Senate Interim Committee On Rules and Executive Appointments. Concerns regarding nomination of Sean Kolmer to Oregon Health Policy Board

Transcription

1 May 28, 2014 To: Senate Interim Committee On Rules and Executive Appointments From: Paul Terdal, Northwest Portland (SC18) Re: Concerns regarding nomination of Sean Kolmer to Oregon Health Policy Board Dear members of the Senate Rules Committee, I am writing to express my concerns over the nomination of Sean Kolmer to the Oregon Health Policy Board. Under Sean s leadership as Chair of the Public Employee s Benefits Board (PEBB), PEBB has adopted a radical reinterpretation of Oregon s landmark Mental Health Parity law PEBB has asserted the right to categorically exclude all coverage for mental or nervous conditions, regardless of medical necessity. This position has denied PEBB members with lawfully mandated, medically necessary mental health services; set a negative example for commercial insurers and exposed the state to expensive litigation to defend a policy that is illegal and contrary to the state s interests. PEBB members have been forced to file a class action lawsuit against the State of Oregon to compel PEBB to comply with its contractual commitment to honor state and federal Mental Health Parity laws. PEBB has issued denial letters to several PEBB members seeking coverage of mental health treatment for autism saying: Because ABA services are related to Autism Spectrum Disorder, they are therefore not benefits covered by your plan. However, Oregon s Mental Health Parity law and the plain language of PEBB s contract -- requires plans to provide coverage for expenses arising from treatment mental or nervous conditions including autism, per OAR and the plain language of the PEBB contract at the same level as, and subject to limitations no more restrictive than, those imposed on coverage or reimbursement of expenses arising from treatment for other medical conditions. There may plausibly be a legal reason to deny coverage of ABA services and we look forward to hearing it but denying coverage of a mental health service solely because that service is related to a mental or nervous condition protected by Mental Health Parity is a prima facie violation of the law and its inexcusable. The lawsuit is a class action filed against the State of Oregon and PEBB in Marion County by PS, a six year old girl with autism whose mother is a state employee. It seeks $,000,000 in actual damages plus

2 compensatory damages for harm suffered by lack of mental health treatment plus punitive damages for violation of civil rights by denying coverage solely because of the patient s disability status. PEBB s administrator asserts that insurers are free to exclude coverage of any and all mental health benefits for any mental or nervous condition PEBB s administrator, Providence, has defended its denial by asserting that: The statute [ORS 4A.18] requires parity in treatment limitations between medical benefits and mental health benefits that the plan covers. [emphasis original] The OMHPA does not mandate coverage of mental health benefits. Based on this interpretation, PEBB s administrator has asserted: the plan provides no mental health services whatsoever related to developmental disabilities even for Autism a covered mental or nervous condition under Oregon law and the PEBB contract. This position flies in the face of decades of legislative history, judicial precedent, and enforcement by the Insurance Division. In 2008, the Oregon Insurance Division took enforcement action against a commercial carrier with similar contractual language specifically limiting coverage for developmental disorders including autism; it reported to the legislature that The Division required the companies to remove the offending language and to comply with the mandates of Senate Bill 1. PEBB s position if upheld would completely undermine Oregon s landmark Mental Health Parity act. As Disability Rights Oregon has written in an amicus brief on a parallel case against Providence, AF v Providence: the implications would devastating for all with mental health conditions not just for children with autism. The same reasoning as that used by Providence to avoid its obligations under state and federal law to provide ABA to children with autism would be used to deny medically necessary services for people with other mental illnesses in the community (a complete copy of DRO s amicus brief has been attached) Attempts to notify PEBB and others about mismanagement: The autism community has worked extensively with PEBB, and directly with Mr. Kolmer, to address these issues, and bring PEBB into compliance with Oregon s Mental Health Parity act to no avail. This issue began in May 2011, when PEBB was provided information that their policy could be out of compliance with state and federal law. We were told by top PEBB and OHA leadership that until PEBB itself was sued and issued a court order, no action would be taken. In September 20 and January 201, Shane Jackson (Lobbyist) and Paul Terdal (advocate) met with Mr. Kolmer and explained concerns with PEBB s handling of mental health care for autism. In January 201, Sean was specifically advised that the state could be named in a lawsuit.

3 In April 201, the lead plaintiff and another PEBB member both went to Mr. Kolmer s office in person to request a meeting to discuss this issue. There was no known response. In May 201, Shane Jackson and Paul Terdal, along with a local attorney, met with Mr. Kolmer for more than an hour. Mr. Kolmer was provided with a copy of the then-recent complaint in AF v Providence along with detailed information about similarly situated PEBB members. Mr. Kolmer was asked to meet with the PEBB members to attempt to resolve the issue. No known action was taken. In July 201, DCBS Director Patrick Allen gave Gov. Kitzhaber a written letter (Blue sheet for SB) specifically advising him that this issue could be litigated. No known action was taken. From November 201 to February 2014, we proposed new legislation (SB12) to address this issue out of court by reiterating PEBB s requirement to comply with Mental Health Parity. We explained the underlying issues in detail during working sessions with Mr. Kolmer and his staff. Under Mr. Kolmer s leadership, PEBB asserted that the legislation was unnecessary, but also refused to take necessary steps to bring PEBB into compliance with its contractual commitment to comply with Mental Health Parity. Providence conduct in administering its PEBB contract was specifically and intentionally planned in such a way as to provoke litigation by public employees against the State of Oregon. PEBB and its plan administrator, Providence, brought this suit upon themselves very literally. In AF v Providence, a related suit regarding identical conduct by Providence on its commercial plans, Providence advised U.S. District Court on 11/1/201 that it had intentionally structured its autism denials so as to provoke litigation by consumers. PEBB has allowed Providence to put the state at great risk for law suit by supporting Providence s interpretation of MHP. In its Memorandum Opposing Motion for Class Certification in AF v Providence, Providence explained its view of the history behind the suit, and its frustration with decisions by physicians in Independent Review Organizations (IRO) appointed by the Insurance Division that consistently overturned Providence and PEBB s findings that ABA was experimental / investigational. Providence wrote: It had become apparent, therefore, that access to a decision by a judge (rather than by physicians) on the federal ERISA issues of law presented by these cases was going to require one of three things: (a) resting a final grievance decision solely on grounds not authorized for IRO review under Oregon s statute; (b) waiting until a member elected to sue in federal court rather than appeal to an IRO physician; or (c) finding an IRO reviewer that would agree with Providence s reading of the clinical literature and waiting for the member to appeal from that decision. Of those choices, only (a) was within Providence s control. In short, Providence was effectively being denied the opportunity for federal judicial review under ERISA of the soundness of its conclusion that ABA services are experimental/investigational, presumably until such time as either (b) or (c) occurred. Providence therefore decided, for a time, to implement strategy (a), in order to attempt to resolve what it could before a judge rather than a physician.

