PAGE 1 – OPINION AND ORDER

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF OREGON

A.F., by and through his parents and 

guardians, Brenna Legaard and Scott 

Fournier; and A.P., by and through his 

parents and guardians, Lucia Alonso and 

Luis Partida, and on behalf of similarly 

situated individuals,

Plaintiffs,

v.

PROVIDENCE HEALTH PLAN,

Defendant.

Case No. 3:13-cv-00776-SI

OPINION AND ORDER

Keith S. Dubanevich, Joshua L. Ross, and Nadine A. Gartner, STOLL STOLL BERNE 

LOKTING & SHLACHTER, P.C., 209 S.W. Oak Street, Suite 500, Portland, OR 97204; Megan 

E. Glor, MEGAN E. GLOR, ATTORNEYS AT LAW P.C., 621 S.W. Morrison Street, 

Suite 900, Portland, OR 97205. Of Attorneys for Plaintiffs.

William F. Gary, Arden J. Olson, and Aaron Landau, HARRANG LONG GARY RUDNICK, 

P.C., 360 East 10th Avenue, Suite 300, Eugene, OR 97401; Aaron T. Bals, HARRANG LONG 

GARY RUDNICK, P.C., 1001 S.W. Fifth Avenue, Suite 1650, Portland, OR 97204. Of 

Attorneys for Defendant.

Michael H. Simon, District Judge.

Autism Spectrum Disorder is a pervasive developmental disorder that begins to appear

during early childhood and is characterized by impairments in communication and social skills, 

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severely restricted interests, and repetitive behavior. Applied Behavior Analysis (“ABA”) is an 

early intensive behavioral interaction health service that helps people with autism to perform 

social, motor, verbal, behavior, and reasoning functions that they would not otherwise be able to 

do. Plaintiffs A.F. and A.P. (collectively “Plaintiffs”) are both covered as dependentbeneficiaries under group health insurance plans issued by Defendant Providence Health Plan 

(“Providence”). A.F. and A.P. were denied coverage of ABA therapy by Providence—both 

initially and on appeal—based on Providence’s “Developmental Disability Exclusion.” 

Plaintiffs bring this class action lawsuit, alleging that Providence’s denial of ABA 

therapy on the basis of its Developmental Disability Exclusion violates the Employee Retirement 

Income Security Act (“ERISA”), 29 U.S.C. § 1001, et seq.; the Paul Wellstone and Pete 

Domenici Mental Health Parity and Addiction Equity Act (“Federal Parity Act”), 29 U.S.C. 

§ 1185a; and two Oregon state laws, Or. Rev. Stat. §§ 743A.168 and 743A.190. Plaintiffs moved 

for class certification, which the Court granted. The parties have agreed that the Court should 

treat their pending motions as cross motions for partial summary judgment. For the reasons that 

follow, the court grants partial summary judgment for Plaintiffs and denies Defendant’s cross 

motion. Providence’s Developmental Disability Exclusion violates both the Federal Parity Act 

and Oregon law and is therefore prohibited under ERISA.

STANDARDS

A. De Novo Review

Judicial review of an ERISA-governed insurance policy that grants the insurer discretion 

to determine a claimant’s eligibility for benefits is ordinarily reviewed for “abuse of discretion.” 

Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 115 (1989). When a court reviews 

questions of statutory interpretation, however, it owes no deference to the insurer’s decision and 

reviews legal questions de novo. Long v. Flying Tiger Line, Inc. Fixed Pension Plan for Pilots, 

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994 F.2d 692, 694 (9th Cir. 1993). The issues presented in the pending motions are questions of 

statutory interpretation.

B. Motion for Summary Judgment

A party is entitled to summary judgment if the “movant shows that there is no genuine 

dispute as to any material fact and the movant is entitled to judgment as a matter of law.” 

Fed. R. Civ. P. 56(a). The moving party has the burden of establishing the absence of a genuine 

dispute of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). The court must view 

the evidence in the light most favorable to the non-movant and draw all reasonable inferences in 

the non-movant’s favor. Clicks Billiards Inc. v. Sixshooters Inc., 251 F.3d 1252, 1257 (9th 

Cir. 2001). Although “[c]redibility determinations, the weighing of the evidence, and the 

drawing of legitimate inferences from the facts are jury functions, not those of a judge . . . ruling 

on a motion for summary judgment,” the “mere existence of a scintilla of evidence in support of 

the plaintiff’s position [is] insufficient . . . .” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252, 

255 (1986). “Where the record taken as a whole could not lead a rational trier of fact to find for 

the non-moving party, there is no genuine issue for trial.” Matsushita Elec. Indus. Co., Ltd. v. 

Zenith Radio Corp., 475 U.S. 574, 587 (1986) (citation and quotation marks omitted).

Where parties file cross-motions for summary judgment, the court “evaluate[s] each 

motion separately, giving the non-moving party in each instance the benefit of all reasonable 

inferences.” A.C.L.U. of Nev. v. City of Las Vegas, 466 F.3d 784, 790-91 (9th Cir. 2006); see 

also Pintos v. Pac. Creditors Ass’n, 605 F.3d 665, 674 (9th Cir. 2010) (“Cross-motions for 

summary judgment are evaluated separately under [the] same standard.”). In evaluating the 

motions, “the court must consider each party’s evidence, regardless under which motion the 

evidence is offered.” Las Vegas Sands, LLC v. Nehme, 632 F.3d 526, 532 (9th Cir. 2011). 

“Where the non-moving party bears the burden of proof at trial, the moving party need only 

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prove that there is an absence of evidence to support the non-moving party’s case.” In re Oracle 

Corp. Sec. Litig., 627 F.3d 376, 387 (9th Cir. 2010). Thereafter, the non-moving party bears the 

burden of designating “specific facts demonstrating the existence of genuine issues for trial.” Id.

“This burden is not a light one.” Id. The Supreme Court has directed that in such a situation, the 

non-moving party must do more than raise a “metaphysical doubt” as to the material facts at 

issue. Matsushita, 475 U.S. at 586.

