Illinois should eliminate the "habilitation" exclusion from health insurance for children

New.  Page added October 24, 2006
Revised March 13, 2009
 
Introduction
Illinois Habilitation Bill close to enactment
Illinois House Bill 1247
Mental Illness coverages:
Habilitation exclusion stopped for Medicaid coverage


      
Introduction

One would think that the purpose of insurance would be to pay for the medical services to ameliorate the effects of a disease.  However, insurance companies have taken the position that they will pay benefits only for those services which restore the patient to the position he had prior to the onset of the disease.  This position does not make sense for children when it is the disease which prevents them from developing.  The purpose of the  services is to treat the effects of the disease to put the child where he would have been if he had not been inflicted with the diesease.  For example, if the disease resulting in autism has prevented a child from acquiring language, he should get speech therapy to put him in the position where he would have been if he did not have autism. Insurance companies routinely deny speech therapy to children would would have spoken on the ground that they had not yet developed speech when they regressed into autism at age one.

Similarly, the New Jersey superior court stated:
"In addition, while the Handbook excludes treatment for development of a function or skill beyond that previously demonstrated, there is no definition of "development" or "developmental." Children are constantly developing. "Developmental" defines childhood. The words "restorative" and "non-restorative" when used in this context are also ambiguous and largely inapplicable to infants and young children. Every child is born with the potential to develop those skills necessary to life in society. Autistic children and other children afflicted with BBMIs are hindered from achieving that potential. The treatment for Jake can restore some of his potential. Even with the therapies described, Jake's prognosis is uncertain, but there is no claim that the treatment is futile. To the contrary, there is the expectation that, to some degree, he will share the skills and functions of more fortunate children, including his siblings."
Micheletti v. State Health Benefits Commission

Such a policy distinction is unjust and unreasonable.  The insurance companies' position forces the cost from those who are paid to accept the risk to the parents, charities and the State of Illinois.  The legislature should act to correct this practice.  On October 23, 2006, Dr. Alan I. Rosenblatt, MD, testified before the joint hearing of the Health Care Access and Availabillity and Developmental Disabilities and Mental Illness Committees of the Illinois House of Representatives.  He informed the legislature that when he was in Maryland, he worked with the legislature to pass a law which eliminates the habilitation/rehabilitation distinction for the developmental disabled.  He urged the legislature to pass a similar law in Illinois.  He also noted that Maryland has already conducted the cost benefit analysis showing that the cost to a Plan is minimal while the benefits to the State are huge. 

The court in Jones-Kelley, below, noted "Taken to its logical conclusion, such a restrictive interpretation . . . would mean that no child who is born with a disability, could ever receive rehabilitative services."

March 2009 Update:

Habilitation Bill close to enactment. See text and description of Bill.

 This Senate Bill 101 would take forward HB 1247, below, which has lapsed.  Both houses of the Illinois General Assembly have passed the bill, and on February 11, 2009, it was sent to the new governor as part of a package bill.  Click the link above for details of this proposed law.

Illinois House Bill 1247

This bill would amend the Illinois Insurance Code by adding the following:
Sec. 356z.9. Habilitative services for children.
    (a) In this Section, "habilitative services" means services, including, but not limited to, occupational therapy, physical therapy, and speech therapy, for the treatment of a child with a congenital or genetic defect to enhance the child's ability to function. A congenital or genetic defect includes, but is not limited to, hereditary defects, such as autism or an autism spectrum disorder and cerebral palsy.
    (b) A group or individual policy of accident and health insurance or managed care plan amended, delivered, issued, or renewed after the effective date of this amendatory Act of the 95th General Assembly must provide coverage for habilitative services for children under 19 years of age with a congenital or genetic defect existing at or from birth.
complete text of the bill: HB1247original.html 
This bill is based on the Maryland Statute:
 
Text of Maryland statute 

 § 15-835. "Habilitative services" and "managed care system" defined; applicability; children under 19 years of age; notice. 
 (a)  "Habilitative services" and "managed care system" defined.-  
  (1) In this section the following words have the meanings indicated.  
  (2) (i) "Congenital or genetic birth defect" means a defect existing at or from birth, including a hereditary defect.  
       (ii) "Congenital or genetic birth defect" includes, but is not limited to:  
     1. autism or an autism spectrum disorder; and  
     2. cerebral palsy. 
 (3) "Habilitative services" means services, including occupational therapy, physical therapy, and speech therapy, for the treatment of a child with a congenital or genetic birth defect to enhance the child's ability to function.  
   (4) "Managed care system" means a method that an insurer, a nonprofit health service plan, or a health maintenance organization uses to review and preauthorize a treatment plan that a health care practitioner develops for a covered person using a variety of cost containment methods to control utilization, quality, and claims.  

