The Public Interest Research Group and AARP are joining state’s attorney generals, including Oregon’s Ellen Rosenblum to defend states’ ability to require self-insured companies to report their medical claims data to state all-payer, all-claims databases.
In a pair of legal briefs, the parties are waging an uphill Supreme Court battle in the case of Gobeille v. Liberty Mutual in support of Gobeille and the state of Vermont, which like Oregon, has a database that aggregates medical claims data.
“States have used health data collection to help develop evidence-based public health policies since the earliest days of the Republic. State data collection initiatives have included mandatory reporting of infectious diseases, statewide cancer registries, and collection of hospital discharge data. Building on these past efforts, many states have in more recent decades enacted laws requiring data about paid healthcare claims to be reported to a state-run all-payer claims database,” the states argued in the brief signed by Rosenblum.
“Creation of an APCD is an expensive undertaking requiring several years of work. After a state enacts an APCD statute, policymakers must coordinate with payers, providers, employers and health insurance exchanges to ensure efficient data collection.”
Liberty Mutual has refused to comply for the self-insured plan it offers its own employees, arguing that such plans are regulated by federal law and fall outside state regulation. The BlueCross BlueShield Association has weighed in to support Liberty.
In a self-insured health plan, the employer assumes the risk and pays out medical claims from a reserve fund, as opposed to paying a premium on a health plan where an insurance company bears the risk. Typically, an employer hires an insurer just to process the claims, except for special stop-loss insurance that buoys the employer against catastrophic claims.
Self-insured plans fall under the jurisdiction of the federal Employee Retirement Insurance Act and are not regulated by the Oregon Insurance Division; the state's all-payer all claims database where companies submit their claims data is housed at the Oregon Health Authority.
The Supreme Court took up the case after the 2nd Court of Appeals reversed a district court decision and ruled in favor of Liberty Mutual. Eighteen states, including Oregon, are supporting Vermont, along with the American Medical Association and the American Hospital Association, in addition to the consumer groups.
If Vermont loses, it would further trivialize Oregon’s all-payer, all-claims database by cutting out 23 percent of Oregonians from the database unless their employers voluntarily submitted claims. The database has already been criticized for providing little ability to increase price transparency in the state’s healthcare industry, although Jesse Ellis O’Brien, a healthcare advocate at the Oregon State Public Interest Research Group, said the database still had potential to direct state policy goals.
“It throws a wrench into a lot of things that Oregon is doing right now,” O’Brien told The Lund Report. “If they’re not included, it skews the data to Medicaid and Medicare” -- groups that are typically much sicker than the people receiving private insurance, and therefore much more costly to insure.
While the health insurance and hospital industries have killed efforts to improve price transparency in Oregon because it might force overpriced hospitals and flimsier health plans to compete in a more open market, more progressive states such as New Hampshire have begun using their databases to provide consumers with tools that allow them to compare prices and the quality of healthcare providers.
In arguments last week, the justices did not split neatly along the usual ideological lines, with Justices Stephen Breyer and John Roberts offering sympathetic comments to Liberty Mutual about the cumbersome nature of state-by-state regulation, while Justices Elena Kagan and Anthony Kennedy were more dismissive with Liberty’s arguments that the data collection produced a burden on insurers.
Correction: The original article wrongly stated which side of the legal argument that the BlueCross BlueShield Association has taken.
Chris can be reached at [email protected].