AT ADVOCATE

Newsletter of the National Assistive Technology Advocacy Project
A Project of Neighborhood Legal Services, Inc.
295 Main Street, Ste. 495 · Buffalo, New York 14203 · (716) 847-0650
(716) 847-0227 FAX · (716) 847-1322 TDD · e-mail: nls01@sprynet.com · Web Page: http://www.nls.org
Supported by the National Institute on Disability and Rehabilitation Research,
U.S. Department of Education, Through a Subcontract with United Cerebral Palsy Associations.

Volume III     Issue 3                                                     April/May 1998
Copyright 1998, Neighborhood Legal Services, Inc.

In this issue......

PRIVATE INSURANCE & AT PART II
Introduction                                                               SPECIAL FEATURES:
Is the Device Covered by the Policy?                         FCC Notice of Proposed Rulemaking
Is the Device Medically Necessary?                            Regarding   § 255 of Telecommunications Act
What if the Policy’s Language is Unclear                    Bridges to Better Advocacy
Appeal Rights                                                            AT Court Watch
The Impact of ERISA                                               AT Related Training in the Northwest
Americans with Disabilities Act                                 Administrative Hearings
Conclusion

PRIVATE INSURANCE CONTRACTS &
ASSISTIVE TECHNOLOGY: PART II

    In our February/March 1998 newsletter, we stated that to determine whether an individual is entitled to private insurance coverage for assistive technology (AT), one must address three issues:

    1. Is the child or adult in question covered by the insurance policy?

    2. Is the item being sought one that is covered by the policy?

    3. Is the item being sought medically necessary?

If the answer to each question is yes, the insurance policy will pay for the AT device, subject to any policy limits, co-payments or deductibles.

    Our last newsletter focused on issue one. We explained who is covered by a private health insurance policy, how pre-existing conditions are now defined and applied since implementation of the Health Insurance Portability and Accountability Act of 1996 and the right to continuing coverage under COBRA after a job termination or layoff.

    In this article we address issues two and three. First, under issue two, we will discuss special policy provisions, such as a durable medical equipment provision, which determine what AT items are covered under an insurance policy. Next, under issue three, we will discuss what criteria must be met for the insurer (i.e., the insurance company or other entity providing insurance) to determine that an AT device is medically necessary. We will then discuss how one appeals a denial of AT by a private insurer. We will close with a limited discussion of the applicability of the Americans with Disabilities Act to private insurance companies.
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    Private health insurance is generally governed by state law. For example, in New York health insurance issues are governed by the state Insurance Law and the Public Health Law. If an issue is not covered by your state law, and there is no relevant federal law, the issue will probably be governed by your state’s common law of contracts.

    As we stated in the previous newsletter, analysis of who is covered and what is covered starts with reviewing the provisions of the policy or contract. Make sure that you obtain the actual contract and not some summary or handbook

which describes its provisions. We stress again that it is important to obtain copies of any amendments, riders and supplemental policies for which the individual or employer is paying.

    In private health insurance policies, AT is commonly referred to as durable medical equipment (DME). DME is usually not available in a "basic" plan, the least costly of group plans. DME is provided, in most cases, in a "major medical" plan which is often an adjunct or a rider to a basic plan. Major medical riders often cover items such as hospital stays, diagnostic testing and DME. In addition to the DME clause, AT might be covered by a clause which addresses prosthetics, orthopedic appliances, medical supplies, or vision services and equipment. One should review the entire policy and all the riders in search of any language that can be relied upon to fund AT.

    You also need to look for "exclusions," i.e., provisions that specifically mention items that are not covered. A policy may list various types of DME or other AT categories that the insurer will not cover. Examples of items which are commonly excluded from coverage are:

• Air conditioners
• Prosthetic devices
• Hearing aids
• Computer-assisted communication devices
• Humidifiers
• Items characterized as athletic equipment
• Orthotics - shoe inserts
• Eyeglasses
• Equipment characterized as experimental

    Even if a DME clause or a similar clause would appear to cover an item, the policy may specifically limit the funding that is available. Some policies contain provisions that place a dollar limit on what will be spent on a particular item. For example, one policy we reviewed had a $1,500 limit on DME coverage. Insurers may also require a co-payment for the purchase of DME (one major New York provider sets it at 20 percent while another at 50 percent). An insurer with a 50 percent co-payment would pay $5,000 towards the purchase of a $10,000 power wheelchair while the insured or beneficiary would be responsible for payment of the remaining $5,000. If a person is covered by both private insurance and Medicaid, Medicaid may be able to pick up the remaining $5,000 co-payment.

