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High-Stakes Poker: Moran "Preempts" ERISA |
It was a David vs. Goliath showdown, but an Illinois patient and her physician battling an HMO’s non-payment decision prevailed in the highest court in the land. This summer, the U.S. Supreme
Court upheld the validity of a key provision of the Illinois HMO Act, ruling that ERISA does not preempt an HMO patient’s right to an independent review in states that have independent review laws on the books. Longtime policyholders may recall that ISMS drafted the language for Illinois’ independent review law back in 1986 - it’s been a victory long in the making.
This landmark case began back in 1996, when the plaintiff, Debra Moran, sought treatment for nerve compression in her shoulder. After conservative treatments failed to alleviate her condition, her primary care physician recommended surgery by an
out-of-network specialist in 1997. In spite of her physician’s recommendation, her HMO refused to pay for the $95,000 operation.
Desperate for relief, Moran paid for the procedure herself, sued her HMO for reimbursement, and sought an independent review of her case under the Illinois HMO Act. An Appellate Court ruled in her favor. The HMO appealed, arguing that ERISA preempted state law, invalidating Moran’s demand for payment. The U.S. Supreme Court , however, sided with the Appellate Court, ruling that state insurance regulations are immune from ERISA.
As the original sponsor of the Illinois HMO act, ISMS joined in Debra Moran’s quest by filing an amicus brief in conjunction with the American Medical Association’s Litigation Center. In a statement about the decision, ISMS president John F. Schneider, M.D., said, “ We are very pleased with the Supreme Court’s ruling and encourage other patients to exercise their rights granted by Illinois law.”