Due to the continuing winter weather problems here in DC (or South Buffalo), the House Federal Workforce Subcommittee has postponed tomorrow’s scheduled hearing on the Chairman’s bill, H.R. 4489, “The Federal Employees Health Benefits Program (FEHBP) Prescription Drug Integrity, Transparency, and Cost Savings Act.” According to the Politico, the House will be out of session until February 22.

The Politico reports that Senate Majority Leader Harry Reid (D Nev) is planning to keep the Senate in session in order to consider President Obama’s top priority a jobs bill.   Business Insurance reports that the COBRA / TCC subsidy extension in the bill will cover people who lose their employer sponsored coverage due to involuntary termination or reduction of hours (NEW) over the next three months. 


The Washington Post reports that the “President Obama and congressional leaders emerged from a rare bipartisan meeting on Tuesday pledging to work together on a range of issues, including a job-creation bill that lawmakers hope to pass this month, along with longer-term goals related to health care, trade and energy.” CNN Politics and the AP offer their perspectives on the political dance leading up to the President’s February 25 health care summit.

Happy Super Sunday!

The House Oversight & Government Reform Committee’s federal workforce committee will be holding a hearing Wednesday February 10 about its Chairman Stephen Lynch’s bill, HR 4489, The FEHBP Prescription Drug Integrity, Transparency and Cost Savings Act.  The hearing will begin at 10 am assuming that we are dug out from the snowcopalypse before then. The witness list has not been posted yet. The National Community Pharmacists Association recently sent Chairman Lynch a letter suuporting the bill but cautioning that

“There are several areas of the bill which we would encourage be modified. The current language establishes that the amount that the carrier plan may pay a PBM for a prescription drug may not exceed the drug’s average manufacturer price (AMP). The use of AMP as a pricing benchmark for the carrier, and in turn the pharmacy provider, is problematic unless AMP were to be significantly redefined or increased in such a way that truly reflects the retail pharmacy acquisition cost of a prescription drug, which is higher than a drug’s current AMP. Moreover, use of AMP would be inappropriate to pay for generic drugs because of the need for reimbursement policies to encourage the use of generics.

“In addition, the definition of AMP in the legislation is not appropriate because it includes mail order sales. It should only reflect sales to retail pharmacies. Without modification of these provisions, community pharmacy participation in the program would be threatened, reducing patients’ access to prescription medications.”

PCMA, the PBM trade association, has expressed its opposition to the bill.

The U.S. Office of Personnel Management has posted its 2009 health information technology and transparency report. The web page lists

The health plans [which] met OPM’s HIT, quality and price/cost transparency standards at the time this Guide went to press. As other plans bring these tools on line, we will add them to the list on our website. So, please check the updated information at www.opm.gov/insure before you make your healthcare decisions.

Congratulations to those FEHB plans.

The New York Times reports that

Democrats were also pushing to include [in the jobs bill that is the President’s current top legislative priority] an extension of unemployment benefits and of health care coverage for those out of work [which refers to the 65% COBRA / TCC subsidy program]. Discussions were also under way about potentially attaching other initiatives, including a provision to prevent a steep [21%] cut in Medicare payment rates for doctors.

As noted here last week, Congress needs to act on extending the COBRA / TCC subsidy program and avoiding the Medicare cut this month.

The Wall Street Journal yesterday featured an interesting interview with Wellpoint’s CEO Angela Braly. “‘It’s just not clear where we go from here,’ says the highest ranking woman in the Fortune 500, sounding as astonished as anyone about Scott Brown’s victory.”

OPM has created an Open Gov website that provides, among other things, links to various OPM data sources, such as federal employment statistics. There is a related OpenOPM web site where authorized users can share ideas.

Newly minted Republican Senator Scott Brown was sworn into office this evening. Is it a coincidence that Modern Healthcare is reporting that the “The White House plans to extend talks to Republican leaders in an effort to reshape health reform legislation in such a way that it can garner some GOP support.” According to the Politico, President “Obama told supporters at a Democratic National Committee fundraiser [today] that he wants to have a meeting with Republicans, Democrats and health care experts to go through the bills “in a methodical way.”

I’m a fan of common sense so I can only shake my head over a Politico report that while “the health care bill is in trouble, a series of narrow deals [with the exception of the so-called Cornhusker kickback] — each designed to win over a wavering senator or key interest group — is alive and well, despite voter anger over the parochial horse-trading that marked the rush toward passage before Christmas.”

Business Week reports that

40,000 to 50,000 American adults die each year from diseases that vaccines could have prevented, according to the report, Adult Immunization: Shots to Save Lives. The report was released jointly Thursday by the Trust for America’s Health, the Infectious Diseases Society of America and the Robert Wood Johnson Foundation.

