ERISA preemption Archives - EMPLOYEE BENEFITS BLOG

From Clinic to Courtroom: Legislation and Litigation Limiting Prescription Practices

by Alden Bianchi | May 10, 2023 | Employee Benefits, Health and Welfare Plans

On April 20, 2023, McDermott’s Alden Bianchi was a speaker at the ERISA Industry Committee’s 2023 Annual Spring Policy Conference, which was held at the National Press Club in Washington, D.C. The panel in which he participated was entitled “From Clinic to Courtroom – Legislation and Litigation Limiting Prescription Practices,” and it covered three main topics: state regulation of telehealth; the regulation of specialty pharmacy supply chains and delivery measures (“brown bagging,” “white bagging” and “clear bagging”); and state-level efforts to regulate pharmacy benefit managers (PBMs) following the US Supreme Court’s 2020 Rutledge decision, which held that an Arkansas law regulating the costs of prescription drugs was not preempted by the Employee Retirement Income Security Act of 1974 (ERISA).

Here are some of the program’s key takeaways and predictions:

While telehealth is here to stay, the high cost of Medicare reimbursements presents an immediate barrier to widespread adoption, and the particulars of how telehealth will be regulated will be left largely to the states.
The battle over the delivery of specialty prescription drugs is heating up as PBMs seek to capture some of the margins previously available only to providers. State laws regulating pharmacies and pharmacists will be at the center of the battle, and future legislative efforts will likely be subject to challenge.
State legislatures have read the Rutledge decision broadly in ways that virtually guarantee a good deal of future litigation. It might take as long as a decade, and it may well take more than one trip to the Supreme Court before plans, issuers, providers, state legislators and regulators, and other stakeholders have a reliable understanding of the contours of ERISA preemption in the pharmacy context.

Accompanying this post are copies of Mr. Bianchi’s panel materials, including:

ERISA Preemption Developments in Managed Care

by Jeremy Earl and Kate McDonald | Apr 13, 2023 | Employee Benefits, Health and Welfare Plans

For plans governed by the Employee Retirement Income Security Act of 1974, 29 U.S.C. §§ 1001-1461 (ERISA), the doctrine of federal ERISA preemption over state statutes, regulations or administrative schemes has been a central subject of litigation since the inception of the statute. In December 2020, the US Supreme Court issued a decision on the subject in Rutledge v. Pharm. Care Mgmt. Ass’n, 208 L. Ed. 2d 327 (2020).

In the short, unanimous opinion, the Supreme Court in Rutledge held that ERISA did not preempt an Arkansas statute that regulates pharmacy benefit managers’ (PBM) drug reimbursement rates. Arkansas passed Act 900 in 2015 to regulate PBM reimbursement rates for pharmacies, which, in effect, established a reimbursement floor that requires PBMs to reimburse pharmacies at a rate that reflects the pharmacy’s acquisition cost for the drug in question.

Access this McDermott Health 2023 Annual Report (pg. 9).

Universal Health Bill Faces Steep Obstacles in New York

by Andrew Liazos | Aug 7, 2018 | Employee Benefits, Health and Welfare Plans

While momentum may be building for a single-payer health care system in New York, such a dramatic shift in the way health care is financed will have to overcome a number of significant obstacles. With ERISA preemption being one of those hurdles, Andrew Liazos comments, “There will be a challenge from somewhere. I don’t know who will lead the challenge, but I don’t think employer groups will just sit by idly.”

Access the full article.

Originally published in Bloomberg Law, August 2018.