Wednesday, November 13, 2013

Rush Prudential HMO, Inc. v. Debra C. Moran, et al. case brief

Rush Prudential HMO, Inc. v. Debra C. Moran, et al. case brief summary
536 U.S. 355 (2002)

Respondent beneficiary of petitioner health maintenance organization's (HMO) plan regulated by the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C.S. § 1001 et seq., sued the HMO to enforce an independent review decision under 215 Ill. Comp. Stat. 125/4-10 (2000). The U.S. Court of Appeals for the Seventh Circuit had reversed a decision that denied the claim on the ground that ERISA preempted the independent review statute.


The HMO denied coverage for an unconventional surgery for the beneficiary's shoulder pain as not medically necessary. While the ensuing lawsuit was pending, the beneficiary went ahead with surgery at her own expense. An independent medical review of her claim, as provided for in the Illinois statute, found that the procedure was medically necessary.


  • The Court held that the Illinois statute was a law "directed toward" the insurance industry, and an insurance regulation under a commonsense view, thus it was not preempted by ERISA. 
  • The Court rejected the HMO's arguments holding that the state statute did not enlarge a claim beyond the benefits available in any action brought under 29 U.S.C.S. § 1132(a). 
  • The Court noted that the state statute bore a closer resemblance to second-opinion requirements than to arbitration schemes. 
  • The state law operated before the stage of judicial review and its effect was no greater than that of mandated-benefit regulation.

The judgment of the circuit court was affirmed.

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