Arizona faces lawsuit over Medicaid cuts to therapy for autistic kids

PHOENIX – A new lawsuit blames the state's Medicaid program for about 1,000 children with autism spectrum disorder for losing the therapy they need.

The claim stems from decisions by two major health insurers who contract with the Arizona Health Care Cost Containment System to terminate their own contracts with two special programs for autistic children. That, according to the lawsuit, has resulted in these children being in danger of regressing and returning to behavior patterns from before they started getting treatment.

What makes the state's Medicaid program liable, according to attorney Tim Nelson, is that AHCCCS approved the action by Mercy Care and Arizona Complete Health.

All that stems from a dispute between the insurers and Action Behavior Centers and Centria Health, both of which provide specialized treatment for children with autism spectrum disorder, about reimbursement rates. That ultimately resulted in the insurers canceling the contracts and informing parents they will need to find somewhere else for the care.

The problem, Nelson said, is that the insurers – paid by AHCCCS to provide this coverage – have not made other comparable treatments readily available, with long waiting lists.

Nelson said AHCCCS's own rules mandate continued provision of behavioral health services "according to the needs of the person'' – but no longer than 45 days after the need is identified.

'Many providers' waitlists far exceed those limits,'' he told the court.

All that, he said, has left the children without the care their parents say they need.

"Continuity of care is critical for children with autism, who often struggle to cope with even minor changes in established routines,'' Nelson wrote. And the best treatment is "applied behavior analysis'' which helps children with autism spectrum disorder develop communications, social, and learning skills.

"So, loss of access to ABA therapy or forcing children to change ABA providers is certain to cause regression and irreparable harm,'' he continued. "Moreover, inevitable gaps in coverage as families attempt to find new providers amid an acute statewide shortage will be just as or even more damaging.''

And even if there are alternatives, several of the parents who sued said their children do not handle change well and fear that starting over with someone else will lead to their youngsters regressing in the progress they have made.

Now Nelson is asking Maricopa County Superior Court Judge Michael Herrod to rule that AHCCCS acted illegally in failing to stop Mercy Care and Arizona Complete Health from terminating their agreements with the two providers and order the state agency to force the insurers to reinstate those agreements. In the alternative, he wants the judge to order AHCCCS to arrange – and pay for – some other treatment "to ensure continuity of care for all plaintiffs.''

While the lawsuit was filed on behalf of 11 parents with children on the spectrum, Nelson wants Herrod to treat this as a class-action case to ensure that all affected children – he sets the number as "upwards of 1,000'' – also get the same legal relief.

A representative of AHCCCS said it does not comment on litigation.

The lawsuit has several examples of the risks to children if their care is interrupted.

One child, identified only as 3-year-old E.L., was diagnosed with autism spectrum disorder at 18 months and began receiving ABA therapy covered by Medicaid through Mercy Care.

According to an affidavit from his mother, he had "frequent tantrums'' because he could not communicate his needs. He also was physically aggressive with family members and would run away.

After therapy, his mother said, E.L. has "learned methods of communicating, like sign language and pointing, and he's working on saying some individual words to communicate his needs.''

She also said his tantrums are "shorter and less frequent'' and he has stopped running away.

The concern, said the mother, is that the child does not do well with changes. She said he is "at an increased risk of returning to prior behaviors and institutionalization without therapy or with reduced hours of therapy.''

There are similar stories from other parents who filed the lawsuit, including one from a mother who lives in San Tan who said that the alternative provided – if she can get in – is 40 minutes from her home.

What has happened, Nelson said, is more than just inconvenient.

He said that the failure of AHCCCS to ensure continued care violates the federal Medicaid Act and its requirements that the state ensure access to care for eligible patients. Nelson also contends the actions – or inactions – of the agency violate other state and federal laws protecting the rights of the disabled.

"AHCCCS' decision to allow these private insurers to place their own profits over the treatment of low-income kids with autism is shocking,'' Nelson said in a separate prepared statement, even though he names only the state agency and not the insurers as a defendant in the lawsuit.

He said the networks for treating patients with autism already were inadequate even before the decision – approved by AHCCCS – to drop the disputed contracts.

"This is illegal and, if not stopped, the results will be heartbreaking for hundreds of Arizona children and families,'' Nelson said.

While AHCCCS would not respond to the lawsuit, it has previously said that it is not the agency's job to intercede in contract negotiations between the insurers that it pays to provide the services and the companies that the insurers retain to provide the actual services.

"Managed care organizations have discretion to manage their provider networks, provided they ensure members have reasonable and timely access to covered healthcare services through a sufficient and well-distributed network of contracted providers, and they comply with contractual requirements,'' agency spokesman Johnny Cordoba said in an emailed statement last fall to the Arizona Capitol Times.

No date has been set for a hearing.