Employer, provider groups file lawsuit on HB 335

A group of employer and health care provider organizations have filed a lawsuit asking the federal district court in Jefferson City to declare that the pharmacy provisions of 1997's Missouri House Bill 335 violate the federal Employee Retirement Income Security Act, according to a Dec. 22 press release from the group.

The lawsuit filed by Associated Industries of Missouri, Express Scripts Inc., the Missouri Chamber of Commerce and the St. Louis Area Business Health Coalition asserts the pharmacy provisions of HB 335 illegally impede the design and administration of affordable pharmacy benefits provided by employers in accordance with ERISA.

The suit names the Missouri Department of Insurance as the defendant because the department is responsible for enforcing HB 335 and promulgating regulations to implement the pharmacy provisions, the release stated.

"Under federal law, employers have the flexibility to create mail service and retail network pharmacy benefit plans that make the most sense for their own employees," said Jim Stutz, executive director of the St. Louis Area Business Health Coalition, in the release.

"The use of exclusive mail pharmacy service in addition to a retail network by such plans also can reduce distribution and other costs, making it possible to broaden access to long-term supplies of medications, especially for consumers suffering from chronic conditions," Stutz added.

Chris Long, president of Associated Industries of Missouri, said many Missouri HMOs are quoting premium increases between 15 percent and 25 percent, due in part, he said, to the "onerous pharmacy provisions" within HB 335.

Long added, "Pharmacy costs are increasing at a faster rate than other components of health care and, for many employers, pharmacy costs are the most expensive part of their health care package. A successful suit can reduce these increases, thus creating an incentive for more businesses to design quality and cost-effective health care benefit packages without increasing co-pays and deductibles, scaling back benefits, or dramatically increasing the cost of goods and services they produce."

Dan Mehan, president of the Missouri Chamber of Commerce, stated, "The federal ERISA statute prohibits states from telling employers how to design a health benefit plan for their employees unless the state law relates directly to regulating the business of insurance."

The group's lawsuit argues that the state went beyond the business of insurance regulation by passing the pharmacy provisions of HB 335.

Stutz said the law's limits on the flexibility of a health plan to contract with select providers to deliver a particular pharmacy benefit have negatively impacted consumers through higher costs.

Meanwhile, Long said, "We want to stress that this legal action does not challenge other provisions of the managed health care reform law. Employers support provisions in the law that ensure the right of doctors to freely discuss treatment options with patients, improved access to simplified consumer information, streamlined appeals process, and more. The suit focuses only on the pharmacy provisions."

Similar provisions of state managed health care reform packages passed by legislatures in other states, such as Arkansas, Louisiana and Texas, have been invalidated by the courts under ERISA, the release stated.

David Harris, of the St. Louis law firm of Greensfelder, Hemker & Gale PC, is representing the plaintiffs in the lawsuit.

Associated Industries of Missouri represents more than 1,500 Missouri employers. The Missouri Chamber of Commerce represents almost 3,000 Missouri employers. The St. Louis Area Business Health Coalition represents 44 large employers providing health benefits for more than 400,000 individuals in the Greater St. Louis Area.

Express Scripts Inc. is a self-insured employer with more than 1,200 employees in Missouri. The company manages prescription drug benefits for self-insured employers and managed care companies.

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