The U.S. Office of Personnel Management (“OPM”) proposed two regulations today.

The first proposal would modify OPM’s regulations governing sick leave, funeral leave,voluntary leave transfer, voluntary leave bank, and emergency leave transfer to better define certain affinity relationships with respect to which an employee may use leave. These examples include step-parents and step-children, grandparents, grandchildren, and same sex and opposite-sex domestic partners. Thus, an employee could use leave to attend the funeral of a step parent or to care for a domestic partner.

OPM described this proposal as a clarification of existing guidance designed to implement President Obama’s June 17, 2009 Memorandum on Federal Benefits and Non-Discrimination. OPM explains that its regulation would not impact statutory benefits available under the Family and Medical Leave Act. OPM’s goal is “to make the application of the leave program across the Federal Government as uniform as possible.

The second OPM proposal would “expand eligibility to apply for coverage under the [voluntary, employee pay all] Federal Long Term Care Insurance Program (FLTCIP). Under the proposed regulation, the definition of ‘qualified relative’ is expanded to cover the same sex domestic partners of eligible Federal and U.S. Postal Service employees and annuitants.”

The proposed regulations are open for public comment until November 13, 2009, at regulations.gov.

The Lewin Group, which is a subsidary of United Healthcare, prepared a study for the Peter G. Peterson Foundation which concludes that the House leadership bill, H.R. 3200,

would expand health insurance coverage and reduce the number of people who are uninsured. However, the analysis also shows that overallhealth care costs will increase, not decrease, as a result of expanded coverage and other provisions in the legislation. From the perspective of the federal budget, the study shows the Act would nearly achieve President Obama’s goal of paying for itself over the next 10 years. In the second 10 years, however, the proposal would add an estimated $1 trillion to the federal deficit * * * excluding debt service costs) due to rapid growth in health care costs that will outpace the growth in incomes and revenues over the longer-term.

The Politico reports that Senate Finance Committee Chairman Max Baucus (D Montana) will release his bill “as early as [this coming] Tuesday.” The last Gang of Six bipartisan meeting will be held tomorrow. The Domestic Policy Committee of the House Oversight and Government Reform Committee will hold a two day long hearing this week to examine the health insurance bureaucracy. According to the Committee’s press release,

On Wednesday, September 16 at 10:00 a.m. in Rayburn House Office Building,
Room 2154, the Subcommittee will hear testimony from patients and health care
providers with personal experience struggling against the bureaucracy of private
health insurance companies to secure needed medical care. The committee will
also hear from a whistleblower; a former health insurance executive who will
testify about internal practices of the industry.

The second part of the hearing on Thursday, September 17 at 2:00 p.m. in the same location will hear testimony from top executives of the 6 largest health insurance companies in the United States.

Surely these executives have better things to do. I trust that they won’t travel to the hearing on private jets.
HHS Secretary Kathleen Sibelius appointed Georgina Verdugo to be the director of HHS’s Office for Civil Rights which is responsible for enforcing the HIPAA Privacy and Security Rules. Ms. Verdugo most recently served as general counsel at the law firm of Garcia Calderon Ruiz LLP in Los Angeles. She previously led the Washington office of the Mexican American Legal Defense and Education Fund, a civil rights organization according to a Health Data Management report. The AIS Report on Patient Privacy reports that the Office for Civil Rights is vowing vigorous enforcement of the HIPAA rules. The National Institutes of Health announced on Friday that

We are encouraged by reports that are now emerging from various clinical trials
of 2009 H1N1 influenza vaccines, conducted by various vaccine manufacturers. We
expect additional companies to announce their preliminary trial results shortly.
The early data from these trials indicate that 2009 H1N1 influenza vaccines are
well tolerated and induce a strong immune response in most healthy adults when
administered in a single unadjuvanted 15-microgram dose.

The AP reports that

The nation’s first round of swine flu shots could begin sooner than expected, with some vaccine available as early as the first week of October, Health and Human Services Secretary Kathleen Sebelius said Sunday [today]. Sebelius said she is confident the vaccine will be available early enough to beat the peak of the expected flu season this fall and that early doses are intended for health care workers and other high-priority groups.

I understand that FEHB plans will be covering both the seasonal and H1N1 vaccines.

