Weekend Update

The Senate Homeland Security and Government Affairs Committee will consider President Obama’s nomination for Office of Management and Budget Director Jacob “Jack” Lew on September 21. Govexec.com reported on Mr. Lew’s confirmation hearing before that Committee last week. The Federal Times reports that

If he gets the job of Office of Management and Budget director, Jacob Lew will push the Office of Personnel Management to respond to findings that the U.S. Postal Service overpaid its pension obligations by tens of billions of dollars, according to a written answer he provided on a Senate Homeland Security and Governmental Affairs Committee questionnaire.

Barron’s posted a Caris & Co.’s review of the pharmacy benefit manager (“PBM”) pricing environment.

In general, our conversations confirmed that there is not a meaningful step-down in industry pricing. However, increased scrutiny on the provisions and language included in PBM contracts could negatively impact margins in the future. Much of the focus is on “pass-through” contracts, which represent a small portion of PBM contracts (approximately less than 20%).

Pass through contracts is precisely the focus that the U.S. Office of Personnel Management established for the FEHB Program earlier this year.

FAIR Health, Inc., which has taken responsibility from Ingenix for managing two usual reasonable and customary databases for pricing out-of-network provider claims (as the result of a settlement with the New York Attorney General), offered an update on its efforts last month.

It has been a busy summer at FAIR Health. Our team has been working diligently to continue our progress in transferring Ingenix’s MDR and PHCS databases to FAIR Health, working with the Syracuse University-led Upstate Health Research Network (UHRN) on the initial methodologies for analyzing our claims data and producing our 2011 benchmark products, building FAIR Health’s Consumer Website, and putting in place the IT and operational infrastructure that will support all of our activities.  I am proud to report that we remain on schedule for the launch of our new claims database and the testing and demonstration of our innovative Consumer Website by fall 2010. The first set of data products derived from the new database will be released to customers on schedule in January 2011.