BACKGROUND

Plaintiffs A.F. and A.P. are both insured as dependent-beneficiaries under group health 

plans in Oregon provided by Providence. A.F. and A.P. have both been diagnosed with Autism 

Spectrum Disorder and prescribed ABA therapy by their treating physicians. ABA therapy is an 

intensive behavior therapy that, among other things, measures and evaluates observable 

behaviors. Evidence shows that ABA therapy may help autistic children with cognitive function, 

language skills, and adaptive behavior. Evidence also suggests that the benefits of ABA are 

significantly greater with early intervention for young autistic children. Before January 2014, 

Providence denied all requests for coverage of ABA therapy.

In 2012, Providence denied a request by A.F.’s parents for reimbursement for the 

expenses of ABA therapy. A.F.’s parents appealed the initial denial, which Providence also 

denied. When A.F.’s parents appealed a second time, Providence denied the second appeal and 

provided this explanation: 

Under the language of the Oregon Group Member Handbook for 

Open Option Plans, services “related to developmental disabilities, 

developmental delays or learning disabilities” are specifically 

excluded from coverage under this plan. (See Group Member 

Handbook, at 43). There is no question that autism spectrum 

disorder is a “developmental disability” or involves 

“developmental delay,” and PHP [Providence Health Plan] here 

has so interpreted it, in this case as it has in other cases seeking 

ABA services for autism spectrum disorder. Because ABA 

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services are related to autism spectrum disorder, they are therefore 

not benefits covered under the plan.

Declatation of Joshua L. Ross (“Ross Decl.”) Ex. C at 9., Dkt. 41-3. 

Also in 2012, Providence denied the request by A.P.’s physician for authorization of 

ABA therapy to treat A.P.’s autism. A.P.’s parents appealed Providence’s denial, and Providence 

denied the appeal. Providence provided the following explanation, which is almost identical to 

the explanation provided to A.F., to A.P.’s parents:

Under the language of the Oregon Group Member Handbook for 

Open Option Plans, mental health services “related to 

developmental disabilities, developmental delays or learning 

disabilities” are specifically excluded from coverage under this 

plan. (See Group Member Handbook, at 41). There is no question 

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 mental health services related to autism 

spectrum disorder, they are therefore not benefits covered under 

the plan.

Ross Decl. Ex. D at 8., Dkt. 41-4. 

Thus, in both cases, Providence denied coverage of ABA therapy because it is a service 

“related to developmental disabilities, developmental delays or learning disabilities.” Id. This 

exclusion (hereinafter, “the Developmental Disability Exclusion”) is included in all of the group 

plan insurance contracts issued by Providence after 2007. The Developmental Disability 

Exclusion is listed in the member handbook given to all members that describes the governing 

terms of the insurance plans.

Providence issues two types of plans: “self-insured” group plans and “insured” group 

plans. Under a “self-insured” plan, the employer carries the risk of coverage. Under an “insured” 

plan, Providence carries the risk of coverage. Both the “self-insured” and “insured” plans are 

subject to Oregon law and ERISA. Plaintiffs and all class members are members of “insured” 

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group plans. Providence is both the administrator of these plans and a fiduciary to all plan 

members. As such, Providence is obligated to apply exclusions consistently and uniformly. 

Providence uses diagnosis codes and current procedural terminology (“CPT”) codes to 

process members’ claims. The diagnosis codes for Autism Spectrum Disorder all start with 299. 

There is no CPT code for ABA therapy. 

Although Providence’s group plans differ in terms of the specific benefits provided to 

group members, all of the group plan contracts issued after January 1, 2007 contain several 

identical provisions, including: (1) coverage for “Mental Health Services;” (2) a definition of 

“Mental Health Services” that includes coverage of autism; and (3) exclusion of coverage for 

“services related to developmental disabilities, developmental delays, or learning disabilities” 

(the Developmental Disability Exclusion). Before 2014, Providence denied coverage of ABA 

therapy under the Developmental Disability Exclusion for all group members under all group 

plans, regardless of whether the member seeks reimbursement for payments for ABA therapy or 

pre-authorization of coverage.

Plaintiffs previously moved to certify the class. The Court granted class certification and 

defined the class to include the following persons:

All individuals: (a) who are, or will be up to the date of class 

certification, beneficiaries of an ERISA health benefit plan (i) that 

is subject to Oregon law, (ii) that contains an Exclusion for 

services related to developmental disabilities, developmental 

delays, or learning disabilities, (iii) and that has been or will be 

issued for delivery, or renewed, on or after January 1, 2007 up to 

the date of class certification, in the state of Oregon, by Providence 

Health Plan or any affiliate of Providence Health Plan, its 

predecessors or successors and all subsidiaries or parent entities; 

(b) who either have been or will be diagnosed, up to the date of 

class certification, with any diagnosis code beginning with 299 

contained in either the Diagnostic and Statistical Manual of Mental 

Disorders (DSM-IV-TR, Fourth Edition) or the International 

Classification of Diseases, Ninth Edition (ICD-9); and (c) who are 

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not (i) a parent, subsidiary, affiliate, or control person of 

Defendant, (ii) an officer, director, agent, servant or employee of 

Defendant, (iii) the immediate family member of any such person, 

or (iv) a class member who has previously released a claim for 

benefits under a settlement agreement.

A.F. ex rel. Legaard v. Providence Health Plan, ---F.R.D.---, 2013 WL 6796095, at *4 (D. Or.

Dec. 24, 2013). 

After the Court granted class certification, but before the current motions were fully 

briefed, Providence changed its policy regarding covering ABA therapy for children with autism. 

Oregon Senate Bill 365 was passed by the Oregon Legislature in 2013, but is not effective until 

January 1, 2015. That law requires that insurance companies in Oregon provide coverage for 

ABA therapy for children eight years of age and younger for up to 25 hours per week. In 

response to the passage of Oregon Senate Bill 365, Providence decided voluntarily to implement 

the coverage sooner than required. The parties agree that because the issue in this case is whether 

the Developmental Disability Exclusion is lawful and because plan members often seek coverage 

for ABA therapy for more than 25 hours per week and for children over age eight, Providence’s 

decision to implement Oregon Senate Bill 365 early does not render moot the issues raised in this 

lawsuit.

