Amicus Curiae Brief — Gobeille v. Liberty Mut. Ins. Co., 135 S. Ct. 885 (2014) (No. 14-181)

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No. 14-181

IN THE

Supreme Court of the Anited States

ALFRED GOBEILLE, in his Official Capacity as

Chair of the Vermont Green Mountain Care Board,

Petitioner,

LIBERTY MUTUAL INSURANCE COMPANY,

Respondent.

On Writ of Certiorari to the

United States Court of Appeals

for the Second Circuit

BRIEF FOR AMICI CURIAE NATIONAL

GOVERNORS ASSOCIATION, NATIONAL

CONFERENCE OF STATE LEGISLATURES,

COUNCIL OF STATE GOVERNMENTS,

NATIONAL ASSOCIATION OF INSURANCE

COMMISSIONERS, AND ASSOCIATION

OF STATE AND TERRITORIAL HEALTH

OFFICIALS, IN SUPPORT OF PETITIONER

GAIL SCIACCHETANO LIsA SORONEN’

Deputy General Counsel Executive Director

JENNIFER MCADAM STATE AND LOCAL

Legal Counsel LEGAL CENTER

NATIONAL ASSOCIATION OF 444 North Capitol St., N.W.

INSURANCE COMMISIONERS Suite 515

1100 Walnut Street Washington, DC 20001

Suite 1500 (202) 434-4845

Kansas City, MO 64106 lsoronen@sso.org

(816) 783-8019 "Co ! of Record

gsciacchetano@naic.org

Counsel for Amici Curiae

TABLE OF CONTENTS

TABLE OF AUTHORITIES ....................ccc:ssesse000

INTEREST OF AMICI CURIAE ................0.0000+

SUMMARY OF ARGUMENT ...............2...cc0cs0000

I. ERISA Preemption is Inappropriate........

A. Health Care Data Collection Laws

Fill Critical Information Gaps for

PE sinshidtcersisininiiciebaidtitiiaeninndnnanteniennnes

1. Development of State Health Care

Data Collection Laws.....................

2. Data are Used for a Variety of

3. Data Collection and Reporting is

Standardized and Routine.............

4. Data Completeness is Important...

The Presumption Against Preemption

ee asiicecibnciasiieaieitiabainaiiatanninsticnsdiiniiodiien

Il. State Health Care Data Collection Laws

Do Not “Relate To” ERISA Plans.............

A. Congress Did Not Intend ERISA to

Supersede State Health Care Data

IIE sesdrittensciensiaiseninscinniieniaeninin

State Health Care Data Collection

Laws Do Not Interfere or Conflict

I Eh

IIT snctinniiniicsentisnediceneinedsinnvmcenninianenine

TABLE OF AUTHORITIES

CASES Page(s)

Alessi v. Raybestos-Manhattan, Inc.,

SS eee 19, 20, 25

California Div. of Labor Standards

Enforcement v. Dillingham Const., N_A.,

Inc.,

CT iccericittnnicnnetnepniencandewaend passim

DeBuono v. NYSA-ILA Medical and

Clinical Services Fund,

ceca aicitenisniesiiseninstsinanisel passim

District of Columbia v. Greater

Washington Bd. of Trade,

SE 26

Egelhoff v. Egelhoff ex rel. Breiner,

gg EEE er 25

FMC Corp. v. Holliday,

Kk SR 19, 20, 25

Fort Halifax Packing Co. v. Coyne,

Le 17

Gobeille v. Liberty Mut. Ins. Co.,

136 S. Ct. SEB7 CRDUB)..........ccccccccerecccsesesseeess 5

Hillsborough County, Fla. v. Automated

Med. Labs., Inc.,

I etic nicintinineanhineenntines 16

Ingersoll-Rand Co. v. McClendon,

4 MRE ENO 19

TABLE OF AUTHORITIES—Continued

Page(s)

Kentucky Ass’n of Health Plans, Inc., v.

Miller,

538 U.S. 329 (2003)................................... i)

Liberty Mut. Ins. Co. v. Donegan,

746 F.3d 497 (2d Cir. 2014) ..........0000000.... passim

Massachusetts v. Morash,

I caslinaeaue 22

Metropolitan Life Ins. Co. v.

Massachusetts,

EE eee 25

New York State Conference of Blue Cross

& Blue Shield Plans v. Travelers Ins.

Co.,

I ema passim

Shaw v. Delta Air Lines, Inc.,

8! 19, 20, 25

STATUTES

BP ie, Ge OID vacnceccnscocescscsecnseccsscese 17, 22

ENE SL eee 22

EE ae ee meee 18, 19

Be ats Ob eR ictccccntcctcescsccoscsssscess g

National Health Planning and Resources

Development Act of 1974 (NHPRDA).

Pub. L. 93-641, 88 Stat. 2225, §§ 1-3,

repealed by Pub. L. 99-660, title VII,

§ 701(a), 100 Stat. 3799.......................000000 23

TABLE OF AUTHORITIES—Continued

ARK. CODE ANN. § 23-61-901 ........................

COLo. REV. STAT. § 25.5-1-204 .......00......0.....

CONN. GEN. STAT. § 38a-1091.......................

CONN. GEN. STAT. § 19a-724(f) (2013)..........

KAN. STAT. ANN. § 65-6804...........................

ME. REV. STAT. ANN. tit. 22, §§ 8703, 8704..

MD. CoDE ANN., Health-Gen. § 19-133........

MAss. GEN. LAWS ANN. ch. 12C, § 12...........

MINN. STAT. ANN. § 62U.04..........................

N.H. REv. STAT. ANN. § 420-G:1]-a..............

N.Y. PUB. HEALTH LAW § 2816.....................

es le I tr hic ccncmcnncccniconsessniens

R.I. GEN. LAWS § 23-17.17-10....................04

TENN. CODE ANN. § 56-2-125.......................

UTAH CODE ANN. § 26-33a-106.1..................

VT. STAT. ANN. tit. 18, § 9410.0...

Va. CODE ANN. § 32.1-276.7:1 ......................

WASH. REV. CoDE. ANN. 43.371.010.............

i is Ee Oe SE cccircencccccosenccoccsccssecnssns

owe vnonwointniwvonooonwri nonTnnnnwnwiwoeewew oe

TABLE OF AUTHORITIES—Continued

COURT FILINGS Page(s)

Brief for Acting Secretary of the United

States Department of Labor as Amicus

Curiae Supporting Defendant-Appellee

(Gobeille), Liberty Mut. Ins. Co. v.

Donegan, 746 F.3d 497 (2d Cir. 2014)

Ss I ccitinsisinnscntileiatiiatiainiinineconsenees 16, 17, 22

Memorandum in Support of its Motion for

Summary Judgment. Liberty Mut. Ins.

Co. v. Donegan, No. 2:11-cv-204 (June 25,

OTHER AUTHORITIES

APCD COUNCIL, ALL-PAYER CLAIMS DATA-

BASE DEVELOPMENT MANUAL (Mar. 2015),

available at https://Awww.apcdcouncil.org/

RO ERA aC SRS Ane a ee 10, 11

APCD CounNciL, MODEL APCD LEGIS-

LATION (May 2015), available at https://

www.apcedcouncil.org/publication/model-

all-payer-claims-database-legislation ...... 10, 18

Beth Kuscher, How New Hampshire Took

the Guesswork Out of Healthcare Costs,

MODERN HEALTHCARE (July 16, 2015),

available at https:/Awww.modernhealth

care.com/article/20150716/NEWS/150719

TABLE OF AUTHORITIES—Continued

Page(s)

CONSTANTIN PANIS & MICHAEL BRIEN, SELF-

INSURED HEALTH BENEFIT PLANS 2015

BASED ON FILINGS THROUGH STATISTICAL

YEAR 2012 (2014), available at

http://www.dol.gov/ebsa/pdf/ACASelfFun

dedHealth PlansReport2015.pdf..............

