Ill-Defined Coverage Muddles Insurance For Developmentally Disabled

A little remarked upon requirement in the federal health law expands treatments for people with cerebral palsy, autism and other developmental disabilities. But some advocates and policy experts are concerned that insurers may find ways to sidestep the mandate.

The health law requires that individual and small group plans sold on or off the health insurance marketplaces cover 10 essential health benefits, including “rehabilitative and habilitative services and devices.”

Health plans of all kinds typically cover rehabilitative services, such as physical, occupational and speech therapy to help people who had an accident or illness, such as a stroke, recover their ability to walk, talk and function in their daily lives. But before the health law passed, coverage of similar services for habilitative purposes — that is, to help people learn or maintain functional skills, rather than regain them — was often excluded.

Insurers would “say they’re not medically necessary,” says Sara Rosenbaum, a professor of health law and policy at George Washington University who authored a recent paper about the law’s habilitative coverage requirements. “They’d say patients are not recovering function, but rather developing function, and that was an education issue,” she says.

For years, Elizabeth Hecht and Scott Simmons have struggled to get their son, Will, the habilitative care he needs. Will has cerebral palsy, and as a child needed speech therapy to learn to speak intelligibly and physical therapy to learn to stand and walk with assistance, among other things.

Now 25 years old, Will needs periodic therapy to help his body remain as functional as possible and avoid pressure sores, as well as to help him learn to use a speech-generating device, Hecht says.

The couple get insurance through her job at an academic research center for people with developmental disabilities in Madison, Wis. The plan doesn’t generally doesn’t cover habilitative services. But it has covered some of Will’s therapy as if it were rehab, says Hecht. Services were frequently approved only after the couple filed an appeal following a denial, however.

“It becomes exhausting,” she says. “He could have two to three denials at one time, so we had to set priorities.”

The law’s new coverage requirement doesn’t apply to large employer group plans like the one covering Will. But Hecht says she hopes that the new rules may eventually encourage broader coverage overall.

“It’s a wonderful recognition of the needs these people have and a great first step in addressing them,” she says.

But advocates fear that insurers may avoid providing benefits to the extent needed by people, many of them children born with serious developmental problems that require lifelong care. That’s because instead of clearly defining habilitative services and spelling out what must be covered in individual and small group plans under the law, the Department of Health and Human Services permitted states and insurers to make the call.

Under the health law, each state had to identify a benchmark plan that would serve as a basis for defining the essential health benefits offered there. In the final rule, HHS said that if a state’s benchmark plan doesn’t define habilitative benefits, states can choose to do so themselves. If they don’t set specific rules, they can either require insurance plans to cover those benefits at on par with rehabilitation services so that they’re similar in scope, amount and duration, or leave it to the insurers to determine how to cover the benefit and report that to HHS. Regulators will review the rules in 2016.

“We were pretty disappointed” with the language in the final rule, says Kim Musheno, director of public policy at the Association of University Centers on Disabilities.

Based on an initial tally, fewer than half of states have explicitly defined the habilitative services that are covered or required parity with rehabilitative services, says Katie Keith, director of research at the Trimpa Group, which consults with the advocacy group Autism Speaks on health law issues.

Strong advocacy by groups representing patients with autism has resulted in coverage by private insurers of at least some habilitative services. Thirty-four states now mandate coverage of intensive therapy called applied behavioral analysis for children with autism, says Lorri Unumb, vice president for state government affairs at Autism Speaks.