Watchdog v. Dep't of Managed Health Care

Decision Date23 April 2014
Docket NumberB232338
Citation170 Cal.Rptr.3d 629,225 Cal.App.4th 862
CourtCalifornia Court of Appeals Court of Appeals
PartiesCONSUMER WATCHDOG et al., Plaintiffs and Appellants, v. DEPARTMENT OF MANAGED HEALTH CARE et al., Defendants and Respondents.

OPINION TEXT STARTS HERE

See 2 Witkin, Summary of Cal. Law (10th ed. 2005) Insurance, § 126.

APPEAL from a judgment of the Superior Court of Los Angeles County, Robert H. O'Brien and James C. Chalfant, Judges. Judgment is affirmed in part and reversed in part and modified. (Los Angeles County Super. Ct. No. BS121397)

Consumer Watchdog, Harvey Rosenfield, Pamela M. Pressley, Santa Monica, and Jerry Flanagan; Strumwasser & Woocher, Fredric D. Woocher, Beverly Grossman, Los Angeles, and Byron F. Kahr for Plaintiffs and Appellants.

Law Office of Stephen P. Sommers, Stephen P. Sommers, San Francisco, 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.

KITCHING, J.

Applied Behavioral 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,1 argues that non-licensed, but BACB-certified, ABA therapists 2 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. 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. (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. ( [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 3 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.) 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...

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