ABA Therapy and Autism Services Insurance Denials: What Federal and State Law Require

Two legal floors: state autism mandates and MHPAEA

Most autism service denials are appealable under at least one of two independent legal frameworks. Understanding which applies to your patient's plan determines which argument you lead with.

State autism insurance mandates. Every state has now passed legislation requiring commercial health insurance plans to cover ABA therapy and related autism services. These laws vary in the details — age caps range from 18 to 21, and a handful of older mandates still include annual dollar limits and apply only to certain plan types — Florida, for example, caps mandated autism coverage at $36,000/year and applies only to large-group fully-insured plans, not individual or small-group plans. Note: for plans subject to MHPAEA, this dollar cap is generally not enforceable — parity law overrides mandate dollar limits, so do not treat $36,000 as a hard ceiling. Autism Speaks maintains a current state-by-state summary at autismspeaks.org/state-regulated-health-benefit-plans.

MHPAEA and the 2013 implementing regulations. The Mental Health Parity and Addiction Equity Act of 2008 and its 2013 implementing regulations at 29 CFR § 2590.712 require that any financial requirement or treatment limitation applied to mental health or substance use disorder benefits be no more restrictive than the predominant limitation applied to substantially all medical/surgical benefits in the same benefit classification. Autism spectrum disorder is classified as a mental health condition under DSM-5 and covered by MHPAEA. This means: visit caps, prior authorization requirements, step-therapy-style fail-first requirements, and medical necessity criteria for ASD treatment are all non-quantitative treatment limitations (NQTLs) that must pass the parity test.

What the May 2025 enforcement pause does and does not affect. On May 15, 2025, the U.S. Departments of Labor, HHS, and Treasury announced they would not enforce the 2024 MHPAEA Final Rule's new provisions — specifically the outcomes-data test, the “meaningful benefits” standard, and the fiduciary certification requirements. That pause did not affect the 2008 statute itself, the 2013 regulations, or the CAA 2021 § 203 statutory NQTL comparative-analysis disclosure duty. For autism appeals, those three layers are fully intact. Do not cite the 2024 Final Rule's new provisions in an appeal — cite the 2013 regs and CAA 2021 § 203 instead.

The ERISA gap — and why MHPAEA still fills it

The most common surprise in autism coverage cases is the ERISA preemption problem. A majority of Americans with employer-sponsored insurance are covered by self-funded ERISA plans — plans where the employer, not an insurance company, bears the financial risk. These plans are governed by federal ERISA law, and ERISA preempts state insurance regulations. That means state autism mandates do not apply to self-funded employer plans.

Before you assume a plan is self-funded, verify it. The plan's Summary Plan Description (SPD) will identify whether the plan is “self-insured,” and a quick call to member services asking “is this a fully-insured or self-funded plan?” usually gets a direct answer. Large employers (500+ employees) are far more likely to be self-funded than small employers.

If the plan is self-funded, state autism mandates are off the table. But MHPAEA applies to all group health plans subject to ERISA, whether fully-insured or self-funded. The parity argument remains intact: if the self-funded plan covers any mental health benefits — which almost all do — the restrictions on those benefits (including ASD-related services) must be no more restrictive than restrictions on comparable medical/surgical care.

For self-funded plan denials, lead with the MHPAEA parity argument and the CAA 2021 § 203 demand. Describe the analogous medical/surgical service the plan covers without the same restriction. Example: “This plan covers outpatient physical therapy for developmental delay diagnoses without prior authorization. Requiring prior authorization for ABA therapy (CPT 97153) delivered by a BCBA for a patient with autism spectrum disorder diagnosis (F84.0) is a non-quantitative treatment limitation more restrictive than the comparable medical/surgical benefit, in violation of 29 CFR § 2590.712(c).”

Which law applies to which plan type

Note: For Medicaid, ABA therapy for children under 21 is covered through the EPSDT (Early and Periodic Screening, Diagnostic and Treatment) benefit, which imposes its own coverage obligations separate from autism mandates. Medicaid EPSDT denials follow a distinct appeals process through state Medicaid agencies.

Five denial patterns specific to autism services — and the argument for each

CO-197 — Prior authorization required for ABA assessment

Prior authorization for initial ABA assessments (CPT codes 97151, 97152, and 0362T) has been removed from the coverage policies of most major commercial payers — including Cigna Behavioral Health, Aetna, and UnitedHealthcare — when the ordering provider is a licensed BCBA or independently licensed clinician and the diagnosis is ASD. If your plan is still requiring prior authorization for these codes, check whether authorization is required for comparable medical evaluations — neuropsychological testing, occupational therapy assessments, or developmental pediatrics evaluations. If those assessments don't require PA, requiring it for ABA assessment is an NQTL more restrictive than comparable medical/surgical care, in violation of 29 CFR § 2590.712(c).

CO-50 — Not medically necessary

Medical necessity denials for ABA therapy most commonly cite the absence of measurable progress, the patient's “level of functioning,” or claim that the services are “educational rather than medical.” The “educational vs. medical” argument was rejected by the Ninth Circuit in Wit v. United Behavioral Health (N.D. Cal. 2019), which found that plans cannot apply restrictive medical necessity criteria that deviate from generally accepted clinical standards. The American Academy of Pediatrics and the American Psychological Association both recognize ABA as evidence-based treatment for ASD — cite both in your appeal and demand the plan's written medical necessity criteria for ABA. Then demand, under CAA 2021 § 203, the written analysis showing how those criteria compare to the plan's medical necessity criteria for analogous medical/surgical services.

