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Insurance Coverage for Mental Health Treatment and ABA Therapy Cannot Be Denied during Appeals Process

By Jodi Bouer, Esq.

The ACA And New Jersey Regulations Prohibit Insurers From Denying Coverage For Continuing Care During Appeals Over Your Child’s ABA Therapy And Residential Mental Health Treatment

Parents with children who are on the autism spectrum or who suffer from mental health conditions should be cognizant of the fact that Affordable Care Act (the “ACA”) and New Jersey regulations require insurers to continue coverage during the course of internal and external insurance appeals. These regulations mean that if your insurance plan is ACA compliant, you can avoid gaps in covered services while your appeals are pending. Under these regulations, you can force the insurer to cover care while your appeals are ongoing, rather than discontinuing care during the appeal process. If you lose your appeal or the insurer refuses to cover continuing care during the appeal process, you can then proceed to court and seek an injunction compelling the insurer to continue to cover therapy while litigation is pending. In the course of such litigation, a violation of these and related regulations may possibly subject the insurer to fines or an attorney fee award.

Pursuant to Sec. 147.136 of the Federal Regulations, continuation of care is required during the appeal process:

(iii) Requirement to provide continued coverage pending the outcome of an appeal . A plan and issuer subject to the requirements of this paragraph (b)(2) are required to provide continued coverage pending the outcome of an appeal. For this purpose, the plan and issuer must comply with the requirements of 29 CFR 2560.503-1(f)(2)(ii), which generally provides that benefits for an ongoing course of treatment cannot be reduced or terminated without providing advance notice and an opportunity for advance review.

New Jersey regulation, N.J.A.C. 11:24A-3.5(h-(i), which was written pursuant to the above ACA provision, further compels New Jersey insurers to continue coverage during the external appeal process:

A carrier shall provide continued coverage of an ongoing course of treatment pending the outcome of a stage 1 internal appeal, a stage 2 internal appeal and an external appeal.

If your child is receiving covered services for ABA therapy or residential mental health treatment and your insurer cuts authorized services or denies coverage entirely, submit your appeal upon receipt of the denial letter. Then if you can afford it, continue obtaining services at the level that you were receiving before. Your insurer is obligated to pay for previously authorized services during the entire appeal process. If the insurer refuses to continue to cover services during appeals at that previously authorized level, refer to the above regulations and demand continuing coverage during the course of the appeals process. If the insurer refuses to provide you with continuing coverage during your appeals, file a formal complaint with the New Jersey Department of Banking and Insurance -- and consider seeking an injunction from the Court and compelling your insurer to cover the therapy during the course of litigation.

One word of caution: Remember that in New Jersey, external appeals are binding on both the insurer and policyholder. If you go through the external appeal process, you will likely be precluded from litigating over coverage after the decision is rendered. As such, depending on the strength of your matter and the possibility of regulatory violations, you should consider litigation as a viable option in lieu of an external appeal.

Freeman Law Offices, LLC - New Jersey & Pennsylvania Special Needs Attorney
Freeman Law Offices, LLC - New Jersey Special Needs Attorney
Located at 103 Carnegie Center, Suite 101 Princeton, NJ 08540. View Map
Phone: (609) 454-6661 | Local Phone: (609) 454-5609.
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