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2 Federal Courts Differ Concerning External Appeals

Almost 40 states have laws giving health plan members the right to seek external review of denials of coverage. Conflicting federal court rulings about states' authority to bind health plans to external review decisions have put their constitutionality in question.

The U.S. Court of Appeals for the Fifth Circuit last June tossed out the external review provision in Texas's right-to-sue law. Health plans, most of which welcome external review as an alternative to a day in court, offer it along the lines of the now-invalidated state law — though are not required to.

Last month, an Illinois external review law nearly identical to the Texas provision was upheld by the Seventh Circuit Court of Appeals. The legislature, the court ruled, merely sought to provide unbiased, third-party arbitration when HMOs and physicians cannot agree on treatment.

Several legal experts told the Dallas Morning News that the two decisions are squarely opposed, and that the question will have to be resolved by the U.S. Supreme Court.

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