(October 17, 2014) — Regence Blue Shield, the largest Washington State health insurer, has agreed to settle a pair of class action lawsuits by covering medically necessary autism treatments, including applied behavior analysis (ABA), and establishing a $ 6 million fund to reimburse policyholders for out-of-pocket expenses incurred as a result of denied claims.
Regence is the last of Washington State’s three largest insurers to settle litigation brought under state and federal Mental Health Parity law over lack of coverage for autism treatment.
“With this settlement and the recent (state) Supreme Court decision, the standard for coverage in Washington state is clearly established,” said Eleanor Hamburger, of Sirianni Youtz Spoonemore Hamburger, who prepresented the plaintiffs. “All other Washington health insurers should change their policies now to ensure that children with developmental disabilities get the insurance coverage to which they are entitled.”
Hamburger was referring to a unanimous decision reached last week by the Washington State Supreme Court in a class action lawsuit that found Regence’s blanket exclusion of treatments on the basis of an autism diagnosis violated the state’s 2005 Mental Health Parity Act. Within days, Regence agreed to settle a second class action suit proceding in U.S. District Court affecting its self-insured, or so-called ERISA, plans which are regulated under federal Mental Health Parity law.
The settlement would cover both the state and federal actions and requires approval by both judges.
The proposed settlement would require coverage for medically necessary speech, occupational and physical therapies and ABA therapy to treat mental health conditions, including autism. Exclusions, age limits, monetary caps and visit limits would all be prohibited. A $ 6 million settlement fund would be established by Regence to reimburse policyholders whose previous claims for autism coverage were denied.
“…This proposed Settlement Agreement – now buttressed by the Washington State Supreme Court – fundamentally changes the insurance landscape for all Regence’s Washington insureds with developmental disabilities and autism,” according to a motion filed by Hamburger before the state and federal judges hearing the cases. “If approved, the Agreement would expand and align Regence’s coverage obligations with the two other large carriers in Washington (Premera and Group Health), resulting in a historic, market-wide expansion of access to medically necessary therapies in Washington State for individuals with developmental disabilities.”
Once the two judges issue their preliminary approval, final hearings will be scheduled in each court and a notice will be sent to all class members about the settlement, the final hearings, and the process for submitting claims for reimbursement of out-of-pocket neurodevelopmental therapy costs.
If the final settlement agreement is approved, Hamburger said she estimates that funds from the $ 6 million settlement fund could be disbursed to affected families by April or May of 2015.
In addition to the Regence, Premera Blue Cross and Group Health Cooperative actions, Hamburger has won a settlement with the Washington Health Care Authority requiring coverage for state employees and has filed an action against Boeing.