The Supreme Court has sided with Liberty Mutual Insurance and against the state of Vermont in a decision that could have implications for insurers nationwide.
In a 6-2 vote, the Justices ruled that Vermont cannot force insurers to hand over information on medical claims and plan members.
Vermont law requires 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.
Liberty Mutual's third party administrator, Blue Cross Blue Shield of Massachusetts, was ordered to transmit its files on eligibility, medical claims, and pharmacy claims for the plan's Vermont members.
Liberty Mutual told Blue Cross not to comply.
[Also: Supreme Court hears Vermont vs. Liberty Mutual case over patient data collection]
It took its case to the district court, where it won, but the decision was reversed by a higher court.
In arguments before the Supreme Court in December, Alfred Gobeille, chairman of Vermont Green Mountain Care Board, and the federal government, through John F. Bash, assistant to the Solicitor General, U.S. Department of Justice, argued that the claims data was needed to meet the goals of healthcare reform.
A ruling against Vermont could limit the information collected by other states, Bash said. Liberty Mutual claimed federal law called the Employee Retirement Income Security Act took precedent over what it called Vermont's expensive and time-consuming mandate for healthcare data reporting.
Also, Liberty Mutual cited concern that the disclosure of confidential information could violate its fiduciary duties.
On March 1, the Justices ruled with Liberty Mutual that the federal Employee Retirement Income Security Act preempted state law.
The Justices also said that the federal law makes it clear that it is the Secretary of Labor, not the separate states, that is authorized to decide whether to exempt plans from the law's reporting requirements, or to require plans to report data.
Vermont's counter-arguments were unpersuasive, said the majority. Vermont had argued that Liberty Mutual did not show that the state scheme had caused it to suffer economic costs. Also, it argued that it is within the state's traditional power to regulate in the area of public health.
Justice Anthony Kennedy delivered the opinion of the court. Siding with him were Chief Justice John Roberts and Justices Clarence Thomas, Stephen Breyer, Samuel Alito and Elena Kagan.
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Justices Ruth Bader Ginsburg and Sonia Sotomayor dissented in the decision.
Vermont is among an estimated 18 states whose laws and regulations governing reporting, disclosure and recordkeeping conflict with federal requirements for employer health plan reporting, according to Healthcare Dive.
The American Hospital Association and American Medical Association were among organizations supporting Vermont in the case, while America's Health Insurance Plans filed a brief in support of Liberty Mutual.
Twitter: @SusanJMorse