Ob-Gyn Coding Alert

About half of Americans with private health insurance have a right to a second opinion if their HMO refuses to pay, according to a ruling upheld by the Supreme Court on June 21. However, despite the final ruling, a 5-4 decision did little to standardize the discrepancies in coverage from state to state.

In its decision, the court endorsed an Illinois law that allows patients to seek a second opinion if their doctor supports the request. Forty-two states allow patients an outside opinion if they have a coverage dispute with their HMO.

The Supreme Court said the Illinois law is not preempted by the Employee Retirement Income Security Act, a 1974 federal act intended to ensure uniform nationwide regulation of employee health and pension plans. The court said the outside review was an issue that could fit within the 1974 law.

The ruling "represents a victory for America's patients and their physicians," Donald J. Palmisano, president-elect of the American Medical Association, said in a statement. "As the AMA has said all along, patients are entitled to an independent review when a health plan overrules the treatment recommended by the patient's physician."   
 
Conversely, the decision is a setback to the health insurance industry. Donald Young, president of the Health Insurance Association of America, said in a statement that the court's decision "will add greater cost and complexity to health insurance coverage, having state standards governing how external review is practiced will mean people covered under a multi-state plan will not have the same benefits."
 
While cheering the ruling, supporters of a federal patients' bill of rights emphasized that the state laws the court upheld have relatively limited impact. They apply to the 53 percent of health plans considered "fully insured." In these, employers pay a separate insurance company to supply health coverage, as opposed to "self-insured" plans, which are common at large companies and under which employers negotiate directly with healthcare providers.
 
The court's decision was based on a case in which a woman went to a primary-care physician within Rush Prudential's network to seek treatment for severe shoulder pain. Eventually, the woman, with her doctor's support, had complex surgery by another physician outside the HMO network. The HMO refused to pay the $95,000 cost of the operation, saying she could have been treated by a cheaper procedure.
 
An independent doctor sided with the patient, but the HMO still refused to pay, and the woman sued. The insurance company won in a federal district court, which agreed with the company that the Illinois law was pre-empted by the 1974 Employee Retirement Income Security Act (ERISA), the federal law that covers the regulation of pensions and other employee benefit plans. 
 
The Chicago-based U.S Court of Appeals for the 7th Circuit sided with the patient, a ruling that clashed with a decision by the New Orleans-based U.S. Court of Appeals for the 5th Circuit, which had struck down a Texas statute in 2000. The Supreme Court accepted RUSH Prudential's request to settle the conflict.
 
ERISA says that it supersedes "any and all state laws insofar as they may now or hereafter relate to any employee benefit plan." But in another clause, ERISA allows states to regulate the insurance business.