STATE OF NEW YORK

EXECUTIVE CHAMBER

GEORGE E. PATAKI, GOVERNOR


Press Office
518-474-8418
212-681-4640
http://www.state.ny.us

FOR RELEASE:
IMMEDIATE, Thursday
June 20, 2002

GOVERNOR HAILS DECISION UPHOLDING STATE'S CONSUMER RIGHTS
External Review Law Protected, Consumers Keep Right to Appeal HMO Decisions

          Governor George E. Pataki today hailed the United States Supreme Court's decision to protect the rights of New York's health insurance consumers by allowing them to request an independent review of a health plan's denial of coverage on the basis of medical necessity or because services are considered experimental or investigational. The 5-4 decision held that state external appeal programs are not preempted by the Employee Retirement Income Security Act of 1974 (ERISA).

          "I am gratified that our State's External Appeal Law will continue to provide the protection New Yorkers need to ensure they are not wrongly denied coverage for important medical treatments," Governor Pataki said. "The External Appeals Law is working for New York's families by providing a prompt, consistent and fair process to ensure that treatment decisions are made for the right reasons."

          The case, Rush Prudential HMO, Inc. v. Moran et al., questioned whether the Illinois external appeal law, in permitting patients to obtain an independent review of an HMO's medical necessity denial, established an alternative remedy to ERISA so that the Illinois Law would be preempted. The Court found the Illinois Law to be a mechanism for the state to regulate insurance, similar to mandated benefit requirements, and permissible under ERISA.

          This case has been monitored closely because of the potential impact on state external appeal programs. By the end of 2001, 42 states, including the District of Columbia, had enacted external appeal laws. The United States Supreme Court decision protects the rights of a significant number of consumers in New York and throughout the United States by upholding the essential remedy of independent medical reviews for health plan denials.

          New York's landmark External Appeal Law went into effect on July 1, 1999, providing New Yorkers the right to obtain an independent external review when a health plan denies services on the basis of medical necessity or if the services are considered experimental or investigational. From inception of its program, New York has received the highest number of external appeal requests of states with external appeal programs in place. As of June 2002, the New York State Insurance Department received over 4,400 external appeal requests, and state certified external appeal agents have overturned health plan denials, in whole or in part, in 47 percent of cases.

           Information about the New York State external appeal program is available on the Insurance Department's website at www.ins.state.ny.us or by calling the Insurance Department at 1-800-400-8882.


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