Health insurers are fighting a state law that would create transparency for physicians and patients when it comes to health insurance payments. A case before the Supreme Court of the United States will determine whether a technicality will stand in the way of reform efforts and keep the insurance payment process cloaked in mystery.
The issue at hand in Gobeille v. Liberty Mutual Insurance Co. is whether or not the federal Employee Retirement Income Security Act of 1974 (ERISA) preempts a Vermont law requiring health insurers to submit claims payment data to an all-payer claims database maintained by the state.
A federal appeals court had held that ERISA preempts application of Vermont’s claims database statute to the self-funded health benefit plan of insurer Liberty Mutual. The court concluded that the statute intruded on “one of ERISA’s core functions.”
The state of Vermont went to great effort to create its all-payer claims database, a method that at least 12 other states also are using. The databases collect and analyze medical claims payment information from all health insurers within the state to fill information gaps that hinder efforts in health care reforms that would bring transparency to health care systems at the state level.
Why transparency matters to physicians and patients
The intent of increased transparency is to create a more competitive market that would benefit both health care consumers and physicians by driving down prices while improving quality.
The Litigation Center of the AMA and State Medical Societies filed an amicus brief in support of the state legislation, claiming that “Vermont’s statue does not ‘relate to’ employee benefit plans” and so is not preempted by ERISA.
Claims databases such as the one in Vermont … “provide important information to consumers, providers and policymakers about health care options, outcomes and costs that enable these stakeholders to make more informed decisions about obtaining and paying for medical treatment,” the brief said, further urging that Vermont’s statute is not preempted by ERISA.
“Historically,” the amicus brief said, “states have regulated both the clinical and economic aspects of the provision of health care, which are often ‘inextricably mixed.’” On the other hand, ERISA “does not regulate health care, including the practice of medicine.”
The principles of the Vermont claims database are clearly defined in the statute:
- Every Vermonter should be able to choose his or her health care providers
- Health care costs should be transparent and easy to understand
- The financing of health care in Vermont must be sufficient, fair, predictable, transparent, sustainable and shared equitably
- The system must consider the effects of payment reform on individuals and on health care professionals
If the Supreme Court rules in favor of Vermont, physicians and patients both could see a more favorable health care. If the decision upholds Liberty Mutual’s claim that Vermont’s law is preempted by ERISA, progress toward health care delivery and payment reform could be impeded, especially in the states that maintain claims databases.
More cases involving ERISA
In NYSPA v. United, a U.S. appeals court ruled in favor of physicians’ ability to stand up in court for mental health patients who are unable to do so themselves.
In a case dealing with physicians’ standing under ERISA, Rojas v. Cigna Health and Life Insurance Company, physicians are seeking a rehearing following a federal court decision that would give insurers more leeway to terminate physicians from their network.
In Pennsylvania Chiropractic Association v. Independence Hospital Indemnity Plan, Inc., a federal appeals court is examining whether the payer can retroactively deny benefits or take back payments without explanation of the action or offering a way for physicians to appeal these actions.
