The 6-2 decision is seen as a blow to state government efforts to track health care costs within their jurisdictions.
The case involved a Vermont law requiring health insurers, health care providers, health care facilities and governmental agencies to report any “information relating to health care costs, prices, quality, utilization or resources required.”
The information would be entered into a state database. Health insurers were also required to submit claims data on members, subscribers and policyholders. At least 17 other states have similar databases.
Liberty Mutual Insurance Co., a self-insured employer that provides benefits in 50 states, sued to block Vermont’s reporting requirement, contending that the Employee Retirement Income Security Act of 1974 (ERISA) preempts such state rules. The court majority agreed with that view.
“Preemption is necessary to prevent the states from imposing novel, inconsistent and burdensome reporting requirements on plans,” Justice Anthony Kennedy wrote for the majority. He argued that such burdensome reporting requirements “could create wasteful administrative costs and threaten to subject plans to wide-ranging liability.”
In her dissenting opinion, with which Justice Sonia Sotomayor concurred, Justice Ruth Bader Ginsburg wrote that “state-law diversity is a hallmark of our political system.” She also argued that ERISA and Vermont’s database have different purposes and thus different data requirements.
“ERISA’s domain is the design and administration of employee benefit plans: notably, prescriptions on the vesting of benefits, claims processing and the designation of beneficiaries,” Ginsburg wrote.
“Its reporting requirements, geared to those functions, ensure that the plans in fact provide covered benefits. Vermont’s data-collection statute, in contrast, aims to improve the quality and utilization, and reduce the cost, of health care in Vermont by providing consumers, government officials and researchers with comprehensive data about the health care delivery system.”