Class Action Against Kaiser Moves Forward

(CN) - A California appeals court has reinstated a class action accusing Kaiser Foundation Health Plan of categorically denying coverage to autism patients for behavioral and speech therapy.

The Second District Court of Appeal overturned an order sustaining Kaiser's demurrer to the lawsuit, filed by the guardian of a 4-year-old autistic child.

Guillermo Arce claimed that Kaiser refused to cover the boy's behavioral and speech therapy on the basis that the treatments were not medical necessary.

Arce filed suit under the Unfair Competition Law, citing breach of contract and violations of the Mental Health Parity Act, which mandates coverage for medically necessary health care services.

Kaiser objected to the class action, arguing that it should be thrown out because it would require looking into plaintiffs' cases on an individual basis to determine if autism treatments were medically necessary.

The trial court sustained the demurrer, citing a lack of commonality and judicial abstention from deciding economic policy issues, including what forms of therapy are covered in health plans.

But the appeals court found that Arce could likely establish enough common issues to support a class action.

"Arce's allegations that Kaiser systematically breached its health plan contract by refusing to provide all putative class members with contractually covered services is sufficient to state a class action claim under the Unfair Competition Law," Justice Laurie Zelon wrote.

The trial court read Arce's allegations and the Mental Health Parity Act too narrowly, the court ruled. The case does not require the court to make individual determinations of medical necessity, the ruling states. Arce asserts that Kaiser is denying coverage to all plan members without even considering medical necessity, the court noted. If the court finds that behavioral and speech services are covered under Kaiser's health plans, then there is a breach of contract, it concluded.

The state appeals court reversed the order sustaining Kaiser's demurrer.

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