DISCUSSION

A. ERISA Civil Enforcement

Plaintiffs argue that Providence’s denial of coverage of ABA under the Developmental 

Disability Exclusion is unlawful in three ways: (1) by violating the Oregon Mental Health Parity 

Act, Or. Rev. Stat. § 743A.168; (2) by violating the Oregon Mandatory Coverage for Minors 

with Pervasive Developmental Disorders Act, Or. Rev. Stat. § 743A.190; and (3) by violating the 

Federal Parity Act, 29 U.S.C. § 1185a. Plaintiffs bring each of these claims under the ERISA

civil enforcement provision, 29 U.S.C. § 1132(a)(3), which provides a cause of action for 

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violations of ERISA itself and, under certain circumstances, violations of state law regulating 

insurance. 

Plan participants and beneficiaries of group policies may bring actions under ERISA’s 

civil enforcement provision to challenge violations of ERISA and the terms of ERISA plans. The 

ERISA civil enforcement provision provides:

A civil action may be brought . . . by a participant, beneficiary, or 

fiduciary (A) to enjoin any act or practice which violates any 

provision of this subchapter or the terms of the plan, or (B) to 

obtain other appropriate equitable relief (i) to redress such 

violations or (ii) to enforce any provisions of this subchapter or the 

terms of the plan.

29 U.S.C. § 1132(a)(3). Because the Federal Parity act is enacted as part of ERISA, it is 

enforceable through a cause of actions under § 1132(a)(3) as a violation of a “provision of this 

subchapter.” See id. Or. Rev. Stat. §§ 743A.168 and 743A.190, on the other hand, are, for the 

reasons discussed below, enforceable through a cause of action under § 1132(a)(3) as “terms of 

the plan.” Id. 

It is a general principle of insurance law that all insurance plans include all applicable

requirements and restrictions imposed by state law. 2 Couch on Insurance § 19:1 (3d ed. 2011). 

State law regulating insurance thus “enter[s] into and form[s] a part of all contracts of insurance 

to which [it is] applicable.” Id. When an insurance policy provision is “in conflict with, or 

repugnant to, statutory provisions which are applicable to the contract,” the inconsistent 

insurance policy provisions are invalid “since contracts cannot change existing statutory laws.” 

Id. at § 19:3. Moreover, when such a conflict exists, “the statutory requirements supersede the 

conflicting policy provisions and become part of the insurance policy itself.” Id.

The Supreme Court has repeatedly held that state law regulating insurance applies to 

ERISA insurance plans, despite the fact that other state laws are preempted by ERISA. See 

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UNUM Life Ins. Co. of Am. v. Ward, 526 U.S. 358, 376 (1999) (“We have repeatedly held that 

state laws mandating insurance contract terms are saved from preemption under 

§ 1144(b)(2)(A).”); Metro. Life Ins. Co. v. Mass., 471 U.S. 724, 733 (1985) (discussing the 

ERISA insurance savings clause, which states that nothing in ERISA “shall be construed to 

exempt or relieve any person from any law of any State which regulates insurance”) (quoting 29 

U.S.C. § 1144(b)(2)(a)) (quotation marks omitted). Section 1144(b)(2)(A), which has come to be 

known as the “savings clause,” states: “Except as provided in subparagraph (B), nothing in this 

subchapter shall be construed to exempt or relieve any person from any law of any State which 

regulates insurance, banking, or securities.” 29 U.S.C. § 1144(b)(2)(A). Therefore, the general 

rule of insurance law—that insurance contracts are subject to and incorporate relevant state law 

regulating insurance—applies with equal force to ERISA insurance plans.1To the extent that 

Oregon insurance regulations are in conflict with the provisions of Providence’s plans, those 

regulations will “become part of the insurance policy itself.” See Couch on Insurance § 19:3.

Thus, because the ERISA civil enforcement provision allows courts to enjoin or provide 

other appropriate equitable relief when a practice violates any “terms of the plan,” and because 

state law regulating insurance, when in conflict with terms of an insurance plan, “supersede the 

conflicting policy provisions and become part of the plan itself,” see Couch on Insurance § 19:3, 

ERISA provides courts with the power to enjoin violations of state law regulating insurance that 

 

1 Oregon’s insurance coverage mandates are also incorporated into Providence’s 

insurance policy as a matter of express contract: “The laws of the State of Oregon govern the 

interpretation of this Group Contract and the administration of benefits to members, except as 

provided in section 14.11 [addressing non-transferability of benefits].” Decl. Brenna Legaad 

Ex. 1, at 77, Dkt. 62.

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have become part of the terms of the plan. See, e.g., Harlick v. Blue Shield of Cal., 686 F.3d 699, 

721 (9th Cir. 2012) cert denied 133 S. Ct. 1492 (U.S. 2013).

2

B. Plaintiffs’ ERISA Claims for Violation of Or. Rev. Stat. §§ 743A.168 and 743A.190 

1. Oregon Statutory Interpretation

Plaintiffs argue that Providence’s Developmental Disability Exclusion violates two 

Oregon laws: Or. Rev. Stat. § 743A.168 and § 743A.190. The Court interprets these statutes 

applying Oregon statutory interpretation principles. Powell’s Books, Inc. v. Kroger, 622 F.3d 

1202, 1209 (9th Cir. 2010) (a federal court interpreting Oregon law should “interpret the law as 

would the [Oregon] Supreme Court” (alteration in original)). Under Oregon law, the “first step” 

of statutory interpretation is an examination of the text and context of the statute in order “to 

discern the intent of the legislature. Portland Gen. Elec. Co. v. Bureau of Labor & Indus., 317 

Or. 606, 610 (1993), superseded by statute, Or. Rev. Stat. § 174.020; see State v. Gaines, 346 Or. 

