U.S. Supreme Court deals blow against HMOs

WASHINGTON (CNN) -- The Supreme Court Thursday ruled state laws designed to help patients fight the decisions of their health maintenance organizations (HMOs) are constitutional.

The decision likely paves the way for additional efforts by patients to obtain second opinions, and for independent boards to review HMO decisions.

With Justice Sandra Day O'Connor casting the deciding vote, the high court ruled 5-4 for Debra Moran, an Illinois woman who underwent surgery after getting a second opinion from a specialist unaffiliated with her HMO.

When the HMO, "Rush Prudential," refused to pay for the $95,000 procedure to correct a nerve condition, Moran sued and won.

The Supreme Court Thursday rejected the HMO's appeal which claimed a federal law on employment benefits (ERISA) pre-empts the Illinois HMO Act providing patients with a right to an independent review of denial of medical benefits.

Most states have passed some type of law intended to assist HMO patients, but the Congress has passed no federal law. Proposals for a national "patients bill of rights" have bogged down in partisan debate.

The Supreme Court ruling in favor of such state laws may remove the urgency for action by congressional lawmakers who have considered the issue.

Justice David Souter wrote the majority opinion, and was joined by his usual allies in the more liberal bloc on the Court, John Paul Stevens, Ruth Bader Ginsburg and Stephen Breyer, and gained O'Connor's crucial swing vote.

The ruling comes months after patients rights legislation stalled at the Capitol after the September 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.

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