W.P. v. ANTHEM INSURANCE COMPANIES INC
ENTRY ON MOTION FOR RECONSIDERATION - Plaintiffs' Motion for Reconsideration (Filing No. 77 ) is GRANTED for the limited purpose discussed herein. The alternative request for Certification and Interlocutory Appeal is DENIED as moot. The Mo tion for Partial Judgment on the Pleadings (Filing No. 48) is now GRANTED in part and DENIED in part. Counts I and II are reinstated to the extent that Plaintiffs assert that Anthem wrongfully denied ABA therapy hours for non-medical reasons in vi olation of the Indiana Autism Mandate. Having reinstated the state law claims for violation of the Autism Mandate, Counts I and II remain for trial. Count II's equitable relief claim for wrongful denial and Count III in its entirety remain dismissed. See entry for details. Signed by Judge Tanya Walton Pratt on 11/8/2017. (MEJ) Modified on 11/9/2017 to clarify (MEJ).
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF INDIANA
W. P., a minor by and through his parents and
guardians KATHRYN PIERCE and
CHESTER PIERCE, on behalf of themselves
and similarly situated individuals,
A.B., a minor by and through his parents and
guardians MICHAEL BECK and JOANNE
KEHOE, on behalf of themselves and similarly
ANTHEM INSURANCE COMPANIES, INC.,
an Indiana corporation,
Case No. 1:15-cv-00562-TWP-TAB
ENTRY ON MOTION FOR RECONSIDERATION
This matter is before the Court on Plaintiff W.P. and his parents and guardians Kathryn
Pierce and Chester Pierce, and A.B and his parents and guardians Michael Beck and Joanne
Kehoe’s (collectively “Plaintiffs”) Motion for Reconsideration or Certification for Interlocutory
Review (Filing No. 77). On April 11, 2016, Defendant Anthem Insurance Companies, Inc.
(“Anthem”) filed a Motion for Partial Judgment on the Pleadings (Filing No. 48). The Court
granted Anthem’s Motion for Partial Judgment on the Pleadings on February 15, 2017 (Filing No.
72). For reasons stated below, the Court grants the Motion for Reconsideration on the issue of
Anthem’s wrongful denial of Applied Behavioral Analysis (“ABA”) therapy hours unrelated to
medical necessity, and as a result, grants in part and denies in part Anthem’s Motion for Partial
Judgment on the Pleadings. Having received a favorable ruling on their Motion for
Reconsideration, the Court does not address Plaintiffs’ Alternative Request for Certification for
The facts of this case as stated in the February 15, 2017 Entry are not disputed and are only
summarized in this Entry. In 2001, the Indiana General Assembly amended the Indiana Code,
requiring individual and group health insurance policies to provide coverage for autism treatment.
See Ind. Code § 27-8-14.2. This amendment is known as Indiana’s Autism Mandate (“Autism
Mandate” or “the statute”). The Autism Mandate provides:
An accident and sickness insurance policy that is issued on a group basis
must provide coverage for the treatment of an autism spectrum disorder of an
insured. Coverage provided under this section is limited to treatment that is
prescribed by the insured’s treating physician in accordance with a treatment plan.
An insurer may not deny or refuse to issue coverage on, refuse to contract with, or
refuse to renew, refuse to reissue, or otherwise terminate or restrict coverage on an
individual under an insurance policy solely because the individual is diagnosed with
an autism spectrum disorder.
The coverage required under this section may not be subject to dollar limits,
deductibles, or coinsurance provisions that are less favorable to an insured than the
dollar limits, deductibles, or coinsurance provisions that apply to physical illness
generally under the accident and sickness insurance policy.
Ind. Code Ann. § 27-8-14.2-4.
On March 30, 2006, the Indiana Department of Insurance (“IDOI”), an agency charged
with enforcing the Indiana Insurance Code, issued Bulletin 136 interpreting the Autism Mandate.
