initially, when
the denials appeared to raise both questions, DMHC chose to send ABA grievances to IMR. As noted above, some of the early IMR decisions on ABA upheld the plans’ denials on the basis that ABA was experimental and did not yet constitute the standard of care. By late-2007, however, IMR decisions regarding ABA were consistently resolved in favor of its medical necessity.
As ABA became more medically accepted, plans focused their denials of ABA on coverage grounds. For example, some plans denied coverage for ABA by BACB certified therapists because the plans did not provide coverage for mental health services provided by an unlicensed individual. Other plans denied coverage for ABA based on an exclusion for any treatment which could safely and effectively be provided by an unlicensed individual.
On March 9, 2009, DMHC issued a memorandum to health plans regarding “Improving Plan Performance to Address Autism Spectrum Disorders” (March 2009 memo). The memorandum was not adopted pursuant to the Administrative Procedures Act. Among other things, the March 2009 memo reconfirmed that plans must “[c]over all basic health care services required under [Knox Keene], including speech, physical, and occupational therapies for persons with [autism], when those health care services are medically necessary.” The memo goes on to state that plans must “[p]rovide mental health services only through providers who are licensed or certified in accordance with applicable California law.” Thus, the March 2009 memo specifically required providers to be licensed if their services were to be covered by the plans.
With respect to grievances, the March 2009 memo states that, “[t]he DMHC will initially make a determination whether the service being sought is a covered health care service. If that determination is made in the affirmative, then any claim that a service is either: (1) experimental or investigational; or, (2) is not medically necessary to treat the patient’s condition, will be referred for IMR as required under California law.” In other words, the March 2009 memo stated that all grievances regarding services for autism raising both types of issues would first be resolved through the standard grievance procedure, and would only be sent to IMR if the coverage dispute was resolved in favor of the patient.
5. The Instant Action
On June 30, 2009, Consumer Watchdog brought a petition for writ of mandate and complaint against DMHC and its director in her official capacity (collectively DMHC). Consumer Watchdog’s operative first amended petition alleges it is a violation of the MHPA “for a health plan to refuse to cover any
treatment for autism that is deemed medically necessary.” (Italics omitted.) Consumer Watchdog further alleges the licensing requirement imposed by the March 2009 memo is unsupported, because the law requires coverage for any medically necessary treatment for autism “when it is provided by a licensed provider, a provider that is certified by a professional organization, or individuals who are supervised by a licensed or certified provider.” (Italics omitted.)
6. Briefing, Argument, and the Trial Court’s Ruling
In support of its petition and complaint, Consumer Watchdog argued plans must provide ABA in all cases where it is medically necessary. In opposition, DMHC argued the Legislature “set forth state licensure as the bright-line consumer protection regarding practitioners of health services.” DMHC argued it could not, consistent with Knox-Keene’s licensure requirements, order the plans to provide coverage for ABA when administered by an unlicensed provider, including therapists certified by BACB—a private certification board.
The trial court concluded DMHC could, itself, impose a licensing obligation as part of its general duties to ensure that health care plans provide quality health care services and to protect the interests of enrollees. As providers of ABA work intensively with fragile autistic children, the court determined DMHC could reasonably require ABA providers to be subject to state licensing quality controls. Thus, the court concluded there was no clear, ministerial duty for DMHC to order ABA when provided by BACB certified therapists. It therefore ...