Massachusetts Medical Society
States may have more freedom to regulate the practices of managed-care organizations than many observers previously believed. In the absence of congressional action on the federal Bipartisan Patient Protection Act, the primary source of patient-protection legislation remains at the state level. Nevertheless, the federal Employee Retirement Income Security Act (ERISA) of 19742restricts state regulation of health maintenance organizations (HMOs) that serve private employee group health plans. On June 20, 2002, the U.S. Supreme Court, in Rush Prudential HMO, Inc. v. Moran, upheld an Illinois state law that requires binding independent external review when an HMO disagrees with the decision of a patient's physician that a treatment is medically necessary. The Moran decision clarifies the states' authority, and may allow physicians a larger say in decisions about managed-care coverage.
Wendy K. Mariner,
Independent External Review of Health Maintenance Organizations' Medical-Necessity Decisions
The New England Journal of Medicine
Available at: https://scholarship.law.bu.edu/faculty_scholarship/845