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UPDATED: 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 coverage for 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, and is not supported by Blue Cross' own medical policy, held that Blue Cross' denial of insurance coverage for this therapy on the ground that that the therapy is "experimental" was arbitrary and capricious under federal law.

This ruling is expected to benefit over 500 children with autism spectrum disorder and result in over $5 million in ABA therapy benefits being paid to class members.  In his ruling, Hon. Stephen J. Murphy, III held that "BCBS's medical policy [characterizing ABA therapy as "experimental"] is internally inconsistent, ambiguous, and, most fatally, not supported by the evidence in the record."  The court granted the families' motion for judgment, declared Blue Cross' policy "arbitrary and capricious" under ERISA, overturned Blue Cross' denials of the families' claims for ABA coverage, and ordered Blue Cross to provide notice of the ruling to the families at Blue Cross' expense.

The court previously certified the case as a national class action, such that the case is on behalf of all similarly situated families covered by an ERISA health plan insured by or administered by Blue Cross, and who, at any time, were denied coverage for ABA therapy by Blue Cross on the ground that such therapy is allegedly "experimental" or "investigative," pursuant to Blue Cross' 2010 policy statement.  Blue Cross attempted to overturn the court's initial class certification ruling in the Sixth Circuit Court of Appeals, but the Court of Appeals denied Blue Cross' Petition to Appeal in 2012.

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