The report’s authors encourage the development and implementation of a better strategy to get adults vaccinated for e.g., pneumonia (recommended for adults over 65).  The FEHB Program covers childhood and adult vaccinations in full.
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While ABC News reports that the Democratic leadership in Congress are attempting to resurrect the national healthcare bill, the AP reports that the President’s FY 2011 budget includes a number of smaller scale initiatives “to squeeze savings, expand coverage and improve quality, but no ambitious change that launches the nation on a path to health care for all.” Business Insurance reports that one of those initiatives is a proposal for Congress to extend the COBRA / TCC continuation coverage subsidy program to employees who are laid off from March 1, 2010, through Dec. 31, 2010, [who] would be eligible for the 65% premium subsidy for up to 12 months.” Absent Congressional action the program will not be available to employees who are involuntarily terminated after February 28, 2010.

Congress also must address soon the Medicare Part B reimbursement formula for physicians, which will be cut by 21% on March 1, 2010. That cut will affect FEHB plans two ways as the FEHB Program covers millions of annuitants over age 65. If the annuitant has Medicare Part B coverage, the FEHB plan will pay more as secondary carrier whenever Medicare reimbursement drops. If the annuitant does not have Medicare Part B coverage, then the FEHB fee for service plan is entitled to use the lower Medicare reimburement rates to pay doctors (5 U.S.C. Sec. 8904(b)).

Govexec.com reports that the budget proposal “recommends a 1.4 percent pay raise for civilian and military employees.”  Govexec.com further reports that the President’s FY 2011 budget with respect to the U.S. Office of Personnel Management

proposed measuring the health of enrollees in the Federal Employees Health Benefits Program to assess the program’s effectiveness. It’s not clear what health data the government would gather, or whether federal employees would be required to undergo screenings. But the administration is seeking funding for “new analytical capacity” so it can do more than simply evaluate FEHBP for fraud risks.

Obama also sought funding for wellness demonstration projects, similar to those OPM has set up in collaboration with neighboring agencies in downtown Washington.

Along the same lines, I noticed today that OPM has a web page about its new “Wolf Packs” which reads in relevant part:

President Obama’s Fiscal Year 2011 Budget and Performance Plans established requirements for hiring reform and employee satisfaction and wellness. OPM Director John Berry has established cross-cutting “wolf packs” that bring stakeholders together in three areas: Hiring, Veterans Employment, and Work/Life.

Work/Life Balance
Led by Marie C. L’Etoile, Work/Life Group Manager & Janet Smith, Talent Management Group Manager, the Work/Life (W/L) Wolf Pack is developing policies and programs to improve life in the workplace and to assist employees in balancing their work with life responsibilities (e.g., dependent care, work schedule flexibilities). There is a separate facilities review team led by Deputy Associate Director Tina McGuire that is developing a plan to improve work spaces and shared facilities, The W/L Wolf Pack has adopted a systematic approach to identifying solutions through survey of the OPM population. Results will be used to improve current programs and shape future W/L initiatives to satisfy employee needs. These programs and policies will gradually be promoted governmentwide.

I also noticed today that OPM has posted a draft strategic plan for the 2010-2015 period on its website.

National Underwriter reports that the House of Representatives will vote this week on a stand alone bill to repeal the McCarran Ferguson Act’s exemption of health and medical malpractice insurers from federal antitrust laws. This evidently is the first of the Speaker’s small ball initiatives. The insurance industry strongly opposes this change. National Underwriter reported earlier last week that

The American Academy of Actuaries said the legislative efforts to strip away the antitrust exemption for medical professional liability insurers “could preclude data collection and aggregation across companies, limiting competition, and potentially increasing premiums.”In a statement, the actuaries said they “urged policymakers to discontinue efforts to advance the repeal provision.”

The Wall Street Journal reported in November 2009 that

America’s Health Insurance Plans, the health-insurance industry’s trade group, said insurance is heavily regulated by the states, where antitrust laws mirror federal rules prohibiting price-fixing and collusion. “Insurers are only exempt from federal laws if there are state laws. We are not letting anyone off the hook here,” said William Schiffbauer, a health-insurance-regulation lawyer who consults for AHIP, among others. Robert Zirkelbach, an AHIP spokesman, said the group is specifically concerned about the fate of projects like one it recently introduced in Ohio where eight insurers collaborated to set up a new portal that doctors can use to file claims.

Tomorrow, the Office of Management and Budget releases the President’s proposed fiscal year 2011 budget. I will be interested to review the FEHBP provisions.On Friday, the Department Health and Human Services, along with its fellow regulatory agencies, the Labor Department, and the Internal Revenue Service, released interim final rules implementing the 2008 Wellstone Domenici mental health parity act, which became applicable to the FEHB Program on January 1, 2010. Because the regulations include several expansive interpretations of the new law, its changes take effect on January 1, 2011, for the FEHB Program. The regulation, which will be published on Tuesday, February 2, will be open for public comment for ninety days from that date.

