Oregon insurance regulators intend to levy fines totaling more than half a million dollars against four insurance companies for refusing to cover therapies for children with autism or other developmental disabilities.

The biggest of the proposed fines is $250,000 against Kaiser Foundation Health Plan, which the state claims “provided incorrect and misleading information in its member documents about whether it would pay for members’ attorney fees in a lawsuit.”

The regulators’ finding is sweet vindication for Paul Terdal, an autism activist who’s been fighting Kaiser for eight years over the health care costs of his two sons with autism. It was Terdal, a Portland, Ore. business consultant, who last September complained to the state insurance division about Kaiser’s position on legal fees that led to the proposed fine.

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A central issue in the fight is applied behavior analysis, which Terdal and other parents maintain has the potential to permanently improve the function of a child with autism if applied early and intensively. Insurers for years refused to cover it, arguing there was insufficient evidence it was effective.

In part because of Terdal’s efforts, the department in 2014 notified insurers that they could not categorically deny coverage of mental health treatments, including applied behavior analysis.

But some companies are dragging their feet.

“Despite our clear guidance to insurance companies on mental health parity, some companies continue to engage in practices that make it difficult for consumers to access treatment,” said Laura Cali Robison, Oregon’s insurance commissioner and administrator of the Division of Financial Regulation. “We continue to monitor this issue across the industry and will not hesitate to take strong action if warranted.”

These are some of the largest fines in the state insurance division’s history. “On the Kaiser case, we believe it affect(ed) lots of people over a long period of time,” department spokeswoman Lisa Morawkski said. “It may have dissuaded consumers from pursuing a lawsuit because they thought they could not recover attorney fees.”

Kaiser officials declined an interview request, citing pending litigation. In a written statement, the company said it “is committed to providing effective mental health treatment and supporting the total health of our patients. We are currently evaluating the order from the Oregon Department of Consumer and Business Services related to informing patients about the disposition of attorney’s fees.”

The other fines include:

• $100,000 against Pioneer Educators Health Trust. The insurer, which covers higher education employees, allegedly denied coverage of autism and other mental health treatment.

• $100,000 against Regence BlueCross BlueShield of Oregon, which served as the third-party administrator for Pioneer. Regence allegedly provided incorrect information to Pioneer and at least one consumer about whether it was required to cover certain mental health conditions.

• $110,000 against United Healthcare, which allegedly denied 22 claims for speech therapy for kids diagnosed with pervasive developmental disorder.

Though Kaiser and other insurers now cover applied behavior analysis, Terdal continues to fight Kaiser over the years when the insurer refused to pay or would cover only limited amounts.

Terdal recalls a time when a Kaiser specialist told him and his wife that the six hours of weekly therapy their sons were getting was not even close to sufficient. But that’s all Kaiser’s insurance company would pay for. The couple subsequently quit their jobs and learned how to administer the intensive therapy themselves.

The parents maintain their two sons, now 9 and 11, suffered lasting harm from the delays in treatment. They are seeking more than $1.3 million in damages from Kaiser in a lawsuit that is still pending.

“I am excited about the progress,” Terdal said. “I’m happy with the work the insurance division did today. There’s still a lot more to do.”

© 2017 The Oregonian
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