The President’s speech yesterday brought to mind Senate Finance Committee Chairman Max Baucus’s proposal which bears strong similarities to the House majority bill, HR 3200. Of course, there are significant differences between the two. For example, the House bill funds the expansion of coverage with surtaxes on wealthy taxpayers while the Baucus proposal uses fees on “Cadillac” plans, health insurers, pharmaceutical companies, and medical device manufacturers for funding. The House bill grandfathers employer sponsored plans from new health plan standards until 2019 while the Baucus proposal appears to allow those plans a somewhat greater degree of flexibility beyond that date. We can’t be sure though until the Baucus proposal is put into legislative language, which should happen next week. The Senator has stated that he plans a committee markup for the week of September 21.

Here is AHIP’s statement on the President’s speech. Marketwatch reports that health insurer, hospital company, and drug manufacturer shares advanced today.

Speaking of benefit design flexibility, Business Insurance reports that “Employers are expecting a nearly 9% increase in the cost of their group health care plans in 2010, but plan to trim that increase to 5.9% through a variety of cost-cutting actions, early responses to a Mercer L.L.C. annual survey indicate.” The cost cutting actions include “eliminating higher-cost or more generous health plan options as a way to move employees into lower-cost options, such as high-deductible consumer-directed health plans; auditing plans to ensure that all covered dependents are actually eligible for coverage; and adding or renegotiating performance guarantees with plan vendors.”

The Wall Street Journal reports that the original business design of retail clinics such as Minute Clinic and Take Care has not worked out as well as expected. That design focused on providing basic services, such as immunizations, at a low cost to walk up customers. Now those clinics are looking at creating a more steady income stream by treating certain chronic illnesses like diabetes and asthsma. The medical community is not pleased by this move onto their main turf.

Finally, the U.S. Court of Appeals for the First Circuit has affirmed the First Databank average wholesale price (“AWP”) settlement. First Databank publishes a listing of AWPs which prescription benefit managers (PBMs) and others use to price prescription drugs for their business partners — both pharmacies and health plans. Under the settlement, First Databank will rollback the AWP on a hundreds of prescription drugs as explained in this press release. In return, First Databank, which also paid about $2 million, received a general release from the class. Not a bad deal for First Databank. PBMs are now busily rewriting contracts to adjust for this change which remedies a wrong that allegedly was committed by co-defendants McKesson and First Databank eight years ago. The settlement doesn’t make sense to me. (McKesson’s agreement to kick $350 million into a settlement pot is OK with me.) The big news is that the AWP benchmark will be going by the wayside in a couple of years, and it will be interesting to see what takes its place.

No, I don’t mean the day when OPM releases 2010 FEHB premiums. That should happen soon. I mean the President’s speech. Yesterday, Senate Finance Committee Chair Max Baucus released his healthcare reform proposal, which bears many similarities to the House bill, HR 3200. Today, the Chairman announced that his Committee will begin to mark up a bill on September 21 with or without Republican support according to the Politico.

Meanwhile, the American Medical Association and the Blue Cross Blue Shield Association published their key health care reform elements.

Modern Healthcare reports that Sen. Christopher D0dd (D. Conn.) declined the chairmanship of the Senate Health Education Labor and Pensions Committee in favor of retaining the chairmanship of the Banking Committee. Sen. Tom Harkin (D Iowa) is now the late Sen. Kennedy’s likely successor.

Well it’s just three days until the President’s health care reform speech before a joint session of Congress. The AP reports that “Montana Democrat Max Baucus indicated Friday he’ll move ahead with a bill soon, whether or not the bipartisan negotiations he’s been focused on [with the Gang of Six] produce a compromise. Baucus, who chairs the Finance Committee, held a 90-minute teleconference with five other senators in the bipartisan group. A face-to-face meeting is scheduled Tuesday [Sept. 8].” The Wall Street Journal reports that

Under the [developing Finance] committee’s proposal, most Americans would be
required to carry health insurance. Insurers wouldn’t be able to deny coverage
to the sick and cherry-pick customers. The plan would be financed by a
combination of cuts to the Medicare program for the elderly and a tax on
particularly generous health-insurance plans that would apply to
health-insurance companies. The tax would generate an estimated $140 billion
over a decade.

The Federal Times reports that “A new [Congressional Budget Office] economic forecast warns there may be no cost-of-living adjustment in federal civilian and military retired pay until 2013. * * * The report projects consumer prices are likely to range between a half-percentage point drop and a half-percentage point increase through 2015.” COLA increases help annuitants with annual FEHBP premium increases. OPM should be releasing 2010 FEHBP premiums soon.

The Wall Street Journal reports that insurers such as Humana, Aetna, and Blue Cross of Florida, are opening store fronts to sell health insurance to individuals and small businesses. “Insurers are trying to position their stores as warm and friendly places, like community centers that also happen to have insurance salespeople.” The storefronts may have more business if global health insurance reform is enacted.

