Insurance Commissioner Jones Charges that Blue Shield Improperly Denied Health Insurance Coverage for Necessary Autism Treatment

California Insurance Commissioner Dave Jones recently announced that the California Department of Insurance is investigating whether Blue Shield of California Life and Health Insurance Company (“Blue Shield”) failed to comply with the California Mental Health Parity Act.  Specifically, Blue Shield is required to respond to an Order to Show Cause regarding its handling of claims for treatment of autism.

During a recent hearing before the California Senate Select Committee on Autism, Department of Insurance representatives testified that Applied Behavior Analysis (“ABA”) therapy must be covered by California health insurers.  While ABA therapy is proven to improve the lives of children with autism, the Department of Insurance charges that Blue Shield violated the California Mental Health Parity Act by:

  • Denying coverage on the ground that ABA isn’t “medically necessary”
  • Denying coverage on the ground that ABA is “experimental”
  • Denying coverage on the ground it is available only for services performed by a licensed provider and ABA providers are not licensed
  • Denying coverage on the ground that ABA is not a “health care service,” but instead is a service for “learning disabilities or behavioral problems or social skills training/therapy”
  • Not including ABA providers in its network
  • Refusing to provide insureds with definitive denials of coverage within 30 days of receiving a claim, thereby preventing insureds from invoking IMR [independent medical reviews]

The Department of Insurance’s investigation of Blue Shield began after the parents of two autistic children sought the Department’s assistance after Blue Shield denied coverage for ABA therapy, despite a finding following an independent medical review that the therapy was medically necessary.  The Department of Insurance explained that its Order to Blue Shield was necessary to “ensure that insurance companies are in full compliance with California’s mental health parity law.”

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