4 And: In Sum: Providence has done what it can to place these issues before this Court by relying on the exclusions other than that relating to services that are experimental/investigational. Mr. Kolmer has ignored repeated attempts to inform him of the misdirection s in areas of state policy that he controls; this has resulted in litigation, legislation, and harm to those who were discriminated against and unlawfully denied coverage solely because it was related to autism a covered mental or nervous condition. The view of mental health parity that PEBB has supported under his leadership would, in the words of Disability Rights Oregon, be devastating for all with mental health conditions. We need someone on the Oregon Health Policy Board who will support mental health treatment, is able to work with non-commercial public advocacy groups, and who understands the full policy implications of his decisions. Mr. Kolmer has shown that he lacks these qualities. Attachments: PS v PEBB Press Release pdf: press release introducing PS v PEBB class action lawsuit against the State of Oregon and PEBB for violation of Mental Health Parity, civil rights legislation P.S ABA denial (REDACTED).pdf: denial letter from PEBB, dated March 11, 2014, denying ABA services solely because they are related to autism PS v PEBB civil complaint pdf: a copy of the class action complaint filed in Marion County Circuit Court AF v Providence 01-cv-00 doc DRO Amicus.pdf: Amicus Brief by Disability Rights Oregon, quoted above DCBS Review of MHP 2009.pdf: 2009 Review of Coverage of Mental or Nervous Conditions in Accordance with OAR (8) by the Oregon Insurance Division; references enforcement action against commercial insurers for excluding mental health coverage for developmental disabilities

5 FOR IMMEDIATE RELEASE April 0, 2014 For More Information: Plaintiff Counsel: Megan E. Glor, Attorneys At Law Volunteer Consumer Advocate: Paul Terdal (0) Eleanor Hamburger Oregon Public Employees Benefits Board Sued in Class Action for Illegal Discrimination; Refuses to Cover Therapy for Autism April 0, 2014, Portland, Oregon -- Attorney Megan Glor and Sirianni Youtz Spoonemore Hamburger, a Seattle law firm, filed a class action lawsuit against Oregon s Public Employees Benefits Board (PEBB) today on behalf of P.S. a six year old girl with autism whose mother is an employee of the State of Oregon. P.S. sought coverage of Applied Behavior Analysis (ABA) therapy to treat her autism. The state refused to cover P.S. s ABA therapy solely because it was related to autism even though Oregon s Mental Health Parity law has required treatment of autism since 200. Providence Health Plans, acting as PEBB s plan administrator, issued a denial letter stating that: Under Providence's Plan, services related to developmental disabilities, developmental delays or learning disabilities are specifically excluded from coverage. Because ABA services are related to Autism Spectrum Disorder, they are therefore not benefits covered by your plan. The lawsuit charges that the PEBB developmental disability exclusion violates Oregon s Unlawful Discrimination Against Persons with Disabilities Act as well as the state and federal Mental Health Parity Acts. This case sends a message that all employers must cover essential health services for individuals with developmental disabilities, including children with autism, said Ms. Glor. Exclusions like the one in the PEBB plan are nothing more than rank discrimination. The State discriminates against its employees and qualified dependents with developmental disabilities when it applies the PEBB developmental disabilities exclusion, said Paul Terdal, a volunteer autism advocate who assisted P.S. and her parents. Not only does the State, as an employer, violate its own laws and public policy, it sets a bad example for other employers and insurers, and weakens the rule of law.

6 The lawsuit, P.S. v. PEBB, is the latest in a string of cases nationwide challenging exclusions and limitations on coverage of treatment for autism including McHenry v PacificSource and A.F. v Providence in Oregon, and numerous cases in Washington and other states. It is the first case in Oregon, however, to charge that such exclusions are also unfair and illegal discrimination on the basis of disability when applied by employers that offer self-funded health benefit plans. PEBB s contract promises that it complies with Oregon s Mental Health Parity law (ORS 4A.18) which requires plans to provide coverage for expenses arising from treatment mental or nervous conditions including autism, per OAR and the plain language of the PEBB contract at the same level as, and subject to limitations no more restrictive than, those imposed on coverage or reimbursement of expenses arising from treatment for other medical conditions. P.S. charges that the PEBB developmental disability exclusion and exclusion of all ABA therapy as experimental/investigational breaches the PEBB contract, as modified by the state and federal Mental Health Parity Acts. A similar exclusionary practice in the Washington State public employee health benefit plan was challenged in D.F. v. Washington State Health Care Authority, a case brought by Eleanor Hamburger and Richard Spoonemore of Sirianni Youtz Spoonemore Hamburger. The D.F. case resulted in a landmark decision that blanket exclusions of medically necessary mental health services such as ABA for autism violated Washington s Mental Health Parity Act. The case eventually settled after the Washington Public Employee Benefit Board removed its ABA therapy exclusion and provided a $. million settlement fund for public employees who had paid out-of-pocket for medically necessary ABA therapy services. ###

