U.S. Supreme Court, By One Vote, Protects California’s Right To Overturn HMO Denials

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Judicial Review Process Also Needed for Patients’ Rights To Be Complete

Santa Monica — California patients’ rights advocates offered a collective sigh of relief that the state’s independent oversight of HMO denials was protected, in a 5-4 Supreme Court decision, from an HMO’s legal challenge.

The court narrowly sided with Debra Moran and against Rush Prudential in a case that decided whether states have the authority to allow state-credentialed doctors to overturn HMO denials of medically necessary care.

Moran went into debt to pay $95,000 for a surgery denied by an HMO that an Illinois independent review panel later said was medically necessary. About 40 states have independent medical review processes. In California, patients have access to such a process and also can collect damages from HMOs whose interference with care significantly harmed them if they used the review process or if it would not be of use to them.

“Californians should breathe a collective sigh of relief because if one justice had decided differently, the entire state scheme of HMO regulation would have unraveled,” said Jamie Court, executive director of the Foundation for Taxpayer and Consumer Rights (FTCR). “This case had the potential to undue all the hard-earned gains of the HMO patients’ rights movement. The lesson Congress must take away is that HMOs will fight with all their money, power and resources if the corporations know that all they are responsible for is the cost of the benefit they should have provided in the first place. HMOs must be liable for damages to punish them when they act with disregard for the health and lives of patients. Today’s decision protects the status quo of the states’ medical review processes, but a federal patients’ bill of rights is needed to establish a judicial review process that punishes HMOs in the same way other corporations must pay when they are reckless or malicious. In too many emergency cases patients simply do not have the time or knowledge to appeal a denial of care to the state. HMOs and health plan administrators should know these patients will have a remedy if they are not treated appropriately.”

Consumer Watchdog
Consumer Watchdog
Providing an effective voice for American consumers in an era when special interests dominate public discourse, government and politics. Non-partisan.

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