Groups' briefs back state health plan appeal laws

In a Supreme Court case, physicians and patient advocates say state appeals laws should stand; health plans argue a federal standard is needed.

By Tanya Albert, AMNews staff. Dec. 3, 2001.

Physicians soon should know whether state laws allowing independent reviews of some HMO decisions to deny treatment are legal.

The U.S. Supreme Court in January will take up a case from Illinois in which the 7th U.S. Circuit Court of Appeals said insured HMOs must obey state independent review laws. Insured plans are those that pay claims rather than simply act as a facilitator for an employer-funded health plan. The lower court said the federal Employee Retirement Income Security Act of 1974 doesn't preempt state statutes, as health plans have argued.

Some legal experts say the case, Rush Prudential HMO v. Moran, is the most important health care issue the high court is scheduled to decide this term.

Although the specifics vary, nearly 40 states have laws that allow an independent review when a physician and health plan disagree on the best course of treatment for a patient. In Illinois, the law says that if the physician conducting the external review decides the insurer should cover the treatment, the insurer must pay.

"This is a big case for patients in that it allows patients and physicians to make decisions jointly in the best interest of the patients," said Donald J. Palmisano, MD, secretary-treasurer of the AMA Board of Trustees. "The insurance company's internal reviewer cannot act in the same objective manner as the external reviewer because the insurer has incentive to save money."

The AMA in November filed a friend-of-the-court brief with the Illinois State Medical Society and the American Psychiatric Assn. in support of the lower court ruling. AARP, the acting solicitor general of the United States, and attorneys general from 32 states and Puerto Rico also filed similar briefs last month. [...]