CO-119 — Annual benefit maximum reached

Annual dollar caps on ABA therapy are a quantitative treatment limitation under MHPAEA. If the plan does not impose a comparable annual dollar maximum on outpatient physical therapy, occupational therapy, or speech therapy billed under the medical benefit, then the ABA cap fails the parity test under 29 CFR § 2590.712(c)(1). For fully-insured plans in states where the autism mandate explicitly prohibits annual dollar caps, lead with the state statute — it provides a cleaner argument and faster resolution. For self-funded ERISA plans where state law doesn't apply, the MHPAEA argument is the only route.

CO-167 — Diagnosis not covered

A plan that excludes ASD (ICD-10: F84.0, F84.5) from covered behavioral health diagnoses while covering anxiety disorders, ADHD, or depression is applying a diagnosis-based exclusion to mental health care — an NQTL under MHPAEA. The plan must demonstrate that it applies comparable diagnosis exclusions to analogous medical/surgical conditions, which most plans cannot. This argument is especially strong for fully-insured plans in states with autism mandates, where the exclusion violates both state law and federal parity requirements simultaneously.

Psychotherapy denials for autistic patients (CPT 90837, 90832, 90834)

Therapists — LMFTs, LCSWs, LPCs, and psychologists — provide psychotherapy to autistic children and adults for co-occurring conditions (anxiety, depression, trauma, OCD) and for skill-building, social communication, and adaptive functioning. These are billed under standard psychotherapy CPT codes (90837, 90832, 90834), not ABA codes. Plans sometimes deny these claims when the patient's primary diagnosis is ASD, arguing that psychotherapy “duplicates” ABA or is “not appropriate for the diagnosis.” Neither argument holds under MHPAEA. The parity test is whether the restriction would be applied to analogous medical/surgical care — a plan cannot deny psychotherapy for an autistic patient if it covers talk-therapy-style services (counseling, behavioral pain management) for patients with medical diagnoses. Cite both the co-occurring diagnosis and the MHPAEA argument in the appeal.

What to include in the appeal letter

An effective autism service denial appeal has five components beyond the standard header (patient ID, claim number, CPT code, CARC code):

1. The diagnosis and its clinical basis. State the ASD diagnosis by ICD-10 code, include the date of diagnosis, the diagnosing clinician, and — if available — the diagnostic evaluation tool used (ADOS-2, ADI-R, CARS). Plans cannot dispute coverage when the diagnosis is documented and the treatment is consistent with it.
2. The legal basis. For fully-insured plans: cite the applicable state autism mandate statute by name and cite 29 CFR § 2590.712. For self-funded ERISA plans: cite 29 CFR § 2590.712 and the MHPAEA statute at 29 U.S.C. § 1185a. Do not cite the 2024 Final Rule's new provisions — cite the 2013 regs only.
3. The comparator argument. Name a specific analogous medical/surgical service the plan covers without the same restriction. Physical therapy, occupational therapy, speech therapy, and neuropsychological assessment are the most common comparators for ABA and autism-related behavioral health services. Be specific: “This plan covers outpatient occupational therapy without prior authorization. Requiring prior authorization for CPT 97153 (ABA therapy — discrete trial training) is an NQTL more restrictive than the comparable medical/surgical benefit.”
4. The CAA 2021 § 203 demand. Sample language you can adapt: “Under § 203 of the Consolidated Appropriations Act of 2021, codified at 29 U.S.C. § 1185a(a)(8), this plan is required to produce a written comparative analysis of the non-quantitative treatment limitation applied to this claim. I request that analysis, including the factors evaluated and the methodology used to assess parity with comparable medical/surgical benefits. Please respond within 30 days.” Review this against your plan documents and denial letter before relying on it.
5. Clinical documentation. Include treatment plan goals, progress notes from the most recent sessions, and — for medical necessity denials — a letter of medical necessity from the treating BCBA, physician, or supervising clinician. Date-of-service notes carry more weight than retrospective summaries.

AppealWin generates letters with all five components automatically from the CARC code, payer, and a brief clinical summary. See the MHPAEA parity appeals guide for the full anatomy of a winning appeal letter, including the escalation path when the plan stalls or refuses.

State-specific protections worth knowing

For fully-insured plans, state autism mandates add a second, independent cause of action. When the state mandate is stronger than MHPAEA — which happens when a state explicitly prohibits dollar caps that MHPAEA might technically tolerate — cite the state statute first and MHPAEA second.

A few state laws that stand out for autism coverage:

• California — Cal. Health & Safety Code § 1374.73 and its parallel Insurance Code provision require coverage for behavioral health treatment (defined to include ABA) without age caps or dollar limits. California's SB 855 (2020) also extended this to all medically-necessary levels of mental health care, strengthening the parity argument for co-occurring conditions.
• New York — NY Ins. Law § 3221(l)(6) requires coverage of ABA therapy without annual or lifetime dollar caps. New York's broader parity statute (§ 3221(l)(5)) also covers autism-related behavioral services beyond ABA.
• Illinois — 215 ILCS 5/356z.14 requires coverage of ABA up to age 21 with no annual dollar cap; carriers cannot impose coverage limits that would not be imposed on physical illnesses.
• Washington — ESSB 5451 (2011) mandates coverage up to age 21 with no dollar or visit caps; Washington also codified major portions of the 2024 MHPAEA final rule into state law (HB 1432, 2025), giving fully-insured Washington plans stronger parity protections than federal law currently provides.

Check the per-state appeal guides for your state's specific insurance commissioner contact, prompt-payment deadlines, and external review rules. For the full text of state autism mandate statutes, Autism Speaks maintains a current resource at autismspeaks.org.

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