The AP reported today that “The government paid more than $47 billion in questionable Medicare claims including medical treatment showing little relation to a patient’s condition, wasting taxpayer dollars at a rate nearly three times the previous year.” Senator Chuck Grassley, an Iowa Republican, announced that he had introduced a bill to fight Medicare fraud. Sen. Grassley states that

Right now, federal law requires that Medicare send payment within a very short time frame, even when there is risk of fraud, waste or abuse. “Because of this prompt payment rule, the government puts itself in a position of having to pay and chase Medicare fraud, instead of working to prevent it in the first place. That doesn’t make any sense,” Grassley said, “and it’s no way to manage Medicare’s resources.”

Slowing down the process would help reduce fraud and simple payment errors, in my view. That’s why I’m concerned that the healthcare reform bills approved by the House and pending in the Senate would require the Department of Health and Human Services to issue new HIPAA transaction standards that would allow for near real time eligibility and claim payment determinations. Calling Tony Soprano and crew. (It’s also ironic that HHS has not completed issuing the HIPAA transaction standards that Congress directed in 1996. The government simply should not be creating technology standards.)

That’s why I chuckled to myself when I read a Govexec.com article about how

At the Holiday Park Senior Center in Wheaton, Md., Democratic Rep. Chris Van Hollen, tried to assure a crowd of about 200 people, mostly retirees, that current health care reforms under consideration would not have an adverse effect on their federal health benefits. Many current and former federal employees reside in Van Hollen’s Montgomery County congressional district.

This two thousand page piece of legislation is bound to unexpected effects on the FEHB Program. For example, according to the article, “Van Hollen said the public option would expand the choices available to FEHBP enrollees by encouraging insurers to lower their prices for everyone.” The public option, assuming that its premiums are more attractive than FEHB plan offerings, will lead to adverse selection against the FEHBP and higher rates for those who stay in the program.

Reuters reports Senate Minority Leader Mitch McConnell’s prediction made today that the health care reform bill, once introduced in the Senate, “will be on the floor for quite a long time.” Senate Majority Leader Harry Reid has indicated that the bill which combines the Senate Finance Committee and Senate Health Education Labor and Pensions Committee approved bills will be submitted this coming week.

The Chief Actuary of the Centers for Medicare and Medicaid Services (“CMS”), Richard S. Foster, has issued his estimate of the financial effects of the health care reform bill (H.R. 3962) approved by the House of Representatives on November 7. He projects that the national health insurance coverage provisions of the bill would cost about $935 billion in order to extend coverage to 34 million people. Medicare savings would offset about $571 billion of this amount. However, those Medicare savings would be cut just about in half if the AMA gets its way and Congress repeals the sustainable growth rate formula for calculating Medicare reimbursement to doctors (H.R. 3961). He predicts that the health care system would not be able to handle the initial surge of new insureds, leading to price increases and cost shifting. He does not believe that the devices in the bill to bend the health care cost curve would be fruitful.

On Friday, CMS announced that

the results for the 2008 Physician Quality Reporting Initiative (PQRI). More than 85,000 physicians and other eligible professionals who satisfactorily reported quality-related data to Medicare under the 2008 PQRI received incentive payments totaling more than $92 million, compared to $36 million in 2007. The number of eligible professionals who earned an incentive payment increased by one-third from 2007, when 56,700 eligible professionals earned an incentive payment. In 2007, eligible professionals could only participate in the program during a 6-month reporting period. In 2008, the program expanded to allow reporting for either a 6-month or a 12-month period.Eligible professionals who participated in the 2008 PQRI can access confidential feedback reports that aggregate the data they submitted across all practices with which they are associated. The reports also show eligible professionals how they compare with other participants across the country who have submitted the same measures. CMS redesigned these reports for 2008 based on feedback from national stakeholder focus groups. Features in the new report include additional data formats and more information about reporting and performance rates per measure.