7 I t PROVl.DENCE Health Plans P.O. Box 4Z Portland, oregon er2oe.4z March 11, 2014 Kell Alford Smith REGARDING; sntal Health Outpatient Services IMPORTANT: Denial of Authori~tion.:"''Please read this Jetter oarefully and retain a copy for your reaords- Dear Parent or Guardian of-- Recently, PBl-I, on behalf of Providence Health Plans, has received a request for authorization for Mental Health outpatient services. After careful review, and per our Medical Policy Providence Health Plan Public Employees Benefit Board - Providence Choice this raque~t was not apptoved for dates of ser\llce 0//2014 with Building Bridges, a partlelpating provider. The reasol1 for the decision is as follows: Under Providence's Plan, serv.lces "related to developmental disabilities, developmental delays or learning disabllltlea" are speclflcally e)(ofuded from coverage. Because ABA services are related to Autlsrn Spfjlctrum Disorder, they are iherefore> not benefits covered by your plan. Your rlghta If you do not agree with this decision, you have the right to fll0 an lnltial grlevanco. We bave enclosed your Gr1evanc;e and Appeals Rights for additional information. '.... Wo want to help. If you have any questions or oonoerns, ~lease oall oontaot our Marnber Seivioes team by calling 1w888w990w, Monday through Friday, 8 a.m. to S p.m. If you are hearing impaired and us& a Teletype (TIY) Device, please call our TIY line at 11. Coples of medical policies are available upon request. Providence Health Plans 0014 Reviewed -201 Pa.ge 1 ot2

8 SPANISH (Eepat\ol): Para obtener asistencla en Espat\ol. Uame al We're here to help! Sincerely, Thomas Blocher', MD Associate Medical Director Board Certified, Psychiatry Board Certified, Addiction Medicine PBH for Providence Heatth Plan cc: Building Bridges Enclosure: Grievance and Ap~eal Rights Providence Health Plans 0014 Reviewed. 201 Pago2of2 _....

9 4 Marion county Circuit court IN THE CIRCUIT COURT FOR TIIE STATE OF OREGON FOR MARION COUNTY a P.S., by and through her parents and guardians, Kelly Alford-Smith and Duane 9 Smith, individually and on behalf of similarly situated individuals, and Kelly Alford-Smith, individually and on behalf of similarly 1 1 situated individuals, Plaintiffs, v. 1 STATE OF OREGON, and OREGON PUBLIC 14 EMPLOYEES' BENEFIT BOARD, 1 Defendants. NO. \4(,\ ~lq ~ COMPLAINT (Oass Action) (Breach of Contract and Violation of O.R.S. 9A.1, 0.R.S. 4A.18,.190 and 29 U.S.C. 118a and its implementing regulations) [REDACTED] Plaintiffs P.S., by and through her parents and guardians, Kelly Alford-Smith and Duane Smith, individually and on behalf o! similarly situated PEBB beneficiaries, and Kelly Alford-Smith, individually and on behalf of similarly situated employees of 19 the State of Oregon, bring this class action lawsuit against the State of Oregon and its 20 Public Employees' Benefit Board (PEBB). 21 This case is about the State of Oregon's unfair and illegal discrimination against 22 individuals diagnosed with Autism Spectrum Disorders (ASD) and their families in its 2 health coverage for public employees. Defendants exclude all coverage of the essential 24 mental health therapy to treat ASD, known as Applied Behavior Analysis (ABA) 2 therapy. ABA therapy is the standard form of treatment for ASD in Oregon and across 2 the country. It is not experimental. COMPLAINT (CLASS ACTION) - 1 Yet defendants exclude coverage of this therapy, SIRIANNI YoUTZ 999 THIRD A VENUE, SUITE 0 SEATTLE, WASHINGTON 984 TEL (20) FAX (20) ~4

10 first claiming that it is "experimental/investigational" and then, when such decisions are overturned by independent medical reviewers, denying all coverage under PEBB' s exclusion of services to treat developmental disabilities. PEBB' s developmental disability exclusion constitutes discrimination in employment and denies Alford-Smith and similarly situated public employees all the benefits to which they are entitled, based upon their family members' developmental disability. The exclusion is also void as against public policy. Tiris civil class action is brought for the purpose of compelling defendants to end their illegal and discriminatory practices, and to provide immediate coverage of ABA therapy to treat ASD, as required by Oregon and United States law. Plaintiffs seek injunctive and declaratory relief, damages, costs, and attorneys' fees. Plaintiffs allege the following: PARTIES 1. Plaintiff P.S. is the nearly six-year-old daughter and dependent of Kelly Alford- 1 Smith and Duane Smith and resides in Oackamas County, Oregon. Plaintiff P.S. is. 1 diagnosed with an ASD. She is a participant in the Oregon PEBB' s Providence Choice 18 Plan, a self-funded plan provided to Oregon public employees and their dependents 19 that is administered by Providence Health Plan. P.S.'s coverage is through Alford- 20 Smith's employment with the State of Oregon Plaintiff Kelly Alford-Smith is the parent and guardian of P.S. and resides in 2 Oackamas County, Oregon. Plaintiff Alford-Smith is employed by the State of Oregon 24 and is entitled to comprehensive health coverage for herself and her developmentally 2 disabled daughter through PEBB as a benefit of her employment. 2 COMPLAINT (CLASS ACTION) - 2 SIRIANNI YoUTZ 999 THIRD A VENUE, SUITE 0 SEATTLE, WASHINGTON 984 TEL. (20) FAX (20)

