1. Case Name: McHenry v. PacificSource Health Plans, United States District Court for the District of Oregon, Portland Division, January 5, 2010. 679 F. Supp. 2d 1226
- Counsel for Plaintiff:
- John C. Shaw, Megan E. Glor, Megan E. Glor, Attorneys at Law, PC
- Nena Cook, Sussman Shank LLP
- Counsel for Defendant: Richard K. Hansen, Schwabe Williamson & Wyatt, PC
3. Format: Published Opinion and Order.
- Type of Treatment Services Denied: Plaintiff Lisa McHenry is suing on behalf of her minor son, J.M., who suffers from autism. Plaintiff’s claims for applied behavioral analysis (ABA) therapy were denied by Defendant.
- ERISA Claim? Yes.
- Class Action/or Individual Action: Individual action.
- Defendant: Defendant is a claims administrator
- Type of Insurance Plan: Plaintiff is a participant in a group health plan. It is not specified whether the plan is large or small group.
- Type of Coverage Denial: Both. Plaintiff’s claims were originally denied based on plan terms. Plaintiff later requested that her claim receive a medical, not administrative review.
- Causes of Action: Plaintiff brings the suit under ERISA to compel payment of benefits.
5. Legal Pointer: Plaintiff’s son who suffers from autism was receiving ABA. Defendant denied Plaintiff’s claims stating that the treatment is not medically necessary and, in the alternative, that it is not a covered benefit because it is excluded under 1) experimental or investigational procedures, 2) educational services, or 3) academic and social skills training. The Plaintiff challenged this interpretation.
6. Legal Issues and Causes of Action: Plaintiff challenges the denial of benefits for her autistic son’s ABA treatment. Defendant argues that it is not medically necessary or in the alternative, the treatment falls within a specific exclusion. In order to be reimbursed, the ABA therapy must be medically necessary, a covered benefit under the Plan, and provided by an eligible provider. Ultimately, the Court finds that the provider in this case is not an eligible provider, and thus that the benefit is not covered.
7. Ruling: Plaintiff’s motion for summary judgment is denied. Defendant’s motion for summary judgment is granted.
8. Narrative Case Description: Plaintiff’s minor son was diagnosed with autism at the age of one year and nine months. Approximately six months later, Plaintiff began ABA treatment for her son. These claims were denied and Plaintiff exhausted the internal administrative appeals process and requested an external independent review. Defendant argues that the treatment is not medically necessary or, in the alternative, that the treatment falls within one of the following exclusions: 1) experimental or investigational procedures, 2) educational services, or 3) academic and social skills training.
In examining the case, the Court states that to be entitled for reimbursement, the treatment must be medically necessary, a covered benefit under the Plan, and provided by an eligible provider. The Plaintiff successfully proved that the treatment was medically necessary by submitting three letters written by J.M.’s pediatrician to Defendant.
In determining whether the treatment was a covered benefit, the Court considers whether it falls under one of the three classifications: 1) experimental or investigational, 2) educational services, or 3) academic and social skills training. The Court finds that the treatment is not experimental or investigational based upon a plethora of evidence submitted in the form of expert testimony and scientific studies submitted by Plaintiff. Defendant only submitted a statement from their Chief Medical Officer stating that the treatment was experimental.
Secondly, the Court considers whether the treatment is excluded as an educational or correctional service. The Defendant argues that the terminology surrounding ABA Therapy (i.e., beneficiaries are ‘learners,’ plans for working with the child are ‘curricula,’ etc.) suggests it is an educational benefit. However, the Court finds that the wording of the exclusion is ambiguous in that it could be read to exclude services only if provided by a school or halfway house. Thus, the Court finds the exclusion does not apply.
Finally, the Court considers whether the treatment is excluded as academic skills training and social skills training. The Court finds that nearly all types of psychological treatment could be classified as academic or social skills training in that they all have benefits on a person’s ability to succeed in education. Thus, the treatment does not fall under this exclusion.
The Court then moves to consider whether J.M.’s treatment is provided by an eligible provider. Defendants argue that Hoyt (the treating provider) lacks state licensing, however the Plan does not explicitly require state licensure. The Court states that Hoyt must 1) be approved by the Oregon Department of Human Services (ODHS), 2) meet Defendant’s credentialing requirements, 3) be authorized for reimbursement under Oregon law, and 4) provide a covered benefit or be otherwise eligible to receive reimbursement. Hoyt has not been credentialed by Defendant, but the Court finds that the language requiring credentialing is ambiguous and the Court must adopt the interpretation most favorable to Plaintiff. However, Plaintiff fails to prove that Hoyt is authorized for reimbursement under Oregon law. To be authorized, a provider must be 1) a therapist with a specialty as a board certified behavior analyst, and 2) enrolled with the ODHS as an approved County Mental Health Program (CMHP) provider. Hoyt is not an approved CMHP provider.
Plaintiff also argues two alternate bases for recovery – the first relies upon an internal policy that permits Defendant to extend coverage for six visits to an otherwise ineligible provider. The policy is a wholly discretionary internal procedure and the Court does not choose to extend it to this case. Finally, the Plaintiff argues that if J.M. is not entitled to ABA therapy, then the purported coverage for autism is illusory. The Court finds that the requirement that Hoyt be authorized for reimbursement under Oregon law is a product of Oregon law, not an illusory contract. As such, the Plaintiff’s motion to dismiss is denied.
8. Additional Comments: Court includes helpful analysis on autism and ABA Therapy.
10. Practical Implications and Lessons Learned:
11. All Legal Theories Presented in Case: Violation of ERISA
12. Successful Legal Theories in Case: Defendant’s motion to dismiss is successful based on the fact that the treating provider is not eligible for reimbursement under Oregon law.