The President will be speaking about health care reform before a joint session of Congress next Wednesday Sept. 9. (The night before the kickoff of the new NFL Season which of course is back to school night at my son’s high school.) The President is expected to provide more details on his health care reform plan. Speaker Pelosi said today according to Modern Healthcare that “We can’t pass a bill without a public option.” She declined to provide a timeline for floor consideration of the House bill HR 3200 which of course features a public option. The Politico reports that according to White House officials, the President has no plans to insist on a public option in his speech.

The AP reports that Sen. Charles Grassley’s spokeswoman stated that the Gang of Six from the Senate Finance Committee will hold a conference call on Friday in an effort to achieve a bipartisan proposal. The President’s speech is now scheduled to occur before the Finance Committee’s soft September 15 deadline for producing a bill.

The Federal Times reports that the President continues to support a 2% pay increase for federal employees next year.”Obama’s proposal, outlined without fanfare in a letter to congressional leaders, would leave federal workers with their lowest cost of living adjustments in two decades. Presidents Bill Clinton and George W. Bush proposed lesser increases three times. Congress, which must approve the plan, has not granted less than 2 percent since 1988.”

The big drug manufacturer Pfizer agreed with the federal government to pay $2.3 billion to settle charges that Pfizer illegally marketed Bexar and certain other drugs for off label purposes and paid related kickbacks. According to a government fact sheet, this is the largest combined federal and state health care fraud settlement in the Justice Department’s history. The resolution includes $1.3 billion in criminal fines and forfeiture and a combined federal and state civil False Claims Act settlement of $1 billion. Settlement proceeds will be distributed among the following programs: Medicaid (federal and state share), Medicare, Department of Defense-TRICARE, Office of Personnel Management-Federal Employee Health Benefits Plan, Department of Veterans’ Affairs, Department of Labor, Bureau of Prisons. Medicaid (federal and state portion) is the largest part of the recovery, constituting $705,287,596 of the combined civil settlement amount. Why isn’t Speaker Pelosi demanding a public drug manufacturer to keep the drug companies honest?

Asparity Decision Solutions announced today that www.PlanSmartChoice.com, an FEHBP Open Season decision making tool, will continue to be available free to all federal employees during the 2010 open season, which begins November 9, 2009.

Walgreens and CVS will begin offering seasonal flu shots on Tuesday, Sept. 1. (There is a separate H1N1 shot that will not be available until mid-October.) The pharmacy chains also are offering the seasonal flu shots at no charge to the unemployed.

Healthcare IT News reports that Harris Teeter pharmacies are selling and making use of personal health records on flash drives — MedFlash (suggested retail price $34.95)– marketed by Florida-based Connectyx Technologies Holding Group, Inc. According to the Connectyx web site

The data file [on the MedFlash] is in an ASCII text format which can be
accessed without special software. Most hospitals and ambulance services will
not allow their personnel to load external programs due to the threat of
viruses. MedFlashtm does not require any more than the use of notepad or any
other word processor to get to the needed information. If a doctor would like to
make updates to your data, just let them load the program from your device and
they can make updates as they wish. Other files such as EKGs, MRIs and X-Rays
may be placed on the MedFlashtm device by using Windows Explorer tm. Any file
that your doctor would like to place on the MedFlashtm can be easily copied
without altering your emergency information.

Leaving aside the security issues (the website describes the device as 100% HIPAA compliant but what happens if you lose it?), how could a doctor trust this thing to be current? I sticking with the NHIN.

Well summer is coming to a close. Labor Day is next weekend. Our public schools open tomorrow, and we only have nine days before Congress returns from its summer recess. That’s a big deal to me because traffic is much lighter when Congress is in recess plus the next round in the health care reform debate begins.

Kaiser Health News features an interview with Sen. Charles Grassley who is the lead Republican negotiator in Senate Finance Committee’s Gang of Six:

Pianin: Do you think you can get a deal [on health care reform]?
Grassley:
“I think that it’s too early to say. If you asked me that on Aug. 6, I would
have said yes I think so, September. But you’re asking me on Aug. 27 and you’ve
got the impact of democracy in America. Everybody’s showing up at town meetings.
What sort of impact is that making? I can’t tell you except in a few instances
in my case, and [Sen. Max} Baucus can tell you in his case. But we need to talk
it over with other members….”

