The Wall Street Journal reports today on health care innovations. It’s a good read. There’s an interesting story about free Web 2.0 tools that can help people stay healthy such as The Carrot and Keas. Both of these sites are designed to help people quit smoking — expanded smoking cessation programs are a required 2011 benefit in the FEHB Program.

The New York Times reports on the Congressional Research Service report mentioned in Sunday’s FEHBlog which finds that Congress created problems for itself with the PPACA, which is the acronym for the health care legislation (pronounced “PEA-pack”). Yesterday, according to Govexec.com, Congress passed the first, but certainly not the last, technical correction to PPACA which concerns TRICARE, not our beloved FEHB Program.

Business Insurance reports that the Senate is close to approving a bill (H.R. 4851) which retroactively will extend the COBRA/TCC subsidy program and the moratorium on the 21% cut on Medicare Part B payments to doctors from April 1 through April 30, 2010. 

Business Insurance also reports that the Health and Human Services Department is readying the claim forms that employers can use to tap into PPACA’s temporary reinsurance program for plans which cover early retirees (aged 55 to 64).  The White House released a fact sheet on the program yesterday.  According to Business Insurance, “Congress allocated $5 billion for the program, which will begin June 23 of this year and end Jan. 1, 2014. However, unless Congress authorizes additional funding, the $5 billion fund is expected to be exhausted quickly.”  Yes, indeed.

Joe Davidson of the Washington Post reported about various organizations’ opinions on OPM’s April 7, 2010, call letter for 2011 benefit and rate proposals. NARFE strongly endorsed OPM’s request for carriers to propose sub-options that would better coordinate FEHB and Medicare primary coverage for annuitants in order to encourage them to remain in Medicare Part B.

OPM released its detailed OpenGov plan.

OPM released a letter to FEHB plan carriers concerning its health data warehouse project. As first announced in OPM’s FY 2011 budget, OPM will be collecting health plan claim and encounter data from carriers and their prescription drug managers in order to take a “holistic” approach to FEHB Program management and worksite wellness programs, among others.

A group of managed behavioral healthcare organizations, including health insurers, known as the Coalition for Parity, Inc., has filed a lawsuit in the federal district court here in DC challenging the legality of the February 2, 2010, federal regulations implementing the 2008 mental health parity act. Business Insurance reports that “The suit alleges that regulators failed to provide a “true and complete comment period [as required by the Administrative Procedure Act],” which has resulted in “confusing, flawed and untested requirements.” I agree. Here’s a link to the complaint. The presiding judge Hon. Colleen Kollar-Kotelly has ordered an expedited briefing schedule. The rule, which is discussed in OPM’s call letter, becomes applicable to the FEHB Program on January 1, 2011.

OPM has kicked off the 2011 contract year by issuing its annual call letter for benefit and rate proposals. Current and new carriers will have until May 31 to submit their proposals to OPM.  OPM settles on the 2011 benefit and rate packages by the end of August, and then carriers prepare for the 2011 Open Season. Good luck to all of the plans!

I thought that Hallmark created all of the new holidays, but it turns out that the International Foundation of Employee Benefits Plan has created National Employee Benefits Day which is celebrated today. The focus of the 2010 NEBD is promoting wellness in the workforce. And, as we know, OPM shares that goal.

Developed by Emory University researcher and highly respected health literacy expert Dr. Julie Gazmararian, the tool addresses the work of all departments and professionals in health plans that touch consumers via the written word, the spoken word, or the world-wide web.  It includes five sections that assess printed information for members, web navigation, member services/verbal communication, forms, and nurse call lines.  It evaluates policies, procedures, and training of professionals in clear health communication.

Happy Easter!  The Federal Times takes its shot at assessing the impact of the health care reform law on the FEHB Program.  Without a doubt, the most visible immediate impact will be the increase in the dependent children eligibility cap from age 22 to age 26 which takes effect on January 1, 2011, according to OPM. Moreover, this new law also permits married dependent children to continue their enrollment. Under the current law, children under age 22 lose FEHB coverage if they marry.

The fact is that there are a mountain of changes in this new 2,000 plus page law impacting health insurers, including those in the FEHB Program, which phase in over the next seven to eight years.  Here’s a link to the Kaiser Family Foundation’s implementation timeline. As you can see, 2014, the year that the health insurance exchanges are scheduled to become operational, is a big year. For more background, the Congressional Research Service has published a report on the taxes and fees created by the new law, such as the 40% excise tax on high cost plans and the health insurer fee.

The PPACA creates several new HIPAA electronic transaction requirements which begin to take in effect in 2013 right around the time that health plans must become compliant with the complex and expensive 5010 electronic transactions standards and the ICD-10-CM code set changes. I therefore was pleased to learn in a Health Date Management article that an industry group called the Committee on Operating Rules for Information Exchage (CORE), a CAHQ initiative.  Health Data Management reports that

 Mandates in the health reform law to adopt “operating rules” for a series of existing and new HIPAA transactions between 2013 and 2016 should easily be achievable, two consultants familiar with the health care electronic data interchange business say.
Industry stakeholders have worked for five years [though CORE] to reach consensus on the rules, which seek to make electronic claims and related transactions far more uniform than they are today, says Rachel Foerster, principal at Rachel Foerster & Associates Ltd., Beach Park, Ill.

