Compliance July 31, 2003

States to High Court: Clear Up ERISA Conflicts

July 31, 2003 (PLANSPONSOR.com) - States should have the right to regulate medical necessity treatment decisions made by health maintenance organizations as a "core power" without it being taken away by ERISA, state officials claim.

Reported by

Fred Schneyer

>The argument by Texas Attorney General Greg Abbott came as Abbott announced that he and 13 other attorneys general had filed a combined friend of the court brief with the US Supreme Court asking the justices to resolve lower courts’ conflicts over ERISA preemption, according to Washington-based legal publisher BNA. Joining Texas in the brief were the attorneys general of Alabama, California, Delaware, Hawaii, Minnesota, Missouri, Nevada, Oklahoma, Oregon, Utah, West Virginia, Wisconsin, and Wyoming – as well as the District of Columbia and the Commonwealth of Puerto Rico.

An Amputation

>The attorneys general’s brief supports a claim by Gwen Roark, whose leg had to be amputated after Humana Health Plan of Texas Inc., delayed approval of a treatment ordered by Roark’s primary care doctor.

>Roark’s husband Robert sued Humana under the Texas Health Care Liability Act, alleging that Humana was negligent in making a medical necessity decision that the treatment was not necessary

”Health insurance plans have no business making decisions about treatments,” Abbott told BNA. ”Let the doctors and their patients determine what’s appropriate. We cannot tolerate this kind of behavior by health insurance companies. Texans expect the insurance they’re paying for to help them out, not put them in further danger.”

>The case was appealed to the Supreme Court after the US 5 ^th Circuit Court of Appeals agreed with Humana that the claim was preempted by ERISA.

>In the attorneys general brief written by Abbott, Abbott argued that the time has come for the Supreme Court to resolve the conflict that has arisen between different circuit courts on the ERISA preemption issue. For example, Abbott said the 5 ^th Circuit’s decision in the Roark case was in ”direct conflict” with the 2nd Circuit’s decision in a February 2003 case.

”HMO medical-necessity determinations, just like treatment decisions made by a physician, involve the exercise of medical judgment – an area squarely within the States’ core power to pass regulations to protect the health and welfare of their citizens,” the brief stated. ”The State amici maintain that because there is no evidence of congressional intent to supplant the States’ traditional role in regulating medical judgment, the regulation of HMO treatment decisions -decisions of medical necessity- are not preempted by ERISA,” it added.