160, 171 (2009) (explaining that Or. Rev. Stat. § 174.020 did not alter the Portland General 

Electric holding regarding the first step of statutory interpretation). “[A]fter examining the text 

and context,” the court will “consult” the legislative history, “even if the court does not perceive 

an ambiguity in the statute’s text, where that legislative history appears useful to the court’s 

analysis.” Gaines, 346 Or. at 172. The “evaluative weight” given to the legislative history is for 

the court to determine. Id. At “the third[] and final step[] of the interpretive methodology,” if 

“the legislature’s intent remains unclear after examining text, context, and legislative history, the 

 

2

Providence cites Haviland v. Metropolitan Life Insurance Co., 876 F. Supp. 2d 946 

(E.D. Mich. 2012), aff’d, 730 F.3d 563 (6th Cir. 2013), cert denied, 134 S. Ct. 1790 (2014), for 

the proposition that ERISA preempts state law and then argues that Plaintiffs are not entitled to 

ERISA relief for violations of state law. The Haviland case, however, addressed a state 

consumer protection law, which is a state law that did not regulate the insurance industry and 

thus was not “saved” by ERISA § 1144(b)(2)(A). The Haviland case, therefore, does not assist 

Providence in the pending lawsuit.

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court may resort to general maxims of statutory construction to aid in resolving the remaining 

uncertainty.” Id. 

2. Oregon Mental Health Parity Act

The Oregon Mental Health Parity Act, Or. Rev. Stat. § 743A.168, requires parity among

the services and treatment covered for medical conditions and the services and treatment covered

for mental health and chemical dependency related conditions. The statute states in relevant part:

A group health insurance policy providing coverage for hospital or 

medical expenses shall provide coverage for expenses arising from 

treatment for chemical dependency, including alcoholism, and for 

mental or nervous conditions 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. 

Or. Rev. Stat. § 743A.168. After the enactment of the Oregon Mental Health Parity Act, several 

Oregon Administrative Rules were issued to help interpret the statute. “Validly promulgated 

administrative rules have the force of law.” Haskins v. Emp’t Dep’t, 156 Or. App. 285, 288

(1998) (en banc). “Administrative rules and regulations are to be regarded as legislative 

enactments having the same effect as if enacted by the legislature as part of the original statute.” 

Bronson v. Moonen, 270 Or. 469, 476 (1974).

One particularly relevant administrative rule interpreting § 743A.168 is Oregon 

Administrative Rule 836-053-1405(1), which provides: 

A group health insurance policy issued or renewed in this state 

shall provide coverage or reimbursement for medically necessary

treatment of mental or nervous conditions . . . at the same level as, 

and subject to limitations no more restrictive than those imposed 

on coverage or reimbursement for medically necessary treatment 

for other medical conditions.

Or. Admin. R. 836-053-1405(1) (emphasis added). Additionally, Oregon Administrative Rule 

836-053-1404 defines “mental and nervous conditions” as “all disorders listed in the ‘Diagnostic 

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and Statistical Manual of Mental Disorders, DSM-IV-TR, Fourth Edition’ except for [certain 

diagnostic codes not relevant here].” Or. Admin. R. 836-053-1404(1)(a)(A). Autism is a disorder 

listed in the Diagnostic Statistical Manual of Mental Disorders and the diagnostic code for 

autism, 299, is not listed among the exceptions. Thus, autism is a “mental and nervous 

condition” under the Oregon Mental Health Parity Act. See id. 

Plaintiffs argue that the legislative intent of § 743A.168 was to prohibit such exclusions 

like the Developmental Disability Exclusion from excluding medically necessary ABA from 

coverage. Plaintiffs also argue that the statute and related administrative rules state that group 

health insurance policies “shall” provide coverage of medically necessary services for mental 

health conditions as other medical conditions and that the ordinary usage of the term “shall” 

creates a mandatory duty. See Friends of the Columbia Gorge, Inc. v. Columbia River Gorge 

Comm’n, 346 Or. 415, 426-27 (2009). In other words, Plaintiffs contend that Or. Rev. Stat. 

§ 743A.168 “mandates” coverage of ABA therapy.

Providence responds that the phrases “at the same level” and “subject to limitations no 

more restrictive than” indicate that § 743A.168 is not a coverage mandate for particular services, 

but rather requires that any service that the group plan covers for mental health conditions is 

covered at the same level as that same service would be covered for other medical conditions. 

Providence argues that if ABA is not a service covered for medical conditions, then Providence 

is free not to provide ABA for mental health conditions. 

Looking to the text and context of the statute, Providence’s focus on the word “services” 

is misplaced. The text of the statute requires coverage of treatment for mental health 

“conditions” at the same level as coverage for medical “conditions.” Therefore, although the 

Oregon Mental Health Parity Act might not mandate coverage of a particular service, it does 

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mandate that Providence cover mental health conditions no more restrictively than it covers 

medical conditions. By stating that it covers autism (a developmental disability), but excluding 

coverage for all services “related to a developmental disability,” Providence is not covering 

treatment for mental health conditions in parity with treatment for medical conditions. 

Providence cannot identify any medical condition covered by its plan where there was an 

exclusion that could, on its face, deny coverage for all services “related to” the treatment for that 

condition. Moreover, Providence cannot provide any examples of a medical condition where an 

exclusion was used to deny coverage of the primary and widely-respected medically necessary 

treatment for that medical condition. Because of the broad-based Developmental Disability 

Exclusion, Providence covers mental health conditions at a different level than medical 

conditions in violation of the parity obligations.

The Court also notes that if Providence’s argument were accepted and insurance 

companies could cover a mental health condition but exclude coverage for medically necessary 

services “related to” that condition, the Oregon Mental Health Parity Act would have little to no 

meaning. For example, Providence could state that it covers depression, but refuse to cover 

psychotherapy or antidepressant medications, provided that it did not cover psychotherapy or 

antidepressant medications when those treatments were medically necessary to treat medical 

conditions. This interpretation is inconsistent with the context of the statute and its purpose to 

ensure that mental health conditions be covered in parity with medical conditions. Particularly 

considering that, because of the nature of mental health conditions, in many instances treatment 

that is medically necessary for mental health diagnoses would never be medically necessary for 

medical diagnoses. Insurers could thus use a broad exclusion, like the Developmental Disability 

Exclusion, to get around the parity requirement. 

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Plaintiffs and Defendant each provided the Court with selections from the legislative 

history for this statute. The Court has considered this legislative history, but does not find it 

particularly useful or illuminating in interpreting § 743A.168. Therefore, in accordance with 

State v. Gaines, the Court accords the cited legislative history relatively little evaluative weight.