The LA Times reflects on the tenth anniversary of the phenomenal scientific accomplishment of sequencing the human genome.  I do hope that the personalized medicine will bring down health care costs over time. A leading genetic scientist, J. Craig Venter, observes in the journal Nature

“Where will genomics be ten years from now? As sequencing capacity increases globally and the data quality improves, we will move beyond the current goal of one genome per person to sequencing multiple genomes per person from sources including sperm and egg cells, blastocysts, stem cells, pre-tumour cells and cancer cells. This will enable us to select healthy cells for reproduction and tissue transplants, or to better understand ageing and tumour development. Equally important for medical progress is the sequencing of the genomes of the millions of microbacteria that dwell within all of us. The genome revolution is only just beginning.”

Reuters reports that U.S. prescription drug sales in 2009 climbed by 5% in 2009 to just over $300 billion. The AP reports that “Sales of high-priced specialty drugs made up more than 20 percent of sales, up from 7.5 percent in 2008. Specialty drugs include injectable, biotech medications used to treat chronic conditions like cancer and psoriasis.”  The Patient Protection and Affordable Care Act created a regulatory pathway for approval of  “generic” versions of specialty or “large molecule” drugs (or “biosimilars”) which after a 12 year exclusivity period for the manufacturer.  The European Union which created this regulatory pathway in 2004 has approved several biosimilar drugs according to the Biotechnology Industry Organization.

Congress created a regulatory pathway for approval of generic versions of small molecule drugs in 1984.  Reuters notes that “The shift toward [small molecule] generics is likely to accelerate by 2012, when several major products, including the world’s two biggest-selling medicines – the cholesterol fighter Lipitor and the blood clot preventer Plavix – face competition from cheap generics.”

The President signed into law today the package of amendments to the Patient Protection and Affordable Care Act (H.R. 4872) that Congress passed on Thursday under its budget reconciliation rules.

A Wall Street Journal article captioned “Flap over Children’s Coverage Settled” incongruously discusses the FEHB Program in the context of a dispute over the scope of the new law’s restrictions on pre-existing condition exclusions:

Jade Harmer, 13, of Fredericksburg, Va., might be able to benefit from the health bill’s immediate provisions. Her mother, Tina Harmer, said the family’s insurance, a Blue Cross Blue Shield plan that is part of the Federal Employee Health Benefits Program, wouldn’t cover weekly $1,000 drug injections for Jade’s multiple sclerosis.
The Blue Cross Blue Shield Association, which administers the Harmers’ plan, couldn’t comment on the specifics of the case. But Jena Estes, a vice president there, said the drug in question was not approved for use in children.
Ms. Harmer applied to several other insurers but said her daughter was turned down because of her health condition. She was hoping that with the new health-care bill she could find a policy that would cover her daughter’s treatment.
“I’ve been keeping a close eye on health reform because I know it would help with pre-existing conditions, but a few things worry me,” said Ms. Harmer. “Is it what they say it is?”

As a parent, I sympathize with this mother, but I don’t get her point. The FEHB Program does not permit pre-existing condition exclusions or limitations, and it has a disputed claims process that is controlled by OPM, not the health plans, which is a very fair deal to federal and postal employees and annuitants. Off label use of prescription drugs is not a matter to be taken lightly considering recent federal prosecutions against drug manufacturers that alleged marketed off label uses for certain prescription drugs. The American Cancer Society offers a useful discussion of the topic on its website.

OPM released its Fiscal Year 2009 summary of performance and financial information report on its website today. The report on page 5 contains the following FEHBP discussion:

Since 1959, the Federal Employees Health Benefits Program (FEHBP) has offered group health insurance to Federal employees. Federal retirees were added to the program in the 1960’s. The FEHBP currently offers 232 health plan options which cover nearly 8 million Federal employees, annuitants, and their dependents.

On average, the Government contributes approximately 70 percent of the total premium cost of enrollments within the FEHBP. Federal agencies, as employers, pay their share of premiums out of the same resources appropriated or otherwise available for the payment of employee salaries. The Government’s share of premiums is approximately $40 billion for both current employees and retirees.

While the FEHBP directly bears the cost of health services, it is currently difficult to analyze those costs and actively manage the FEHBP program to ensure the best value for both Federal employees and taxpayers. In the past, OPM has not routinely collected, or analyzed, program-wide claims data. The capacities to collect, manage, and analyze health services data on an ongoing basis will allow OPM to: 1) understand the drivers of cost increases for Federal employees; 2) determine the best approach to developing worksite wellness programs; and 3) model the potential effects of health system reform or environmental changes on Federal employees.