CTR. FOR HEALTH INFO. AND ANALYSIS &

HEALTH POLICY COMM’N, MASSACHUSETTS

COMMERCIAL MEDICAL CARE SPENDING:

FINDINGS FROM THE ALL-PAYER CLAIMS

DATABASE 2010-2012 MEDICAL CLAIMS

PAYMENTS FOR THE THREE LARGEST COM-

MERCIAL PAYERS (July 2014), available at

https://www.mass.gov/anf/docs/hpc/aped-

alma nac-chartbook. pdf ....................000s000

DENISE LOVE & CLAUDIA STEINER, KEY

STATE HEALTH CARE DATABASES FOR

IMPROVING HEALTH CARE DELIVERY (Feb.

2011), available at http//www.apcdcouncil.

org/publication/key-state-health-care-data

bases-improving-health-care-delivery .....

Elizabeth Cohen, How to Save Money on

Health Care, CNN, (Mar. 4, 2010),

available at https:/Awww.cnn.com/2010/

HEALTH/03/04/medical.waste/................

H. James, Roderick Hudson (New York

ed., World’s Classics 1980) .....................0.

vii

TABLE OF AUTHORITIES—Continued

Page(s)

Healthcare Claims Indicator Report

Module, NH HEALTH WRQS,

https://www.nhhealthwrgqs.org/HealthW

RQS2?SubSystem=CLAIMS (last visited

Interactive State Report Map, APCD

COUNCIL, http:/Awww.apcdcouncil.org/

state/map (last visited Aug. 27, 2015)......

KATHARINE LONDON ET AL., ANALYSIS OF

PRICE VARIATIONS IN NEW HAMPSHIRE

HOSPITALS (Apr. 2012), available at

http// www.nh.gov/insurance/lah/docu

Tee

Medical Expenditure Panel Survey

Household Component, 2014, CTR. FOR

FIN., ACCESS, AND COST TRENDS, AGENCY

FOR HEALTH-CARE RESEARCH AND

QUALITY, http://Awww.meps.ahrq.gov/mep

sweb/data_stats/summ_tables/hc/hith_in

sr/2014/alltables.pdf (last visited Aug. 27,

LATE a

MINN. DEP’T OF HEALTH, AN INTRODUCTORY

ANALYSIS OF POTENTIALLY PREVENTABLE

HEALTH CARE EVENTS IN MINNESOTA

(2015), available at http://www.health.

state.mn.us/healthreform/allpayer/poten

tially_preventable_events_072115.pdf.....

TABLE OF AUTHORITIES—Continued

Page(s)

Nat! Program of Cancer Registries, About

the Program, CENTERS FOR DISEASE

CONTROL AND PREVENTION, http://www.

cde.gov/cancer/npcr/about.htm (last visited

A Fa csi Tisccacnninnciccitabcinticiiniaiglialies

Nati Vital Statistics Sys., About the Nat'l

Vital Statistics Sys., CENTERS FOR

DISEASE CONTROL AND PREVENTION,

http://www.cdc.gov/nchs/nvss/about_nvs

s.htm (last visited Aug. 27, 2015).............

NEW HAMPSHIRE COMPREHENSIVE HEALTH

CARE INFO. Sys., ADULT PREVENTIVE

HEALTH CARE IN NEW HAMPSHIRE ISSUE

BRIEF — JUNE 2009, available at

http://www.dhhs.nh.gov/ombp/document

s/adultpreventivebrief.pdf (last visited

FE, Se iesicciineniattiiantibbindacandpansienaiatinigns

NH HEALTHCOstT, https:/Awww.nhhealth

cost. org (last visited Aug. 27, 2015)..........

MAINE HEALTHCOST, https://mhdo.maine.

gov/healthcost2014/CostCompare (last

Sk ee

13, 14

TABLE OF AUTHORITIES—Continued

Page(s)

Office-based Medical Provider Services-

Median and Mean Expenses per Person

With Expense and Distribution of

Expenses by Source of Payment:

United States, 2012, All Office-based

Medical Provider Services, AGENCY FOR

HEALTHCARE RESEARCH AND QUALITY,

U.S. DEP’T OF HEALTH AND HUMAN

SERVICES, http//meps.ahrq.gov/mepsweb

/data_stats/tables_compendia_hh_intera

ctive jsp? SERVICE=MEPSSocketO&_P

ROGRAM=MEPSPGM.TC.SAS&File=H

CFY2012&Table=HCFY2012 PLEXP G

&VAR1=AGE&VAR2=SEX&VAR3=RAC

ETH5C&VAR4=INSURCOV&VAR5=PO

VCAT12&VAR6=MSA&VAR7=REGION

&VAR8=HEALTH&VARO 1=44+17+44+6

4&VARO2=1&VARO3=1&VARO4=1&V

ARO5=1&VARO6=1&VARO7=1&VARO

8=1& Debug (last visited Aug. 27, 2015) 7

PATRICK MILLER ET AL., ISSUE BRIEF:

UTILIZATION AND COSTS FOR ADVERSE

DRUG REACTIONS IN MAINE AND NEW

HAMPSHIRE: 2005-2007 (2009), available

at https://chhs.unh.edw/sites/chhs.unh.

edu/files/docs/nhihpp/2009_09_03ADEIs

i iniepidscinnitaninnnstinteanssnenemieneess 13

S. REP. No. 93-127, 93th Cong., 2nd Sess.

1974, 1974 U.S.C.C.ALN. 4838, 4863........ 22

TABLE OF AUTHORITIES—Continued

Page(s)

Standards, APCD COUNCIL, https://Awww.

apedcouncil.org/standards (last visited

I i 15, 18

Total Health Services-Median and Mean

Expenses per Person with Expense and

Distribution of Expenses by Source of

Payment: United States 2012, AGENCY

FOR HEALTHCARE RESEARCH AND

QUALITY, U.S. DEP’T OF HEALTH AND

HUMAN SERVICES, available at http://

meps.ahrq.gov/mepsweb/data_stats/tabl

es_compendia_hh_interactive.jsp?_ SER

VICE=MEPSSocket0&_ PROGRAM=ME

PSPGM.TC.SAS&File=HCFY2012&Tab!

e=HCFY2012 PLEXP %40&VAR1=AGE

&VAR2=SEX&VAR3=RACETH5C&VAR

4=INSURCOV&VAR5=POVCATI12&VA

R6=MSA&VAR7=REGION& VAR8=HEA

LTH&VARO1=44+17+444+64& VARO2=1&

VARO3=1&VARO4=1&VARO5=1&VAR

06=1&VARO7=1&VARO8=1&_ Debug

(last visited Aug. 27, 2015)....................... 7

TABLE OF AUTHORITIES—Continued

Page(s)

Understanding of the Efficiency and

Effectiveness of the Health Care System,

THE DARTMOUTH ATLAS OF HEALTH CARE,

http://www.dart mouthatlas.org (last

oS er 6

Wilson Andrews et al., Disparity in Medical

Billing, WASHINGTON PosT (May 8, 2013),

available at http:/Awww.washingtonpost.

com/wp-srv/special/national/actual-cost-

I Sn a 6

INTEREST OF AMICI CURIAE'

Amici are organizations whose members include state

governments and officials from across the country.

