The case hinges on Vermont legislation requiring all administrators of self-insured benefit plans to regularly submit data on medical claims, pharmacy claims, member eligibility, provider and other information for use in the state's unified healthcare database.
The U.S. Supreme Court heard oral arguments Wednesday in a Vermont case that could have ramifications for the insurance industry nationwide.
The Justices made no decision Wednesday in the case of Alfred Gobeille, chairman of Vermont Green Mountain Care Board, versus Liberty Mutual Health insurers.
The insurers are required to submit annual registration forms and report claims data at specific intervals, which could be monthly.
The Vermont board, backed by the United States., argues the data is needed to meet the goals of healthcare reform, and a ruling against Vermont could limit the information collected by other states.
Liberty Mutual claims federal law preempts Vermont's expensive and time-consuming mandate for healthcare data reporting.
A lower court sided with Liberty Mutual in ruling that the federal Employee Retirement Income Security Act takes precedence over state law, protecting insurers and third-party administrators from having to share the information.
Gobeille, as petitioner for the Vermont Green Mountain Care Board, was represented by Attorney Bridget C. Asay. Also supporting the case was John F. Bash, assistant to the Solicitor General, U.S. Department of Justice.
Asay told the Justices that under the principles the Supreme Court adopted in another case involving Travelers, Vermont's collection of healthcare data is not preempted by federal law.
"Vermont is merely collecting standardized data that Blue Cross necessarily generates and already provides to the state for itself and other entities," Asay said.
The Justices raised questions about the burden of reporting, when different states could have differing reporting requirements.
Justice Ruth Bader Ginsburg said a uniform requirement would be less burdensome.
"But if each state has its own specifications, then that becomes burdensome and costly," she said.
Asay said the third-party administrators who are healthcare insurers, are already generating this data.
Chief Justice John Roberts said the government wants money to go to benefits, not to administrative and bureaucracy expenses.
Justice Stephen Breyer was the among the most outspoken on the issue.
"But what I want to find out is this," he said. "The factor I saw was 93 million people have these (employer pension) plans. And if 93 million people have these plans, there can be 50 states with 50 different sets of regulations imposing a huge financial burden upon healthcare. And were that to happen, suddenly all the people we're trying to help under this plan will find themselves much worse off, and purely for bureaucratic reasons."
Breyer said the Vermont board could initiate a fix to the problem by going to the Department of Labor or Health and Human Services to ask for uniform rules.
"Conflict among states in requirements means money," Breyer said. "A lot of money."
He added, "And frankly, it's pretty ironic that the petitioner and the government claim on the one hand that it is so important to get this information from these plans because 60 percent of all citizens in the United States get their healthcare from these self-funded plans, and yet requiring them to keep the particular records that the state wants and to report it on a quarterly, annually, or monthly basis, has no relation to or connection with the plan."
Justice Elena Kagan asked Liberty Mutual Attorney Seth Waxman why he did not give evidence of the specific cost burden to have Blue Cross Blue Shield comply with the request.
"But we did introduce substantial evidence in the record below," Waxman said. "So we didn't put a dollars and cents in, but we did make the lower court, the district court, on its request, very aware of this very substantial burden."
The American Hospital Association and American Medical Association are among organizations supporting Vermont in the case, while America's Health Insurance Plans filed a brief in support of Liberty Mutual.
Twitter: @SusanJMorse