11 Defendant State of Oregon employs Alford-Smith on a full-time basis in a PEBB participating organization. Both Alford-Smith and her daughter, P.S., are enrolled in a self-funded PEBB plan administered by Providence Health Plans. 4. Defendant Public Employees' Benefit Board (PEBB) is part of the Oregon State Division of Administrative Services. PEBB is statutorily authorized to contract for ~d ad.minister health benefit plans that are "best designed to meet the needs and provide for the welfare of eligible employees" and their family members. O.R.S Despite its statutory mandate, PEBB has designed and directed Providence Health. Plans to administer health benefit plans that exclude all coverage of ABA therapy, an essential mental health treatment for ASD. JURISDICTION AND VENUE. 1 Jurisdiction of this case arises pursuant to O.R.S because the Court has 1 jurisdiction of the parties. Venue is proper pursuant to O.R.S bec~use 1 defendants are located in Marion County and the cause of the suit, or some part 18 thereof, arose there. 19 NATURE OF THE CASE 21 Plaintiffs seek to end PEBB' s standard practice of excluding all coverage of ABA 22 therapy to treat ASD. Early and intensive ABA therapy can dramatically improve the 2 health and life-long wellbeing of PEBB enrollees with ASD. PEBB, however, excludes 24 all coverage of this essential mental health treatment. PEBB has sometimes excluded 2 the treatment as "investigational" but more recently has excluded it by applying 2 COMPLAINT (CLASS ACTION) - SIRIANNI YO UTZ 999 THIRD AVENUE, SUlTl! 0 SEATILE, WASHINGTON 984 TEL. (20) FAX (20)

12 PEBB's exclusion of all services "related to developmental disabilities, developmental delays or learning disabilities.". PEBB' s application of its "developmental disability" exclusion to all coverage of ABA therapy to treat ASD, even when ABA is medically necessary, breaches its coverage contract with plaintiffs and the putative class, as modified by applicable state and federal Mental Health Party Acts. See O.R.S. 4A.18; 29 U.S.C. 118a; 29 C.F.R. 290.(c)(4). 8. Defendants' exclusion of all services to treat developmental disabilities also violates Oregon's prohibition against discrimination on the basis of disability in employment. O.R.S. 9A.1. In particular, Oregon anti-discrimination law forbids 1 employers, including the State of Oregon, from "exclud[ing] or otherwise den[ying] benefits to a qualified individual because the individual is known to have a 1 relationship or association with an individual with a disability." O.R.S. 1 9A1(2)(d) (emphasis added). PEBB denies Plaintiff Alford-Smith the full panoply 1 of dependent benefits available through her employment simply because her qualified 18 dependent child is diagnosed with a developmental disability for which the child 19 needs specialized medical and mental health services. ~ ~ 21 Defendants' systemic exclusion of ABA therapy to treat ASD as 22 "experimental/ investigational" is also a breach of contract. PEBB, through its 2 administrator, has uniformly denied coverage of ABA to treat ASD even though the 24 therapy can be medically necessary, is accepted medical practice in Oregon and across 2 the country, and is safe and efficacious. Although multiple independent reviewers 2 have overturned denials of coverage for ABA as experimental/ investigational, PEBB COMPLAINT (CLASS ACTION) - 4 SIRIANNIYOUTZ 999 THIRD A VENUB, Surm 0 SEAITLE, WASHINGTON 984 TEL. (20) FAX (20)

13 maintains th.at the therapy can never be medically necessary, as stated in Providence Health Plans' "Medical Policy and Criteria regarding Autism Spectrum Disorders/Pervasive Developmental Disorders Assessment and Treatment.". This lawsuit seeks class-wide remedies for defendants' breach of contract, violations of state and federal Mental Health Parity Acts and violation of Oregon Anti- Discrimination law. It further seeks to recover the benefits th.at have been wrongfully denied to plaintiffs and the proposed class. It also seeks a court order declaring defendants' exclusion of ABA therapy to treat ASD either under its /1 developmental disability" exclusion or as "experimental/investigational'' illegal, void and against public policy. The lawsuit further seeks an injunction to prevent any future or ongoing efforts by defendants to use and enforce any exclusions, limitations, policies or practices that impermissibly deny, exclude or limit Oregon PEBB participants' access to 14 medically necessary mental health services to treat ASD. 1 1 CLASS ALLEGATIONS Class Definitions. Plaintiffs propose certification of two subclasses: An ABA 1 s subclass and an Employee subclass ABA Subclass. Plaintiffs propose the ABA subclass consisting of all individuals 21 who: (a) have been, are, or will be participants in a self-funded PEBB health benefit 22 plan on or after April 29, 2008; and (b) have received or require, or are expected to 2 require, ABA therapy for the treatment of an ASD Size of ABA Subclass. The proposed class of participants in a self-funded PEBB. 2 health benefit plan diagnosed with ASD who have received or required, or are COMPLAINT (CLASS ACTION) - SIRIANNI YOUTZ 999 nmm A VENUE,Surrs0 SBA.TILE, WASHINGTON 984 TEL. (20) FAX (20)