The Washington Post reports today that “Senate Majority Leader Harry M. Reid (D-Nev.) said during a tele-town hall Friday that health-care reform should be bipartisan, but suggested Republicans might be trying to kill reform altogether. ‘If we can’t do a bipartisan bill, we can do a partisan bill,’ he said. ‘I don’t want to do that.'” We shall see.
CMS issued a fact sheet on the International Classification of Diseases 10th edition (ICD-10-CM) that health care providers and health plans will be required to use in about four years (Oct. 1, 2013). It’s huge change that impacts claims systems and hospital network contracts. Before implementing the new code set, the covered entities will be required to adopt new electronic transaction standards (the 5010 standards) which utilize the ICD-10-CM codes.Government HIT reports that last Thursday August 27 “At the Department of Health and Human Service’s first-ever “code-a-thon”, software programmers hunkered down to mash up software code for “Connect,” a set of open source tools for exchanging health information over the budding nationwide health information network.” The NHIN will be a nationwide electronic patient record locator that serves as the nerve system of the regional networks. Once the NHIN is active, a health care provider participating in a regional health information organization (RHIO) will able to query providers in other RHIOs for my electronic records. Without the NHIN the provider would only be able query within the RHIO. Dow Jones reports that

United Healthcare will soon offer $20 discounts off monthly co-pays for
members who refill certain prescriptions within about 30 days after the last
prescription runs out – essentially rewarding patients for adhering to treatment
plans, Tim Heady, head of UnitedHealth’s pharmaceutical solutions unit, said in
an interview this week.The eligible asthma drugs include GlaxoSmithKline PLC’s (GSK) Advair and AstraZeneca PLC’s (AZN) Symbicort. The antidepressants qualifying for the $20 discounts include Eli Lilly & Co.’s (LLY) Cymbalta, and Wyeth’s (WYE) Effexor XR and Pristiq. These drugs carry $50 co-pays on some UnitedHealth preferred-drug lists, so the discounts would reduce members’ out-of-pocket costs to about $30.The so-called “adherence incentive” discounts will begin Oct. 1 for most of UnitedHealth’s eight million fully insured members, and on Jan. 1 for a small percentage of them. The program is “cost-neutral” to UnitedHealth’s employer customers because the discounts are at least partially factored into UnitedHealth’s rebate contracts with drug manufacturers.

The Federal Times reports that OPM today proposed is proposing “paid leave benefits for federal employees who must care for family members stricken by pandemic flu or other communicable disease, and advance sick leave for employees caring for family members injured in military duty.”

Healthcare IT News reports that BlueCross BlueShield of Tennessee has contracted with Eliza Corp. to “provide tailored health and wellness information to its members through interactive, automated phone calls.” According to a Businessweek report, “Eliza, a 10-year-old company with 130 staffers and a track record of using automated phone calls to communicate health tips or reminders. The Beverly (Mass.) company counts 90 clients, all in health care, including nine of the top 10 HMOs, leading pharmaceutical companies, and pharmacy benefit managers, as well as big employers such as Wal-Mart Stores (WMT). “

Reuters reports that “Medco Health Solutions Inc (MHS.N) is seen as the lead bidder for Aetna Inc’s pharmacy benefit manager in an auction that has drawn scant interest, sources familiar with the situation said on Wednesday.”

Reuters reports that

U.S. Representative Dennis Kucinich sent letters dated Wednesday to Aetna Inc, Cigna Corp, Humana Inc, UnitedHealth Group Inc and WellPoint Inc, among others. The letter asks the companies’ CEOs to testify at a September 17 hearing about “the nature, cost/benefit, and impact of administrative measures and protocols used by the health insurance industry to determine coverage.” Kucinich, a Democrat, chairs the domestic policy subcommittee of the Oversight and Government Reform Committee in the House of Representatives.

Meanwhile, the AP reports that

White House health advisers held an hourlong conference call Tuesday night with close to 3,000 physicians and officials of their professional groups in which they tried drumming up support by answering questions and describing the administration’s goals, participants said.Before the call, the White House e-mailed a 12-page booklet to medical associations titled “Doctors for Health Insurance Reform.” The brochure stated the administration’s case for revamping the nation’s health care system and suggested ways doctors could call attention to the issue.Among the suggestions: Hosting local events on health care, giving tours of hospitals or designating a “Health Insurance Reform Week” during which events could be staged around the country.

I expect that the budget deficit news this week will trump these efforts and sympathy for the passing of Sen. Kennedy and lead to a small scale reform bill, but time will tell.