Argument of Speaker
Mr. Speaker: The opinion of the Court in two cases will be announced by Justice Souter.
Argument of Justice Souter
Mr. Souter: The first of these is No. 00-1021, Rush Prudential HMO, Inc. against Moran.
The case comes to us on writ of certiorari to the United States Court of Appeals for the Seventh Circuit.
The Employee Retirement Income Security Act of 1974 (ERISA) preempts State Laws that relate to employee benefit plans, but it saves from preemption State Laws that regulate insurance.
The question here is whether Section 410 of the Illinois Health Maintenance Organization Act is preempted.
The petitioner Rush Prudential is an HMO that provides medical services for employee benefit plans covered by ERISA.
The respondent Debra Moran is a beneficiary under a Rush Health Plan.
She sought an unusual medical treatment and Rush denied it on the ground that it was not medically necessary.
The situation is addressed by Illinois HMO Act which guarantees that in certain disputes over the medical necessity of a treatment, an independent physician will review the claim.
If the reviewer decides that treatment is necessary, the HMO must provide it.
Moran sued to force Rush to comply with the statute.
The reviewer here found that Moran’s treatment was necessary.
Rush argued that the reviewer’s decision did not matter because the Illinois Act was preempted by ERISA.
The Seventh Circuit held that the Act was a law that regulated insurance and was saved from preemptions.
We granted certiorari and in an opinion filed today with the Clerk of Court, we affirm.
HMO as defined by Illinois both provides Health Care and assumes the financial risk of providing it.
Thus, the Act is targeted toward the segment of the insurance industry and it regulates insurance within the meaning of the ERISA provision that preserves State Law.
This alone would answer the question of preemption but for the fact that in Pilot Life Insurance against the Dedeaux, we held that even State Insurance Laws might be preempted if they interfered with ERISA's exclusive scheme of remedies for benefit denials.
Here, Rush contends that the Act provides a remedy binding arbitration and is therefore preempted under Pilot Life.
We do not accept the argument because the Act does not provide any cause of action or separate relief a plan member like Moran must still sue under ERSIA to obtain benefits.
The independent review procedure is not a true arbitration but is instead more like a medical judgment that states may regulate.
Justice Thomas has filed a dissenting opinion in which he is joined by the Chief Justice, Justice Scalia, and Justice Kennedy.
