Metropolitan News-Enterprise


Thursday, January 28, 2010


Page 1


C.A. Revives UCL Action Against Kaiser Over Autism Services




Class action allegations charging Kaiser Foundation Health Plan with violating the Unfair Competition Law by denying speech and behavioral therapies to children with autism spectrum disorders were revived yesterday by this district’s Court of Appeal.

Div. Seven said the complaint raised issues that are properly resolved in a class action, and that Los Angeles Superior Court Judge Emilie Elias erred in dismissing the case on the ground that the court would be required to resolve individual issues with respect to the medical necessity of the therapies.

The complaint was filed in 2008 by Guillermo Arce, the father of a 4-year-old boy with autism. He alleged that the child was a Kaiser plan member, and that after he displayed a lack of speech and other symptoms associated with autism, he was referred by his pediatrician to speech and occupational therapists for an assessment as to whether autism was the cause.

The complaint further alleged that Kaiser, after delaying the assessment for months, finally scheduled it, with the result that the child was diagnosed with autism and recommended two hours of occupational therapy per month to address his difficulty with swallowing food, but all other services were denied.

The other therapies sought by Arce were denied, Kaiser said, because they “were behavioral in nature, not medical, and could be provided by the Regional Center” of the California Department of Developmental Services.

 Arce sought an independent medical review of his requests for a behavior therapy known as Applied Behavior Analysis, as well as speech and occupational therapy. The reviewing physician rejected Kaiser’s contentions that ABA can be performed by a non-licensed physician, and thus falls under the plan’s “custodial care” exclusion, and that the other requested therapies were non-medical.

The state Department of Managed Health Care upheld the reviewer’s findings and determination that the child was entitled to 20 hours per week of ABA, 10 hours per week of occupational therapy, and speech therapy twice per week.

While pursuing his administrative remedies, Arce also filed his UCL suit. He claimed that Kaiser has established a pattern or practice of asserting that ABA and speech therapies for autism are “non-health care services,” “academic or educational interventions,” or “custodial care,” and denying coverage on those bases.

In doing so, he said, Kaiser had violated not only the plan contract, but also the California Mental Health Parity Act, which mandates that every health care service plan “provide coverage for the diagnosis and medically necessary treatment of severe mental illnesses of a person of any age...under the same terms and conditions applied to other medical conditions.” The act specifies that autism is a severe mental illness.

Elias held that the complaint did not state claims that could be pursued in a class action, and sustained Kaiser’s demurrer. She reasoned that the plaintiff failed to establish the community of interest requisite to a class action, and that the doctrine of judicial abstention advised against having the court make individual determinations of medical necessity.

Justice Laurie Zelon, however, writing for the Court of Appeal, said the trial judge abused her discretion.

The justice—who noted in a footnote that under the “death knell” doctrine, the dismissal of class claims is appealable even if individual claims remain pending—said the trial court was not being called upon to make individualized medical determinations, but merely to resolve issues of contractual and statutory interpretation.

Zelon noted that the plaintiff was not alleging “that Kaiser’s denial of coverage to the putative class was based on case-by-case determinations that the therapies were not medically necessary for the individual plan members,” but rather that the denial “was based on an across-the-board determination that these categories of therapies are contractually excluded from coverage.”

The justice went on to note that even if the trial court determines that those therapies are excluded, the plaintiff might still prevail on his discrimination claim under the Mental Health Parity Act.

The trial judge’s error with respect to the act, Zelon wrote, was in construing the complaint and the act too narrowly.

Arce, the justice wrote, was not alleging that Kaiser was violating the act by denying services to those for whom they were medically necessary, but rather that the plan “categorically refuses to cover Applied Behavior Analysis therapy and speech therapy for autism spectrum disorders regardless of any individual issues of medical necessity that may be involved for a particular plan member” and “never considers the issue of medical necessity because it has concluded that there is no coverage for these therapies in the first place.”

That claim, Zelon continued, can be resolved on remand by determining “whether the therapies are health care services under the Mental Health Parity Act, and if so, whether the statute mandates that services only be provided by health care professionals licensed or certified by the state,” in which event Kaiser’s reliance on the “custodial care” exclusion would be unavailing.

The appeal was argued by Scott Glovsky of Pasadena for the plaintiff and William A. Helvestine of Epstein Becker & Green for Kaiser.

The case is Arce v. Kaiser Foundation Health Plan, Inc., 10 S.O.S. 411.


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