Amici regularly file briefs in matters like this one, which

raise issues of concern to the Nation’s States.

The National Governors Association (“NGA”), founded

in 1908, is the collective voice of the Nation’s governors.

NGA’s members are the governors of the fifty States,

three Territories, and two Commonwealths.

The National Conference of State Legislatures

(“NCSL”) is a bipartisan organization that serves the

legislators and staffs of the Nation’s fifty States,

its Commonwealths, and Territories. NCSL provides

research, technical assistance, and opportunities for

policymakers to exchange ideas on the most pressing

state issues. NCSL advocates for the interests of state

governments before Congress and federal agencies, and

regularly submits amicus briefs to this Court in cases,

like this one, that raise issues of vital state concern.

The Council of State Governments (“CSG”) is the

Nation’s only organization serving all three branches

of state government. CSG is a region-based forum that

fosters the exchange of insights and ideas to help state

officials shape public policy. This offers unparalleled

regional, national, and international opportunities

to network, develop leaders, collaborate, and create

problem-solving partnerships.

1 No party or counsel for a party authored this brief in whole

or in part. No party, counsel for a party, or person other than the

amici curiae or their counsel made a monetary contribution

intended to fund the preparation or submission of this brief.

Petitioner and Respondent have filed blanket consents to the

filing of amicus curiae briefs in this case.

The National Association of Insurance Commissioners

(“NAIC”), founded in 1871, is the U.S. standard-setting

and regulatory support organization created and gov-

erned by the chief insurance regulators from the 50

states, the District of Columbia, and five U.S. territo-

ries. Through the NAIC, state insurance regulators

establish standards and best practices, conduct peer

review, and coordinate regulatory oversight. The NAIC

members, together with the centralized resources of

the NAIC, form the national system of state-based

insurance regulation in the U.S.

The Association of State and Territorial Health

Officials (“ASTHO”) is the national nonprofit organi-

zation representing public health agencies in the

United States, the U.S. Territories, and the District of

Columbia, and over 100,000 public health profession-

als these agencies employ. ASTHO members, the

chief health officials of these jurisdictions, formulate

and influence sound public health policy and ensure

excellence in state-based public health practice. ASTHO’s

primary function is to track, evaluate, and advise mem-

bers on the impact and formation of public or private

health policy which may affect states and to provide

them with guidance and technical assistance on improv-

ing the nation’s health.

This case directly impacts the interests of amici and

their members. States across the country—through

members of the amici organizations, which include

the governors, legislatures, insurance commissioners,

public health officials, and other state officials—are

working to ensure that citizens have access to quality

and affordable health care services. This is a task for

which states have traditionally been responsible—

rising to the level of an “historic police power.” In an

effort to better understand the provision of health care

services, track related expenses and provide transpar-

ency to consumers, providers, and payers, many states

have implemented databases similar to the one estab-

lished by Vermont. States have long-relied on the

assumption that the federal government would not

interfere with their historic police powers in the field

of health care policy. In implementing these databases,

states depend on the strong presumption against

ERISA preemption to guarantee they are collecting

complete and reliable data from all health care service

payers. Amici, thus, have a strong interest in the

outcome of this case.

SUMMARY OF ARGUMENT

Eighteen states, including Vermont, collect and

analyze health care claims data to regulate the safe

and effective provision of health care services. The

data collected provides states with critical information

about the health of their citizens and contributes to

their understanding of health care utilization, cost,

and quality. The information gathered can be used for

a variety of purposes, allowing consumers to shop for

the lowest cost and highest quality care, insurers to

negotiate acceptable rates, and lawmakers to estab-

lish tailored health care policy initiatives. But without

data from all health care payers, including self-insured

plans (which cover nearly 70 million participants) the

completeness, and therefore usefulness, of the data

would be compromised.

ERISA does not preempt these health care data

collection laws. In enacting these laws, states are

exercising their historic and traditional police power

to ensure the health and safety of their citizens.

Accordingly, this Court should apply the presumption

against preemption to these laws. Liberty Mutual has

provided no evidence to overcome this presumption.

These laws apply generally to all health care payers

and do not relate to ERISA plans. They do not inter-

fere or conflict with the “reporting” required by

ERISA, which is predominantly concerned with the

financial solvency of the plans and not the health care

outcomes of their beneficiaries. Additionally, there is

no indication that Congress meant to supersede these

types of laws, particularly in light of a federal law

enacted only months after ERISA encouraging states

to seek much of the same data collected by Vermont

and other states. Furthermore, the state data collection

laws do not mandate benefit structures or administra-

tion, nor do they provide an enforcement mechanism.

And while there may be incidental costs involved with

providing the data, these costs alone do not render a

state law preempted by ERISA.

The Second Circuit misapplied long-standing ERISA

preemption case law. Left uncorrected, this ruling will

negatively impact health care policy across the country.

ARGUMENT

I. ERISA Preemption is Inappropriate

This Court repeatedly has held that there is a pre-

sumption that Congress does not intend to supplant

state law, particularly in areas of traditional state reg-

ulation. New York State Conference of Blue Cross &

Blue Shield Plans v. Travelers Ins. Co., 514 U.S. 645,

655, 657 (1995); California Div. of Labor Standards

Enforcement v. Dillingham Const., N.A., Inc., 519 U.S.

316, 334 (1997); DeBuono v. NYSA-ILA Medical and

Clinical Services Fund, 520 U.S. 806, 814-15 (1997).

In the case below, the Second Circuit rejected this

presumption, confining its analysis to a footnote in

which it concluded, without citation, that the “state

data collection laws do not regulate the safe and effec-

tive provision of health care services, which is among

the states’ historic police powers.” Liberty Mut. Ins. Co.

v. Donegan, 746 F.3d 497, 506 n.8 (2d Cir. 2014), cert.

granted sub nom. Gobeille v. Liberty Mut. Ins. Co., 135

S. Ct. 2887 (2015). The amici joined in this brief disagree

with this conclusion and defend the legitimate use of

state police powers to collect health care data.

A. Health Care Data Collection Laws Fill

Critical Information Gaps for States

States are regulators, suppliers, payers and customers

of the health care delivery system. States need access

to high quality, consistently-collected data reflecting

health care use to support effective health policy devel-

opment, understand health system use, and drive

health delivery reform. Unsurprisingly, for many

years, states have been innovators in data collection to

support these health care improvement efforts.

Historically, state health care data collection has

been limited. Currently, most states maintain: state-

based hospital discharge systems;* cancer registry

systems; and vital records systems.‘ These data are

useful but because they are limited they cannot be

aggregated and analyzed to answer many basic and

2 DENISE LOVE & CLAUDIA STEINER, KEY STATE HEALTH CARE

DATABASES FOR IMPROVING HEALTH CARE DELIVERY (Feb. 2011),

available at http://www .apedcouncil.org/publication/key-state-health-

care-databases-im proving-health-care-delivery.

8 Nat'l Program of Cancer Registries, About the Program,

CENTERS FOR DISEASE CONTROL AND PREVENTION, http//www.

cdc.gov/cancer/npcr/about.htm (last visited Aug. 27, 2015).

