'Patients Bill of Rights' Case Will Be Debated Before Supreme Court

By Christine Hall | July 7, 2008 | 8:19 PM EDT

(CNSNews.com) - Following U.S. Senate passage of the Patients Bill of Rights, the U.S. Supreme Court plans to hear a case involving whether health maintenance organizations should be forced to pay for medical procedures approved by a third party.

The legal case touches on two of the main issues addressed by the McCain-Kennedy-Edwards Patients Bill of Rights: when an HMO must pay for a procedure and when federal law trumps state health insurance law.

The Court's decision to hear the case comes at a time when lower courts are split on the question of whether federal law prevents doctor review panels from pre-empting HMO decisions.

Even so, Tom Miller, director of health care studies for the Cato Institute, said it is unclear why the high court decided to take up the case now, since it is likely the U.S. House will follow the Senate's lead and pass the Patients Bill of Rights. The Senate approved the McCain-Kennedy-Edwards bill Friday, 59-36.

"By the time this gets up on the calendar for oral argument next year, Congress will have passed this, [President] Bush will have signed it, and everybody will say the issue is moot," said Miller.

Maybe "they didn't want to hold themselves hostage to what Congress does or doesn't do," Miller speculated.

"When [the Court] should have granted certiorari (review) was earlier this year and have a decision before Congress voted" on the bill, said Miller. "It might have changed the context in which this issue was viewed."

The case now before the Supreme Court, Rush Prudential HMO v. Moran, involves an Illinois woman who was denied coverage by the HMO for shoulder surgery to relieve chronic pain. Relying on the independent review of several doctors, the HMO ruled that the particular surgery the patient, Debra Moran, wanted was more than what was needed. But Moran decided to go ahead with the surgery and sue the HMO for reimbursement afterwards.

As in many other states, Illinois law requires HMOs to submit to an independent physician review to determine whether a procedure was "medically necessary," the standard also contained in the Patients Bill of Rights.

In Moran's case, a state court eventually sided with the HMO in its refusal to provide reimbursement. However, the federal 7th Circuit Court of Appeals reversed the decision, with four justices dissenting.

"These are all stretches in terms of what judges try to do to reconcile the irreconcilable or make something sound like other than it is," Miller remarked. "They were trying to say it's a contract action" but then use state regulation to change the contract, he said.

Still, said Miller, the courts would probably have done a better job with health care law than Congress and the President.

"You might have been able to struggle out to a half-way reasonable approach through court opinions," said Miller. "The courts were probably closer to finding some more equivalent balance to all the other garbage ... in what gets passed by Congress."

Miller and other opponents of the Patients Bill of Rights object to efforts by Congress and state legislators to allow doctor review panels to require HMOs to cover procedures outside the purview of the health care contract.

"The first round of surrender" on the part of congressional Republicans "was to say, 'let's have the doctors win part of what they want by [letting] the doctors override the health plan contracts in these independent reviews," said Miller.

"But this wasn't enough for the Democrats who want to get even more lawsuits and more regulations, so they wouldn't take 'yes' for an answer. So we're in this current stage of debate to get the extra loaf."