William Pitsenberger

Abstract

This article examines state constitutional concerns arising from the 2002 Supreme Court decision Rush Prudential HMO v. Moran, which granted external review entities—not preempted by ERISA—the authority to determine medical services for health organizations. The decision raises significant procedural fairness issues, particularly when viewed in light of state constitutional requirements. External review laws of this kind may be constitutionally infirm, though judicial review and ERISA preemption could mitigate some negative effects. The article explores state external review laws in detail, categorizing them within broader questions of appealability and the binding nature of external review decisions. Many states have “open courts” provisions and embrace separation of powers doctrines, yet the Rush decision complicates these principles. The recent Hawaii Management case adds further uncertainty: allowing judicial review risks ERISA preemption, but disallowing it may violate constitutional separation of powers. Ultimately, resolving this tension may require either accepting the dichotomy created by Rush or adopting mandated benefits systems to avoid the conflict altogether.

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