The Democratic Congressional leadership continues to discuss the path forward on health care reform while the issues of jobs creation and deficit control take center stage in the wake of last night’s State of the Union message. CQ Politics reports that House leaders plan to bring small-scale health care legislation to the floor before the chamber leaves for its Presidents Day recess on Feb. 11, aides to Speaker Nancy Pelosi said Thursday. The Politico reports that “Some of these sidebar issues are issues that are very important,” Pelosi said. “They can be done. They can move quickly. And that’s not about one thing over the other. That’s about time. Everything is about time.” The Politico cites stripping the health insurance industry of its federal antitrust exemption is an example of a sidebar issue. I expect that many of the so-called immediate reforms in the House bill, HR 3962, and the Senate bill, HR 3590.

This is the list of immediate reforms from the House bill:

Sec. 101. National high-risk pool program.
Sec. 102. Ensuring value and lower premiums.
Sec. 103. Ending health insurance rescission abuse.
Sec. 104. Sunshine on price gouging by health insurance issuers.
Sec. 105. Requiring the option of extension of dependent coverage for uninsured young adults.
Sec. 106. Limitations on preexisting condition exclusions in group health plans in advance of applicability of new prohibition of preexistingcondition exclusions.
Sec. 107. Prohibiting acts of domestic violence from being treated as preexisting conditions.
Sec. 108. Ending health insurance denials and delays of necessary treatment for children with deformities.
Sec. 109. Elimination of lifetime limits.
Sec. 110. Prohibition against postretirement reductions of retiree health benefits by group health plans.
Sec. 111. Reinsurance program for retirees.
Sec. 112. Wellness program grants.
Sec. 113. Extension of COBRA continuation coverage.
Sec. 114. State Health Access Program grants.
Sec. 115. Administrative simplification.

While I don’t expect the Speaker’s small scale bills to be limited to these immediate reforms, I can see many of these provisions included in the small scale bills.

Modern Healthcare reports from the Senate side that “Key Senate leaders met for about an hour to help plot a workable course to pass stalled health reform legislation, with one [Sen. Tom Harkin (D Iowa)] predicting that a pathway would emerge over the next two weeks.” Evidently, neither the Senate nor the House leadership has ruled out use of the reconciliation sidecar approach discussed in the FEHBlog on Tuesday, but I can’t see it happening. I would not be surprised to see small scale reform happen. After Hillarycare died in 1994, Congress passed the smaller scale reforms of HIPAA in 1996 followed by the State Childrens Health Insurance Program in 1998. History is instructive.

The Politico reports that “Senate Democratic leaders said Monday that they don’t expect to have a decision on how to move forward with health care reform in time for President Barack Obama’s State of the Union address on Wednesday.” This comes as a surprise to me. The Washington Post reports today on House Majority Leader Steny Hoyer’s (D Md) comments today on possible options — no bill, a scaled back bill, and passing the Senate bill with a “sidecar” reconcilation bill that makes mutually acceptable changes to the Senate bill, such as the so called Cadillac tax compromise that was worked out before the Massachusetts election. The Senate can bypass filibusters with the reconciliation approach, but reconciliation measures must be budget related.

How is this restriction enforced? The Center on Budget and Policy Priorities explains that

While reconciliation enables Congress to bundle together several different provisions affecting a broad range of programs, it faces one major constraint: the “Byrd rule,” named after Senator Byrd of West Virginia. This Senate rule makes any provision of (or amendment to) the reconciliation bill that is deemed “extraneous” to the purpose of amending entitlement or tax law vulnerable to a point of order. If a point of order is raised under the Byrd rule, the offending provision is automatically stripped from the bill unless at least 60 senators vote to waive the rule. This makes it difficult, for example, to include any policy changes in the reconciliation bill unless they have direct fiscal implications. Under this rule, authorizations of discretionary appropriations are not allowed, nor are changes to civil rights or employment law, for example. Changes to Social Security also are not permitted under the Byrd rule.

In addition, the Byrd rule bars any entitlement increases or tax cuts that cost money beyond the five (or more) years covered by the reconciliation directive, unless these “out-year” costs are fully offset by other provisions in the bill.

Business Insurance reports today that Democratic Senators Blanche Lincoln (D Ark) and Evan Bayh (D Ind.) have announced their opposition to the use of the reconciliation sidecar. “But the No. 2 Democrat in the Senate, Dick Durbin, D-Ill., said reconciliation remained a viable option on health care.” Last week, the House Speaker ruled out a fourth option — simple House passage of the Senate bill — because she does not have the votes.

