Key Points:

• Parents of 11 children filed a class action lawsuit against the state’s Medicaid agency

• The complaint accuses the agency of unlawfully approving changes to provider networks

• The dispute impacts children with autism spectrum disorder receiving applied behavioral analysis therapy

Another lawsuit has been filed against the Arizona Health Care Cost Containment System over contract disputes between insurance companies and two autism therapy centers.

Parents of 11 children with autism spectrum disorder filed a class action lawsuit against AHCCCS on Feb. 6, alleging the agency unlawfully approved changes to provider networks for two insurers: Mercy Care and Arizona Complete Health. The complaint follows another lawsuit filed by families and Centria Autism Center on Dec 15 against AHCCCS, Mercy Care and the Department of Economic Security. 

“AHCCCS’ decision to allow these private insurers to place their own profits over the treatment of low-income kids with autism is shocking,” said Tim Nelson, attorney for the 11 families, in a statement. “These companies have never retained enough autism providers for Medicaid beneficiaries, and waiting lists for families with autistic children were already way too long.”

The lawsuits were sparked by Mercy Care and Arizona Complete Health terminating contracts with Centria Autism and Action Behavior Centers, forcing many families to switch providers for their children’s applied behavioral analysis therapy. Centria and ABC allege Mercy Care terminated their contracts after the insurer attempted to reduce reimbursement rates for services without negotiating in good faith.

Arizona Complete Health terminated its contract with ABC around the same time Mercy Care began terminating contracts, though ABC staff allege that Arizona Complete Health terminated the contract without cause. The class action suit also alleges the insurer has not been assisting patients in finding new therapy providers. 

Applied behavioral analysis, known as ABA, is an increasingly popular form of therapy for children on the autism spectrum and is currently covered by the state’s Medicaid system. Parents of children who receive services from Centria and ABC are afraid that moving their children to unfamiliar therapy centers will cause their children to regress. 

Children with autism spectrum disorder are incredibly sensitive to change and parents of children attending Centria told the Arizona Capitol Times in November that their children have experienced regression as a result of disruptions to their ABA therapy. 

In court filings in the first lawsuit, AHCCCS argued that Mercy Care has openings for clinic-based and in-home ABA services for more than 1,000 of its members, more than the number of members losing access to Centria and ABC.

“Plantiffs’ declarations speak of their emotionally charged preferences and the worries they have about changing ABA providers …” attorneys for AHCCCS wrote on Jan. 9. “… the individual Plaintiffs’ concerns and attachment to Centria’s services (even if understandable) do not rise to the level of irreparable injury.” 

However, the class action suit filed on Feb. 6 argues that the parents’ resistance to switching ABA providers is not just about “emotionally charged preferences” but also about logistical issues such as transportation, a lack of providers with openings in rural areas and reduced hours for services. 

Attorneys for AHCCCS said the families and Centria had no dispute with the agency, but with Mercy Care, and a lawsuit against AHCCCS would not “achieve Plaintiffs’ desired outcome” because the agency cannot reinstate the contracts. 

Attorneys for the 11 families represented in the class action suit argue that allowing the insurers to terminate contracts with ABA providers not only violates state and federal law, but it could result in a wave of other insurers terminating contracts with ABA providers in Arizona. 

The contract terminations are set to take effect in March, leaving families little time to find new providers or a new insurer to cover their children’s ABA therapy. Both lawsuits ask the court to temporarily stay the effective dates while the cases play out, but a ruling on those requests has not yet been issued in either case.