Compliance August 6, 2003

US High Court Green Lights State HMO Review

June 20, 2002 (PLANSPONSOR.com) - US Supreme Court justices have rubber stamped the now-widespread practice of allowing patients an independent review of a health maintenance organization's decision that deny them health coverage.

Reported by

Fred Schneyer

In a divided five to four vote, the justices rejected the notion that ERISA preempts such review now in effect in about 40 states, according to a Reuters news report.

Based on the state laws passed in recent years after floods of patient complaints about denials of service, patients have been able to get a second opinion on whether their ailment should be covered.

Background

In the case before the high court, Debra Moran of suburban Chicago sued her health insurer, Rush Prudential HMO, after it refused to pay the $95,000 cost of a shoulder operation by a surgeon not affiliated with the Rush plan. The HMO insisted Moran could have been treated with a cheaper procedure.

Moran sought an independent review of her condition by an outside specialist under the Illinois HMO Act. The physician decided that her surgery to be medically necessary.

Under the Illinois law, an independent specialist selected by the HMO, the primary care physician and the patient, makes a decision, which is binding and final. WellPoint Health Networks Inc. bought the Rush health plan in 2000.

A US appeals court in Chicago ruled the review provisions were not preempted by ERISA, a position shared by the US Department of Labor. The US Justice Department supported Moran during the Supreme Court consideration.

Writing for the majority, Justice David Souter upheld the appeals court decision.