See Gaines, 346 Or. at 171. Finally, because the meaning and legislative intent of the Oregon 

Mental Health Parity Act are clear after examining the text and context of the statute, the Court 

does not need to apply general maxims of statutory interpretation.3Id. at 172.

The Court also takes into consideration the fact that other federal courts in this district 

and state courts across the country have interpreted similar mental health parity acts to require 

insurance companies to cover ABA therapy under similar circumstances. The persuasive 

reasoning in these opinions provides further support for the Court’s conclusion that § 743A.168 

requires insurance companies to cover medically necessary services for covered mental health 

conditions. 

In McHenry v. PacificSource Health Plans, 679 F. Supp. 2d 1226 (D. Or. 2010), U.S. 

Magistrate Judge Stewart analyzed, albeit in dicta, an exclusion of benefits for pervasive 

developmental disorders (“PDDs”), similar to the Developmental Disability Exclusion, and noted

that the then-recently enacted Oregon Mental Health Parity Act resulted in the insurance 

company abandoning the exclusion. Judge Stewart wrote:

 

3

The Court finds the statute’s meaning to be clear after considering the text and context 

of the law. The Court notes, however, that if it were to proceed to step three of the Gaines

analysis and consider maxims of statutory interpretation, the maxim that statutes should be 

interpreted to avoid an absurd result would be persuasive on this point. See Griffin v, Oceanic 

Contractors, Inc., 458 U.S. 564, 575 (1982). The Court would interpret § 743A.168 to avoid the 

absurd result that insurance companies could decide not to cover medically necessary services 

for covered mental health conditions (thus obliterating parity) and still be in technical 

compliance with the Mental Health Parity Act.

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The status of this [PPD] exclusion was brought into question by 

legislation effective shortly after [the plaintiff’s] diagnosis. In 

August 2005, the State of Oregon enacted the Mental Health Parity 

Act (“Parity Act”), which went into effect on January 1, 2007. See

Or. Laws 2005, c. 705, § 1, codified at ORS 743.556 (renumbered 

ORS 743A.168). The Parity Act mandated that “[a] group health 

insurance policy providing coverage for hospital or medical 

expenses” must “provide coverage for expenses arising from 

treatment for . . . mental or nervous conditions 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.” Id. This language required 

PacificSource to abandon its prior exclusion for PDDs in the 2006 

Plan.

Id. at 1233 (footnote omitted). Judge Stewart, although only in dicta, indicated that a PPD would 

be invalid under the Oregon Mental Health Parity Act.

Similarly, a state appellate court in New Jersey addressed the New Jersey mental health 

parity act and an exclusion that barred from coverage occupational, speech, and physical therapy. 

The court wrote: 

[A]n exclusion from coverage for claims based upon occupational, 

speech, and physical therapy offered to developmentally disabled 

children would render meaningless the specific inclusion of PDD

and autism within those biologically-based mental illnesses subject 

to the parity statute. . . . To read the governing statute as offering 

parity, but not affording coverage for medically necessary 

treatment of the very conditions that are the enumerated subjects of 

the parity provisions would be unreasonable.

Markiewicz v. State Health Benefits Comm’n, 915 A.2d 553 (N.J. App. Div. 2007); see also 

Micheletti v. State Health Benefits Comm’n, 913 A.2d 842, 849 (N.J. App. Div. 2007) (“If the 

[plan administrator] is correct in its reading, the statute would appear to promise much, but it 

really grants little or nothing for an autistic child. We cannot infer such a cruel intent by the 

Legislature.”).

Thus, looking to the text and context of § 743A.168 as well as the persuasive case law, 

the Court finds that Providence cannot simultaneously purport to cover autism and yet deny 

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coverage for medically necessary ABA therapy through its Developmental Disability Exclusion

consistent with the Oregon Mental Health Parity Act. Because of the Developmental Disability 

Exclusion, which provides a blanket exclusion for an entire family of mental health diagnoses, 

Providence is not providing equal coverage of mental health and medical conditions. The Court

thus holds that the Developmental Disability Exclusion violates Or. Rev. Stat. §743A.168. 

3. Oregon Mandatory Coverage for Minors with Pervasive Developmental 

Disorders Act

In 2007, the Oregon Legislature passed House Bill 2918, which requires health benefit 

plans to cover treatment of pervasive developmental disorders for children. The bill, codified as 

Or. Rev. Stat. § 743A.190, provides:

(1) A health benefit plan, as defined in ORS 743.730, must cover 

for a child enrolled in the plan who is under 18 years of age 

and who has been diagnosed with a pervasive developmental 

disorder all medical services, including rehabilitation services, 

that are medically necessary and are otherwise covered under 

the plan.

(2) The coverage required under subsection (1) of this section, 

including rehabilitation services, may be made subject to other 

provisions of the health benefit plan that apply to covered 

services, including but not limited to:

(a) Deductibles, copayments or coinsurance;

(b) Prior authorization or utilization review requirements; 

or

(c) Treatment limitations regarding the number of visits or 

the duration of treatment.

Or. Rev. Stat. § 743A.190(1) and (2). “Pervasive developmental disorder,” defined in subsection 

(3) of the statute, includes “autism spectrum disorder.” Or. Rev. Stat. § 743A.190(3)(b). In 

addition, subsection (3) defines “medically necessary” as “in accordance with the definition of 

medical necessity that is specified in the policy, certificate or contract for the health benefit plan 

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and that applies uniformly to all covered services under the health benefit plan,” and 

“rehabilitation services” as “physical therapy, occupational therapy or speech therapy services to 

restore or improve function.” Or. Rev. Stat. § 743A.190(3)(a), (c).

Plaintiffs argue that Or. Rev. Stat. § 743A.190 mandates coverage of all medically 

necessary medical services, including ABA therapy, for children with development disorders

under the age of 18. Providence responds that ABA therapy does not fit within the definition of 

“medical services,” that ABA therapy is not “otherwise covered” by Providence’s plan, and 

therefore, that § 743A.190 does not mandate coverage of ABA therapy.

