All payer claims databases, which have been set up in 20 states and are seemingly an invaluable and inevitable tool in many payment reform initiatives, were dealt a blow by the U.S. Supreme Court in a March 1, 2016, decision finding them unlawful if run by state law. In a case styled Gobeille v. Liberty Mutual Insurance Co., the Supreme Court found a Vermont law requiring all health plans to report data on paid claims to be pre-empted by federal regulation under ERISA.

Vermont is one of 20 states that has enacted legislation and is operating or implementing all payer claims databases. [1] Vermont’s law required all health plans with Vermont members, or with non-Vermont members who received care in Vermont, to report medical claims data, pharmacy claims data, member eligibility data, provider data and other information. According to federal law, however, ERISA pre-empts “any and all State laws insofar as they may now or hereafter relate to any employee benefit plan.” Courts have upheld this pre-emption so as to assure uniformity in the regulation of health plans and protect plans from being subject to different regulation that may be imposed by any or all of 50 different states. Since ERISA already regulates the reporting, disclosure and record-keeping requirements for plans, the Supreme Court found that Vermont’s law requiring the reporting of claims and eligibility data to be pre-empted by ERISA’s regulation, even if ERISA does not currently require the same type of information gathering Vermont sought.

Spurred by payment reform and the rapidly-increasing size of electronic medical record information available, all payer claims databases have emerged as important tools for plans, providers and states alike. States that have not yet enacted legislation have been considering it. In Ohio, for instance, the governor’s 2016-2017 budget bill as introduced in February 2015 included creation of “the Ohio all-payer health claims database.” The final bill as enacted, however, did not include the language.

The concept of an all-payer claims database is not likely to go away, but its enactment will now have to come from federal law. In fact, in its decision disallowing Vermont’s law, the Supreme Court noted that the Secretary of Labor “may be authorized to require ERISA plans to report data similar to that which Vermont seeks.” When and what that law looks like will depend on elections and congressional developments that will take months, perhaps years, to play out.