ERISA as a Barrier for State Health Care Transparency Efforts
Carmel Shachar, I. Glenn Cohen, Holly Fernandez Lynch, and Barbara J. Evans eds., Transparency in Health and Health Care, Cambridge University Press (2019).
UC Hastings Research Paper No. 334
Georgia State University College of Law, Legal Studies Research Paper No. 2020-04
13 Pages Posted: 7 Jul 2019 Last revised: 12 Jun 2020
Date Written: July 3, 2019
Abstract
To improve health care market dynamics and reduce costs, many states have passed legislation to improve transparency in health care for consumers, regulators, and employers. Significant state-led initiatives include building price transparency tools using data from state all-payer claims databases (APCDs), requiring pharmacy benefit managers to report drug markups and pricing methodologies, increasing provider network transparency, and limiting surprise medical bills from out-of-network providers. Despite robust and salutary state innovation in consumer health care transparency, the federal Employee Retirement Income Security Act’s (ERISA) growing preemptive sweep prevents these state laws from benefiting a growing percentage health care consumers — those covered by self-funded employee health plans. In Gobeille v. Liberty Mutual, the Supreme Court dramatically broadened ERISA’s preemptive reach over state laws imposing data reporting requirements on self-funded plans. The expanding scope of ERISA preemption fundamentally limits the ability of states to protect their citizen-consumers and oversee rising health care costs through health care transparency laws. For transparency initiatives to achieve their maximal effect at the state level, lawmakers must make changes at the federal level. A federal solution could take many forms, ranging from narrow-issue administrative rulemaking to amending ERISA to exempt state transparency laws from preemption. Although federal policy may be necessary for health care transparency efforts to reach all consumers, such a policy should preserve state flexibility and innovation.
Keywords: ERISA, Health Care, Transparency, Preemption, Surprise Billing, All-Payer Claims Database, APCD
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