Federal Appeals Court Upholds Texas Law Allowing MCO Subscribers To Request Independent Reviews

The 5th U.S. Circuit Court of Appeals on Dec. 16 upheld a Texas law that allows managed care patients to appeal denial of care decisions to independent review boards appointed by the state Department of Insurance, the Austin American-Statesman reports. The 1997 law mandates that managed care organizations provide care that the review boards determine to be medically necessary. Several large insurance companies challenged the measure, saying federal law prohibits states from establishing independent review procedures. However, a Supreme Court ruling last June "effectively upheld" the Texas law, the American-Statesman reports (Pasztor, Austin American-Statesman, 12/18). The Supreme Court ruled 5-4 in Rush Prudential v. Moran to uphold state laws giving patients the right to seek independent review of MCOs' denial of care (Kaiser Daily Health Policy Report, 6/21). The appeals court ruling in Corporate Health Insurance et al. v. Texas Department of Insurance is final, meaning that Texas HMO patients are "secure in their right to seek independent reviews," according to Kathy Mitchell of the advocacy group Consumers Union, the American-Statesman reports. About 500 people each year have filed appeals under the law, with the boards reversing HMOs' decisions in slightly more than half the cases, according to a Consumers Union study released this year. Mitchell said she expects "a lot more people" to use the law now that its legality is no longer in doubt (Austin American-Statesman, 12/18).