Key Points:

• Centria Autism and two parents of children with autism sued Arizona’s Medicaid agency and one of its insurance contractors

• The lawsuit stems from a contract dispute between Centria Autism and insurer Mercy Care

• Centria and the parents allege children with autism will lose critical therapy services 

Two parents of children with autism and an autism therapy center are suing the state Medicaid agency, one of its insurance contractors and the Department of Economic Security over a contract dispute that threatens to leave patients without care.

Tiana Brandon, Jessica Parisi and Centria Autism said in a Dec. 15 complaint that managed care organization Mercy Care abruptly and erroneously terminated its contract with the therapy center on Oct. 17 without engaging in good faith negotiations on increasing reimbursement rates. 

Additionally, the lawsuit alleges that the Arizona Health Care Cost Containment System and DES, which manages the state’s Division of Developmental Disabilities, have not done enough to ensure that affected patients can continue receiving therapy services.

“Mercy Care and AHCCCS have not provided any written transition plan to (parents) to help them identify other providers via a different network or to provide an option to continue with current Centria practitioners via a different MCO,” the complaint alleges.

The lawsuit stems from an ongoing contract dispute between Centria, which provides applied behavioral analysis therapy services to children with autism spectrum disorder, and Mercy Care after the insurer attempted to decrease its reimbursement rates by 25%. Centria alleges that when it tried to discuss the harm decreased reimbursement rates would cause to its services, Mercy Care instead terminated its contract without cause. 

“Mercy Care has attempted to unilaterally force certain ABA therapy providers into accepting an unsustainable 25% rate decrease, just months after it reduced these providers’ rates by 15%,” Attorneys for Centria wrote in a court filing. “Centria determined such rate cuts were unsustainable and would detrimentally affect its quality of services to patients.”

Centria is one of the largest providers of ABA (applied behavioral analysis) services for children on Medicaid in Arizona, serving around 700 children. Nearly 300 of those children are on Mercy Care’s health plan, according to Centria’s complaint.

The state is currently facing an ABA provider shortage and is dealing with recent layoffs of providers at another autism services provider, Arizona Autism. Centria says an estimated 22,000 children in Arizona are unable to receive ABA services.

Brandon told the Arizona Capitol Times in November that AHCCCS and the Division of Developmental Disabilities had been unhelpful in finding a new provider or a new health plan for her son Micah, who currently attends Centria. Children with autism spectrum disorder are especially sensitive to change and Brandon and other Centria parents said they are worried their children will regress without stable, continued therapy. 

“The best-case scenario is that these children wait six months before receiving services from a new provider — yet there is a clear risk of regression and harm to these children if they do not receive any services or treatment during that time,” the complaint argues. 

Centria and the parents say Mercy Care failed to provide transition and network adequacy plans for affected patients and breached its contract with Centria by terminating it without engaging in good faith negotiations over reimbursement rates. A spokeswoman for Mercy Care did not directly address the lawsuit in a Dec. 17 statement.

“Applied Behavior Analysis (ABA) therapy is important for children and families, and we work to ensure our provider relationships align with the needs of our members and the state,” Laurie Munn said in an emailed statement. “We are confident in our network of providers and our ability to ensure continuity of care for our members.”

The complaint also accuses AHCCCS and DES of approving Mercy Care’s termination of Centria through a submission of a material change to its provider network, despite being aware of ABA provider shortages. It also alleges AHCCCS “actively prevented” some Centria patients, like Brandon’s son, from switching to a different managed care organization to continue therapy at Centria. 

A spokesperson for DES declined to comment on ongoing litigation A spokesperson for AHCCCS declined to comment on the specifics of the lawsuit in an emailed statement.

“AHCCCS is aware of the lawsuit that was filed on December 15, and the Agency is in the process of reviewing the allegations made by the Plaintiff,” the statement said. “ABA is an AHCCCS covered service, and the agency and its contracted health plans continue to cover ABA services when the services are determined to be medically necessary.”

Centria and the two parents also filed a motion for a temporary restraining order, asking the Maricopa County Superior Court to prevent the contract termination from going into effect in March and stop any attempts to transition Centria patients to other providers. A hearing on the restraining order is set for Dec. 19.