I think that I’ll ask my doctor amigos whether they participate in PQRI.Speaking of Medicare, the Medicare Advantage (Part C) and Prescription Drug Plan (Part D) open enrollment period starts tomorrow and runs through December 31 according to a CMS press release. “Beginning on November 15th, beneficiaries can go to www.medicare.gov or call 1-800-MEDICARE (1-800-633-4227) to make changes in their Medicare prescription drug and health coverage. People in Original Medicare without prescription drug coverage can enroll in a drug plan or health plan that offers drug coverage during Open Enrollment.”

In the spirit of Open Season, the Federal Times reports on 2010 changes in the Federal Employees Dental and Vision Insurance Program (or FEDVIP). “About 813,000 employees and retirees have dental coverage under FEDVIP and more than 570,000 are signed up for vision coverage, according to an Office of Personnel Management fact sheet issued in September.”

OPM and its Federal Employees Long Term Care Insurance Program contractor Long Term Care Partners are working to correct errors in letters that the contractor sent Program enrollees, according to an OPM press release.

Responding to OPM’s request, Long Term Care Partners reports they will begin mailing notices to the approximately 71,600 affected individuals, alerting them to the errors about the premiums shown in the “Benefit Amount” section of their election letters. The company also reports that in December, they will mail personalized letters providing accurate information to affected enrollees so that they can make an informed decision using correct information.

“Getting accurate, easy to understand information to our enrollees in a timely manner is my top priority,” said OPM Director John Berry. “All companies participating in this program must take steps to ensure that similar errors are avoided in the future.”

Due to the error, Long Term Care Partners is extending the decision period for those who received an erroneous letter to March 15, 2010, giving enrollees sufficient time to review their options.

Reuters reports that the Business Roundtable released a Hewitt Associates report on health care reform that appealed to all sides of the debate. According to the Roundtable’s press release,

“This report shows that effective reforms can slow health care costs by as much as $3,000 per employee in 2019,” said Antonio M. Perez, Chair of Business Roundtable’s Consumer Health and Retirement Initiative and Chairman and CEO of Eastman Kodak Company. “Health care reform done right could reduce the growth rate of health care costs – not just for government, but for the private sector as well. This must be a key measurement of success for Business Roundtable and the economy as a whole, and will be a key factor of businesses’ review of the final health care legislation. The report also shows that reform done wrong won’t work and could make a bad situation much worse, in which case Business Roundtable could not support the bill. Making the right choices as the final health care bill gets crafted is essential, and we are committed to working with Congress and the Administration toward a bill we can support.”

Reuters is reporting that pharmacy chain / prescription benefit manager “CVS Caremark Corp. (CVS.N) is trying to fix problems in its pharmacy benefits management business and wants to find a new leader to run the unit by the end of this year, Chief Executive Tom Ryan said on Thursday.” The Dow Jones News Wires adds

Ryan’s comments came days after CVS Caremark detailed a net $4.8 billion in lost pharmacy benefit management, or PBM, accounts for 2010, disclosed that the Federal Trade Commission was investigating company business practices and announced that the president of its PBM is retiring. The company expects to complete a search for a new PBM head by year end, in time for the 2011 “selling season” that starts early next year, he said.

The Dow Jones Newswires also reported today that Coventry Healthcare has sued CVS Caremark in federal court in Tennessee.

Coventry Health, which is moving more than $1 billion a year worth of pharmacy-benefits-management business from CVS Caremark to a rival PBM [Medco Health Services], accuses the company of wrongfully paying hundreds of thousands of dollars or more in prescription drug claims [involving military pharmacies and Medicaid beneficiaries.

According to the report, CVS Caremark denies the allegations.

The FEHBlog on Sunday commented on the fact that the decision of several HMOs to withdraw from the FEHB Program for 2010 is not the end of the world because federal and postal employees and annuitants nationwide have the choice of several high quality fee for service plans. The beauty of the FEHB Program lies in its competitive nature — which means that suppliers and purchasers can freely enter and leave the market. Nevertheless, it is important for federal and postal employees in those departing plans, who total about 60,000 — to select a replacement plan during this Open Season.

