Blue Cross Blue Shield of Michigan illegally denied its members coverage for autism therapy known as applied behavior analysis, a federal district court in Detroit ruled.
In its denials, Blue Cross claimed that the ABA therapy's effectiveness hasn't been established. But U.S. District Judge Stephen Murphy said in his ruling that ABA therapy isn't experimental or investigative--and is supported by multiple authorities, according to a statement from law firm Mantese Honigman Rossman and Williamson PC, which defended the plaintiffs.
Calling Blue Cross's coverage denials "arbitrary and capricious," Murphy ordered the insurer to reconsider the claims denials, which could mean the insurer would pay out more than $5 million in claims for more than 500 children, reported Crain's Detroit Business.
However, he cautioned that his remand for readministration shouldn't be misconstrued as an opportunity for Blue Cross to "invent new bases for denial of claims that were not previously asserted."
Blue Cross said it hasn't yet decided whether it will appeal the ruling. "We understand the concern and are very sympathetic to the challenges of families dealing with autism," Blue Cross spokeswoman Helen Stojic said, according to a Michigan Live article.
She defended its practices, saying Blue Cross was the first insurer in Michigan to offer an ABA coverage option to customer groups in May 2009.