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 (

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 necessary.

"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 review.
  • 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 be independent.

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 procedure.

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 agreement."


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

-- ### --