Medi-Cal, Medi-Caid and Applied Behavioral Analysis Lawsuit

By Scott Glovsky on July 3rd, 2012 in Autism Insurance Coverage, Child Injuries, Class Action, Eating Disorders, Insurance, Insurance and Healthcare Denials, Insurance Bad Faith

A March 26, 2012 case from the U.S. District Court for the Southern District of Florida, K.G. v. Dudek, 2012 U.S. Dist. LEXIS 59579, No. 11-20684 (S.D. Fla. March 26, 2012) recently held that Florida’s Medicaid program must cover Applied Behavior Analysis (“ABA”) for Medicaid-eligible minors diagnosed with autism, and the court issued a permanent injunction ordering the State of Florida to “provide, fund and authorize Applied Behavioral Analysis treatment” to the plaintiffs in the case as well as “to all Medicaid-eligible persons under the age of 21 in Florida who have been diagnosed with autism or Autism Spectrum Disorder, as prescribed by a physician or other licensed practitioner. “

Three minors with autism who were recipients of Medicaid were prescribed ABA by their treating neurologists, but were unable to obtain ABA because of a Florida regulation prohibiting Florida Medicaid from paying for community behavioral health services for treatment of autism.  The plaintiffs argued that this rule violated the federal Medicaid Act, which requires states to provide children diagnosed with autism and other disorders during special Medicaid screenings with any services described in 42 U.S.C. section 1396(d)(a) that are necessary to correct or ameliorate the children’s conditions, whether or not the service is covered for adults under that state’s Medicaid plan.

The court first held that ABA was covered by 42 U.S.C. section 1396(d)(a). This section mandates coverage of “diagnostic, screening, preventative, and rehabilitative services, including any medical or remedial services . . . recommended by a physician or other licensed practitioner of the healing arts . . . for the maximum reduction of physical or mental disability and restoration of an individual to the best possible functional level.” Rehabilitative services are defined in the relevant federal regulations as “any medical or remedial services recommended by a  physician or other licensed practitioner of the healing arts, within the scope of his practice under State law, for maximum reduction of physical or mental disability and restoration of a recipient to his best possible functional level.” The court held that plaintiffs had established “beyond all doubt” that ABA is a rehabilitative service because it is necessary to restore children with autism or ASD to the normal trajectory of development that all children have through the first twelve years of life.

The court then examined the issue of whether ABA was medically necessary to treat autism , noting that the Medicaid Act does not require states to pay for services that are not medically necessary.  The defendants—the state agency that drafted Florida’s policy prohibiting coverage of ABA—argued that ABA was not medically necessary to treat autism because it was “experimental.” However the court, noting that the state agency had failed to do any substantive or significant review of the medical literature on ABA, and after reviewing the breadth of the evidence presented by the plaintiffs demonstrating the effectiveness of ABA, held that the evidence in support of ABA “conclusively” showed that ABA was not “experimental” and was medically necessary to treat autism.

The court consequently ruled that the state’s exclusion of ABA treatment was unreasonable, arbitrary and capricious, and that children with autism could be left with “irreversible language and behavioral impairments” if they did not have access to ABA, and issued a permanent injunction requiring Florida to cover ABA for Medicaid-eligible minors diagnosed with autism.

This is another case involving attorneys advocating for children with Autism Spectrum Disorders to obtain Applied Behavioral Analysis. Our cases in California, led by Arce v. Kaiser Foundation Health Plan, will confirm that ABA is covered under California’s Mental Health Parity Act and that health insurance companies in California are required to cover ABA for children with ASDs.