Plaintiffs, however, seek injunctive and declaratory relief, asking the Court to enjoin 

Providence from denying coverage based on its Developmental Disability Exclusion and to issue 

a declaration stating that Providence’s Developmental Disability Exclusion violates applicable 

law. Thus, the issue before the Court is not whether Or. Rev. Stat. § 743A.190 mandates 

coverage of ABA therapy in the abstract, but rather, whether Providence can lawfully use the

Developmental Disability Exclusion to deny coverage of ABA therapy—or stated another way, 

whether the Developmental Disability Exclusion violates Or. Rev. Stat. § 743A.190. Thus, 

specifically determining whether ABA therapy is a “medical service” that is “otherwise covered” 

by Providence is unnecessary.4

 

4

If the Court were to interpret “medical services,” it would find, and does find in the 

alternative, that ABA therapy is a medical service. Looking to the text and the context, the 

statute provides that a health benefit plan must cover “all medical services, including 

rehabilitation services, that are medically necessary and otherwise covered.” Or. Rev. Stat. 

§ 743A.190(1). “Rehabilitation services” is defined as “physical therapy, occupational therapy or 

speech therapy services to restore or improve function,” but “medical services” is not explicitly 

defined in the statute. Or. Rev. Stat. § 743A.190(3). Plaintiffs argue that ABA therapy, like 

“physical therapy, occupational therapy or speech therapy,” is a therapy service meant to “restore 

or improve function,” and that therefore, ABA fits within the “plain, natural, and ordinary” 

definition of medical services if these other types of rehabilitation services fit within the 

definition of medical services. ABA is a widely accepted therapy that is “firmly supported by 

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To determine whether the Developmental Disability Exclusion violates Or. Rev. Stat. 

§ 743A.190, the Court first looks to the text and context of the statute and then consults the 

legislative history to the extent that it is useful. See Gaines, 346 Or. at 171-72. The plain text of 

the statute, cited above, provides that a health plan must cover all medically necessary medical 

services for children with a pervasive developmental disorder that are otherwise covered. 

Providence contends that the common sense meaning of “otherwise covered” is that the medical 

services must be “otherwise covered” for plan members who do not have a developmental 

disorder. See Or. Rev. Stat. § 743A.190(1). Plaintiffs argue that the plain and ordinary meaning 

of “otherwise covered” is that the service would be subject to the plan’s other coverage 

limitations, such as limitations on the number of visits and any “outside of network” physician 

restrictions. The Court assumes without deciding that Providence’s interpretation is correct. The 

result is the same.

Providence’s Developmental Disability Exclusion excludes from coverage services

“related to developmental disabilities, developmental delays or learning disabilities.” Ross Decl. 

Ex. D at 8., Dkt. 41-4. Although Providence does not appear to enforce the Developmental 

Disability Exclusion in all circumstances, on its face, the exclusion exempts from coverage all 

services related to a plan member’s pervasive developmental disability. There are several 

 

decades of research and application and is a well-established treatment modality of autism and 

other [pervasive developmental disorders].” McHenry, 679 F. Supp. 2d at 1237. Based on the 

text and context of the statute—including the statutory definition of “rehabilitation services”—

the Court agrees that ABA therapy fits within the ordinary definition of medical services. Accord 

Hummel v. Ohio Dep’t of Job & Family Servs., 844 N.E.2d 360, 366 (Ct. App. Ohio 2005) 

(interpreting “medical service” to include ABA therapy under the ordinary definition); K.G. ex 

rel. Garrido v. Dudek, 839 F. Supp. 2d 1254, 1276-77 (S.D. Fl. 2011) (holding that ABA therapy 

is a medical service that must be covered under Medicaid), affirmed in relevant part Garrido v. 

Dudek, 731 F.3d 1152 (11th Cir. 2002); Chisholm ex rel. CC, MC v. Kliebert, 2013 WL 

3807990, at *22 (E.D. La. July 18, 2013) (holding that ABA therapy when recommended by a 

physician or psychologist constitutes “medical assistance”)

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services that would be considered “related to” a developmental disorder—for example speech 

therapy, physical therapy, and psychotherapy—that are covered by Providence for other plan 

members. 

In other words, if a plan member requested coverage for speech therapy related to his or 

her developmental disability, Providence could deny coverage under the exclusion, but still 

provide coverage for speech therapy for a different plan member who does not have a 

developmental disability. Regardless of whether or not Providence chooses always to enforce its

Developmental Disability Exclusion, the exclusion on its face directly violates Or. Rev. Stat. 

§ 743A.190. As such, even accepting Providence’s interpretation of “otherwise covered,” the 

Developmental Disability Exclusion conflicts with the statute. 

Although the plain text of the statute is clear, the legislative history further supports the 

conclusion that the Developmental Disability Exclusion violates Or. Rev. Stat. § 743A.190. Both 

parties cited extensive legislative history to support their arguments.5For example, in a speech 

cited by Providence, Representative Sara Gelser explained the purpose of the proposed 

legislation. She stated:

 

5

Plaintiffs cite to the testimony of several advocates and legislators discussing how the 

bill would provide coverage for ABA therapy. Of particular relevance, is the testimony of 

Representative Mitch Greenlick in support of the House Bill 2918. Representative Greenlick 

discussed the United States Surgeon General’s statement describing a study of ABA therapy that 

demonstrated “the efficacy of [ABA] in reducing inappropriate behavior and in increasing 

communication, learning, and appropriate social behavior.” Or. H.R. H. Health Care Subcomm. 

On Health Care Access, Rep. Mitch Greenlick, H.B. 2918, Mar. 14, 2007, Gartner Decl. Ex. H. 

This testimony in support of the bill, regarding the importance of ABA therapy, indicates that the 

legislators believed that ABA therapy would be included in the definition of “medical services.” 

Providence points out that all of this testimony cited by Plaintiffs took place in March of 2007, in 

support of a previous (and more expansive) version of the bill. The original bill stated: “All 

health benefit plans, as defined in ORS 743.730, shall provide coverage for treatment of a 

pervasive developmental disorder that is prescribed by the beneficiary’s physician in accordance 

with a treatment plan.” H.B. 2918 § 2(1), 74th Leg. Assemb., Reg. Sess. (Or. 2007) (as 

introduced). This legislative history regarding an earlier version of the bill is less probative. 

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[C]hildren with autism or pervasive developmental delay, learning 

disabilities, mental retardation are routinely denied services that 

are available to other members of their family under the same 

health insurance plan because they are people with learning 

disabilities, developmental disabilities and developmental delays. . 