* Nat’ Vital Statistics Sys., About the Nat'l Vital Statistics Sys.,

CENTERS FOR DISEASE CONTROL AND PREVENTION, http://www.

cdc.gov/nchs/nvss/about_nvss.htm (last visited Aug. 27, 2015).

helpful questions that could improve health care

quality, access, and cost. Hospital discharge data, for

example, are used broadly and in many different ways,

including studying patterns of care in the inpatient

setting, understanding rates of hospitalization for dis-

ease and injury, and exploring patient characteristics

for different hospitals. Data all states currently collect

can also reveal information about costs for services,

which can be used by health care consumers. For

instance, certain hospital inpatient data has shown

the disparity in costs charged for various procedures

in hospitals across the country.® To illustrate, data

from 2011 showed that one Miami hospital charged

$127,038 to implant a pacemaker, while a hospital

down the street charged only $66,030. Id.

Until recently states have not collected similar data

for office-based and other outpatient care (“ambulatory

care”) except for Medicare® and Medicaid patients,’

although the majority of health care in the United

®° Wilson Andrews et al., Disparity in Medical Billing, WASHINGTON

Post (May 8, 2013), available at http//www.washingtonpost.com/

wp-srv/special/national/actual-cost-of-medical-care.

® Regarding ambulatory care, the Centers for Medicare and

Medicaid Services collects and makes available data based on

claims paid by Medicare, which includes those 65 and older and

those with certain medical conditions. While these data have

been used to provide a robust understanding of patterns of care,

the data are limited to that population. Understanding of the

Efficiency and Effectiveness of the Health Care System, THE

DARTMOUTH ATLAS OF HEALTH CARE, http://www.dartmouth

atlas.org (last visited Aug. 27, 2015).

’ State-based Medicaid data also provide a wealth of infor-

mation about the type, quality, and cost of care for that popula-

tion. But, like Medicare data, Medicaid data reflects only a small,

albeit very important, portion of the population, including low-

income parents, children and people with disabilities.

States is provided in these settings.® For this reason,

states have begun implementing health care data

collection laws like Vermont’s.

®In 2012, 72.4% of the U.S. population had a health care

expense related to an office visit. Office-based Medical Provider

Services-Median and Mean Expenses per Person With Expense

and Distribution of Expenses by Source of Payment: United

States, 2012, All Office-based Medical Provider Services, AGENCY

FOR HEALTHCARE RESEARCH AND QUALITY, U.S. DEP’T OF HEALTH

AND HUMAN SERVICES, http://meps.ahrq.gov/mepsweb/data_stata/

tables_compendia_hh_ interactive jap? SERVICE=MEPSSocket0

& PROGRAM=MEPSPGM.TC.SAS&File=HCFY2012&Table=H

CFY2012_ PLEXP_G&VAR1=AGE&VAR2=SEX&VAR3=RACET

H5C&VAR4=INSURCOV&VAR5=POVCAT12&VAR6=MSA&VA

R7=REGION&VAR8=HEALTH&VARO 1=4+17+44+64& VARO2=

1&VARO3=1&VARO4=1&VARO5=1&VARO6=1&VARO7=1&VA

RO8=1&_Debug (last visited Aug. 27, 2015). The percentage of

the population with inpatient hospital, outpatient hospital, or

emergency room expense was much lower: 7.5%, 15.8%, and

12.9%, respectively. Jd. In 2014, only around 20% of the popula-

tion was covered by public insurance (e.g., Medicare and Medicaid),

while approximately 60% were covered by private insurance.

Medical Expenditure Panel Survey Household Component, 2014,

CTR. FOR FYIN., ACCESS, AND COST TRENDS, AGENCY FOR

HEALTHCARE RESEARCH AND QUALITY, http/Awww.meps.ahrq.gov/

mepsweb/data_state/summ_tables/hc/hith_insr/2014/alltables. pdf

(last visited Aug. 27, 2015). Further, nearly half of all medical

expenses were paid for by private insurance in 2012. Total Health

Services-Median and Mean Expenses per Person with Expense

and Distribution of Expenses by Source of Payment: United States

2012, AGENCY FOR HEALTHCARE RESEARCH AND QUALITY, U.S.

DEP’T OF HEALTH AND HUMAN SERVICES, available at http://meps.

ahrq.gov/mepsweb/data_stats/tables_compendia_hh_ interactive.

jsp?_SERVICE=MEPSSocketO0&_PROGRAM=MEPSPGM.TC.SA

S&File=HCFY2012&Table=HCFY2012_ PLEXP_%40&VAR1=AG

E&VAR2=SEX&VAR3=RACETH5C&VAR4=INSURCOV&VARS

=POVCAT12&VAR6=MSA&VAR7=REGION& VAR8=HEALTH&

VARO1=4+17+44+64&VARO2=1&VARO3=1&VARO4=1&VARO

5=1&VARO6=1&VARO7=1&VARO8=1& Debug (last visited

Aug. 27, 2015).

1. Development of State Health Care Data

Collection Laws

Recognizing the need for broad-based, health system-

wide data to understand key health issues, states

began creating All-Payer Claims Databases (“APCDs”),

like Vermont’s, which hold the potential for a much

deeper understanding of patterns, quality, and cost

of care across the entire population. In 2007, the

Regional All-Payer Healthcare Information Council

began as a convening organization to bring together

several Northeast states that had, or were developing,

APCD systems. The vision was to support cross-state

data harmonization and analytic activities. The organ-

ization quickly expanded to include states across the

country to address a wider variety of activities, such

as sharing of processes, addressing common challenges

in data acquisition, and identifying resources that

could be leveraged across states. In 2010, the organi-

zation became the All-Payer Claims Database Council

(“APCD Council”) to reflect the expanded reach.

As of August 2015, 18 states have enacted legislation

creating these health care databases (“state health care

data collection laws” or “APCD laws”).’ Currently, there

are 14 states with existing APCDs, 4 in implementa-

tion, 3 existing voluntary efforts, and at least 5 other

* ARK. CODE ANN. § 23-61-901; COLO. REV. STAT. § 25.5-1-204;

CONN. GEN. STAT. § 38a-1091; KAN. STAT. ANN. § 65-6804; ME.

REV. STAT. ANN. tit. 22, §§ 8703, 8704; Mp. CODE ANN., Health-

Gen. § 19-133; Mass. GEN. LAWS ANN. ch. 12C, § 12; MINN. STAT.

ANN. § 62U.04; N.H. REV. STAT. ANN. § 420-G:1l-a; N.Y. Pus.

HEALTH LAW § 2816; Or. REV. STAT. § 442.466; R.I. GEN. LAWS

§ 23-17.17-10; TENN. CODE ANN. § 56-2-125; UTAH CODE ANN.

§ 26-33a-106.1; VT. STAT. ANN. tit. 18, § 9410; VA. CODE ANN.

§ 32.1-276.7:1; WASH. REV. CODE. ANN. 43.371.010; W. VA. CODE

§ 33-4A-2.

states with interest in developing an APCD.'° The

health care claims-payment data that states collect

can be used to analyze health care utilization, cost,

quality, and population health, as well as to support

health care reform initiatives. Some states also focus

on transparency for consumers,’ to better inform the

populace of the true costs of health care services. Two

states also use the data to regulate the rates that

health insurance companies charge consumers.””

