In a ruling that could have reverberations for a Connecticut health reform effort, the U.S. Supreme Court ruled Tuesday that certain health plans could not be required by a state to disclose data for use in a health care claims database.

The court ruled 6-2 in the case, Gobeille v. Liberty Mutual Insurance Company, which centered on whether health plans that are not governed by state law can nonetheless be required by a state to report data to a so-called all-payer claims database. The case centered on Vermont’s law and database.

Close to 20 states, including Connecticut, are developing or already have databases of medical, dental and pharmacy claims that can show what health care services residents used and what was paid for them. Proponents of the databases say they can be a key tool in better understanding health care service usage and costs, including price variation and gaps in access to care.

But a large portion of people with private insurance are covered by employer-sponsored plans that are subject to federal law – the Employee Retirement Income Security Act, or ERISA – rather than state regulation, because they self-insure, meaning the employers pay the claims themselves.

Liberty Mutual, which operates a self-insured plan that covers workers in 50 states, raised concerns that reporting information on its plan eligibility and medical and pharmacy claims could violate its fiduciary duties, and told its insurance administrator not to provide the data to Vermont’s database. Vermont ordered the plan to provide it, and said not complying could lead to fines of $2,000 per day and suspension of the insurer’s authorization to operate in the state.

Liberty Mutual sued the state, seeking a court declaration that federal law pre-empts the application of Vermont law.

The Supreme Court sided with Liberty Mutual, finding that ERISA pre-empted any state laws related to employee benefits plans – an affirmation of an earlier ruling by the Second Circuit Court of Appeals.

Justice Anthony Kennedy, writing for the majority, cited the consequences of the alternative.

“Differing, or even parallel, regulations from multiple jurisdictions could create wasteful administrative costs and threaten to subject plans to wide-ranging liability,” Kennedy wrote. “Pre-emption is necessary to prevent the States from imposing novel, inconsistent, and burdensome reporting requirements on plans.”

An amicus brief submitted on behalf of Connecticut’s health insurance exchange, Access Health CT, which is developing the state’s database, warned that a ruling against Vermont could have dire consequences for its efforts and broader state initiatives to change how care is paid for and delivered.

The appeals court ruling against the Vermont law “puts at risk Connecticut’s APCD and, by implication, Connecticut’s health care reform efforts,” the brief said. “The decision threatens to weaken one of Connecticut’s most powerful tools for reviewing and analyzing health care data and would hamper Connecticut’s ability to promulgate evidence-based health care policy and regulation.”

In 2011, 54 percent of Connecticut residents with employer-sponsored health care coverage were enrolled in a self-insured plan, and that number has been increasing, the brief said.

Connecticut’s all-payer claims database has been collecting data, but Tamim Ahmed, who heads the database effort for the exchange, said last month that some companies were holding off on submitting data from self-insured plans until the Supreme Court ruled. Aetna was an exception, he said, and had been submitting data from all plans it administered.

Access Health CEO Jim Wadleigh called the ruling disappointing, and said it could mean that “potentially a third of our APCD customers may not end up in the database.”

The goal of the database is to help people in the state – including employers and individuals – understand health care pricing and what influences it, as well as what insurers are paying for care, Wadleigh said.

“Ultimately this ruling ends up hurting visibility into that process and kind of protects the carriers who are really just trying to probably protect their business with the employers,” Wadleigh said.

One option, Wadleigh said, would be to ask major employers in the state to push their insurers to submit their data. The state employee and retiree plan, which is self-insured, will have its data submitted, Wadleigh said.

Keith Stover, a lobbyist for the Connecticut Association of Health Plans, said Tuesday that it was too soon to know the implications of the ruling.

“I think there’s a lot of work to do in terms of interpreting what the heck this thing means and whether it is a rifle shot or a shotgun blast,” he said.

But Stover said it could lead companies to be more cautious about actions that could potentially raise questions about their validity under ERISA.

Wadleigh said the database could begin producing reports as early as this summer. Individuals would not be identified in the data, but some critics have said the database nonetheless raises privacy concerns and have sought the ability to opt out of having their information submitted.

Chief Justice John Roberts joined Kennedy in the majority opinion, as did Justices Clarence Thomas, Stephen Breyer, Samuel Alito and Elana Kagan. Justices Ruth Bader Ginsburg and Sonia Sotomayor dissented.

Arielle Levin Becker covered health care for The Connecticut Mirror. She previously worked for The Hartford Courant, most recently as its health reporter, and has also covered small towns, courts and education in Connecticut and New Jersey. She was a finalist in 2009 for the prestigious Livingston Award for Young Journalists, a recipient of a Knight Science Journalism Fellowship and the third-place winner in 2013 for an in-depth piece on caregivers from the National Association of Health Journalists. She is a 2004 graduate of Yale University.

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