14 2 4 8 expected to require, ABA therapy to treat their ASD is expected to number in the hundreds and is so large that joinder of all members is impracticable. 14. Class Representative P.S. Named plaintiff P.S. is a participant in a self-funded PEBB plan sponsored by the State of Oregon, a large employer of more than 1 employees. P.S. is diagnosed with ASD, a condition that is listed in the most recent DSM. P.S. needs ABA therapy to treat her ASD. PEBB denied all of P.S.'s requests for coverage of her ABA therapy, first because it determined that ABA therapy is always 9 /1 experimental/ investigational" and then second because it determined that ABA 11 therapy was excluded as a service to treat a developmental disability. Her claims are typical of the claims of the other members of the ABA subclass, and through her parents, she will fairly and adequately represent the interests of the subclass Employee Subclass. Plaintiffs propose the Employee subclass consisting of all 1 individuals who: (a) have been, are, or will be participants in a self-funded PEBB 1 health benefit plan on or after April 29, 2008; and (b) who have a qualified dependent 1 who received or requires, or is expected to require, ABA therapy for the treatment of 18 anasd Size of Employee Subclass. The proposed subclass of employees who 21 participate in a self-funded PEBB health benefit plan and who have a qualified 22 dependent who received or requires, or is expected to require, ABA therapy to treat an 2 ASD is expected to number in the hundreds and is so large that joinder of all members 24 is impracticable. 2 2 COMPLAINT (CLASS ACTION) - SIRIANNI YOUTZ 999 THIRD A VENUE, SUITB 0 SEAITLE, WASHINGTON 984 TEL (20) FAX (20)

15 Class Representative Alford-Smith. Named plaintiff Alford-Smith is employed by the State of Oregon in a PEBB qualified state agency. Alford-Smith's daughter P.S. is a qualified dependent and a participant in a self-funded health benefit plan administered by defendant PEBB. P.S. is diagnosed with ASD and needs ABA therapy to treat her ASD. Defendants, however, exclude all coverage of this essential therapy as a /1 service to treat developmental disabilities." As a result, defendants discriminate against P.S. and her parent Alford-Smith on the basis of her disability, in violation of Oregon anti-discrimination law. 18. Common Questions of Law and Fact For Both Subclasses. This action requires a determination of whether PEBB' s application of contract provisions, policies and practices that exclude coverage of ABA therapy to treat ASD in PEBB' s self-funded health benefit plans breaches its coverage contracts with its participants, violates the 1 requirements of the Oregon and Federal Parity Acts, and illegally discriminates against 1 participants with ASD and their families because they have a developmental disability. 1 Adjudication of these issues will in tum determine whether PEBB is liable for 18 declaratory and injunctive relief as well as damages due to its conduct Separate Suits Would Create Risk of Varying Conduct Requirements. The 21 prosecution of separate actions by class members against defendants would create a. 22 risk of inconsistent or varying adjudications with respect to individual class members 2 and health benefit plans that would establish incompatible standards of conduct. 24 Certification is therefore proper under 0.R.C.P. 2(b}(l). 2 2 COMPLAINT (CLASS ACTION)- SIRIANNI Y OUTZ 999 THIRD A VENUE, SUlTE 0 SEATTLE, W ASHINCTON 984 TEL (20) FAX (20)

16 Defendants Have Acted on Grounds Generally Applicable to the Classes. Defendants, by applying standard policies and practices that result in the improper exclusion of ABA therapy, a mental health service to treat ASD, a condition listed in the DSM, has acted on grounds generally applicable to the classes, rendering declaratory and injunctive relief appropriate respecting each entire class. Certification is therefore proper under O.R.C.P. 2(b )(2). 21. Questions of Law and Fact Common to the Classes Predominate Over Individual Issues. The claims of the individual class members are more efficiently adjudicated on a class-wide basis. Any interest that individual members of the classes may have in individually controlling the prosecution of separate actions is outweighed 1 by the efficiency of the class action mechanism Upon information and belief, there is 1 4 no pending class action suit filed against these defendants for the same relief requested 1 in this action. This action can be most efficiently prosecuted as a class action in the 1 Marion County, where defendants are located. Issues as to PEBB' s conduct in applying 1 standard policies and practices towards all members of the class predominate over 18 questions, if any, unique to members of the class. Certification is therefore additionally t 9 proper under 0.R.C.P. 2(b)(). 21 Class Counsel. Plaintiff has retained experienced and competent class counsel. 22 FACTUAL BACKGROUND Plaintiffs P.S. and Alford-Smith. In May 20, P.S. was diagnosed with autism. 2 (DSM-IV ) by a multidisciplinary team including Aimee Gerrard-Morris, Ph.D., 2 COMPLAINT (CLAS.S ACilON) - 8 SIRIANNI Yo UTZ 999TH!RD AVBNUB, SUlTI! 0 SEATILE, WASHINGTON 984 TEL (20) FAX (20)

17 pediatric neuropsychologist, at Legacy Emanuel Children's Hospital in Portland Oregon. P.S. was two years old. 24. P.S. is an individual with a disability for the purposes of the Oregon Unlawful Discrimination Against Persons with Disabilities Act, O.R.S. 9A. et seq. She has a physical or mental impairment that substantially limits one or more major life activities. In particular, her ASD impacts her ability to care for herself, communicate and interact with others, and engage in appropriate age-appropriate behavior and activities. 2. P.S. is also perceived by defendants as having a developmental disability. 2. The multidisciplinary team at Legacy Emanuel recommended that P.S. be enrolled in a behaviorally-based, comprehensive, intense, multidisciplinary program 1 with professionals with expertise in autism. Dr. Gerrard-Morris also recommended 1 speech and occupational therapies to treat P.S.'s autism. P.S.'s parents enrolled her in 1 speech and occupational therapy as advised by the Legacy Emanuel Children's 18 Hospital team In 20, P.S.'s parents had P.S. evaluated by a developmental pediatrician, Michelle Raddish, M.D., who recommended that P.S. immediately start an ABA 22 therapy program. ~ ~ 24 P.S.' s parents enrolled her in an ABA therapy program. They did not seek 2 preauthorization from their PEBB plan because they had heard that PEBB never covers 2 ABA therapy. COMPLAINT (CLAs. ACTION) - 9 SIRIANNI Y OUTZ 999 nmid A VENUE, S'um! 0 SEATTLE, WASHINGTON 984 TEL. (20) FAX (20)