In an effort to harmonize state activity around

APCDs, the APCD Council has worked with states

across the country on a variety of matters related to

APCD development, including: coordinating stakeholder

meetings; reviewing legislation; assisting with rule

cdcouncil.org/state/map (last visited Aug. 27, 2015).

'! See, e.g., CONN. GEN. STAT. § 19a-724(f) (2013).

‘2 New Hampshire currently uses the data to regulate rates,

while Arkansas recently transferred its data collection efforts to

the insurance rate review section, to facilitate their use of the

data to regulate insurance rates. Laws like those of New Hampshire

and Arkansas may be afforded further protection from preemp-

tion under ERISA’s savings clause which provides that nothing

in ERISA “shall be construed to exempt or relieve any person

from any law of any state which regulates insurance, banking or

securities.” 29 U.S.C. § 1144(bX 2A). To be saved from preemp-

tion, a state law must (1) be “specifically directed toward entities

engaged in insurance,” and (2) “substantially affect the risk pool-

ing arrangement between the insurer and the insured.” Kentucky

Ass’n of Health Plans, Inc., v. Miller, 538 U.S. 329, 342 (2003). If

a state’s data collection law is used to inform a state’s health

insurance rate review process or administration of risk adjust-

ment, it would substantially affect the risk pooling arrangement

between insurers and insureds because it would dictate the rates

that an insurer may charge, and thereby alter the scope of

permissible bargains between insurers and insureds.

development; assisting with vendor selection; provid-

ing analytics support; linking states to one another to

find common solutions; and leveraging state resources

to achieve common objectives. Among the APCD Coun-

cil’s efforts is publication of a manual that provides a

framework for states to develop their own APCDs."* In

addition, the APCD Council published model legisla-

tion to encourage legal consistency among states."

2. Data are Used for a Variety of Purposes

APCDs are unique administrative datasets that con-

tain information, across all payers, for all ages, in one

database, and can supplement the information availa-

ble through other more limited and restricted data

sources. These databases generally include data derived

from medical claims, pharmacy claims, eligibility files,

provider (physician and facility) files, and dental claims

from private and public payers. Given the breadth

of APCDs, analysis of these data can answer many

important health services research questions for policy

makers, consumers, employers, providers, insurers,

and researchers. Research and policy questions that

can be answered using APCDs include:

e Which providers have the highest prices?

e How far do people travel for services? Which

services are they travelling for?

e Which parts of the state have better access to

specialists?

'8 APCD COUNCIL, ALL-PAYER CLAIMS DATABASE DEVELOPMENT

MANUAL (Mar. 2015), available at https://www.apcdcouncil.org/

manual.

“ APCD COUNCIL, MODEL APCD LEGISLATION (May 2015),

available at https//www.apcedcouncil org/publication/model-all-

payer-claims-database-legislation.

e Which parts of the state have better access to

dental care?

e Are services for mental health, substance use,

or primary care available in rural areas?

e What are the drivers of high cost patients and

hospital readmissions?

e If emergency room usage in Medicaid is higher

than in the commercially-insured population,

what are the drivers?

e What are the utilization patterns and rates for

Medicaid compared to commercial insurance?

e What are the testing, treatment, and screening

trends for communicable diseases? What are

the gaps in disease prevention and health

promotion services?

e What percentage of the population has had a

mammogram?

e What is the average length of time people are

using antidepressant medications and what are

the patient demographics?

States are developing APCD reporting systems to

fill these critical information gaps, to ensure accessi-

bility of data to a broad variety of users, to promote

health care transparency initiatives, to improve admin-

istrative simplification in the provision of health care

services, and to provide actionable information for

their stakeholders.*®

‘6 APCD CoUNCIL, ALL-PAYER CLAIMS DATABASE DEVELOPMENT

MANUAL (Mar. 2015), available at https//www.apedcouncil.org/

manual.

Examples of ways that states have used APCDs are

described below.

Pricing Variation: A New Hampshire report

released in the fall of 2007 and updated in 2012 uses

both APCD data as well as hospital discharge data to

look at pricing of inpatient and outpatient services in

the state."*

Preventive Health Care Services in Medicaid:

The New Hampshire Office of Medicaid Business and

Policy has published a report comparing the use of

preventive health services for those covered by Medicaid

versus commercial insurance. The findings of the study

highlight opportunities for improvement in the use

of preventive services (e.g., cancer screening, asthma

medication) in the Medicaid population.*’

Disseminating Administrative Data: New

Hampshire has a web-based reporting and query sys-

tem, known as HealthWRQS, for the dissemination of

data collected systematically by state agencies for pub-

lic health purposes. It provides community-level infor-

mation about the burden of cardiovascular disease and

mental illness, and the treatment of those conditions."®

Burden of Adverse Drug Events: Researchers in

Maine and New Hampshire analyzed data from the

'® KATHARINE LONDON ET AL., ANALYSIS OF PRICE VARIATIONS

IN NEW HAMPSHIRE HOSPITALS (Apr. 2012), available at

http//www.nh.gov/insurance/lah/documents/umms.pdf.

‘7 NEW HAMPSHIRE COMPREHENSIVE HEALTH CARE INFO. SYS.,

ADULT PREVENTIVE HEALTH CARE IN NEW HAMPSHIRE ISSUE

BRIEF — JUNE 2009, available at http-//www.dhhs.nh.gov/ombp/

documents/adultpreventivebrief. pdf (last visited Aug. 27, 2015).

‘8 Healthcare Claims Indicator Report Module, NH HEALTH

WRQS, https:/vww nhhealthwrqs.org/HealthWRQS2?SubSystem-

CLAIMS (last visited Aug. 27, 2015).

APCDs of those states to determine the scope and costs

associated with adverse drug events.'®

Health Care Delivery Efficiency Improvement:

The Minnesota APCD is used to assess the opportuni-

ties for greater health care efficiencies.”

Spending Trends in Health Care: Massachusetts

relies upon the APCD data to develop an annual report

examining trends in commercial medical spending

including overall spending trends and spending by cat-

egory of service, type of episode, and region using data

from the Massachusetts APCD.?!

Health Cost Transparency: Price transparency

websites that contain comparison prices for a variety

of common healthcare procedures allow consumers

and employers to identify accessible low cost providers

in their area for health care services. Examples include

NH HealthCost” and Maine HealthCost.* Like Maine

1° PATRICK MILLER ET AL., ISSUE BRIEF: UTILIZATION AND COSTS

FOR ADVERSE DRUG REACTIONS IN MAINE AND NEW HAMPSHIRE:

2005-2007 (2009), available at https//chhs.unh.eduw/sites/chhs.

unh.edu/files/doca/nhihpp/2009_09_03ADElIssueBrief. pdf.

7 MINN. DEP’T OF HEALTH, AN INTRODUCTORY ANALYSIS OF

POTENTIALLY PREVENTABLE HEALTH CARE EVENTS IN MINNESOTA

(2015), available at http//www_.health.state.mn.us/healthreform/

allpayer/potentially_preventable_events_072115.pdf.

21 CTR. FOR HEALTH INFO. AND ANALYSIS & HEALTH POLICY

COMM’N, MASSACHUSETTS COMMERCIAL MEDICAL CARE SPENDING:

FINDINGS FROM THE ALL-PAYER CLAIMS DATABASE 2010-2012

MEDICAL CLAIMS PAYMENTS FOR THE THREE LARGEST COMMERCIAL

PAYERS (July 2014), available at https://www.mass.gov/anf/docs/

hpe/aped-almanac-chartbook. pdf.

