AOA joins other groups seeking Supreme Court reversal of decision favoring ERISA authority

June 25, 2024
Groups representing doctors and states expressing interest in the case seeking the overturn of a lower court ruling. The request was submitted June 12.
Front view of the Supreme Court builing with American Flag

The AOA is siding with the state of Oklahoma and other health care organizations who seek a reversal of a lower court decision allowing federal Employee Retirement Income Security Act (ERISA) rules to supersede state regulation of insurance plans.

The amicus brief, filed by the American Dental Association (ADA), was supported by eight organizations that represent health care providers, including the ADA, the AOA, the American Association of Orthodontists, the American Academy of Pediatric Dentists and others.

The brief was filed June 12. ERISA, a 1974 law, sets a standard for the administration of most private-sector retirement and health plans in this country.

“This decision by the courts in Oklahoma to allow benefit managers to bypass state laws under the guise of ERISA is very important for us to monitor as a profession,” says Steven Eiss, chair of the AOA’s Third Party Center Committee.

“Many have passed laws to curtail the abuses of the vision and benefit managers and help prevent them from putting their bottom line ahead of what is best for patients,” Dr. Eiss continues. “The AOA is currently supporting the DOC Access bill in Congress, which would help close this loophole that plans are trying to use to get around complying with state laws.”

The ADA: Curb the confusion

The ADA is seeking review of the 10th Circuit’s decision in Pharmaceutical Care Management Association v. Glen Mulready decided last year. The ADA argues that the 10th Circuit’s decision invalidating the Oklahoma law conflicts with the Supreme Court’s holding in the case, Rutledge v. Pharmaceutical Care Management Association (2020). The Rutledge decision had brought much-needed clarity to legislators, regulators and providers, the amicus brief says. Until recently, that is.

The groups in the amicus brief endorse the state of Oklahoma’s position that the court’s interpretation of ERISA preemption encroaches on state authority.

According to the brief, several states also back the request for review: Arizona, California, Colorado, Connecticut, Delaware, Florida, Hawaii, Illinois, Indiana, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Nebraska, Nevada, New Hampshire, New Jersey, New York, North Carolina, Ohio, Oregon, Pennsylvania, Rhode Island, South Dakota, Texas, Utah, Virginia, Washington and the District of Columbia.

Said Linda Edgar, D.D.S., president of the ADA, in a news release: “The ADA and numerous health care organizations urge the court to take the opportunity to reemphasize its holding in Rutledge before other lower court decisions further muddy the water.”

What’s next?

“Our hope is that the Supreme Court orders the 10th Circuit to revise its opinion to be in line with the holding in Rutledge,” says AOA General Counsel, Mike Stokes, J.D. “As the amicus brief effectively explains, Congress intended for ERISA to harmonize benefits plan administration throughout the country, not to preempt states from legislating and regulating health care in general.

Stokes continues, “It’s too important to people’s lives for courts to remove it from all state oversight.”

If the Supreme Court fails to act, Dr. Edgar said in the ADA release, ERISA will continue to act as if it is not subject to “pro-patient and pro-provider state laws,” superseding historic oversight of insurance in respective states.

The decision would have obvious implications for optometry.

“This decision in Oklahoma conflicts with a Supreme Court decision upholding the limits on ERISA exemptions made in the 2020 case Rutledge versus Pharmaceutical Care Management Association,” Dr. Eiss says. “A higher-court decision could confirm that ERISA plans, such as employer-funded benefit plans, must still comply with the state laws that they are providing benefits in, would reduce confusion for the patients and providers, and ensure that all patients in the state are afforded the same protections.

“I think it is important for optometrists to report any vision plans operating in their state that are citing the ERISA exemption to bypass state laws to the AOA, as having this information may be useful to show how plans use this to overreach the laws they probably should be adhering to.”  

⏩ Learn more about the AOA and affiliates’ fight against VBM abuses.

If you or your practice experience difficulties with a health or vision plan, please report these challenges to the AOA Third Party Center at stopplanabuses@aoa.org.

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