Posted on: Friday, December 31, 2004

EDITORIAL
Reinstate review of treatment denials

Until recently in Hawai'i, you could appeal to an independent insurance appeals panel if your medical insurer refused to pay for recommended treatment. And if that didn't help, you could sue.

Well, a ruling by the Hawai'i Supreme Court has done away with that process, and that does not bode well for our overburdened court system nor any patients' bill of rights.

The state's highest court last week ruled that the 1974 federal Employee Retirement Income Security Act, known as ERISA, trumps the appeals process of Hawai'i's patient protection laws.

That means the only redress for denied coverage is to take your dispute directly to court, which is hardly the most viable alternative.

It's worth noting that more than 40 states have laws that require outside review of HMO decisions. Before it was struck down, Hawai'i's panel heard about 70 cases a year.

So why can't we keep ours, or at least a version of it?

Consider the Illinois case, Rush Prudential HMO vs. Moran, which centers on a Chicago speech therapist who suffered from a chronic nerve condition that prevented movement in her shoulder and arm.

Debra Moran could not get her HMO to authorize the surgery recommended, so she ended up paying herself.

When she sought independent review of her case under the Illinois HMO law, her insurer refused to participate, claiming that the Illinois statute conflicted with ERISA.

The case made its way to the U.S. Supreme Court, which in 2002 ruled that ERISA did not pre-empt the Illinois law allowing patients to seek third-party review.

In light of that decision, it would be prudent for our state Legislature to model our independent review process on those used by other states, such as Illinois. Instead of a three-person review panel, Hawai'i's external review, which would be binding to avoid litigation, could be conducted by a neutral third-party physician.

Presumably, that would pass muster under the U.S. Supreme Court's view of ERISA.

The state Insurance Division has scheduled a Jan. 11 public meeting to discuss remedies. Options include independent review organizations, amending state law or appealing to the U.S. Supreme Court.

Appeals take years. For now, the Legislature should get cracking on reinstating an outside medical review process that does not conflict with ERISA.