During FY 2009, OPM developed a plan to reorient the management of the FEHBP by capitalizing on the collection and analysis of program wide claims data. The planned implementation will include:

Data Collection and Maintenance—Establish regular data feeds from the ten largest FEHBP plans (and major Pharmacy Benefit Managers); develop/test front end edits to assure data integrity and consistency across plans; manage data flows; assure and maintain data quality and integrity; manage data storage and back-up.

Analysis Support—Design database and linking routines to link claims to demographics, provider files, and other OPM maintained data sets; create databases that analysts can use to run specific analyses.

Data Warehouse—Development of a data warehouse application that will allow flexible queries of the data set—not only general demographic queries, but also risk-adjusted profiles, comparison of chronically ill patients, and other useful analytics.

Developing such a database and analytical capability will better position OPM to negotiate effectively with FEHBP carriers to keep Federal premium increases below industry-wide levels. This initiative will build OPM’s knowledge base and expertise, strengthening its ability to strategically shape future benefits design, and better position OPM to negotiate with the carriers.

Over time, this initiative will result in contained premium growth. The magnitude of the savings is not concrete at this time; however, just a 0.1 percent reduction in annual premium growth for three consecutive years yields savings of approximately $1.25 billion to the Program over ten years, and more specifically, $400 million in payments from the Government’s general fund for annuitant premiums over the same period.

OPM sought funding for this initiative in its FY 2011 budget proposal which Congress is considering.

Congress is now in recess until April 12.

Last week, a House Appropriations Subcommittee held a hearing on OPM’s FY 2011 budget proposal.  OPM Director John Berry testified. The Director noted that

Included in the OPM budget request is $7 million to start a data warehouse to analyze the claims experience of participants in the Federal Employees Health Benefits Program (FEHBP). Through this effort we hope to identify trends in employee health issues and potentially drive down costs through a better understanding of the Federal employee and retiree population’s most common health care needs.

Availability of health, wellness, and work-life options for Federal employees is a critical tool for improving the ability of the Government to recruit and retain a high-performing workforce. In 2010, OPM received an appropriation of $2,654,000 to develop and operate a comprehensive worksite wellness pilot program for the downtown Washington campus including GSA, Interior, and OPM. The development of Government-wide health and wellness policies and programs to provide employees with a meaningful balance of work and life will continue to be a top priority at OPM in FY2011.

The Politico reports that a bill (H.R. 4851) to further extend unemployment benefits, the COBRA / TCC subsidy program, and the moratorium on a 21% cut in Medicare Part B reimbursement to doctors stalled in the Senate over funding issues. The Senate will not take up this bill again until it returns from recess on April 12. As a result, the Medicare cut will take effect on April 1, although I expect that the Centers for Medicare and Medicaid Services (“CMS”) will instruct its Medicare administrators to hold Part B claims in order to allow the Senate to act. This development impacts the FEHB Program because there is a large cadre of annuitants with primary Medicare Part B coverage in the FEHB Program. Moreover, FEHB fee for service plans are entitled to use Medicare Part B pricing for claims incurred by annuitants who do not enroll for Part B (5 U.S.C. Sec. 8904(b)).

Modern Healthcare reports that President Obama is expected to nominate Donald Berwick, MD, to be the CMS Administrator.  CMS has not had a Senate confirmed Administrator since late 2006.  Here’s Dr. Berwick’s impressive CV from the Institute for Healthcare Improvement website:

Donald Berwick, MD, MPP, FRCP, President and CEO, Institute for Healthcare Improvement (IHI), is one of the nation’s leading authorities on health care quality and improvement. He is also Clinical Professor of Pediatrics and Health Care Policy at the Harvard Medical School, and Professor in the Department of Health Policy and Management at the Harvard School of Public Health. Dr. Berwick has served as vice chair of the US Preventive Services Task Force, the first “Independent Member” of the Board of Trustees of the American Hospital Association, and chair of the National Advisory Council of the Agency for Healthcare Research and Quality. An elected member of the Institute of Medicine (IOM), Dr. Berwick served two terms on the IOM’s governing Council and was a member of the IOM’s Global Health Board. He served on President Clinton’s Advisory Commission on Consumer Protection and Quality in the Healthcare Industry. He is a recipient of numerous awards, including the 1999 Joint Commission’s Ernest Amory Codman Award, the 2002 American Hospital Association’s Award of Honor, the 2006 John M. Eisenberg Patient Safety and Quality Award for Individual Achievement from the National Quality Forum and the Joint Commission on Accreditation of Healthcare Organizations, the 2007 William B. Graham Prize for Health Services Research, and the 2007 Heinz Award for Public Policy from the Heinz Family Foundation. In 2005, he was appointed “Honorary Knight Commander of the British Empire” by the Queen of England in honor of his work with the British National Health Service. Dr. Berwick is author of numerous articles and the books Curing Health Care and Escape Fire.