Supreme Court takes Vermont all-claims database case

The Supreme Court on Monday granted a judicial review to a case on whether federal employee benefits law trumps Vermont's state law requiring insurance companies, including self-insured plans, to report to a statewide database, according to Bloomberg BNA. The court is planning a hearing on the issue next term.

The case, Gobeille vs. Liberty Mutual Insurance Co., asks whether the Employee Retirement Income Security Act (ERISA) means self-insured plans can opt out of the Vermont Health Care Uniform Reporting and Evaluation System (VHCURES).

Sixteen states have set up these databases, which are designed to collect and analyze insurer information in an effort to transform payment reform efforts, FierceHealthPayer has reported previously.

"It would be awful tough to judge the majesty of the Green Mountains through the vision of a drinking straw. And so it's the same thing in health regulation--the smaller the pool you can look at, the more inaccurate you are," Al Gobeille, the namesake in the Vermont case and chairman of the Green Mountain Care Board, a five-person panel that oversees the health care industry in Vermont, told Vermont Public Radio.

The case involves the records of only 137 people in Vermont, which Liberty Mutual does not want to turn over. However, Gobeille says it's a matter of legal precedent.

A district court granted Vermont's motion to dismiss the case, but the Second Circuit reversed it in a split decision. It said that not "every state law imposing a reporting requirement is preempted," but the reporting mandated by the Vermont statute was sufficiently "burdensome, time-consuming and risky" to warrant preemption, according to an article at Lexology.

At issue is whether plan administrators have to meet a multiplicity of state reporting requirements for these databases, in addition to those imposed by ERISA itself.

Advocates say all-payer claims databases, which collect claims data from all commercial insurers within their borders to detect price discrepancies among doctors and hospitals, are essential to controlling costs.

Critics say greater payment transparency could lead to providers raising prices when they see competitors out-earning them. They're also concerned that Americans will misunderstand and misuse payment data.

To learn more:
- read the Bloomberg story
- here's the Lexology piece
- check out the VPR story