  (b)  Applicability.- This section applies to:  

      (1) insurers and nonprofit health service plans that provide hospital, medical, or surgical benefits to individuals or groups on an expense-incurred basis under health insurance policies or contracts that are issued or delivered in the State; and  
      (2) health maintenance organizations that provide hospital, medical, or surgical benefits to individuals or groups under contracts that are issued or delivered in the State. 
  (c)  Children under 19 years of age.-  
      (1) An entity subject to this section shall provide coverage of habilitative services for children under the age of 19 years and may do so through a managed care system.  
      (2) An entity subject to this section is not required to provide reimbursement for habilitative services delivered through early intervention or school services. 
  (d)  Notice.- An entity subject to this section shall provide notice annually to its insureds and enrollees about the coverage required under this section.  
  (e)  Adverse decision.- A determination by an entity subject to this section denying a request for habilitative services or denying payment for habilitative services on the grounds that a condition or disease is not a congenital or genetic birth defect is considered an "adverse decision" under § 15-10A-01 of this article.  
 [2000, ch. 92; 2002, ch. 382, § 1.] 
Notes:

  1. Section (a)(2)(ii) was a later amendment.  Since autism is rarely present at birth, the definition had to be amended to clarify that the statute applied to autism as well to disorders present at birth.
  2. Autism should include Pervasive Developmental Disorders, Asperger Syndrome, Rett's Syndrome or an autism spectrum disorder.
  3. Autism should not be limited by mental illness coverages (see comment below).
  4. The operative part of the law is in section (c)(1), which imposes a mandate which requires insurers to provide children with habilitation services, rather than prohibiting the exclusion from applying to children with autism or developmental disabilities.
 
Please contact your State representative or the Committee Chair Mary Flowers or Vice-Chair Karen May and urge them to introduce a bill similar to the above.
 
Rep. Elizabeth Coulson is the sponsor of HB1247.

Mental Illness coverages:

For an explanation why autism coverage should not be treated under the mental illness coverages of a health insurance policy, please see the AutismNews.net Insurance Law Update: autismnews.net/insurance

On August 16, 2006, the State of New York enacted a law which states:

New York State Senator Charles J. Fuschillo stated that the statute attempts to take autism out of the mental illness coverages of health plans by labeling autism as a neurobiological condition.  text of Senate Bill 784
 

Habilitation exclusion stopped for Medicaid coverage

The Federal Medicaid Act defines ‘rehabilitative’ as ‘any medical or remedial services
recommended by a physician or other licensed practitioner of the healing arts, within the
scope of his practice under State law, for maximum reduction of physical or mental
disability and restoration of a recipient to his best possible functional level.

Ohio Medicad was prohibited from using a rule which disallowed reimbursement for ABA.  ABA was medically necessary.  Although this decision applies only to Medicaid, based on specific Federal regulations, there is a good discussion of why treatment is not merely habilitative.
Parents League for Effective Autism Services, et. al. v. Jones-Kelly, 565 F. Supp. 2d 895 (S.D. Ohio 2008)
This case is still being actively litigated. Ohio LRS  The purpose of the court's order was to prevent Ohio Medicaid from using its exclusions until the court could conduct a more extensive trial using more evidence.  The case could also be appealed.

While the decision does not bind ERISA or insurance plans, its discussion may help persuade a court that the treatment is medically necessary, but the primary criteria will be the wording of the plan's exclusion.

The court also noted "Taken to its logical conclusion, such a restrictive interpretation . . . would mean that no child who is born with a disability, could ever receive rehabilitative services.

The Court also noted that Medicaid provided for coverage of "preventive" services as well as rehabilitative services and opined that the ABA services at issue "may well be 'preventative' as well as 'rehabilitative.'"