    Each policy will contain its own definition of DME which may be similar to the following:

    1. is able to withstand use by more than one person;

    2. is primarily and customarily used to serve a medical purpose;

    3. is not useful in the absence of illness or injury.

Some policies also include a statement that the DME is for use in the home.

    Any part of this definition can give rise to disputes over what is covered. For example, many insurers interpret the statement, "is able to withstand use by more than one person," to exclude anything but standard equipment. Therefore, some insurers have refused to fund customized wheelchairs by invoking that clause. They may limit payment to the normal cost for a standard wheelchair, which is usually far less than the cost of the customized wheelchair. That coupled with the co-payment requirement may make the particular wheelchair or other piece of DME unaffordable. It is an unresolved question whether that clause, or the restrictive interpretation of it, violates the American with Disabilities Act (see discussion p. 110).
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    Like Medicaid and Medicare, private insurance policies will only pay for DME that is "medically necessary." How that term is defined is determined by the individual insurance contract. Most policies use language such as the following in defining medical necessity:

    1. is consistent with the symptoms or diagnosis and treatment of a condition, disease, ailment or injury;

    2. is in accordance with standards of good medical practice;

    3. is not for the insured's convenience.

    Determinations of medical necessity are usually made by an employee of the insurance company, such as a doctor or utilization review agent. Your state law may dictate the level of qualifications required of this decision maker. This process of determining both coverage under the policy and medical necessity is probably similar to the prior approval process used by Medicaid agencies in most states to rule on applications for AT funding.
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    Where the policy language is clear, that language determines what is available under the policy. What if a particular provision is unclear or ambiguous?

    We have not attempted to review the statutory and case law of the 50 states to look for rules governing the interpretation of health insurance contracts. However, you need to become familiar with your relevant state law and case law as it may provide guidance for interpretation of ambiguous contract provisions.

    A good starting point for analysis is the Restatement of Contracts, 2^nd. Although the Restatement is not law, it has been regularly cited with approval by the courts. Under the Restate-ment, the general rule is that insurance contracts must be liberally construed, with ambiguities in the policy language resolved in favor of the insured (i.e., the beneficiary). Restatement of Contracts, 2^nd, § 206 & comment a. See also, Westchester Resco Co., L.P. v. New England Reinsurance Corp., 818 F.2d 2, 3 (2^nd Cir. 1987); Stainless, Inc. v. Employer’s Fire Insurance Co., 418 N.Y.S. 2d 76, 79 (Appellate Div., 1^st Dept. 1979), affirmed 428 N.Y.S.2d 675; Government Empire Ins. Co. v. Kligler, 42 N.Y.2d 863, 397 N.Y.S.2d 777 (1977)(a decision from New York’s Court of Appeals).

    This general rule for interpreting insurance contracts, if adopted by the courts in your state, should be helpful to attorneys pursuing AT-related court appeals. Since insurance policy provisions governing DME and medical necessity are often written in very general language, it would be most helpful to know that those terms will be interpreted in favor of the person seeking the item in question.
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    There are two ways to appeal an adverse determination: through an insurance company’s internal appeal process; and through a court appeal. There may also be a complaint process available through your state’s insurance department or a similar agency.

    Here again, check state law to determine what, if anything, is required as an insurance company appeal process. One should also check the policy in question which will probably describe how one appeals an adverse decision.

    It is important to determine both the method of filing an appeal and any time limits for doing so. Sometimes a telephone call to the insurer initiates the appeal. Other policies may require that an appeal be in writing. We always recommend that a person file a written letter to appeal and follow up that letter with a phone call.

    Since there will be a time limit imposed for filing an appeal or grievance, it is important to find out what the time limit is and file any appeal within the time frame imposed. Since information about how to appeal is not always readily available, we suggest filing an appeal letter with the insurance company as soon as possible after an adverse decision is received.

    In almost all cases we recommend using the appeal or grievance procedure established in the insurance contract before proceeding further. In our experience, a significant percentage of AT-related appeals can be favorably resolved in this manner. During the past several years, we have successfully resolved several cases involving private insurance funding of augmentative communication devices and several others involving wheelchairs. One large HMO agreed to pay for a power wheelchair with power tilt and space after we intervened, conceding that our client’s was the first such wheelchair they had approved. One former client obtained a standing wheelchair after she wrote a very strong and well-reasoned appeal letter.

