Opinion ID: 2634504
Heading Depth: 4
Heading Rank: 1

Heading: Rush Prudential HMO, Inc. v. Moran

Text: In Rush Prudential, the Supreme Court considered an Illinois statute similar to HRS § 432E-6. According to the Illinois statute, when an HMO denied a patient's claim for certain types of health care coverage, the HMO was required to honor the patient's request for an independent medical review of the patient's claim. Rush Prudential, 536 U.S. at 359, 361, 122 S.Ct. 2151. The statute mandated that the independent medical review be done by `a physician holding the same class of license as the primary care physician, who is unaffiliated with the [HMO], jointly selected by the patient..., primary care physician and the [HMO].' [12] Id. at 361, 122 S.Ct. 2151 (quoting 215 Ill. Comp. Stat. 125/4-10 (2000) [hereinafter, § 4-10]) (ellipsis in original). The statute provided that `[i]n the event that the reviewing physician determines the covered service to be medically necessary, the [HMO] shall provide the covered service.' Id. (quoting § 4-10). The Court explained that the independent review statute was similar to arbitration in that the independent reviewer was entitled to consider the HMO contract in addition to evidence such as medical records; however, despite these similarities, the Court stated that § 4-10 does not resemble either contract interpretation or evidentiary litigation before a neutral arbiter, as much as it looks like a practice (having nothing to do with arbitration) of obtaining another medical opinion. Id. at 382-83, 122 S.Ct. 2151. A divided Court upheld § 4-10. Justice Souter, writing for the Court, stated that the Illinois statute was not preempted because it did not create a new claim for relief: [T]his case addresses a state regulatory scheme that provides no new cause of action under state law and authorizes no new form of ultimate relief. While independent review under § 4-10 may well settle the fate of a benefit claim under a particular contract, the state statute does not enlarge the claim beyond the benefits available in any action brought under § 1132(a). And although the reviewer's determination would presumably replace that of the HMO as to what is medically necessary under this contract, the relief ultimately available would still be what ERISA authorizes in a suit for benefits under § 1132(a). Id. at 379-80, 122 S.Ct. 2151 (footnote omitted). The Rush Prudential Court recognized that allowing the states to establish these types of procedures would somewhat undermine ERISA's purpose in establishing a uniform federal regime of `rights and obligations' under ERISA. Id. at 381, 122 S.Ct. 2151. However, the Court stated, `[s]uch disuniformities ... are the inevitable result of the congressional decision to `save' local insurance regulation.' Id. (quoting Metro. Life Ins. Co. v. Massachusetts, 471 U.S. 724, 747, 105 S.Ct. 2380, 85 L.Ed.2d 728 (1985)) (alterations in original). The Court acknowledged its previous holding in Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41, 57, 107 S.Ct. 1549, 95 L.Ed.2d 39 (1987) (holding that Congress had clearly express[ed], through the structure and legislative history of ... ERISA, an intention that the federal remedy... displace state causes of action) and explained that a state statute might so resemble an adjudication as to fall within Pilot Life's categorical bar. Rush Prudential, 536 U.S. at 381, 122 S.Ct. 2151. Nevertheless, the Court upheld the Illinois statute because the statute does not implicate ERISA's enforcement scheme at all and imposes no new obligation or remedy. [13] Id. at 386, 122 S.Ct. 2151. Justice Thomas, joined by Chief Justice Rehnquist, Justice Scalia, and Justice Kennedy, dissented. Id. at 388, 122 S.Ct. 2151. Justice Thomas (who later wrote for the Court in Aetna Health ) argued that ERISA's civil enforcement scheme was intended to be exclusive: Such exclusivity of remedies is necessary to further Congress' interest in establishing a uniform federal law of employee benefits so that employers are encouraged to provide benefits to their employees[.] Id. He contended that § 4-10 was an alternative state-law remedy and that the Court had consistently held that such state-law remedies conflicted with ERISA's civil enforcement scheme. Id. at 393-94, 122 S.Ct. 2151. He stated that, while the states are entitled to regulate health care, the states are not entitled to circumvent ERISA by creating alternative procedures like those in § 4-10: [W]ere a State to require that insurance companies provide all medically necessary care or even that it must provide a second opinion before denying benefits, I have little doubt that such substantive requirements would withstand ERISA's pre-emptive force. But recourse to those benefits, like all others, could be sought only through an action under § [1132] and not, as is the case here, through an arbitration-like remedial device. Section 4-10 does not, in any event, purport to extend a new substantive benefit. Rather, it merely sets up a procedure to conclusively determine whether the HMO's decision to deny benefits was correct when the parties disagree, a task that lies within the exclusive province of the courts through an action under § [1132(a)]. Id. at 399, 122 S.Ct. 2151. Justice Thomas conceded that ERISA's saving clause allowed for some lack of uniformity, but stated that [a]llowing disparate state laws that provide inconsistent external review requirements to govern a participant's or beneficiary's claim to benefits under an employee benefit plan is wholly destructive of Congress' expressly stated goal of uniformity in this area. Id. at 400-01, 122 S.Ct. 2151.