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Mark O. Hatfield Courthouse in downtown Portland. (Dave Killen |Staff)

(Dave Killen|Staff)

Providence Health Plan has agreed to pay $10,000 each to two families whose boys were denied coverage for autism therapy and about $638,000 in attorney fees under a settlement reached in federal court.

Providence Health Plan also agreed to never use the Developmental Disability Exclusion to deny coverage of behavioral therapy for autistic children under the settlement.

U.S. District Judge Michael H. Simon on Tuesday approved the agreement, reached through mediation with former Oregon Supreme Court Justice Paul DeMuniz. It ends a long-running class action case against Providence Health Plan on behalf of children with autism.

"We are honored to have represented five amazing families whose steadfast determination to obtain the best treatment for their children allowed us to help not only them but every other family in Oregon that needs substance abuse or mental health treatment,'' said attorney Josh Ross, one of two Stoll Berne lawyers who represented the plaintiffs.

In August 2014, Simon ruled that Providence's denial of coverage violated both federal and state mental health parity laws. The statutes require health insurers to cover mental health issues no different than physical ones.

Brenna Legaard, the mother of one of the plaintiffs in the Providence case, approved of the agreement.

"I am pleased that in reaching settlement on behalf of the class, we successfully obtained the full relief sought in our class claim,'' she wrote to the court. "I fully support the proposed settlement and believe that it is fair, adequate and reasonable.''

In 2013, Legaard, her husband and another Portland family sued on behalf of their young sons, who weren't identified in the lawsuit beyond their initials. They claimed Providence's denial of coverage violated the Employee Retirement Income Security Act.

Applied behavior analysis is an early, intensive type of behavioral interaction that helps people with autism perform social, motor, verbal, behavior and reasoning functions that they wouldn't otherwise be able to do. While expensive and time-consuming, it offers a new potential for meaningful treatment. The New York Times Magazine ran a story last August about ABA headlined "The Kid Who Beat Autism."

Providence denied coverage to the two families saying ABA was experimental.

The parents appealed to the insurance division, which convened a panel of doctors, who sided with the parents that ABA was the appropriate treatment. Providence then denied coverage under a different policy exclusion for treatment of developmental disabilities.

"We argued that Providence unjustly enriched itself by not paying for the care these children needed and instead invested and sat on that money,'' said attorney Keith Dubanevich, co-counsel with Ross on behalf of the plaintiffs.

Only one of several claims brought against Providence was filed as a class action, seeking to stop Providence from using the developmental disabilities exclusion to deny coverage of the special autism therapy. That claim did not seek money damages.

In settling the claim, Providence also agreed to pay $10,000 to the two families who brought the suit on behalf of the class of plaintiffs impacted, Ross said. The $10,000 reflects a "service award,'' meaning it's not damages but recognizes the "hard work, commitment and time invested by those two families in bringing the claim on behalf of the class.''

A second claim was brought to recover out-of-pocket expenses that five families paid for the ABA therapy for their children while Providence denied coverage. Previously, the court ruled that these families were entitled to recover virtually all of those amounts.

"Providence is glad that this lawsuit has been amicably resolved,'' said Gary Walker, spokesman for its Oregon region.

He said the settlement involved cases prior to 2014 and Providence is covering applied behavioral analysis therapy today.

Disability Rights Oregon filed a friend of the court brief in support of the plaintiffs' case against Providence.

Disability Rights Oregon, a federally funded, nonprofit law office charged with protecting the rights of people with disabilities, was concerned that if Providence's denial of coverage for a "medically necessary service for children with autism'' was permitted then other group therapy or drug therapies would be "arbitrarily limited'' or denied for others suffering mental illnesses.

-- Maxine Bernstein

mbernstein@oregonian.com

503-221-8212

@maxoregonian