In a case that is likely to have a significant impact on patient bill of rights legislation now pending in Congress, the U.S. Supreme Court has ruled that the Employee Retirement Income Security Act of 1974 ("ERISA") does not preempt a state law action to compel a health maintenance organization ("HMO") to provide a medical service.
The court’s 5-to-4 decision in Rush Prudential HMO, Inc. v. Moran (2002) is significant because the holding suggests that existing state laws may provide an effective remedy for disgruntled health plan participants and, therefore, make the need for a new federally-mandated cause of action unnecessary.
Rush Prudential HMO, Inc. ("Rush HMO") had denied a request by Debra C. Moran for an independent medical review of her claim, as guaranteed by the Illinois HMO Act ("Act"). The Act provides that if a reviewing physician determines that a covered service is medically necessary, the HMO "shall provide" the service. Rush HMO had refused Moran’s demand for