. . And so what this amendment does, basically, is it just creates 

some equity within an insurance plan that says if speech therapy is 

covered for Betty in a family, it should also be covered for Ben, 

even if he has autism, at the same level of coverage that it’s offered 

to Betty.

H. Comm. on Health Care, Testimony of Rep. Sara Gelser, H.B. 2918, April 25, 2007, Olson 

Decl. Ex 1 at 4, Dkt. 70-1. Representative Gelser’s testimony supports, rather than diminishes,

the conclusion that the Developmental Disability Exclusion, which could, on its face, in some 

instances deny a person with a developmental disability a service that is otherwise provided by 

Providence to plan members without a developmental disability, is in conflict with Or. Rev. Stat. 

§ 743A.190. 

The House Staff Member Summary of the bill also interpreted the statute consistently 

with the Court’s interpretation. It specified that the bill ensures “that health benefit plans may not 

deny benefits to an individual who is covered under the plan due to the diagnosis of pervasive 

developmental disorder.” Staff Measure Summary, H.B. 2918 A, 74th Leg. Assemb., Reg. Sess. 

(Or. 2007), Olson Decl. Ex 3., Dkt. 70-3. Moreover, after the bill passed the Oregon House of 

Representatives and the Oregon Senate, Representative Peter Buckley—a member of the Joint 

Ways and Means Committee—testified as follows: 

We are asking for nothing more or less than what is available to a 

child without the diagnosis of pervasive developmental disorder or 

autism. . . . We have compromised down with the insurance 

companies to only require the same medically necessary benefits 

for developmentally disordered children that non-developmentally 

disordered children are offered under the exact same polices. 

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Joint Comm. On Ways and Means, Transp. & Econ. Dev. Subcomm., Testimony of Rep. 

Buckley, H.B. 2918, 74th Leg. Assemb. Reg. Sess. (Or. 2007), June 16, 2007, Olson Decl. Ex 5 

at 7-8, Dkt. 70-5. Representative Buckley further provided this useful example: 

Two children live on the same street. The evaluations for both 

children indicate the same need for physical therapy. One child 

experienced a stroke at four months so has access to covered 

benefits because it was the result of an illness or injury. The other 

child, same age, whose disability occurred prior to birth, is given a 

label of developmental disability and is therefore denied access to 

the family’s covered health benefits.

Id. at 11-12. Representative Buckley concluded by saying that this bill would prevent insurers 

from covering this first child’s physical therapy and not covering the second child’s physical 

therapy. This testimony supports the proposition that the statute prohibits an insurer from 

refusing to cover a service for a developmentally disabled child that is otherwise covered for 

other plan members.

The text, context, and legislative history thus make it clear that an insurer cannot provide 

coverage for a service for one child and deny coverage for the same service for another child 

solely because the second child suffers from a developmental disability. The Developmental 

Disability Exclusion, however, would allow just that. It permits Providence to deny coverage for 

services as “related to a developmental disability” that otherwise would be covered for other plan 

members who do not have developmental disabilities. Whether or not Providence chooses 

consistently to enforce the Developmental Disability Exclusion does not matter. On its face, the 

Developmental Disability Exclusion violates Or. Rev. Stat. § 743A.190.

C. Plaintiffs’ ERISA Claim for Violation of the Federal Parity Act

Plaintiffs argue that Providence’s Developmental Disability Exclusion is also unlawful 

under the Federal Parity Act, 29 U.S.C. § 1185a(a)(3)(A)(ii). This law requires that for group 

health plans, financial requirements and treatment limitations to mental health benefits must be

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no more restrictive than the predominant requirements or limitations applied to substantially all 

medical and surgical benefits.6Providence argues that the Federal Parity Act, like the Oregon 

Mental Health Parity Act, does not mandate, or require, coverage of any specific service or 

treatment, but merely states that if a certain service or treatment is covered, it must be covered 

equally for medical and mental health conditions. 

The Court uses federal principles of statutory interpretation to interpret this federal law. 

Under these principles, “[s]tatutory interpretation begins with the language of the statute.” UMG 

Recordings, Inc. v. Shelter Capital Partners LLC, 718 F.3d 1006, 1026 (9th Cir. 2013) (citation 

and quotation marks omitted). When terms within a statute are not defined, those terms must be 

“accorded their plain and ordinary meaning, which can be deduced through reference sources 

such as general usage dictionaries.” Id. When determining the meaning of a statute, however, 

courts “look not only to the particular statutory language, but to the design of the statute as a 

whole.” Crandon v. United States, 494 U.S. 152, 158 (1990). Nonetheless, “statutory 

construction must begin with the language employed by Congress and the assumption that the 

ordinary meaning of that language accurately expresses the legislative purpose.” Park ‘N Fly, 

Inc. v. Dollar Park and Fly, Inc., 469 U.S. 189, 194 (1985).

The Court thus begins its analysis by looking to the text of the Federal Parity Act. In 

pertinent part, it provides:

In the case of a group health plan (or health insurance coverage 

offered in connection with such a plan) that provides both medical 

and surgical benefits and mental health or substance use disorder 

benefits, such plan or coverage shall ensure that—

 

6 As discussed above, plan participants and beneficiaries of group policies may bring 

actions under ERISA’s civil enforcement provision to challenge Federal Parity Act violations. 

ERISA provides individual participants and beneficiaries with a basis to challenge a plan for 

“any act or practice” that violates ERISA provisions, including the Federal Parity Act, which was 

enacted within ERISA. 

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(i) the financial requirements applicable to such mental health or 

substance use disorder benefits are no more restrictive than the

predominant financial requirements applied to substantially all 

medical and surgical benefits covered by the plan (or coverage), 

and there are no separate cost sharing requirements that are 

applicable only with respect to mental health or substance use 

disorder benefits; and

(ii) the 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.

29 U.S.C. § 1185a(3)(A)(i)-(ii) (emphasis added). The law defines “treatment limitation” as 

follows: “The term ‘treatment limitation’ includes limits on the frequency of treatment, number 

of visits, days of coverage, or other similar limits on the scope or duration of treatment.” 29 

U.S.C. § 1185a(3)(B)(iii). 