See Ind. Ins. Bulletin 136, 2006 WL 1584562 (Mar. 30, 2006). Bulletin 136 states that an insurer
has the right to “request an updated treatment plan not more than once every six (6) months from
the treating physician to review medical necessity” and “[a]ny challenge to medical necessity will
be viewed as reasonable only if the review is by a specialist in the treatment of [autism spectrum
disorder].” Id. at 1, 3. Bulletin 136 also states that services to treat autism spectrum disorders
“will be provided without interruption, as long as those services are consistent with the treatment
plan and with medical necessity decisions.” Id. at 2. “Service exclusions contained in the
insurance policy…that are inconsistent with the treatment plan will be considered invalid…”. Id.
W.P. is a thirteen year-old who suffers from severe autism. W.P. has limited verbal skills,
is unable to navigate stairs without assistance, and frequently exhibits repetitive behaviors
including rocking, flapping his arms and hands, and heavy breathing. W.P.’s treating physician
prescribed forty hours per week of ABA therapy to treat his autism. In February 2011, W.P. began
receiving ABA therapy and his parents observed almost immediate improvements in his ability to
walk, use words, and respond appropriately to prompts.
W.P.’s repetitive behaviors also
W.P. is the beneficiary of a health insurance plan (“the Plan”) sponsored by his father’s
employer. Anthem is the insurer and claims administrator for the Plan. Anthem initially covered
W.P.’s forty hours per week of ABA therapy but, in July 2013, Anthem reduced the number of
covered ABA therapy hours for W.P. to twenty-five hours per week. In July 2014, Anthem further
reduced the number of covered hours to twenty hours per week. On April 9, 2015, Plaintiffs filed
this putative class action asserting that Anthem’s policy and practice of limiting coverage for ABA
therapy for school-aged children with autism violates ERISA because it fails to comply with
Indiana’s Autism Mandate, as well as federal law.
Motions to reconsider serve a limited function, to be used “where the Court has patently
misunderstood a party, or has made a decision outside the adversarial issues presented to the Court
by the parties, or has made an error not of reasoning but of apprehension.” Davis v. Carmel Clay
Sch., 286 F.R.D. 411, 412 (S.D. Ind. 2012) (quoting Bank of Waunakee v. Rochester Cheese Sales,
Inc., 906 F.2d 1185, 1191 (7th Cir. 1990)) (additional quotations omitted). A court may grant a
motion to reconsider where a movant demonstrates a manifest error of law or fact. In re Prince,
85 F.3d 314, 324 (7th Cir. 1996). A motion to reconsider is not an occasion to make new
arguments. Granite State Ins. Co. v. Degerlia, 925 F.2d 189, 192 n.7 (7th Cir. 1991).
Like a Rule 12(b)(6) motion, the court will grant a Rule 12(c) motion only if “it appears
beyond doubt that the plaintiff cannot prove any facts that would support his claim for relief.” N.
Ind. Gun & Outdoor Shows, Inc. v. City of S. Bend, 163 F.3d 449, 452 (7th Cir. 1998) (quoting
Craigs, Inc. v. Gen. Elec. Capital Corp., 12 F.3d 686, 688 (7th Cir. 1993)). The factual allegations
in the complaint are viewed in a light most favorable to the non-moving party; however, the court
is “not obliged to ignore any facts set forth in the complaint that undermine the plaintiff’s claim or
to assign any weight to unsupported conclusions of law.” Id. (quoting R.J.R. Serv., Inc. v. Aetna
Cas. & Sur. Co., 895 F.2d 279, 281 (7th Cir. 1989)). “As the title of the rule implies, Rule 12(c)
permits a judgment based on the pleadings alone. . . . The pleadings include the complaint, the
answer, and any written instruments attached as exhibits.” Id. (internal citations omitted).
In its previous Entry, the Court dismissed Plaintiffs’ claim against Anthem for violation of
the Autism Mandate because it found that the plain language of the statute does not prohibit
Anthem from imposing a cap on the number of ABA therapy hours it covers. Plaintiffs challenge
the Court’s findings and argue that the Court misunderstood its argument, and based its ruling on
a misapprehension of their interpretation of the statute. In particular, Plaintiffs assert that the
Court’s interpretation of the Autism Mandate is at odds with the IDOI’s interpretation.