Asparity Decision Solutions is making its FEHBP Open Season decision tool freely available on the internet to federal and postal employees and annuitants. As noted previously, OPM has its own plan comparison tool on the web.

The Federal Times published an op-ed by the chief executive officer of the National Community Pharmacists Association bashing the role of prescription benefit managers in the FEHB Program. I don’t buy it. The shortest path is cost savings in prescription drugs is strictly controlling access to drugs — that’s how the VA does it, and it has the means to pull it off because it runs healthcare facilities. FEHB plans generally don’t. (A few group model HMOs like Kaiser do). “You want Lipitor — so sorry we only dispense Zocor.” It’s tough to do that unless you control the doctors.

Speaking of Lipitor I notice that my favorite foreign company Dr. Reddy’s Laboratories, an Indian company, is planning to roll out a generic version of Lipitor in the U.S., according to the Business Standard of India. Lipitor is the world’s best selling prescription drug with annual sales of over $10 billion. Its manufacturer Pfizer surely will not roll over.

The Federal Benefits Open Season starts tomorrow and runs through December 14, 2009. OPM’s Open Season Facebook page now has over 500 fans, and there’s an interesting discussion going on about which plan to choose for 2010. I have always understood that word of mouth (along with the employee premium) is a significant Open Season driver. Now word of mouth has made the leap to the internet.

Govexec.com bemoans the fact that there are fewer FEHB plans to choose this year because more HMOs dropped out than joined the Program. “According to the Office of Personnel Management, 10 states — Alabama, Alaska, Connecticut, Maine, Mississippi, Nebraska, New Hampshire, North Carolina, South Carolina and Vermont — will no longer have an HMO choice.” But all of the federal employee and annuitants in those states and across the country will be able to choose from among six high quality fee for service plans with preferred provider networks. Several of those plans offer more than one option. Certain employee groups have the choice of their own high quality employee organization sponsored plan. The OPM plan comparison tool is here.

You hardly need to read the FEHBlog to know that the House of Representatives passed its leadership’s health care reform bill (H.R. 3962) by a two vote margin after an amendment was approved that strengthened the language in the bill that prevents federal funds to be used to pay for abortions, except where the pregnancy endangers the mother’s health or in cases of rape or incest. The Wall Street Journal reports that

The health overhaul still has several hurdles to clear before it can become law, and its final passage is far from assured. The Senate must pass its own bill and meld it with the House bill before sending it to President Obama’s desk. It’s more difficult to pass legislation through the Senate, and despite Democrats’ wide majority there, leaders are straining to bring together their fractious coalition. Any final bill is likely to be more moderate, and possibly less ambitious, than what passed through the more liberal House.

I took up the invitation on OPM’s website and became a fan of OPM’s Open Season web page on Facebook. The Federal Benefits Open Season, which encompasses the FEHBP, FEDVIP and FEDFSA starts on Monday November 9 and runs through December 14, 2009.

A group of sixteen Republican members of Congress have written a letter to the House Oversight and Government Reform Committee Chair asking for a hearing or markup of the House leadership’s health care reform bill, HR 3962, concerning the bill’s impact on the FEHB Program. I think that it would be a good idea to slow down this bill for a number of reasons, including this one.

At the beginning of this decade, Congress passed a well meaning law which created the TRICARE for Life program. This law had a significant impact on the FEHB Program because many veterans become federal employees after leaving the service, and the TRICARE for Life program caused those veterans to leave the FEHB Program. It’s the second bounce of the ball that can catch you off guard. The House bill allows federal employees to jump out of the FEHBP Program to join a qualified health plan in the Exchange. As this CBO report illustrates, it’s hard to predict how the H.R. 3962 ball will bounce.

