Sample Insurance Letter (California)

August 20th, 2010

VIA CERTIFIED MAIL

INSERT CLAIM HANDLER’S NAME
CLAIM HANDLER’S TITLE
CLAIM HANDLER’S CITY STATE ZIP

RE: ENROLLEE’S NAME
ENROLLEE’S DATE OF BIRTH
ENROLLEE’S SOCIAL SECURITY NUMBER
HEALTH PLAN PURCHASER’S NAME
HEALTH PLAN IDENTIFICATION NUMBER
CLAIM NUMBER
SUBJECT: Payment Authorization for Enrollee’s autism

Dear:

Please deem this letter to be a formal, urgent and continuing request for you to promptly authorize payment of multi-disciplinary therapeutic interventions recommended by the Enrollee’s treating healthcare provider(s) in the enclosed report(s) as being medically necessary, now and over a period of time.

As you can see from the enclosed report(s), the following is recommended:

  • A number of speech therapy session spread out over a consistent period of time;
  • A number of occupational therapy sessions spread out over a consistent period of time;
  • A number of physical therapy session spread out over a consistent period of time;
  • A number of recreational therapy sessions spread out over a consistent period of time;
  • A number of behavior modification therapeutic sessions spread out over a consistent period of time;
  • A number of discreet trial training therapeutic sessions spread out over a consistent period of time;
  • A number of professional progress and assessment evaluations spread out over a consistent period of time;
  • Medication treatments as needed;
  • Parent training sessions as needed;
  • Brain imaging and other diagnostic laboratory testing as needed to assist in the direction of future treatment; and
  • Other types of non-experimental and non-investigational interventions that are known in their respective disciplines to be reliable in treating and reducing the more severe aspects of autism.

CALIFORNIA STATE MANDATE LAWS

While you may be trained in the meaning of different terms in your company’s health care plan, please remember that any contractual terms in your plan that attempt to limit coverage for autism are unenforceable in California if they violate California’s state mandates on minimal levels of autism care. Samson v. Transamerica (1981) 30 Cal. 3d 220, 231.178. Cal. Rptr. 323, 350.

Your company had to agree to these state mandates as a condition of doing business in California.

These state mandates are in two forms: firstly, general state mandates that apply to all medical conditions; secondly, state mandates that specifically require that all medically necessary care for autism be covered. These state mandates are not preempted or overruled by contrary federal ERISA law. Metropolitan Life v. Massachusetts (1985) 471 U.S. 724.

For instance, your company had to agree to offer in California general or “basic health care services” to all medical conditions, including “physician referrals, hospital inpatient serves, home health services, preventive and emergency healthcare services.” Health and Safety Code 1345(b) (1)-(6); 1367(i).

Your company had to also agree to provide specific treatments for autism that are “medically necessary,” that do not discriminate based on age, and that cover an amount equal to those benefits offered “to other medical conditions.” Health and Safety Code 1374.72(a) and (d)(7); Insurance Code 10144.5(a) and (d)(7) [known as AB 88]

In relation to treating autism specifically, your company had to also agree to cover “out patient services, inpatient hospital serves, partial hospitalization services, and prescription drugs if the [plan’s] contract includes coverage [already] for prescription drugs.” Health and Safety Code 1374.72(b)(1)-(4); Insurance Code 10144.5(b)(1)-(4) [part of AB 88]

URGENCY AND MEDICAL NECESSITY DEFINED

This letter just cited to you California state mandate law, general as well as specific to autism that nullifies any contrary coverage limitations that may otherwise be available to you in your contract terminology.

Consequently, I will now address California’s definition of “medical necessity” and the relevant medical literature which concludes that multi-disciplinary autism intervention works; in other words, such intervention is not experimental, speculative, or investigational.

The California Legislature has defined “medically necessary” as all care which is “reasonable and necessary to protect life, to prevent significant illness or significant disability, or to alleviate severe pain.” Welfare & Institutions Code 14059.5

In the “historical and statutory notes” preamble to AB 88, the California autism state mandate, the California Legislature “declares and finds” conclusively that autism is “treatable” and that inadequate treatment “causes relapse and untold suffering” as well as “homelessness…and other significant social problems.”

In other words, the California Legislature has conclusively determined that autism intervention does indeed work – hence, it is not experimental and is indeed medically necessary.

The medical literature also proves the fundamental maxim that the earlier the autism intervention, the better the expected medical result:

“[A]t least six comprehensive [autism intervention] treatment programs designed to stimulate widespread changes in young children with autism have published positive outcome data in peer-reviewed journals… [paragraph]. All the studies reported (a) significant acceleration of developmental rates, resulting in significant I.Q. gains; (b) significant language gains in the treated children; (c) improved social behavior and decreased symptoms of autism…[paragraph]. Children with autism appear most able to benefit when intervention is begun very early, between ages two and four, making far more progress than do older children receiving the same interventions …, and when intervention is intensive, including 15 or more hours per week of focused treatment with very low child-to-adult ratios over one to two years or more.” Rogers, “Early Intervention in Autism” Journal of Autism and Developmental Disorders (April 1996), Vol. 26, No. 2, Plenum Press, New York and London, pp. 243-245 (citations omitted).