The Court previously found, as agreed by both parties, that the Autism Mandate language
was plain and free from ambiguity. Although the parties agreed that the statute was clear and
unambiguous, Plaintiffs and Anthem offered different interpretations. Anthem argued that the
statute only specifically prohibits dollar limits, thereby permitting Anthem to cap the number of
ABA therapy hours that it covers. “On its face, the only limitations that this statute places on
Anthem are that Anthem cannot restrict coverage ‘solely’ because of autism spectrum disorder and
that Anthem cannot impose ‘dollar limits, deductibles, or coinsurance provisions’ that it does not
apply to physical illness coverage generally.” (Filing No. 49 at 7.) The Court discussed Plaintiffs’
interpretation at length in its analysis. (“Plaintiffs next argue that, even if the Court considers the
merits of Anthem’s Motion, the plain language of the Autism Mandate requires insurers to cover
any ‘treatment that is proscribed by the insured’s treating physician in accordance with a treatment
plan’ and precludes the application of quantitative caps on coverage.”) (Filing No. 72 at 6-7)
(quoting Filing No. 50. at 13) (emphasis in original). Although the Court quoted directly from
Plaintiffs’ Brief and the word “any” was included just before treatment in the Brief, Plaintiffs now
seek to clarify that they did not assert that Anthem must cover any treatment for autism included
in a treatment plan. Rather, Plaintiffs’ position was that Anthem must cover only medically
necessary services included in a treatment plan.
The Court did not misapprehend Plaintiffs’ interpretation of the Autism Mandate regarding
Plaintiffs’ argument on the statute’s flat-out prohibition on imposing a cap on the number of
therapy hours i.e., subsection (b) of the Autism Mandate. There was no manifest error of law or
fact in the Court’s Order on this point. Nevertheless, even if Plaintiffs meant to limit its position
to only medically necessary services, the Court’s interpretation of the statute on the permissibility
of a cap on hours of therapy, would not change because of the statute’s plain and unambiguous
language. Hours limitations are permissible under the statute.
Plaintiffs argue that the Court’s failure to explicitly explain why it gave no persuasive
weight to the IDOI’s interpretation was error and that Bulletin 136 has guided insurance coverage
in Indiana for over a decade. The Court’s decision rested on the plain language of the Autism
Mandate, which was the reason it gave Bulletin 136 no persuasive weight. (“The Court agrees
with Anthem and concludes that, even if IDOI’s interpretation of the Autism Mandate imposes an
hour limitation, the plain language of Indiana’s Autism Mandate does not preclude Anthem from
capping the number of covered ABA therapy hours.”) (Filing No. 72 at 10.) Additionally, Bulletin
136 prohibits dollar limits and visit limits, but it does not mention hour limits. Plaintiffs argued
that these were all synonymous, but the Court never reached the merits of Bulletin 136 because
the plain meaning of the Autism Mandate foreclosed judicial interpretation of the permissibility of
That being said, the Court agrees that when parsing out subsection (a) the broad language
included in this subsection creates some ambiguity. The Court’s discussion in its Order focused
on the permissibility of a cap on ABA therapy hours, as it understood Plaintiffs’ interpretation of
the statute to provide insurers to cover any treatment proscribed in a patient’s treatment plan and
to specifically prohibit hours caps. There were two issues covering two different subsections of
the Autism Mandate collapsed in the parties’ briefings and upon reconsideration, the Court
unpacks the medical necessity requirement. Under subsection (a) an insurer may not restrict
coverage on an individual under an insurance policy solely because the individual is diagnosed
with an autism spectrum disorder. It is clear that subsection (a) provides for broad coverage,
however, it also allows for additional restrictions outside of subsection (b)’s specific exclusions.
“Coverage provided under this section is limited to treatment that is prescribed by the insured's
treating physician in accordance with a treatment plan.” Ind. Code Ann. § 27-8-14.2-4(a).
