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Federal Court Strikes Down Blue Cross Of Michigan's Denial Of Applied Behavior Analysis Therapy To Children With Autism

DETROIT, April 1, 2013 /PRNewswire/ -- The federal district court in Detroit held, on March 30, 2013, that Blue Cross Blue Shield of Michigan acted illegally in denying Applied Behavior Analysis ("ABA") therapy to children with autism spectrum disorder.  The case is Potter, et al. v. Blue Cross Blue Shield of Michigan, Case No. 10-14981 (E.D. Mich., Hon. Stephen J. Murphy, III).  The court, noting that ABA therapy is supported by numerous authorities,  held that Blue Cross's denial of insurance coverage for this therapy on the ground that that the therapy is "experimental" was arbitrary and capricious under ERISA.

This ruling is expected to benefit over 500 children with autism spectrum disorder, and will result in over $5 million in ABA therapy benefits being paid to class members.  In his ruling, Hon. Stephen J. Murphy, III held that Blue Cross's characterization of ABA therapy as "experimental" was not supported by its own Medical Policy.

The court previously certified the case as a national class action, such that the case is proceeding on behalf of all similarly situated families, and specifically, all individuals who, on or after December 16, 2004, were insured in an ERISA plan insured by or administered by Blue Cross, and who were denied coverage for ABA therapy by Blue Cross on the ground that such therapy was allegedly "experimental" or "investigative."  Blue Cross attempted to overturn the class certification ruling in the Sixth Circuit Court of Appeals in Ohio, but the Court of Appeals denied Blue Cross' Petition to Appeal in 2012.

After the case was certified as a class action, Blue Cross failed to comply with a court order requiring Blue Cross to compile the names of families who were denied ABA therapy.  The attorneys for the families were therefore forced to file a motion to hold Blue Cross in contempt of court.  Blue Cross then attempted to comply with the court's order. 

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