18 In the summer of 20, Alford-Smith learned that some PEBB enrollees had been successful in appealing denials of coverage for ABA therapy when those appeals went to an independent review organization (IRO). As a result, she decided to request coverage for P.S.' s ABA therapy and appeal any denials. 0. In early September 20, P.S.'s mother submitted a request for coverage of P.S.'s ABA therapy services to her PEBB plan. 1. In response to the request, by letter dated September 19, 20, Providence Health Plans, the PEBB administrator, informed P.S.' s parents: According to your child's Providence Health Plans Medical Policy and Criteria regarding Autism Spectrum Disorders/Pervasive Developmental Disorders Assessment and Treatment, Intensive intervention programs for autism (e.g. Lovaas therapy, applied behavior analysis) are not covered because they are considered experimental and investigation According to your child's Providence Health Plan Oregon Open Option Public Employees' Benefit Board Group Member. Handbook for Open Option Plans, effective for dates of service in 20, services that are experimental and/ or investigational are not covered by your benefit. 2. The PEBB denial did not include as an enclosure either the Providence Health Plans medical policy on ABA therapy nor the PEBB definition of "experimental/ investigational." 2 COMPLAINT (CLASS ACTION) - SIRIANNI YoUTZ. 999 THIRD A VENUE,SUr:ra 0 SBAlnB, WASHINGTON 984 TBL. (20) FAX (20)

19 P.S.'s mother timely appealed, providing extensive information as to why P:S.'s ABA therapy was medically necessary and not "experimental/ investigational." 4. P.S.' s mother included with her appeal an updated letter of medical necessity from P.S.'s developmental pediatrician who noted substantial improvement in P.S.'s condition as a result of ABA therapy.. Melissa Gard, Ph.D., P.S.'s Board-Certified Behavior Analyst, also documented P.S.'s progress with ABA therapy, as did P.S.'s speech therapist.. P.S.' s parents also submitted numerous clinical studies, consensus statements, position papers and other evidence to show that ABA therapy can be medically 14 necessary and is not "experimental/ investigational" as defined by the PEBB plan. 1 language. P.S.' s mother also submitted an independent review organization (IRO) 1 decision overturning PEBB' s administrator's determination that ABA therapy to treat 1 ASD was /1 experimental/ investigational." In response, PEBB changed its basis for denying P.S. 's ABA therapy. On 20 October 0, 20, PEBB through its administrator, Providence Health Plans, upheld. the 21 denial, but for a different reason After acknowledging that PEBB first denied P.S.' s request for coverage based 24 upon its "experimental/ investi.gational" exclusion, PEBB stated: 2 2 COMPLAINT (CLASS ACTION) - 11 SIRIANNI Y OUTZ 999TH!RDAVBNUE,SUITB~0 EATILE, WASHINGTON 984 TEL. (20) FAX (20)

20 2 We have decided neither to overturn nor to affirm the decision on that basis, reserving Providence's rights under that policy but focusing on a different issue Under the language of the Oregon PEBB Providence Statewide member handbook, services "related to developmental disabilities, developmental delays or learning disabilities" are specifically excluded from coverage under this plan. (See Member Handbook at 0). There is no question but that autism spectrum disorder is a "developmental disability" or involves "developmental delay," and Providence as the plan administrator here has so interpreted it in this case as it has in other cases seeking ABA services for autism spectrum disorder. Because ABA services are related to autism spectrum disorder they are therefore not benefit covered by the plan. See PEBB letter to P.S.'s mother dated October 0, 20 (emphasis added). In short, PEBB refused to reach a determination of P.S.'s appeal of PEBB's denial of ABA on 1 experimental/ investigational grounds. Instead, it applied PEBB' s "developmental disability" exclusion, which had never been applied to any services previously sought for P.S.'s autism. Even today, the only service to treat P.S.'s developmental delay that PEBB has excluded under this provision is her ABA therapy. 9. P.S.' s parents appealed the denial to the second internal appeal within PEBB. They submitted evidence regarding the medical necessity of P.S.'s therapy as well as legal argument that PEBB' s belated application of its "developmental disability" exclusion was improper. 40. On February 11, 201, PEBB, through its administrator, Providence Health Plans, denied P.S.' s second level appeal. COMPLAINT (CLASS ACITON) - SIRIANNI YoUTZ 999 THIRD AVENUE, SUITE 0 SEA'ITLE, WASHINGN 984 TEL. (20) FAX(20)22-024

21 2 41. PEBB maintained that it would not address P.S.'s arguments regarding the 11 experimental/ investigational" denial on appeal "becal;j.se this decision does not rest on that exclusion." 42. PEBB upheld its application of the /1 developmental disabilities" exclusion to P.S.'s request for coverage of ABA therapy. 4. PEBB further informed P.S. that because it did not deny her request on the basis that it considered ABA to be "experimental/investigational," P.S. had no right to. external review. "Because this decision does not rest on a ground subject to review by an independent review organization, it is final unless and until you seek review in a court of law." By changing the reason for P.S.'s denial of ABA therapy from 1 "experimental/ investigational" to the PEBB developmental disability exclus~on, 1 defendants prevented P.S. from accessing the external review process, where other 1 s PEBB enrollees had been successful in overturning the PEBB exclusion In December 201, P.S.' s mother heard that another PEBB participant with ASD 21 had been approved for ABA therapy without application of the "developmental 22 disability" exclusion. ~ ~ 24 On February 11, 2014, P.S.'s mother submitted another request for pre- 2 authorization, hopeful that PEBB had changed its position. She included in her reql!est 2 COMPLAINT (CLASS ACTION) -1 SIRIANNI Yourz 999 THIRo A VENUE, SUITE 0 SEAITLE, WASHINGTON 984 TEL. (20) FAX (20)