Nevertheless, I doubt that the request will be honored because the House Rules Committee is setting a rule on HR 3962 and the Managers Amendment on Friday afternoon and according to the Hill newspaper the House will vote on HR 3962 on Saturday evening. The Wall Street Journal explains tonight that

As of Wednesday, House leaders didn’t appear to have secured the 218 votes they need to pass the bill. They were moving to quickly swear in two Democrats elected Tuesday, which would give the party 258 seats in the House and allow leaders to lose as many as 40 Democratic votes without losing their majority. No Republicans are expected to vote for the bill.House leaders are targeting the vote for late Saturday so they have time to shore up support and set voting rules while still giving members a full week at home for Veterans Day, which falls next Wednesday. While the schedule could slip some, leaders are reluctant to push the vote beyond the holiday. A lull could expose it to attacks from Republicans and a more-than-$10 million advertising campaign by employers that slams the legislation for raising taxes during a bad economy.

The House Republicans have proposed a substitute for H.R. 3962 which is available for review on the House Rules Committee website. (It’s only 230 pages long.) The CBO report on the substitute measure provides a helpful analysis if you are interested.

The Politico and other sources report that the Senate is working at a slower pace.

On Monday, [Sen. Majority Leader Harry] Reid sent a letter to Republicans acknowledging that he is waiting on the Congressional Budget Office’s cost estimates and analysis to finish drafting a bill. Democrats signaled that those estimates would not be ready this week, casting further doubt on their ability to finish reform this year.

Time will tell.

While the House rapidly passed a bill last month to freeze the Medicare Part B premium at $96.40 monthly, the Senate has not followed suit. In October, the Centers for Medicare and Medicaid Services announced that for the 2010 calendar year the following changes will occur:

The Medicare Part B premium will increase for approximately 23% of Medicare beneficiaries because they are new enrollees, they are subject to income related adjustments, or they do not have their Medicare Part B premium withheld from their Social Security check. The premium generally will increase to $110.50 for these folks. The income adjustments which begin at an adjusted gross income of $85,000 for an individual and $170,000 for a married couple can add up to $250 monthly to the premium.

The Part B annual deductible will increase to $155.

The Part A deductible on inpatient admissions per spell of illness will increase to $1110.

Business Insurance informs us that Rep. Joe Sestak (D Pa.) has introduced a bill in Congress (H.R. 3930) to extend the health care continuation subsidy available to involuntarily terminated employees, including federal and postal employees. Without an extension of the law, the 65% subsidy will begin to sunset at the end of this month. The subsidy became available in March 2009, and it extends for nine months. Under Rep. Stesak’s bill, the subsidy period would be 15 months, and it would made be available to people who lose their jobs in 2010. I am surprised that this extension was not included in the House healthcare reform bill.

The Centers for Medicare and Medicaid Services announced the 2010 Medicare Part B reimbursement rates for doctors under the sustainable growth rate formula that Congress routinely overrides. The 2010 adjustment is negative 21.2%. It’s not a question of whether the override will occur; it’s a question of when. As secondary payer to a multitude of Medicare beneficiaries, FEHB plans have an interest in these changes.

Govexec.com reported on OPM’s efforts to ameliorate changes in the Federal Employees Long Term Insurance Program.

The Speaker has released her leadership’s healthcare reform bill, H.R. 3962, which weighs in at 1,990 pages. I have skimmed through about 400 pages that impact employer sponsored coverage including the FEHB Program. The bill adds many new mandates on employer sponsored plans, such as an extension of the term of COBRA continuation coverage (TCC in the FEHB Program) to 2013.

Govexec.com is upbeat about the bill’s impact on the FEHB Program. I am withholding an opinion for now because further analysis is required. The Congressional Budget Office report on HR 3962 is available here. The Politico reports that Democratic “Party leaders would like to start debate on the bill next week and hope to have a final vote before Veteran’s Day on Nov. 11.”

The Federal Times reports that Congress has extended until December 18 the Continuing Resolution funding the federal government. This is the second Continuing Resolution of federal fiscal year 2010 which began on October 1.