Modern Healthcare - - LEGAL -

This case, so far, is the one to watch for those in healthcare. It has po­ten­tial ram­i­fi­ca­tions for self-funded in­sur­ers and states eye­ing healthcare re­form.

The case will de­cide whether the third-party ad­min­is­tra­tor for self-funded in­surer Lib­erty Mu­tual In­sur­ance Co. should have to turn over cer­tain data—such as claims, mem­ber el­i­gi­bil­ity and other is­sues—to the state of Ver­mont. The state ar­gues it needs the data to im­prove the cost and ef­fec­tive­ness of healthcare. Lib­erty Mu­tual, how­ever, says that the fed­eral Em­ployer Re­tire­ment In­come Se­cu­rity Act, known as ERISA, pro­tects it and its ad­min­is­tra­tor from hav­ing to share the in­for­ma­tion.

If the Supreme Court sides with the in­surer, that could hin­der healthcare re­form ef­forts in the states, said Dana Berkowitz, a part­ner at Stris & Ma­her, which is rep­re­sent­ing the state of Ver­mont in the case.

“It would ba­si­cally sti­fle the states’ abil­i­ties to be lab­o­ra­to­ries of in­no­va­tion in the healthcare field,” Berkowitz said.

Ni­cholas Ba­gley, a law pro­fes­sor at the Univer­sity of Michigan, called the case “a big deal.”

“If those pretty mod­est in­for­ma­tional de­mands are im­per­mis­si­ble un­der ERISA, that sug­gests a fairly lim­ited scope of state power to un­der­take fu­ture re­forms to the healthcare sys­tems in their states,” he said.

The Amer­i­can Hos­pi­tal As­so­ci­a­tion and the Amer­i­can Med­i­cal As­so­ci­a­tion have filed briefs in the case sup­port­ing the state of Ver­mont.

Lib­erty Mu­tual, how­ever, has ar­gued in court doc­u­ments that states will still have enough data to con­sider healthcare re­forms even with­out in­for­ma­tion from self-funded in­sur­ers. It has also ar­gued that ERISA was meant to pro­tect such plans from “the bur­dens of com­ply­ing with con­flict­ing state laws.”

Steve Wo­j­cik, vice pres­i­dent of public pol­icy with the Na­tional Busi­ness Group on Health, said em­ploy­ers will be closely watch­ing the case.

“This will be hope­fully a good case that strength­ens ERISA pre-emp­tion of state re­quire­ments put on self­funded em­ployer plans,” Wo­j­cik said. But if Ver­mont is suc­cess­ful, he said, “It could en­cour­age other states to do a sim­i­lar type of thing, to place ad­min­is­tra­tive bur­dens on em­ployer plans, ask­ing them for data or re­port­ing of other in­for­ma­tion.”

Oral ar­gu­ments have not yet been sched­uled, but Berkowitz said they will likely hap­pen in De­cem­ber or Jan­uary.


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