22 a redacted copy of the decision from PEBB to provide coverage for the other child with ASD. 4. Nonetheless, on March 11, 2014, PEBB, through its administrator, denied coverage for P.S.'s ABA therapy based upon its developmental disabilities exclusion. PEBB maintained that it can exclude coverage of ABA therapy for P.S. under its developmental disability exclusion even after covering the therapy for another PEBB enrollee withasd. 48. P.S.' s parents have incurred actual damages of approximately $1,000 to gate and the proposed ABA and Employee subclasses have incurred estimated actual damages of approximately $ million to date Based upon information and belief, defendants willfully violated the Oregon 1 anti-discrimination law. After discovery, should the evidence demonstrate that 1 defendants intentionally applied the PEBB /1 developmental disability" exclusion in 1 order to eliminate health coverage for class members because they are developmentally 18 disabled, plaintiffs will file a motion for leave to amend the complaint to add a claim 19 for punitive damages at the appropriate time CLAIMS FOR RELIEF FIRST CLAIM: BREACH OF CONTRACT 0. Plaintiffs re-allege all paragraphs above. Ill/ /Ill COMPLAINT (CLASS ACTION) - 14 SIRIANNI YoUTZ 999 THIRD A V1!NUll, SUITE 0 SEAITLE, WASHINGTON 984 TEL. (20) FAX (20) :m-024

23 Defendants have breached the contract of coverage between PEBB and its beneficiaries with ASD by excluding all coverage of ABA therapy, the essential, nonexperimental therapy to treat their condition. Defendants breach the contract of coverage when they exclude ABA therapy either under PEBB' s "developmental disability" exclusion or its "experimental/investigational exclusion." 2. Specifically, Defendants' application of its "developmental disability" exclusion breaches its coverage contract, which includes and incorporates all applicable state and federal laws, including the federal Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 ("federal Mental Health Parity Act" or "federal Parity Act") and its implementing regulations. See 29 U.S.C. 118a; 29 C.F.R. 290.(c)(4) In particular, the federal Parity Act prohibits the use of non-quantitative 1 treatment limitations for mental health services that are not equally applied to 1 medical/ surgical benefits: frlhe treatment limitations applicable to such mental health or substance use disorder benefits are no more restrictive than the predominant treatment limitations applied to substantially all medical and surgical benefits covered by the plan (or coverage) and there are no separate treatment limitations that are applicable only with respect to mental health or substance use disorder benefits. 2 29U.S.C. 118a(a)()(A)(ii) (emphasis added); see also 29 C.F.R. 290.(c)(4) Additionally, the federal Parity Act requires plans, including PEBB, to define 2 mental health benefits consistent with "applicable federal and state law'' and/ or SlRIANNIYOUTZ COMPLAINT (CLASS ACTION) THIRD A VENUE, SUITE 0 EATILE, WASHINGTON 984 TEL. (20) FAX (20)

24 "generally recognized independent standards of current medical practice." See 29 US.C. 118a(e)(4). Oregon law is express. Autism, as well as many other developmental DSM conditions, are included in the definition of mental health services. O.R.S. 4A.18; O.A.R PEBB cannot exclude autism and ASD from its definition of "mental health services" through its developmental disability exclusion.. Defendants further breach the PEBB contract when they deny coverage of ABA therapy under its /1 experimental/ investigational" exclusion when the therapy is standard treatment for newly diagnosed individuals with ASD.. Defendants additionally breach the coverage contract when they deny coverage 1 of ABA therapy under its "experimental/ investigational" exclusion for some insureds, 14 while covering the therapy for others Defendants further breach the coverage contract when they deny coverage 1 based upon the developmental disability exclusion solely to prevent developmentally 1 s disabled enrollees from accessing the state and federally mandated external review 1 9 procedures SECOND CLAIM: DISPARATE TREATMENT 8. Plaintiffs re-allege all paragraphs above. 9. Defendants have continuously discriminated against and continue. to discriminate against plaintiff Alford-Smith and the proposed class in compensation COMPLAINT (CLASS ACTION) - 1 SIRIANNI Y OUTZ 999 THIRD A VENUB, SUITE 0 SEATI'LB, WASHINGTON 984 TEL. (20) FAX (20)

25 and in the terms, conditions, benefits and privileges of their employment because they have a family member with a developmental disability. Defendants, by applying their developmental disability exclusion, exclude employees with developmental disabilities, and qualified dependents with developmental disabilities from insurance coverage while, at the same time, routinely providing such coverage to nondevelopmentally disabled employees and qualified dependents. Defendants' blanket exclusion of services related to developmentally disabled participants denies medically necessary health care to PEBB participants solely due to their identity as individuals with disabilities who need treatment to address a major life activity. See O.R.S. 9A Defendants' continued exclusion of coverage for the essential services to treat developmental disabilities is intentional disparate treatment based upon disability, in violation of O.R.S. 9A.1(1); (2)(d) As a result of defendanis' discriminatory exclusion of coverage for services to 1 treat developmental disabilities, plaintiffs have suffered and will continue to suffer 18 economic losses because of increased health care costs. The amount of these losses. are 1 9 unknown at this time and this Complaint will be amended before trial to set forth the 20 amounts As a result of defendants' failure to cover medically necessary treatment for 2 ASD and other developmental disabilities, plaintiffs and the proposed class have 24 suffered increased and otherwise avoidable developmental delay and disability. These 2 adverse consequences entitle plaintiffs to compensatory damages unknown at this 2 time. This Complaint will be amended before trial to set forth the amounts. COMPLAINT (CLASS ACTION) -1 SIRIANNI Y OlITZ 999 THIRD AVENUE, Sum: 0 SEATILE, WASHINGTON 984 TEL (20) FAX (20)

