HMO Ruling Leaves Many Without Right of Appeal

By: - June 21, 2002 12:00 am

Experts say tens of millions of Americans will be unaffected by a U.S. Supreme Court ruling upholding an Illinois law that gives patients a right to seek independent review of an HMO’s refusal to pay for treatment. Forty one other states also permit some form of review.

The reason is a 1974 federal law called the Employee Retirement Security Act (ERISA) that reserves regulation of many employee benefit programs to Congress. “The court reaffirmed the basic ERISA framework, and ruled narrowly on a provision in Illinois’ HMO law,” says Susan Pisano, spokesperson for the American Association of Health Plans , the nation’s largest managed care trade group.

Nearly one-third of the nation falls under ERISA or self-insured plans, which are exempt from state mandates.

How will the decision affect other states? Pisano says it will “depend on how the laws are written.”

Rachel Morgan, a health policy expert with the National Conference of State Legislatures , agrees with Pisano. The court’s decision won’t have an effect on current laws, but it will strengthen state programs already in place, she says.

Idaho, Mississippi, Nebraska, Nevada, North Dakota, South Dakota and Wyoming have no independent review process for HMO decisions. Arkansas’ appeals system kicks in next September.

Morgan says states lacking an appeals process will now be prompted to revisit the issue. But in Wyoming, where less than 2 percent of the state’s population is in an HMO, there may be no need.

Following the decision, some consumer groups renewed the call for a national patient’s bill of right, which would include an appeals process for HMO enrollees. “It is critical that the national (measure) gets enacted as soon as possible,” says Ron Pollack, executive director of Families USA , a Washington, DC-based health advocacy organization.

Noting the current impasse between Congress and the Bush Administration over such a measure, Pollack called on the President to “quickly reach a compromise… so that tens of millions of people are not left helpless when HMOs …withhold needed health care.”

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