Final Opinion: Second Opinions OK

HMO graphic with dollar bills in the background
A closely divided Supreme Court ruled Thursday that states can help patients fight their HMOs, a decision that could increase requests for second opinions.

The court voted 5-4 to endorse an effort, like those used in 42 states, to let patients bypass health plan gatekeepers who refuse to approve payment for a treatment. The ruling also lifts some pressure off Congress, which has failed to pass a national patients' rights plan.

The state laws are intended to let people get second opinions, and sometimes force health maintenance organizations to pay up if an independent review shows a surgery or other care is justified.

The ruling helps patients who want to seek a second opinion about treatment from an independent doctor, says Legal Analyst Andrew Cohen, by precluding HMOs from relying upon a federal law to block such opinions. It supports those existing laws in those 40 states and it probably encourages legislators in the remaining ten states to look into similar legislation.

The Supreme Court said that states, in trying to better arm patients in their battles with big HMOs, did not conflict with a federal law.

The ruling comes months after patients rights legislation stalled at the Capitol after the Sept. 11 attacks, putting on hold plans for a nationwide system for independent evaluations. The subject has been part of closed door talks this year, with no consensus.

HMOs had argued that they were not opposed to independent review boards, but wanted one national standard instead of the hodgepodge of state laws.

The ruling doesn't automatically pave the way for an onslaught against HMOs, said Cohen — the ruling is fairly narrow in that it applies to second-opinions and whether and to what extent they can be obtained. But what's got to worry HMOs is the notion that patients with other beefs against the companies now will try to rely upon this ruling and their state laws to create another chink in the armor.

The court specifically upheld the Illinois procedure used by Debra Moran to get her health plan to pay for an operation that fixed her rare, debilitating nerve problem. The surgery cost about $95,000.

The decision focused on whether a 1974 federal law governing most employee benefit plans overrules the state laws on independent reviews.

The court determined it did not, ruling against Moran's health carrier, Rush Prudential HMO Inc., which has been purchased by Wellpoint Health Network.

Justice David H. Souter, writing for the majority, said the federal law says nothing about second opinions, and that the state law was allowed.

In Winfield, Ill., a suburb of Chicago, Moran said she hopes the decision encourages other patients to seek second opinions and independent reviews.

"They need to know the laws are out there," she said. Moran said she knew the decision would be close, but the outcome "really shows that if you're adamant about your position, the justice system works for you."

"It's been a long time," said Moran, who filed a lawsuit in 1998. "The champagne's been in the refrigerator a long time."

Justice Clarence Thomas said in a dissent that the ruling "undermines the ability of HMOs to control costs, which, in turn, undermines the ability of employers to provide health care coverage for employees." Thomas was joined by Chief Justice William H. Rehnquist and Justices Antonin Scalia and Anthony M. Kennedy.

The 1974 employee benefits law has bedeviled the Supreme Court over the years, prompting multiple rulings on how far states can go to set their own rules for employee benefits. The rulings have provided no clear guidelines for how states can impose their own regulations.

Thursday's decision affirms a ruling by the 7th U.S. Circuit Court of Appeals in Chicago, which said under Illinois law, Moran was entitled to both the review and the reimbursement.

The decision potentially affects about 120 million Americans whose employers buy coverage from a health insurance company.

Employers and insurance companies, who have been fighting the federal legislation, said the decision would increase the cost of coverage.

"By forcing employers and health plans to adhere to potentially 50 different conflicting state external review requirements, the court has dealt them a blow in the battle to control the already soaring cost of health care for working families," said a statement from the Health Benefits Coalition, a group of businesses.

The American Medical Association said the decision "represents a major victory for America's patients and their physicians.

The doctors' group had filed an amicus curiae brief in the case.

"Patients are entitled to an independent review when a health plan overrules the treatment recommended by the patient's physician," the AMA statement continued.

Independent reviews are not frequently sought. In 2000, about 2,500 cases were accepted for full review in 16 states surveyed by the American Association of Health Plans. The reviewer upheld the decision made by the insurers' doctors in about half of those.

Health care advocates contend one reason for the low numbers is that people are unaware of the option. That could change with the attention from this case filed by Moran, a speech therapist.

Moran's health problems began in 1995. Physical therapy and other treatments recommended by her primary care doctor did not relieve her arm pain, so she sought the opinion of a surgeon who did not participate in her health plan. That doctor recommended a more extensive surgery, which Rush Prudential refused to pay for.

In other decisions released Thursday:

  • Mentally retarded people are generally competent to stand trial for crimes, the court said, because they frequently know right from wrong. However, reports CBS News Correspondent Barry Bagnato, when it comes to the ultimate punishment, the justices said the retarded face a special risk of being wrongfully executed because of their diminished capabilities. The court concluded there's a national consensus against capital punishment for the retarded.
  • A Gonzaga University student wrongfully accused of sexual misconduct wanted to sue the college for releasing that information from his records — information he didn't even know existed. But Bagnato reports the Supreme Court said federal privacy laws do not give students the right to sue colleges for divulging information about them. It says the laws not in question here do not create individual privacy rights.
  • North Carolina held on to a House seat claimed by Utah on Thursday when a divided Court reaffirmed a 40-year-old census estimating technique that Utah said caused its population to be undercounted. In ending a legal tug-of-war between the two states, the court by a 5-4 ruling concluded that the government did nothing wrong in filling in gaps in the last census.
  • Jennifer Harbury's husband, a rebel in Guatemala, died after disappearing there 10 years ago. She believes he was murdered by a paid CIA informant, and that Secretary of State Warren Christopher and other former Clinton administration officials withheld information she could have used to go to court to try to save his life. She wanted to sue them, and she argued her own case before the Supreme Court, reports Bagnato. But the High Court ruled she has no right to go ahead with her suit.