Coverage for speech therapy.

Q We live in California and have a five-year-old son who has been diagnosed with pervasive developmental disorder (PDD). He has been receiving speech therapy since he was two and a half years old. At age three, he had tubes placed in his ears, which improved his speech and language skills dramatically. For the past year, we've been battling our private insurance company over payment for his speech therapy.

Over the years, we've been subject to delays in payment because of periodic reviews by our insurance company In April 1995, the company conducted another review. Seven months later, they agreed to cover our son's speech therapy from the previous April, when the review was initiated, to September, but took the position that the therapy was "not medically necessary." They told us we would have to submit daily therapy notes for all claims after September.

Since then, although we have submitted therapy notes and doctors' letters, the claims have not been paid.

The insurance company has indicated that they will not cover the therapy because our son has shown only minimal progress. Our policy has an arbitration clause. Should we proceed, or is there some agency we should contact?

A I think it's essential to begin with an understanding of the way health insurance policies generally deal with services such as speech therapy. Originally, many policies provided coverage only for hospitalization. Later, they began to cover doctors' office visits, x-rays, outpatient medical tests and specific medical treatments for a wide variety of conditions. Eventually, coverage was also extended to psychological therapy, physical therapy, speech therapy and other non-medical services.

As coverage expanded, companies developed different rules. For example, payment of speech therapy claims often requires that patients show continuing progress. Usually, companies require detailed, written documentation of such progress.

Unfortunately, some insurance companies seem to rely on generalized, computer-generated statements when communicating with consumers. As a result, it's often difficult to understand what they are trying to say. It's also important to understand that insurance companies use technical terms in a specialized way. "Not medically necessary" can mean two different things: either that the insurance company requires additional documentation--such as doctors' letters or therapists' reports--to determine whether or not the treatment is "medically necessary" or that the insurance policy does not cover the treatment

Thus, I think your first step should be to talk to a supervisor at your insurance company and try to determine which of these meanings the company has in mind. If by "not medically necessary" the company means that further documentation is required, you can ask your child's doctor and speech therapist to provide additional reports.

Judging from your letter, however, your insurer seems to be using "not medically necessary" to mean that your son's speech therapy is not covered under the policy. If that is the case, you need to consider the next step.

Arbitration is one possibility. In arbitration, an arbitrator listens to both sides in a dispute, and then makes a decision. Arbitration carries some risk because, in many cases, the arbitrator's decision is binding.

Before agreeding to arbitration, it's essential to obtain legal advice. Protection and Advocacy Inc., a California agency with extensive experience in health insurance issues, should be able to help you. Call them at [phone] (California only; to find a similar office in another state, contact the National Association of Protection and Advocacy Systems, 202/408-9514, voice; 202/408-9521, TTY; 202/408-9520, fax).

You might also explore the possibility of obtaining speech therapy through the public school system. If it can be demonstrated that speech therapy is directly related to your son's educational needs, and if it is listed in his IEP (individualized education plan), the school system will pay for it. Protection and Advocacy, Inc., may be able to offer advice on this issue as well.

You can also contact the American Speech-Language-Hearing Association (800/638 8255) and ask for "Do Your Health Benefits Cover Audiology and Speech Language Pathology Services?" This free brochure offers tips on under standing insurance policies and getting coverage for speech therapy.

In addition, I think it is important that you write to your state legislators. The state legislature has the authority to regulate health insurance (except for policies issued by self-funded plans). It is essential that legislators hear the experiences of consumers.

In this department, Richard Epstein answers readers' questions about health insurance. Send questions to him at EXCEPTIONAL PARENT, 209 Harvard St., Ste. 303, Brookline, MA 02146; [phone] (fax).

If your question relates to a specific health insurance claim, please include copies of any materials you're received from the insurance company (Please, don't send originals!) Include your address and phone number, so we can contact you for more information if necessary. Letters cannot be answered individually.

Since regulations differ from state to state, and since state and federal regulations change periodically, it is essential to discuss specific health insurance problems with appropriate state and/or federal agencies, or with an attorney, before taking any actions based on the advice provided in this column.