updated 1/5/2011 5:41:45 PM ET 2011-01-05T22:41:45

State regulators shouldn't have sent health insurers a memo on how to handle complaints about autism treatments because it was tantamount to issuing a regulation without it being properly vetted, a judge has ruled.

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In the mixed decision filed in Los Angeles Superior Court last week, Judge Robert H. O'Brien said the state Department of Managed Health Care erred in issuing the memo, but it has a right to want licensed practitioners to provide treatment to autistic children.

The Dec. 30 ruling came as a result of a lawsuit brought by Consumer Watchdog. The consumer advocacy group claimed the state was allowing insurers to delay coverage for Applied Behavioral Analysis, an intensive form of treatment that can cost $70,000 a year.

The lawsuit alleged that insurers lobbied the Schwarzenegger administration to get out of obligations to parents of autistic children by sending a memo calling for treatment providers to be licensed and referring complaints to the department instead of independent mediators.

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O'Brien suggested Consumer Watchdog could back a bill on the matter of treatment providers being licensed, saying its remedy is with the Legislature and not through a court order.

In a statement, Pamela Pressley, litigation director for Consumer Watchdog called on the administration of newly sworn-in Gov. Jerry Brown to "close an insurer-sized loophole opened by the Schwarzenegger administration in a back room deal with insurers."

DMHC Director Cindy Ehnes defended her department's commitment to quality care from licensed providers. In a written statement, she said "we are following the correct course to ensure that patients continue to get the services to which they are entitled under their health coverage."

Copyright 2011 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


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