26 As a result of defendants' discriminatory actions, plaintiffs are entitled to an award of reasonable attorneys fees and costs pursuant to O.R.S. 9A.88. TIDRDCLAIM: DISPARATE IMPACT 4. Plaintiffs re-allege all paragraphs above.. Defendants' exclusion from coverage of all services relating to developmental disabilities has a disparate impact on developmentally disabled employees and employees with qualified dependents who have developmental disabilities. The effect of the exclusion is to deny medically necessary care to developmentally disal;>led employees and/ or qualified dependants at a higher rate than non-developmentally disabled employees or non-disabled qualified dependents. Employees with developmentally disabled qualified dependents therefore do not enjoy the same privileges and benefits of employment that other state employees receive.. As a result of defendants' discriminatory exclusion of coverage for services to treat developmental disabilities, plaintiffs have suffered and will continue to suffer economic losses because of increased health care costs. The amount of these losses are unknown at this time and this Complaint will be amended before trial to set forth. the amounts.. As a result of defendants' failure to cover medically necessary treatment for ASD and other developmental disabilities, plaintiffs and the proposed class have. suffered increased and otherwise avoidable developmental delay and disability. These CO:MPLAINT (CLASS ACTION) -18 SIRIANNI YOUTZ 999 THlRD AVENUE, SUITE 0 SEATILE, WASHINGTON 984 'I'Et. (20) FAX (20)

27 adverse consequences entitle plaintiffs to compensatory damages unknown at this time. This Complaint will be amended before trial to set for the amounts. 8. As a result of defendants' discriminatory actions, plaintiffs are entitled to an award of reasonable attorneys fees and costs pursuant to O.R.S. 9A.88. FOURTH CLAIM: VIOLATION OF OREGON PUBLIC POLICY, O.R.S. 9A. 9. Plaintiffs re-allege all paragraphs above. 0. It is the public policy of the State of Oregon to guarantee individuals the fullest possible participation in the social and economic life of the state, to engage in remunerative employment and to receive the benefits of the services, programs and activities of state government without discrimination on the basis of disability. O.R.S. 1 9A Defendants violate this public policy when they authorize and direct the administrator of the self-funded PEBB health benefit plans to exclude coverage of ABA. therapy, the essential services designed to treat developmental disabilities such as ASD based upon a determination that the therapy is /1 experimental/ investigational" and/ or excluded under the PEBB developmental disability exclusion. FIFTH CLAIM: DECLARATORY JUDGMENT 2. Plaintiffs re-allege all paragraphs above. 2 COMPLAINT (CLASS ACTION) - 19 SIRIANNI YoUTZ 999 THIRD A VENUE, SUITE 0 SEA'ITLE, WASHINGTON 984 Tm.. (20) FAX (20)

28 Plaintiffs and the classes they represent are entitled to a declaratory judgment determining their legal rights, pursuant to the Uniform Declaratory Judgment Act, O.R.S et seq. They are entitled to a declaration that defendants may not exclude coverage for ABA therapy to treat ASD based upon defendants' developmental disability exclusion and/ or experimental and investigational exclusion, based upon existing state law and the federal Mental Health Parity.Act DEMAND FOR RELIEF WHEREFORE, plaintiffs request that this Court: 1. Certify this case as a class action and the proposed subclasses, and designate the named plaintiffs as class representatives; and designate SIRIANNI Yourz, Eleanor Hamburger and Stephen Sirianni, and LA w OFFICE OF MEGAN E. GLOR, Megan E. Glor as class counsel; 1 2. Enter judgment on behalf of the named individual plaintiffs and 1 the classes for losses due to Defendants' breaches of contract; 1. Declare that Defendants may not apply contract provisions, 18 policies or practices that wholly exclude medically necessary services to treat ASD, 19 including ABA therapy; Enjoin Defendants from further violations of the Oregon and 21 Federal Parity Acts and implementing regulations, Oregon Unlawful Discrimination. 22 Against Persons With Disabilities Act, as incorporated into the terms of the PEBB 2 coverage contracts; 24. Enter judgment in favor of named individual plaintiffs and the 2 classes for damages in an amount to be proven at trial due to defendants' failure to 2 COMPLAINT (CLASS ACTION) - 20 SIRIANNI Y OUTZ 999 THIRD A VENUE, Surra 0 SE.ATTI..E, WASHINGTON 984 TEL. (20) FAX (20)

29 provide benefits due under the PEBB plans, and defendants' discrimination against developmentally disabled PEBB participants and their family members;.. DATED: April 29, Award plaintiffs and the classes their attorney fees and costs and Award such other relief as is just and proper. :MEGAN E. GLOR AITORNEYS AT LAW JhE.Q~) megan@meganglor.com 21 SW Morrison Street, Suite 900 Portland,OR 920 Telephone: (0) Facsimile: (0) and- SIRIANNI YOUTZ Eleanor Hamburger {WSBA#248) (pro hac vice application to follow) Stephen Sirianni (OSB #004) ehamburger@sylaw.com D ssirianni@sylaw.com 999 Third Avenue, Suite 0 Seattle, WA 984 Telephone: (20) Facsimile: (20) Attorneys for Plaintiffs 2 COMPLAINT (CLASS ACTION) - 21 SIRIANNI YOUTZ 999 THlRD A VHNUE, SUrrB 0 SEATILE, WASHINGTON 984 TEL. (20) FAX (20)