Clearly, when a healthcare plan refuses to authorize autism treatment at the earliest possible moment, it fails “ to prevent…significant [future] disability” and it fails “to alleviate severe pain” by preventing one from learning how to communicate and become productive and independent, in violation of what California mandates as “medically necessary” care under Welfare & Institutional Code 14059.5. Repeated violations of state mandates can cause your company to lose its license to do business in California.

Moreover, financial inducements to limit medically necessary care are illegal in California. Health & Safety Code 1348.6(a).

CONCLUSION

Because time is of the essence, I am requesting that you immediately authorize payment for all the interventions recommended in the enclosed report(s).

If there are any interventions for which you refuse to pay, please immediately identify those interventions and give the reasons which support your denial. Denials of coverage cannot be arbitrary or capricious. Insurance Code 790.03(h) (13) sates that it is an unfair claims settlement practice when:

“Failing to provide promptly a reasonable explanation of the basis relied on in the insurance policy, in relation to the facts or applicable law, for the denial of a claim or for the offer of a compromise settlement.”

Courts have applied Insurance Code 790.03, quoted immediately above, to self-insured corporations. Nathanson v. Hertz Corporation (1986) 183 Cal.App.3d 78,227 Cal.Rptr. 799, review denied.

SIMULTANEOUS PETITION FOR INTERNAL APPEAL

As to those claims which you intend to refuse to pay, if any, please deem this letter to also be a petition for appeal of said refusal within the appeal and grievance procedures set out in your plan. Pursuant to this appeal petition, I request that you immediately photocopy and distribute this instant letter and its enclosures to each and every member of each and every appeal and grievance panel procedurally recognized in your plan. This should guarantee that timely treatment remains a viable option. In other words, this should prevent your response from developing into an untimely treatment program that could forever injure the optional recoverability of your enrollee. Please carbon copy me on this distribution list and provide me with the dates and times in which I may appear before these panels to advocate my cause.

Please remember that under California law, managed care entities now have “a duty of ordinary care to arrange for…medically necessary healthcare service.” Civil Code 3428. Pursuant thereto, if the breach of this duty causes “substantial harm” through the unreasonable “denial, delay or modification” of services recommended for an enrollee, then the victim may sue. Injunctive relief to stop abusive managed care practices in court is no longer defeated by arbitration clauses. Broughton v. Cigna Healthplans (1999) 21 Cal.4 th 1066, 90 Cal.Rptr.2d 334.

REQUEST FOR ARBITRATION

As to those claims refused by you, which refusals your appeal panels intend to uphold, please then deem this letter to also be a request for arbitration of those refused claims. It is my desire to have an impartial arbitrator immediately hear my contention that the refused benefits are medically necessary, and hence must be provided. The above quoted general and autism state mandates, as well as the medical literature and the legislative preamble, clearly establish that the reliable autism interventions requested by me are medically necessary, and hence cannot be justifiably refused by you.

Courts have recognized that fair claims settlement practices described in insurance regulations:

“…establish the standard of conduct for insurers in California. Insurers who fought the regulations have no right to gain a competitive edge on insurers who scrupulously follow the regulations and faithfully discharge their obligations to their insureds. Insurers who follow the law should not be put at competitive disadvantage, particularly at the expense of insureds that may have valid claims.” Spray, Gould & Bowers v. Associated International Insurance Co. (1999) 71 Cal.App.4 th 1260, 1274, 84 Cal.Rptr.2d 552, 560-561.

As stated in Mariscal v. Old Republic Life Insurance Co. (1996) 42 Cal.App.4 th 1617, 1623, 50 Cal.Rptr.2d 224, 227:

“Insureds seek protection against calamity and purchase insurance to buy peace of mind and security. [citations omitted] The insurer has a duty to protect the insured’s interest as if it was its own, and it may not deny a claim without thoroughly investigating it. [citations omitted]

“A trier of fact may find that an insurer acted unreasonably if the insurer ignores evidence available to it which supports a claim. The insurer may not just focus on those facts which justify denial of the claim. If an insurer unreasonably refuses a claim, it is liable for breach of the covenant of good faith and fair dealing inherent in every insurance policy. [citations omitted]

“An insurer must liberally construe claims forms and the policy in favor of coverage; exclusions are strictly interpreted against the insurer.”

Failure of a managed care entity to timely provide arbitration pursuant to an enrollee’s request can free the enrollee to sue the managed care entity for coverage and personal injury damages in front of a jury. Engalla v. Permanente (1997) 15 Cal.4 th 951, 64 Cal.Rptr.2d 843.

Please immediately provide me with an arbitration date so my experts can appear to establish medical necessity. This arbitration will only be necessary if you continue to deny my appeal to you to reconsider my claim.

Very truly yours,

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