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Courts Read Network Adequacy Requirements into Federal Lactation Counseling Mandates

The ACA and federal regulations require health insurers and plans to cover lactation counseling without cost-sharing (deductibles and co-pays).[1] Under the regulations, an insurer or plan can meet this obligation by either including “a provider” in its network who can provide the service, or by permitting its members to use an out-of-network provider free of any cost.[2] In two recent cases, courts appear to be reading some level of network adequacy and disclosure requirements into the mandates for insurers and plans that take the in-network route.  

In a California federal case,[3] several women alleged that their plan had failed to either establish a network of lactation counselors or cover out-of-network counseling. For example, one woman claimed that she was unable to get an appointment with her hospital’s lactation counselor, couldn’t find an in-network lactation counselor on the plan’s website and was denied reimbursement when she did obtain the service. According to the court, the plan contended it was ACA compliant “so long as it has one provider of lactation counseling services, no matter how far that provider is from the patient, and no matter how difficult it is to identify and get an appointment with that provider.” The court stated that this argument was “absurd,” reasoning that “there is no ‘coverage’ for a service if a patient can’t find the service or isn’t told that the service is available.” It added: “nor is there ‘coverage’ for a service like lactation counseling if a woman and her child live hundreds of miles away from the nearest in-network provider. The service must be available in a meaningful way for the plan to comply with the Affordable Care Act.”

In an Illinois federal case,[4] the plaintiffs alleged that their plans made it nearly impossible for members to find in-network providers, and then imposed cost-sharing on members who used out-of-network providers. The defendants contended that even if they did not provide a specified list of lactation counselors on their website, they had many other in-network providers, such as pediatricians, midwives and nurses, who could provide lactation counseling. The court, however, found that the plaintiffs’ allegations were sufficient for the case to proceed. Indeed, the plaintiffs’ claims that the plans provided inconsistent guidance, failed to respond timely to requests for authorization, and failed to provide a list or directory that clearly disclosed in-network providers of lactation counseling sufficiently stated a claim that the plans violated the ACA by imposing administrative burdens that rendered full coverage of breastfeeding services illusory. The court stated that the “Defendants argue that their plans comply with the ACA because some women might stumble upon in-network lactation services providers while, for example, giving birth in a hospital.” But it countered, “an insurer cannot avoid an illusory coverage problem by simply conceiving of a single hypothetical situation to which coverage would apply.”

Because both of these ruling were made at the pleading stage, the cases may come out differently for the parties when the evidence is weighed. Nevertheless, the takeaway from these decisions is that if an insurer or plan decides to provide mandated services through in-network providers, it must take steps to ensure that members are actually able to obtain them.

David Johnson can be reached at david.johnson@mrllp.com or (415) 857-6751.

This blog post is not offered as, and should not be relied on as, legal advice. You should consult an attorney for advice in specific situations.

[1] 42 U.S.C. § 300gg-13; https://www.hrsa.gov/womens-guidelines/index.html.

[2] 45 C.F.R. § 147.130(a)(3)(ii); 29 C.F.R. § 2590.715-2713(a)(3)(iii).

[3] 2017 WL 7420997 (N.D. Cal., Aug. 15, 2017).

[4] 281 F. Supp.3d 725 (N.D. Ill 2017)