CCH Provides Analysis Of Supreme Court Ruling Against HMOíS Denial Of Independent Review
Next Steps, How the
Review Board Process Works
(RIVERWOODS, ILL., June 21, 2002) Ė While hopes for last yearís
proposed federal patientís rights bill have faded, a Supreme Court
decision upholding a patientís right to an independent review board
to determine the necessity of a medical procedure could focus new
interest on healthcare legislation, as well as make more individuals
aware of their rights under current state laws, according to CCH
INCORPORATED (CCH), a leading provider of healthcare law information
and software (health.cch.com).
The Supreme Court decision Rush Prudential HMO v. Moran upheld
a lower court ruling that determined the federal Employee Retirement
Income Security Act (ERISA) does not preempt state laws requiring
health maintenance organizations (HMO) to submit to an independent
physician review when there is disagreement between a patient's
primary physician and the HMO over whether a course of treatment is
"This is significant because 42 states now have laws requiring
HMOs to submit to independent review boards," said Jay Nawrocki,
a healthcare analyst for CCH. "However, while this ruling has
implications for millions of people insured under HMOs, itís likely
most individuals are not aware of how the review process works and
only a very few individuals ever even request a review."
State Laws on Review Process
While HMOs are required under state law to inform individuals of
their rights to a review board, the notices may be given out when the
individual first joins the HMO, not when he or she is seeking to have
a medical procedure. While the laws vary state to state, the general
steps in the process include:
- A patient makes a request to the HMO for a medical procedure.
- The HMO either grants or denies the request based on whether it
believes the procedure is medically necessary.
- If the request is denied, the patient can request an internal
review. This is a review conducted by the HMO physician to more
closely look at the request for the medical procedure. Some states
also require that the HMO assign non-attending physicians to the
- If the patientís procedure is denied under internal review,
the patient can then request an external review. This review is
conducted by a physician or team of physicians not affiliated with
the patient or the HMO. Some states select the physicians to carry
out the review. Other state laws simply stipulate the review must
Currently, the outcome of external reviews is split about 50-50,
according to Nawrocki, with about half in favor of the HMO to deny the
requested procedure and half overturning the HMOís denial of the
What Comes After the Supreme Court Ruling?
While some in Congress may think the decision relieves pressure to
pass a federal patientís bill of rights, the Supreme Court decision
could actually add to that pressure.
"The Supreme Court decision covers millions of Americans who
are employed by organizations that buy coverage from health insurance
companies," said Nawrocki. "But it does not cover the nearly
as many millions of individuals covered by self-insured employers Ė
essentially large employers with their own healthcare plans. These
individuals may now seek these review rights more aggressively."
Additionally, industry groups have indicated they are not opposed
to independent review boards, but they wanted a single, federal
process established as was outlined in the patientís rights bill.
"The adoption of independent review board rules was not a
controversial part of the patientís rights bill," said Nawrocki.
"As a result, another approach at the federal level may be to try
to move forward with the parts of the bill where thereís
About CCH INCORPORATED
For more than 50 years, CCH INCORPORATED has regularly tracked,
reported, explained and analyzed health and entitlement law for health
care providers, insurers, attorneys and consumers. CCH is the premier
provider of Medicare and Medicaid information. CCH is a wholly owned
subsidiary of Wolters Kluwer North America. The CCH Health group site
can be accessed at health.cch.com.
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