    The second option for appeal is a lawsuit in a court of competent jurisdiction. Subject to the provisions of the Employee Retirement Income Security Act (ERISA), discussed below, most appeals will be filed in your state courts. This method of appeal may be very costly, however, because of filing fees and attorney fees (in those cases in which free legal services are not available).

    Many of you who work under Protection and Advocacy for Assistive Technology (PAAT) projects within Protection and Advocacy offices have taken on insurance appeals as part of your work. You may also be able to identify Legal Services, Legal Aid and pro bono private attorneys who will handle some AT-related appeals, without charge.

    Insurance appeals will probably be filed under your state’s common law of contracts. There may also be claims that arise under state law provisions which govern health insurance. It is important that you determine the statute of limitations governing a court appeal under the health insurance policy in question. In New York, for example, the usual statute of limitations for suing under a contract is six years. However, if the claim arises under a health insurance contract, the statute of limitations is three years. New York law also permits parties to a contract to agree on a shorter statute of limitations. One major insurer has a one year statute of limitations in its standard policy. If your state law also allows parties to provide a shorter statute of limitations by contract, you must read the contract provisions to learn what the statute of limitations is for any particular insurance policy.

    If an individual pursues an appeal or grievance through the insurance provider it is critical to know if that grievance tolls or stops the running of the statute of limitations for filing a lawsuit. When a lawsuit is likely, it is important to research the law and the particular contract involved to ensure that the statue of limitations does not expire.

    An individual may also have a right to file a complaint with your state agency which oversees health insurance. If an agency of state government accepts complaints, you need to determine what procedure must be followed. For example, your state’s agency may or may not require that complaints be in writing or submitted on an approved form.

    It is important that you determine the authority of your state insurance agency to act on complaints. For example, you may be more likely to file a complaint with them if they have authority to order an insurance company to fund AT in an individual case. If their authority is limited to an investigation of the complaint and some attempt at mediation, you may be less likely to turn to them. If an individual pursues a complaint before your state insurance agency, it is critical to know if that complaint tolls or stops the running of the statute of limitations for filing a lawsuit or pursuing other remedies under the policy.
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    The Employee Retirement Income Security Act (ERISA), 29 U.S.C. §§ 1001 et seq., is a complicated set of federal laws which protects employee pensions by creating vesting rights and placing controls over the administration of pension funds. ERISA also applies to certain self-insured employee benefit health insurance plans. Although the complications of ERISA are well beyond the scope of this article, we will make some very general comments about it.

    Attorneys who are contemplating a court appeal involving health insurance need to be aware of ERISA. When it applies, the defendant has a right to have the case removed from state court into federal court. Once in federal court, the ability to pursue state-related claims becomes very limited and may change the complexion of one’s case. Anyone who wishes to discuss the impact of ERISA on a potential or pending lawsuit involving health insurance is encouraged to call the AT Advocacy Project and speak to Bill Mastroleo, extension 243.
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    The provisions of the Americans with Disabilities Act (ADA), 42 U.S.C. §§ 12100 et seq., took effect in 1992. The ADA prohibits discrimination, on the basis of disability, in a wide range of private and governmental activities. Titles I and III of the ADA apply to private health insurance.

    Insurers routinely limit the availability of AT through their policies. This is done through outright exclusion, through reimbursement limits and through high co-payment requirements. Many insurance policies will pay for expensive surgery, doctor visits, medication and physical therapy to allow a person to recover from a knee injury and regain mobility. The same policy will often limit wheelchair coverage to the standard wheelchair costing under $500 even though a more expensive light weight or power wheelchair is required for independent mobility.

    Similarly, many policies will cover a course of surgery and after care to remove a cancerous growth from the vocal cords in order to restore speech. The same policies often exclude coverage for an augmentative communication device which accomplishes the same thing -- providing the ability to speak -- through electronic means.

    If the policy does not specifically exclude coverage, the best argument will generally be that the contract should be interpreted liberally to include the power wheelchair, augmentative communication device or other AT device. (See discussion above regarding the interpretation of contracts.) If the item in question is specifically excluded or excluded under the interpretation of the contract, this raises the question of whether such denials violate the ADA’s provisions.

    Title I of the ADA applies to employment and would apply to most health insurance policies provided as a term of employment. Title III of the ADA applies to public accommodations including insurance companies. Although it still may be an open question, we believe the proper view of Title III is that it applies to both the physical offices of the company and to the policy itself. The question then arises as to whether an insurance company can limit its coverage to individuals based upon their illness or disability.

