Insurer Settles Claims It Capped Autism Benefits

SAN FRANCISCO (CN) – Aetna has settled a proposed class action accusing it of illegally capping benefits for a crucial autism spectrum disorder treatment.

The terms of the settlement, which the parties hammered out in arbitration, are confidential, according to Jordan Lewis, an attorney for lead plaintiff Anna Sanzone-Ortiz. Sanzone-Ortiz sued Aetna Health of California and its corporate parent in July 2015 on behalf of herself and her minor son, who was diagnosed with autism, under the Employee Retirement Income Security Act.

“The resolution of this case resulted in a multipage settlement agreement, and one of the substantive terms of the agreement is that the resolution and the terms of the resolution are confidential,” Lewis said in an interview Tuesday. “It’s obviously important to Aetna.”

U.S. District Judge William Orrick dismissed the class action with prejudice from federal court in the Northern District of California in an order late Monday following the settlement.

Orrick had sent the case to arbitration in December 2015, ruling that Sanzone-Ortiz was bound by an arbitration agreement she signed when she enrolled herself and her family in Aetna Health of California’s health insurance plan through her employer.

In her suit, Sanzone-Ortiz said Aetna capped her policy benefits at 20 hours a week of applied behavior analysis therapy even though her son’s doctors had recommended a minimum of 36 hours a week.

The “gold standard” autism treatment involves up to 40 hours a week of individual treatment and can cost tens of thousands of dollars a year, making insurance coverage a must for most families.

Fighting arbitration last year, Sanzone-Ortiz said she wasn’t bound by Aetna’s arbitration agreement because it was only enforceable against her son. She also claimed that although her employer had agreed to arbitrate, she had not.

But Orrick called her argument  “unsubstantiated”  and said it contradicted the allegations in her complaint.

“Ortiz cannot rely on a contract she signed that incorporated the [Evidence of Coverage] ‘while simultaneously attempting to avoid the burdens that contract imposes,'” Orrick wrote in his December 2015 ruling ordering arbitration.

Lewis said Tuesday that arbitration affected the outcome of the case.

“We fought the arbitration provision pretty hard and took a number of whacks at it, and we lost, and that certainly affected how the case was resolved,” he said.

In May 2015, Aetna Life and Health Insurance companies agreed to pay $4.5 million to settle claims they failed to cover autism spectrum disorders in Missouri, in what ended up being the largest fine in the state’s history for violating insurance laws.

In that settlement, Aetna admitted that it had failed to cover treatment in some cases.

Jordan Lewis is with Kelley Uustal in Fort Lauderdale, Florida.

Aetna is represented by Geoffrey Sigler with Gibson, Dunn & Crutcher in Washington. He did not return a request for comment.