“NH HEALTHCOsT, https://Awww.nhhealthcost.org (last visited

Aug. 27, 2015).

33 MAINE HEALTHCOST, https://Amhdo.maine gov/healthcost2014/

CostCompare (last visited Aug. 27, 2015).

and New Hampshire, several states cater directly to

health care consumers.“ And consumers are experi-

encing direct benefits from cost transparency. For

example, when a six-year-old girl cut her eyebrow and

needed stitches, the girl’s mother was able to compare

emergency room costs for that procedure on the NH

HealthCost website. Id. She used the data to save $500

by driving to a hospital 20 minutes further than the

one closest to her home. /d. Insurers are using the

health care cost data too. The largest health insurer in

New Hampshire was able to renegotiate a hospital

contract after discovering that the hospital was charg-

ing rates that were 50% higher than other hospitals.”

3. Data Collection and Reporting is Stand-

ardized and Routine

States have developed APCDs by leveraging exist-

ing data systems in place for the claims adjudication

processes, i.e., the processes by which claims are

submitted to and paid by health insurers. State-based

claims data systems collect data from the commercial

carriers’ data storage systems. Providers of care and

payers exchange data on these systems for the pur-

poses of adjudication. The state APCDs collect data

elements that are typically part of the adjudication

process for both private and public payers, such as

Centers for Medicare and Medicaid Services (CMS).

* Elizabeth Cohen, How to Save Money on Health Care, CNN,

(Mar. 4, 2010), available at https:/Awww.cnn.com/2010/HEALTH/

03/04/medical.waste/.

* Beth Kuscher, How New Hampshire Took the Guesswork Out

of Healthcare Costs, MODERN HEALTHCARE (July 16, 2015),

available at http?//Awww.modernhealthcare com/article/20150716/

NEWS/1507 19922.

Therefore, the collected data already exists and is

readily accessible in the payer’s system.

Because claims data are generated for billing pur-

poses, the data elements are generally available across

payer systems. Uniformity of data submisrion is

important, both for reasons of comparability within

and across states and to reduce the payers’ burden to

submit data to different states in different formats. To

address these issues there are initiatives to standardize

data reporting formats.” In fact, “{iJn 2010 and 2011,

the APCD Council convened a Technical Advisory Panel

to build consensus around the APCD data collection

standardization process.” Jd. Several large health insur-

ers participated on the panel including Aetna, Cigna,

Humana, and Kaiser Permanente. Jd. Early efforts in

standardization have resulted in industry reporting

standards that align with both state reporting needs

and payer reporting capabilities. Jd.

4. Data Completeness is Important

States have developed APCDs to answer important

public health, public policy and health care market

questions. The most accurate understanding of the

population in a state comes from analyzing compara-

ble data collected from the majority of the population.

Therefore, availability of data from both the insured

and self-insured population is critically important to

states for health care planning, public policy and eco-

nomic development.

In this case, Liberty Mutual seeks to avoid partici-

pation in this important data collection simply because

it is a self-insured plan. If APCD laws are found to be

preempted by ERISA, an employers’ choice to self-

*° Standards, APCD COUNCIL, https://www.apcedcouncil.org/

standards (last visited Aug. 27, 2015).

insure its workforce would result in a permanent lack

of critical claims data necessary for the improvement

of the health care system. The exclusion of data from

self-insured plans is not insignificant. The number of

participants in self-insured plans governed by ERISA

has been increasing over the last several years. As of

2012, that number reached 69.8 million.?’

B. The Presumption Against Preemption

Applies

“(T]he regulation of health and safety matters is

primarily, and historically, a matter of local concern.”

Hillsborough County, Fla. v. Automated Med. Labs.,

Inc., 471 U.S. 707, 719 (1985). Liberty Mutual must

“bear the considerable burden of overcoming ‘the start-

ing presumption that Congress does not intend to

supplant state law.” DeBuono v. NYSA-ILA Medical

and Clinical Services Fund, 520 U.S. 806, 814 (1997)

(quoting New York State Conference of Blue Cross &

Blue Shield Plans v. Travelers Ins. Co., 514 U.S. 645,

654 (19965)).

As an initial matter, the state data collection does

not encroach on ERISA’s objectives. California Div. of

Labor Standards Enforcement v. Dillingham Const.,

NA., Inc., 519 U.S. 316, 325 (1997). The Second Circuit

majority opinion mistakenly declares “reporting” to be

a core ERISA function, Donegan, 746 F.3d at 508,

without analyzing the distinction between the type of

information required by the Department of Labor and

that required by the state laws, and in direct contra-

vention of the Department of Labor’s position. Brief

77 CONSTANTIN PANIS & MICHAEL BRIEN, SELF-INSURED HEALTH

BENEFIT PLANS 2015 BASED ON FILINGS THROUGH STATISTICAL

YEAR 2012 (2014), available at http://www .dol.gov/ebsa/pdf/ACA

SelfFundedHealthPlansReport2015.pdf.

for Acting Secretary of the United States Department

of Labor as Amicus Curiae Supporting Defendant-

Appellee (Gobeille) at 12-14, Donegan, 746 F.3d 497

(2d Cir. 2014) (No. 12-4881) [hereinafter DOL Second

Circuit Amicus Brief]. The core functions of the ERISA

statute are “determining the eligibility of claimants,

calculating benefit levels, making disbursements,

[and] monitoring the availability of funds for benefit

payments.” Fort Halifax Packing Co. v. Coyne, 482

U.S. 1, 9 (1987). While plans are required to furnish

reports, 29 U.S.C. §§ 1021-30, those reports relate to

the provision of benefits to participants and the finan-

cial soundness of the plans (e.g., “monitoring the avail-

ability of funds for benefit payments”).

As the Department of Labor made clear, it does not

collect the data sought by the states, and there is no

overlap between the reporting requirements of the fed-

eral and state governments. DOL Second Circuit Amicus

Brief at 13 (the Vermont law “does not impose conflict-

ing data collection or reporting requirements... and

does not appreciably add to the burdens of complying

with ERISA reporting requirements or serve the same

purpose as ERISA’s reporting regime”).

The Second Circuit also found that the state laws

are burdensome (albeit without any record support).

Donegan, 746 F.3d at 509, 515. Liberty Mutual never

presented evidence that complying with the law con-

stituted a burden. In fact, its third-party administra-

tor, which maintained the data, was by all accounts

“happy to provide the data Vermont has asked for, and

it does so for other clients.” Jd. at 515 (J. Straub, dis-

senting in part and concurring in part).

The APCD laws are not burdensome. They do not

require any recordkeeping, and only require plans (along

with all other health care payers) to report information

already in their possession. And while a multiplicity of

reporting regimes theoretically could impact plans so

adversely as to alter their benefit structure, states are

working together, through the APCD Council and other

entities, to minimize such burdens. For instance, a model

law promotes uniformity for states enacting their own

legislation. MODEL APCD LEGISLATION, supra note 14.

And states have used existing claims adjudication pro-

cesses as the basis for the reporting requirements,

thereby limiting the impact of the administrative bur-

den of compliance. Standards, supra note 26.

As a result, the presumption against preemption is

not overcome, since the states’ reporting laws are laws

of general applicability with only incidental impact on

ERISA plans. Travelers, 514 U.S. at 661.