So we continue to wait. But one thing is certain. The moratorium on a 21% cut in Medicare and Tricare reimbursements to doctors ends in a little over four weeks. Medical News Today reports that “National groups [the American Medical Association, AARP, and the Military Officers Association of America] are calling for a permanent solution to the doctor payment formula and warning about a possible shortage in doctors and impending decline in Medicare payments.” But how can Congress provide a permanent solution when the President is about to propose a three year freeze on non-discretionary spending in next week’s FY 2011 federal budget proposal, according a New York Times report. Of course, it can do so because it is Congress. Alternatively, Congress can always kick the SRG can down the road a little bit farther, making the day of reckoning more imposing.

It was a very busy week, followed by a quiet weekend. The Democratic majority continues to consider its next steps on healthcare reform following last Tuesday’s special Senate election in Massachusetts, and I expect those next steps will be unveiled early this week and no later than the President’s State of the Union message on Wednesday, January 27.

House Federal Workforce Committee Chairman Stephen Lynch (D Mass.) has introduced a bill, H.R. 4489, to regulate the prescription drug pricing and use of prescription benefit managers in the FEHB Program. According to his press release,

Specifically, the FEHBP Prescription Drug Integrity, Transparency, and Cost Savings Act provides the Office of Personnel Management (OPM) greater oversight authority of the FEHBP’s prescription drug contracting and pricing methods in order to better ensure that federal workers are receiving the best benefits at the best price. Among the strong oversight provisions included in the legislation is a requirement that Pharmacy Benefit Managers (PBMs), who currently contract with individual insurance plans to provide FEHBP prescription drug benefits, return 99% of all rebates, market share incentives, and other monies received from pharmaceutical manufacturers for FEHBP business. In addition, the legislation would prohibit “drug switching” without prior physican approval, impose new disclosure and transparency requirements on PBMs in line with industry trends, and cap prescription drug prices paid by the FEHBP at the amount of the Average Manufacturer Price (AMP).

PCMA, the PBM trade association, was not pleased with the new bill. Its press release states in pertinent part

Congress has enough on its plate without also trying new experiments on the successful Federal Employees Health Benefits Program (FEHBP), one of our nation’s most proven health benefit programs. FEHBP is one of the best-functioning, well-regarded health programs in America and should not be subject to wholesale political changes.

The Subcommittee will hold a hearing on the bill next month.

Last week’s general health care reform compromise would postpone application of the Senate bill’s 40% excise tax on high cost plans from 2013 to 2018 for collectively bargained plans and state and local government employee plans. Joe Davidson of the Washington Post and Govexec.com report today that Majority Leader Steny Hoyer has announced that the compromise also will be extended to rank and file federal employees participating in FEHB plans.

IFAwebnews reports on a Heritage Foundation conference at which three former OPM directors questioned the Senate healthcare reform bill discussed the Senate bil provision that would authorize the OPM Director to contract for at least two multi-state health plans that would participate in the Senate bill’s state health insurance exchanges. The related Heritage Foundation analysis of the provision is here.

However, other press reports indicate that Mr. Hoyer’s announcement, while welcome, and the Heritage Foundation discussion assume a fact not in evidence — that the Senate bill in in play. The Washington Post reports tonight that

As Democrats continued to grapple with the consequences of their loss in Massachusetts, House Speaker Nancy Pelosi on Thursday eliminated the most obvious avenue for completing health-care reform, saying the House will not embrace the version of the legislation already approved by the Senate.

The Politico further reports that on the majority side of the aisle

Health care reform teetered on the brink of collapse Thursday as House and Senate leaders struggled to coalesce around a strategy to rescue the plan, in the face of growing pessimism among lawmakers that the president’s top priority can survive.

With Republican Scott Brown’s victory in the special election to fill the late Sen. Ted Kennedy’ seat, the Democrats lost their filibuster proof sixty seat majority in the Senate, the President and Congressional leadership are re-evaluating the course of health care reform. The President in an interview with ABC News today advised that the Senate should wait for Senator elect Brown to be sworn in before returning to health care reform. The President stated that

I would advise that we try to move quickly to coalesce around those elements of the package that people agree on.

The Politico reports that Senate Majority Leader Harry Reid (D-Nev.) echoed the president, saying, “We’re going to wait until the new senator arrives before we do anything on health care.” Modern Healthcare reports that

House Democrats planned to meet with disparate factions of their party in order * * * to find a baseline of reforms that could garner enough support to pass in short order.

“I think that’s a reasonable approach,” House Majority Leader Steny Hoyer (D-Md.) said.

So we all have some time to reflect.