Weekend Update – Miscellany

  • NY Attorney General Andrew Cuomo expanded his investigation of the Ingenix usual reasonable and customary fee database last week by issuing new subpoenas to Aetna, Cigna, United Healthcare (which owns Ingenix), Wellpoint and other major managed care companies. Modern Healthcare.com reports that

    Cuomo is seeking all e-mail correspondence involving the companies’ CEOs, chief operating officers, chief fiscal officers, presidents and employees supervising claims. He also wants any records that might question the accuracy of reimbursements that he says are too low.

    Cuomo also is interested in taking testimony from the CEOs of these companies. The Dow Jones newswires reported on Thursday that “Empire Blue Cross Blue Shield said it hasn’t found any evidence that its use of data from UnitedHealth Group Inc.’s (UNH) Ingenix was defective as it cooperates with the New York Attorney General’s office.” The Wall Street Journal reports today that “UnitedHealth spokesman Tyler Mason says, “We are in the midst of talks with the attorney general’s office, and we will continue to fully cooperate.” The managed care trade association AHIP “decried” the expansion of the investigation according to Modern Healthcare.com

  • There are two Average Wholesale Price class actions pending in the U.S. District Court for the District of Massachusetts — one is an action against several prescription drug manufacturers who allegedly improperly inflated the AWP and the other is an action against First Databank and McKesson who allegedly conspired to inflate an AWP factor. On Friday a settlement in the first case was announced by plaintiffs’ counsel:

    Today eleven major pharmaceutical companies, including Abbott Laboratories (NYSE: ABT) and Watson Pharmaceuticals (NYSE: WPI), agreed to a $125 million nationwide settlement in the average wholesale price (AWP) litigation filed in 2002 by consumers and insurance companies, which claimed the defendants intentionally inflated reports of the average wholesale prices on certain prescription drugs. The defendants included in today’s settlement are Abbott Laboratories, Amgen Inc., Aventis Pharmaceuticals Inc., Hoechst Marion Roussel, Baxter Healthcare Corp., Baxter International Inc., Bayer Corporation, Dey, Inc., Fujisawa Healthcare, Inc., Fujisawa USA, Inc., Immunex Corporation, Pharmacia Corporation, Pharmacia & Upjohn LLC, Sicor, Inc., Gensia, Inc., Gensia Sicor Pharmaceuticals, Inc., Watson Pharmaceuticals, Inc., and ZLB Behring, L.L.C. Drugs covered in this settlement include Aranesp, Epogen, Neupogen, Neulasta, Anzemet, Ferrlecit and Infed. Two major defendants — AstraZeneca and Bristol-Myers Squib – not part of settlement.

    Plaintiffs’ counsel in the second action asked the Court last week to schedule a status conference at which the plaintiffs and First Databank will present a revised settlement agreement as directed by the Court at a January 22, 2008, hearing. The Court scheduled the hearing for March 19.

  • Modern Healthcare.com reports that “The CMS is heading in the right direction on value-based purchasing, but it should not be used as a vehicle to reduce Medicare spending, hospital leaders said during a roundtable hosted by the Senate Finance Committee.”
  • OPM submitted a short term disability program bill to Congress on Friday. According to OPM’s press release, “Under the proposal, participation would be voluntary and insurance premiums would be fully paid by the policy holder.” Thursday’s House Federal Workforce subcommittee hearing indicates that this proposal will not be well received on Capitol Hill. OPM’s Capitol Hill problems are illustrated in this Federal Times article about OPM’s legislative proposal to rehire more annuitants (S 2003 and HR 3579).