Il. State Health Care Data Collection Laws Do

Not “Relate To” ERISA Plans

In recognition of the strong presumption against

preemption, 20 years ago, this Court rejected its pre-

viously broad reading of ERISA’s preemption clause.

Travelers, 514 U.S. at 655 (1995). That clause, Section

514(a) of ERISA, 29 U.S.C. § 1144(a), preempts “any

and all State laws insofar as they may now or hereaf-

ter relate to any employee benefit plan” covered by

ERISA. The Travelers Court explained that the words

of limitation (“insofar as they . . . relate”) would effec-

tively be limitless “[i]f ‘relate to’ were taken to extend

to the furthest stretch of its indeterminacy[.]” Travelers,

514 US. at 655. If so, “preemption would never run its

course, for ‘really, universally, relations stop nowhere[.}”

Id. (quoting H. James, Roderick Hudson xli (New York

ed., World’s Classics 1980)). This Court acknowledged

that its “prior attempt(s} to construe the phrase ‘relate

to’ dlid] not give [] much help drawing the line.” Jd.

at 655. Ultimately, Travelers stands for the “rejection

of a strictly literal reading of § 514(a).” DeBuono,

520 U.S. at 813.

The New York statutes at issue in Travelers

required hospitals to collect surcharges from patients

covered by a commercial insurer but not from those

insured by a nonprofit Blue Cross/Blue Shield plan.

Travelers, 514 U.S. at 649. They also subjected certain

health maintenance organizations to surcharges based

on the number of Medicaid recipients they enrolled. Jd.

This Court determined that these laws did not “relate

to” ERISA because they “affect only indirectly the rel-

ative prices of insurance policies, a result no different

from myriad state laws in areas traditionally subject

to local regulation, which Congress could not possibly

have intended to eliminate.” Id. at 668.

Even prior to Travelers, only two categories of state

laws were found to be “related to,” and, thus, preempted

by, ERISA: “those that mandate employee benefit struc-

tures or their administration . . . and those providing

alternative enforcement mechanisms.” Jd. at 657-8 (cit-

ing Shaw v. Delta Air Lines, Inc., 463 U.S. 85, 97

(1983); FMC Corp. v. Holliday, 498 U.S. 52, 60 (1990);

Alessi v. Raybestos-Manhattan, Inc., 451 U.S. 504, 524

(1981); Ingersoll-Rand Co. v. McClendon, 498 U.S.

133, 141 (1990)).

In Shaw, for example, the preempted state statutes

“relate[d] to’ benefit plans” by “prohibit{ing] employers

from structuring their employee benefit plans in a

manner that discriminate|[d] on the basis of pregnancy”

and by “requir[ing] employers to pay employees spe-

cific benefits.” Travelers, 514 U.S. at 657 (quoting

Shaw, 463 U.S. at 97, 103). Likewise, a Pennsylvania

antisubrogation law was found to be related to

employee benefit plans because it “prohibited ‘plans

from. . requiring reimbursement [from the benefi-

ciary] in the event of recovery from a third party.” Id.

(quoting Holliday, 498 U.S. at 60). This resulted in

some Pennsylvania employees recovering benefits in

excess of what employees in other states received and

prevented plan administrators from calculating “uni-

form benefit levels nationwide.” Jd. Similarly, a New

Jersey law was found to be related to ERISA plans

because it “prohibit[ed] plans from setting workers’

compensation payments off against employees’ retire-

ment benefits or pensions because doing so would prevent

plans from using a method of calculating benefits

permitted by federal law.” Id. (citing Alessi, 451 U.S.

at 524).

The APCD laws at issue here do not implicate any

of the concerns in the cases cited above. The APCD

laws do not mandate employee benefit structures nor

do they provide alternative enforcement mechanisms.

They do not impose any conditions that would affect

the contractual relationship among the involved par-

ties. And their relationship to ERISA is even more

indirect than the surcharges at issue in Travelers

because APCD laws do not impose fees or taxes but

simply seek already-existing information from all health

care payers.

In deciding Travelers, this Court referred back to a

pronouncement made more than 10 years previously,

that a law “relates to” an employee benefit plan “if it

has a connection with or reference to such a plan.” Jd.

at 656 (quoting Shaw, 463 U.S. at 96-97). Determining

* The issue of whether the Vermont law makes “reference to”

ERISA is not before this Court. Liberty Mutual did not raise this

point in its Memorandum in Support of its Motion for Summary

Judgment in the district court or in its brief filed with the Second

Circuit.

whether a law has a “connection with” ERISA plans

can result in the same frustration as determining

whether a law is “related to” ERISA plans since “infi-

nite connections,” like “infinite relations cannot be

the measure of pre-emption.” Jd. at 656. Therefore, we

look to “the objectives of the ERISA statute as a guide

to the scope of the state law that Congress understood

would survive . . . as well as to the nature of the effect

of the state law on ERISA plans.” Dillingham, 519 U.S.

at 325 (quoting Travelers at 658-59). This analysis is

done under the “assumption that the historic police

powers of the States were not to be superseded by the

Federal Act unless that was the clear and manifest

purpose of Congress.” Jd. In pursuing this line of

inquiry, it is clear that the state APCD laws have no

“connection with” ERISA plans.

A. Congress Did Not Intend ERISA to

Supersede State Health Care Data

Collection Laws

The Second Circuit Court of Appeals incorrectly

seized on the fact that the federal law imposes “report-

ing” requirements on plan providers. Donegan, 746 F.3d

at 508. But this “misses the nuance of what ‘reporting’

A law contains an impermissible “reference to” ERISA plans,

where it “acts immediately and exclusively upon ERISA plans . .

or where the existence of ERISA plans is essential to the law’s

operation. Dillingham, 519 U.S. at 325 (citations omitted). The

Vermont law and the other APCD laws apply generally to all pro-

viders, purchasers and insurers, including self-insured plans gov-

erned by ERISA. It cannot be said that these statutes contain a

“reference to” ERISA plans. As laws applicable to “all payers,”

they do not “act{] immediately and exclusively upon ERISA

plans.” Jd. at 325 (citations omitted). As laws of general applica-

tion, “the existence of ERISA plans” is not “essential to the law[s’]

operation.” Id.

means in the context of ERISA.” Jd. at 511 (J. Straub,

dissenting in part and concurring in part). ERISA plan

administrators are required to provide a summary

plan description to participants and to file an annual

report with the Department of Labor. See 29 U.S.C.

§§ 1021-1030. The summary plan description notifies

participants of their rights and obligations under the

plan, while the annual report seeks financial and

actuarial information from the plan. See id. Among the

purposes of these reports is to ensure that the plan is

“operated according to instructions and in the best

interests of participants and beneficiaries” and to enable

participants “to know whether the plan [is] financially

sound and being administered as intended.” S. REP. No.

93-127, 93th Cong., 2nd Sess. 1974, 1974 U.S.C.C.A.N.

4838, 4863.

While the Department of Labor is authorized “to

undertake research and surveys and .... to collect,

compile, analyze and publish data, information, and

statistics relating to employee benefit plans,” 29

U.S.C. § 1143, the Department of Labor has stated

that it does not collect any of the data states are col-

lecting under these laws. DOL Second Circuit Amicus

Brief at 12. In fact, Congress’ primary concern, in enact-

ing ERISA, “was with the mismanagement of funds

accumulated to finance employee benefits and the fail-

ure to pay employees benefits from accumulated

funds.” Dillingham, 519 U.S. at 326-27; Massachusetts

v. Morash, 490 U.S. 107, 115, 109 (1989). Based on this

concern, Congress “established extensive reporting,

disclosure, and fiduciary duty requirements to insure

against the possibility that the employee’s expectation

of the benefit would be defeated through poor manage-

ment by the plan administrator.” Morash, 490 U.S. at

115.