    In the examples above, does the insurance company violate the ADA when it pays for surgical intervention to restore "normal" mobility or speech, but refuses to pay for the mechanical device that can accomplish the same thing? What if the AT device is less costly than the surgery and after care? What if the policy provided funding for power wheelchairs for those who cannot walk, but excluded augmentative communication devices for persons who cannot speak?

    These are some of the many questions which the ADA leaves open for interpretation. They are questions that have not been specifically addressed by the courts but probably will be during the next several years. For now, attorneys and advocates should consider the ADA as a potential advocacy tool for obtaining AT through private insurance. [A more elaborate summary of these issues, the potential arguments, the governing law and the relevant case law is contained in Steve Mendelsohn’s conference handout on the ADA and insurance. See box, p. 107.]
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    Because so many Americans are covered by health insurance policies, private insurance is one of the most important funding sources for persons seeking AT. Despite the widespread coverage, however, very few attorneys and advocates have been involved in appeals challenging the decisions of insurance companies. We hope that our two-part article on insurance will serve to encourage more attorneys and advocates to consider working on insurance-related appeals.
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ADMINISTRATIVE HEARINGS

For copies of these fair hearings contact
Vivian at (716) 847-0655 ext. 271
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   On April 2, 1998, the Federal Communications Commission adopted a Notice of Proposed Rulemaking (NPRM) to implement § 255 of the Telecommunications Act of 1996. In its press release, the FCC describes § 255 as "the most significant governmental action for people with disabilities since the passage of the Americans with Disabilities Act .... It is one of the key provisions of the Act promoting the goal of universal access and seeks to increase the accessibility of telecommunications services and equipment to the 54 million Americans with disabilities."

    The full text of the NPRM is available on the FCC’s web page [www.fcc.gov]. We will also provide a link to it through the National AT Advocacy Project’s web page [www.nls.org]. The FCC is accepting comments to the NPRM through June 30, 1998.
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Massachusetts Court Orders Medicaid Funding
for Handi-Move Wall-to-Wall Lift System

    Gatto v. Bullen, Mass. Superior Court, # 97-2787-G (2/26/98): A 40 year-old woman sought Medicaid funding for this $5,466 system. Medicaid denied the request claiming there were less costly and equally appropriate alternatives to allow for transfers in the bathroom and other parts of the house. In reversing, the court reasoned that the Handi-Move meets the Massachusetts definition of medical necessity in that this is the only device that will decrease the number of needed transfers, thereby preventing the worsening of the plaintiff’s condition (i.e., the back pain which frequently occurs when transfers are made). The court also found that the hearing officer’s disregard of the report of plaintiff’s treating physician "was arbitrary, capricious and otherwise not in accordance with the law."

For a copy of this decision or the brief submitted by Tim Sindelar of the Massachusetts Disability Law Center, call Vivian at 716-847-0655 ext. 271.
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"Bridges to Better Advocacy" — Conference a Hit

    March 26^th through March 28^th marked the second national AT conference for attorneys and advocates in Austin, Texas. Twenty-six persons attended the Thursday session for newer advocates and 68 persons attended the Friday-Saturday sessions. Based on the written evaluations and the individual feedback we received, we can report that the conference was a huge success. Thank you again to all the organizers, speakers and those from Advocacy, Inc. in Austin whose work made this conference a success.

Handouts are Available — Call Vivian at (716) 847-0655 ext. 271 for copies of the handouts.
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    The National Association of Protection and Advocacy Systems (NAPAS) will sponsor a conference in Portland, Oregon on July 30^th through August 1^st. A major focus of this conference will be the transition from special education programs to work. Ron Hager of the National AT Advocacy Project will be a primary speaker for this three-day event and will place a significant emphasis on AT-related issues during his sessions.

    Although this conference is targeted to Client Assistance Program advocates, NAPAS will open the conference to other advocates.

    For more details on the conference, registration information, etc., call Cheryl Bates-Harris at NAPAS, 202-408-9514 ext. 27.
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    We have designed a word-searchable digest, using computer technology, to store and retrieve hearing decisions and other administrative documents. We also have indexed more than 250 documents from more than 70 pending and decided court cases. All documents are available through our AT Resource Library. Please send us your hearing decisions, briefs and other documents involving AT.

In future issues.....

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