The U.S. Department of Health and Human Services has issued regulations interpreting 

the Federal Parity Act. In these regulations, the agency explains that the term “treatment 

limitations” includes both quantitative and nonquantitative limitations:

Treatment limitations include limits on benefits based on the 

frequency of treatment, number of visits, days of coverage, days in 

a waiting period, or other similar limits on the scope or duration of 

treatment. Treatment limitations include both quantitative 

treatment limitations, which are expressed numerically (such as 50 

outpatient visits per year), and nonquantitative treatment 

limitations, which otherwise limit the scope or duration of benefits 

for treatment under a plan or coverage. (See paragraph (c)(4)(ii) of 

this section for an illustrative list of nonquantitative treatment 

limitations.) A permanent exclusion of all benefits for a particular 

condition or disorder, however, is not a treatment limitation for 

purposes of this definition.

45 C.F.R. § 146.136(a); 29 C.F.R. § 2590.712(a). Included in the regulations is an illustrative list 

of nonquantitative treatment limitations which include, of particular relevance, “[m]edical 

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management standards limiting or excluding benefits based on medical necessity or medical 

appropriateness, or based on whether the treatment is experimental or investigative.” Id.

Plaintiffs argue that the Federal Parity Act prohibits Providence from denying ABA 

therapy under the Developmental Disability Exclusion because it is a “treatment limitation” that 

is applicable only to mental health disorders. Providence responds primarily with two arguments 

for the proposition that the Federal Parity Act does not preclude Providence from using the

Developmental Disability Exclusion. First, Providence contends that the Developmental 

Disability Exclusion is not a “treatment limitation.” Providence argues that the Federal Parity 

Act deals with treatment limitations that are “limits on benefits based on the frequency of 

treatment, number of visits, days of coverage, days in a waiting period,” or other similar limits 

comparable to those listed. Providence argues that under the principal of ejusdem generis, which 

means that general words should be interpreted consistently with the specific words they follow, 

“treatment limitations” is limited to similar quantitative limits like “frequency of treatment,

number of visits, days of coverage, days in a waiting period.” The Developmental Disability 

Exclusion is not a numerical or quantitative limitation like those listed in the statute, and 

therefore, Providence argues, it is not a “treatment limitation.” This argument is unpersuasive. 

The statute itself and the related regulations explicitly note that the Federal Parity Act 

applies to both quantitative and nonquantitative limitations. See 45 C.F.R. § 146.136(a); 29 

C.F.R. § 2590.712(a); see also Interim Final Rules Under the Paul Wellstone and Pete Domenici 

Mental Health Policy and Addiction Equity Act of 2008, 75 Fed. Reg. 5410-01, 5413 (Feb. 2, 

2010) (“The statute describes the term as including limits on the frequency of treatment, number 

of visits, days of coverage, or other similar limits on the scope or duration of treatment, but it is 

not limited to such types of limits.” (emphasis added)). Moreover, the principal of ejusdem

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generis normally only comes into play when a general word follows a list of specific words. 

“The ejusdem generis canon applies when a drafter has tacked on a catchall phrase at the end of 

an enumeration of specifics.” Antonin Scalia & Bryan A. Garner, Reading Law: The 

Interpretation of Legal Texts 199 (2012). In this instance, the statute provides examples of what 

treatment limitations might be after the term is used. The term “treatment limitations” does not 

appear as a general term at the end of a list of specifics.

The plain and ordinary meaning of “treatment limitation” includes and encompasses the 

Developmental Disability Exemption. It is a limitation on the treatment of plan members with 

developmental disabilities. The regulations bolster this interpretation, because they include 

“[m]edical management standards limiting or excluding benefits based on medical necessity or 

medical appropriateness, or based on whether the treatment is experimental or investigative,” 29 

C.F.R. § 2590.712, as an illustration of what a nonquantitative treatment limitation might be. 

Providence itself has used an “experimental” exemption and a “medical necessity” exemption in 

addition to the Developmental Disability Exemption when denying coverage for ABA therapy in 

the past. Thus, the Developmental Disability Exemption, like an experimental or medical 

necessity exemption, is a “treatment limitation” within the meaning of the Federal Parity Act.

Providence’s second argument is that the Federal Parity Act does not require an insurance 

plan to cover any particular benefits or conditions, but instead merely requires that if Providence 

were to choose to cover a particular benefit, then they must cover it with equal restrictions as 

medical benefits. Plaintiffs respond that although the Federal Parity Act does not require 

coverage of any particular condition, it does require that any limitation on services of an already 

covered condition be equally applied to mental health and medical conditions. In other words, 

Providence would be free under the Federal Parity Act not to cover autism. But after Providence 

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chooses to cover autism, any limitation on services for autism must be applied with parity. 

Because Providence does cover autism, it cannot use the Developmental Disability Exclusion to 

deny coverage of ABA therapy because it is a “separate treatment limitation” that applies only to 

mental health disorders.

The Developmental Disability Exclusion applies specifically and exclusively to mental 

health conditions. The Federal Parity Act requires that a plan have “no separate treatment 

limitations that are applicable only with respect to mental health or substance use disorder 

benefits.” 29 U.S.C. § 1185a(a)(3)(A)(ii). Providence’s Developmental Disability Exclusion

limits coverage of services “related to developmental disabilities, developmental delays or 

learning disabilities.” Ross Decl. Ex. D at 8, Dkt. 41-4. Thus, Providence’s exclusion is overtly

applicable only to mental health conditions—specifically developmental disabilities—and does 

not apply to medical or surgical conditions. The plain text of the Federal Parity Act prohibits 

“separate treatment limitations that are applicable only with respect to mental health or substance 

use disorder benefits.” 29 U.S.C. § 1185a(a)(3)(A)(ii). Thus, under the plain text of the statute, 

Providence’s Developmental Disability Exclusion is prohibited.

CONCLUSION

Plaintiffs’ motion for partial summary judgment (Dkt. 59) is GRANTED, and 

Defendant’s cross motion (Dkt. 67) is DENIED.

IT IS SO ORDERED.

DATED this 8th day of August, 2014.

/s/ Michael H. Simon

Michael H. Simon

United States District Judge

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