The “medical necessity” language comes from IDOI’s interpretation of the Autism
Mandate in Bulletin 136, which the Court did not interpret in reaching its decision regarding the
permissibility of the hours limitations. In Plaintiffs’ Response in Opposition to Anthem’s Motion
for Partial Judgment on the Pleadings, Plaintiffs summarized their argument as:
In sum, when the statute is read as a whole, it requires an insurer to cover treatment
for an autism spectrum disorder that is included in a treatment plan approved by the
child’s treating provider and specifically precludes the application of certain
quantitative caps on coverage. Nothing in the statute suggests that an insurer can
adopt a cap on the number of hours of ABA therapy it will cover to treat an autism
spectrum disorder that is unrelated to the medical necessity of the plan.
(Filing No. 50 at 13-14). The Court adopts Bulletin 136’s interpretation insofar as it clarifies the
kinds of services that insurers may restrict. “The Department of Insurance recognizes the insurer’s
or HMO’s right to review the services prescribed under the treatment plan as to medical necessity.”
Ind. Ins. Bulletin 136, 2006 WL 1584562 (Mar. 30, 2006).
Indiana courts defer to an administrative agency’s interpretation of a statute that the agency
is charged with enforcing. “An interpretation of a statute by an administrative agency charged with
the duty of enforcing the statute is entitled to great weight, unless the interpretation would be
inconsistent with the statute itself.” LTV Steel Co. v. Griffin, 730 N.E.2d 1251, 1257 (Ind. 2000).
The Autism Mandate does not specifically preclude hours caps and it also does not provide that
dollar limitations are the only impermissible restrictions.
Bulletin 136 speaks on the gray area that hours limitations fall under. Although the statute
allows for hours limitations, insurers must provide for services that are consistent with the
treatment plan and medical necessity decisions under subsection (a) of the Autism Mandate.
Bulletin 136 resolves the permissible restrictions insurers may place on coverage i.e., restrictions
related to lack of medical necessity. Although Plaintiffs propositioned that hours limits were
completely and specifically prohibited by the statute, Plaintiffs also referred to the medical
necessity aspect in its Response in Opposition (Filing No. 50). Because restrictions in coverage
(hours caps) of services included in a patient’s treatment plan as medically necessary may violate
the Autism Mandate, Anthem must still show that its denial of additional ABA hours rested on
considerations of medical necessity. Anthem contends that it will demonstrate at trial, that its
hours caps were based on medical necessity criteria which resulted in fewer hours than requested
because mandated services are available in public schools. (Filing No. 78 at 4 n.2.) Further, as
previously discussed, Bulletin 136 prohibits dollar and visit caps, but makes no mention of caps
on the number of covered ABA therapy hours.
In light of the medical necessity analysis, the Court concedes that it made an error of
apprehension. Under the plain meaning of the statute, hours limitations are permitted under
subsection (b) of the Autism Mandate. However, hours limitations must comply with the broad
mandate of subsection (a) and Bulletin 136’s interpretation which places an affirmative duty on
insurers to provide coverage for medical necessity treatments proscribed by a provider in the
patient’s treatment plan.
Plaintiffs’ Motion for Reconsideration (Filing No. 77) is GRANTED for the limited
purpose discussed herein. The alternative request for Certification and Interlocutory Appeal is
DENIED as moot. The Motion for Partial Judgment on the Pleadings (Filing No. 48) is now
GRANTED in part and DENIED in part. Counts I and II are reinstated to the extent that
Plaintiffs assert that Anthem wrongfully denied ABA therapy hours for non-medical reasons in
violation of the Indiana Autism Mandate. Having reinstated the state law claims for violation of
the Autism Mandate, Counts I and II remain for trial. Count II’s equitable relief claim for wrongful
denial and Count III in its entirety remain dismissed.
Blythe H. Chandler
TERRELL MARSHALL LAW GROUP PLLC
Toby J. Marshall
TERRELL MARSHALL LAW GROUP PLLC
Syed Ali Saeed
SAEED & LITTLE LLP
Jonathan Lamont Mayes
BOSE MCKINNEY & EVANS, LLP
Kristopher N. Kazmierczak
KATZ & KORIN P.C.
Sally F. Zweig
KATZ & KORIN P.C.
Martin J. Bishop
REED SMITH LLP
Rebecca R. Hanson
REED SMITH LLP
Timothy R. Carwinski
REED SMITH LLP
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