By Jon Hood
ConsumerAffairs.com

June 21, 2009
Blue Cross has settled a lawsuit brought by parents of children with autism, reimbursing them for the costs of therapy they had to pay out of their own pockets.

The suit, filed in Detroit, alleged that Blue Cross refused to pay for Applied Behavioral Analysis (ABA) therapy for autistic children on the grounds that it was experimental.

Blue Cross policies exclude experimental therapies for a variety of conditions. The plaintiffs in the current suit, Johns v. Blue Cross Blue Shield of Michigan, argued that characterizing ABA as experimental was arbitrary, capricious, and possibly even illegal.

John Conway and Gerard Mantese, attorneys for the plaintiffs, said in a statement that ABA is "supported by science and is not 'experimental.'" The therapy is used to help autistic children develop the deficient verbal and social skills that are hallmarks of the disease.

ABA is based on the classical conditioning concepts of positive and negative reinforcement — rewarding good behavior and discouraging unhealthy actions. ABA therapy has been recognized and respected for decades, and is implemented under the supervision of psychologists and other medical professionals. Classical conditioning itself stretches back to the early 1900's, when Ivan Pavlov developed his now-famous experiment involving "conditioned reflexes." By pairing the ringing of a bell with the scent of raw meat, Pavlov eventually trained — or conditioned — dogs to drool at the sound of the bell alone.

Indeed, as the plaintiffs pointed out, Blue Cross acknowledged in a 2005 draft policy that ABA is anything but controversial. That draft explicitly noted that ABA is "currently the most thoroughly researched treatment modality for early intervention approaches to autism spectrum disorders and is the standard of care recommended by" a number of professional organizations, including the Association for Science in Autism Treatment.

Additionally, as the draft pointed out, the earlier the treatment is applied, the better the child's prognosis for a normal and productive life.

During a court deposition, Dr. Calmaze Dudley, Blue Cross's medical director, said that he would probably employ the therapy if he had a child with autism. These findings call into question why Blue Cross refused to pay for the treatment in the first place. Indeed, the settlement came shortly after the court ordered Blue Cross to produce these documents.

As with many developmental and psychological disorders, autism isn't covered by most medical insurance plans. Depending on the severity of a child's autism — which varies greatly from case to case — intensive speech and developmental therapy can cost nearly $100,000 per year. In Michigan, where the instant suit was filed, the state House has introduced two bills mandating coverage for diagnosis and treatment of autism-spectrum disorders, including Asperger Syndrome and Rett Syndrome. HB 4776 applies specifically to plans issued by Blue Cross; HB 4183 applies to all other insurance companies.

In the settlement, Blue Cross agreed to reimburse the families of more than 100 autistic children who paid for their own behavioral therapy over the past six years. Included in the settlement are families covered by a Blue Cross policy who never actually submitted a claim.