Indiana Settles Autism ABA Case

According to a recent news release, In 2012, Anthem sent letters to their Indiana subscribers with autism stating that medical necessity reviews for ABA therapy services for school aged children, that is children aged 7 and older, would include a review of the child’s school schedule and services as part of the medical necessity review.  The Arc of Indiana objected strenuously to this policy change as a violation of the Indiana Autism Mandate Law, federal mental health parity law (also called MHPAEA), as well as federal insurance laws called ERISA laws. The state of Indiana had concerns, that a pattern of ABA therapy denials  appeared to be based solely upon age and not the person’s clinical presentation or the standards of medical treatment for ASD.  The problem remained unresolved and a class action suit was filed in 2015.

 A settlement agreement was made public this month.  If approved by the court, about 200 children will receive some payment for ABA therapy that was denied previously.  Further, Anthem has agreed to cease using age-based guidelines for medical necessity determinations regarding ABA therapy and autism.

 Highlights from the settlement agreement include:  

Recovery for the Settlement Class

  • 4.1 Each Settlement Class Member shall receive a check representing the Settlement Class Member’s share of the settlement proceeds, which shall be calculated by multiplying the “Settlement Class Payment” (as defined herein) by the Settlement Class member’s “Pro Rata Share” (as defined herein). Settlement Class Payment means the Settlement Fund, less any award of attorneys’ fees and costs, less any costs of notice and settlement administration, and less any incentive payments to the Named Plaintiffs. A Settlement Class Member’s “Pro Rata Share” means (i) the sum total of the dollar amounts that Anthem would have paid for the ABA therapy at the time the claims were adjudicated for which Anthem denied coverage in relation to that Settlement Class Member (without consideration of deductibles, copays, co-insurance, or out-of-pocket maximums) divided by (ii) the total value of all dollar amounts that Anthem would have paid for the ABA therapy for which Anthem denied coverage in relation to all Settlement Class Members combined (without consideration of deductibles, copays, co-insurance, or out-of-pocket maximums).

 4.2 As further consideration, Anthem agrees that, consistent with Indiana and federal law, Anthem, in connection with its decisions regarding pre-authorization of ABA therapy coverage for Indiana beneficiaries, shall (i) cease the use of guidelines relating to coverage for ABA therapy based solely on an individual’s age; (ii) issue a statement to its Utilization Management employees regarding the use of age-related considerations; and (iii) require employees who review treatment plans to participate in periodic external continuing education relating to autism and/or ABA therapy. These changes shall be enacted and communicated to Anthem’s employees in a manner approved by Class Counsel within sixty (60) days following entry of the Preliminary Approval Order as described herein. Within sixty (60) days after entry of such Order, Anthem shall provide to Class Counsel a declaration confirming that it has implemented the policies and procedures set forth in this section.