Thus, the “reporting” mandated by Congress is of an

entirely different nature and scope from the “report-

ing” required by the states. Congress is concerned with

the solvency and viability of ERISA plans to ensure

that participants and beneficiaries are guaranteed

their benefits. States, on the other hand, are concerned

with the nature, cost, and quality of health care ser-

vices among all health care providers and carriers,

which just happens to include ERISA plans among a

number of other affected entities. There is no indica-

tion, in the law or legislative history that in enacting

ERISA, Congress had the “clear and manifest purpose”

of superseding the “historic police powers of the States”

with regard to health care policy. See Dillingham,

519 U.S. at 325. “[Nlothing in the language of the Act

or the context of its passage indicates that Congress

chose to displace general health care regulation, which

historically has been a matter of local concern.”

Travelers, 514 U.S.at 661 (citations omitted).

Of particular assistance in understanding ERISA’s

history is the fact that, just months after adopting

ERISA, the same Congress adopted the National Health

Planning and Resources Development Act of 1974

(NHPRDA). Pub. L. 93-641, 88 Stat. 2225, §§ 1-3,

repealed by Pub. L. 99-660, title VII, § 701(a), 100 Stat.

3799. “The NHPRDA sought to encourage and help

fund state responses to growing health care costs and

the widely diverging availability of health services.”

Travelers, 514 U.S. at 665 (citations omitted). The

NHPRDA ‘provided for the organization and partial

funding of regional ‘health systems agencies’ responsi-

ble for gathering data as well as for planning and devel-

oping health resources in designated health service

areas.” Id. In acknowledging the historic police powers

of states in matters of health care policy, Congress

asked the states to “gather data” in order to respond

to “growing health care costs.” Jd. This is precisely

what states are currently doing with the APCD laws

at issue here. Indeed, among the goals of the NHPRDA

was establishing state agencies to “regulat[e] rates for

the provision of health care.” Jd. at 666. Most states

with health care databases are not even taking the

extra step of “regulating rates” and are simply provid-

ing information to consumers, providers and others in

an effort to promote efficiency, efficacy and transpar-

ency in the provision of health care services.

The Travelers Court compared the purposes and

goals of the NHPRDA with New York’s hospital sur-

charge laws, finding that “the statutes’) provision for

comprehensive aid to state health care rate regulation

is simply incompatible with pre-emption of the same

by ERISA.” Id. at 667. Likewise, in comparing the pur-

poses and goals of the NHPRDA with the state APCD

laws, there can be no finding that Congress had any

intention of preempting such laws.

B. State Health Care Data Collection Laws

Do Not Interfere or Conflict with ERISA

In applying ERISA preemption, the Second Circuit

focused on the fact that different states may collect dif-

ferent data leading to a lack of “national uniformity”

in data collection that would be burdensome to self-

insured plans. The Second Circuit explained that

“(preemption ‘was intended to ensure that plans and

plan sponsors would be subject to a uniform body of

benefits law .. to minimize the administrative and

financial burden of complying with conflicting direc-

tives among States or between States and the Federal

Government.” Donegan, 746 F.3d at 504-05 (citations

omitted). But uniformity in health care data reporting

is not the type of uniformity that ERISA is concerned

with.

The statutes that have been found to interfere with

national uniformity include those that “mandated

employee benefit structures or their administration.”

Travelers, 514 U.S. at 658. These preempted statutes

have included the following: a law that prohibited “a

method of calculating pension benefits that federal

law permit(ted]”; a law that “required employers to

provide certain benefits”; an antisubrogation law that

“require[d] plan providers to calculate benefit levels . .

based on expected liability conditions that differ[ed]

from those” in other states; and a law that prevented

administrators from “mak[ing] payments simply by

identifying the beneficiary specified by the plan docu-

ments” and, instead required them to “familiarize

themselves with state statutes so that they clould]

determine whether the named beneficiary’s status has

been ‘revoked’ by operation of law.” DeBuono, 520 U.S.

at 814-15 (citing Alessi, 451 U.S. at 524-25; Shaw, 463

U.S. 85; Metropolitan Life Ins. Co. v. Massachusetts,

471 U.S. 724 (1985)); Travelers, 514 U.S. at 657-58

(quoting Holliday, 498 U.S. at 60); Egelhoff v. Egelhoff

ex rel. Breiner, 532 U.S. 141, 142 (2001). These are the

types of laws that “frustrate plan administrators’ con-

tinuing obligation to calculate uniform benefit levels

nationwide.” Holliday, 498 U.S. at 60.

The state APCD laws at issue here have no impact

whatsoever on an ERISA plan’s calculation of benefit

levels. Furthermore, states enacting these laws are

seeking uniformity for reasons that have nothing to do

with ERISA. It is to the states’ advantage that they

collect data in a similar manner so that eventually, the

data can be compared with other states. The work of

the APCD Council, including the issuance of its model

law, helps ensure that these laws are harmonized

across the country. So, while states might request sub-

mission of different data fields from the already exist-

ing claims data held by plan administrators, this hardly

rises to the level of conflict ERISA preemption seeks

to avoid. Additionally, payers, providers and other

data submitters have the opportunity to participate in

the legislative process, to ensure that the burdens

across borders are minimized.

Nor would the incidental costs involved with provid-

ing the data require preemption of the state APCD

laws. “Any state tax, or other law, that increases the

cost of providing benefits to covered employees will

have some effect on the administration of ERISA

plans, but that simply cannot mean that every state

law with such an effect is pre-empted by the federal

statute.” DeBuono, 520 U.S. at 816. As the Travelers

Court explained, “cost uniformity was almost certainly

not an object of pre-emption, just as laws with only an

indirect economic effect on the relative costs of various

health insurance packages in a given State are a far

cry from those ‘conflicting directives’ from which Con-

gress meant to insulate ERISA plans.” Travelers, 514

US. at 662. “Pre-emption does not occur .. . if the state

law has only a tenuous, remote, or peripheral connec-

tion with covered plans, as is the case with many laws

of general applicability.” District of Columbia v.

Greater Washington Bd. of Trade, 506 U.S. 125, 130

n.1 (1992) (citations omitted). The state APCD laws,

which are laws of general applicability have only a

“tenuous, remote, or peripheral connection with covered

plans” and, therefore, cannot be found to be preempted.

CONCLUSION

For these reasons, the judgment of the Second

Circuit should be reversed.

Respectfully submitted,

GAIL SCIACCHETANO LISA SORONEN™

Deputy General Counsel Executive Director

JENNIFER MCADAM STATE AND LOCAL

Legal Counsel LEGAL CENTER

NATIONAL ASSOCIATION OF 444 North Capitol St., N.W.

INSURANCE COMMISIONERS Suite 515

1100 Walnut Street Washington, DC 20001

Suite 1500 (202) 434-4845

Kansas City, MO 64106 lsoronen@sso.org

(816) 783-8019 ‘

gsciacchetano@naic.org Counsel of Record

Counsel for Amici Curiae

September 3, 2015

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.