High Court Upholds States' HMO Rules
By Steven Brostoff, Washington Editor
NU Online News Service, June 20, 12:34 p.m. EST?The United States Supreme Court has ruled that states can require managed care plans to accept independent review determinations regarding medically necessary treatments.
The decision is seen as one that could have major implications in the debate over a number of patient protection bills that are pending.
In a 5-4 decision, the court upheld a 7th Circuit Court of Appeals determination that the Employee Retirement Income Security Act does not preempt state laws mandating independent review.
In the case of Rush Prudential HMO v. Moran, an employer-sponsored managed care plan challenged Illinois' independent review law, arguing that it is preempted by ERISA.
However, the 7th Circuit rejected the challenge, stating that while ERISA preempts most state laws affecting employer-sponsored plans, state laws that regulate the business of insurance are saved from preemption.
Applying the definition of the "business of insurance" from a series of Supreme Court cases, the 7th Circuit said that the independent review mandate in Illinois is a specific statutory provision aimed at the business of insurance which provides additional safeguards to preserve the integrity of the decision-making process.
Thus, the 7th Circuit said, the Illinois law is saved from preemption. The Supreme Court upheld this reasoning.
Nearly 40 jurisdictions in the U.S. have similar laws.
Mandatory independent review is one of the primary features of patient protection legislation now pending before Congress.
© Arc, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.