• Sen. Joe Lieberman (I Conn.), proponent of domestic partner coverage in the FEHBP, has been allowed by the Democratic leadership to retain his chairmanship of the Senate committee with responsibility for FEHBP oversight, Homeland Security and Governmental Affairs. The House committee with FEHBP oversight responsibility, Oversight and Government Reform, lost its chairman Henry Waxman (D Calif) to the more powerful Energy and Commerce Committee chair. Rep. Ed Towns (D NY) will become the new Oversight and Government Reform Committee chairman.
• AHIP, the managed care trade association, expressed support for a health care reform based on an individual mandate which is found both in the Obama and Baucus reform plans.
  

Summary of AHIP’s Proposal to Guarantee Coverage for Pre-existing Conditions and Promote Affordability in the Individual Insurance Market:

Guarantee-issue coverage with no pre-existing condition exclusions;

Establish an individual coverage requirement with an insurance coverage verification system, an automatic enrollment process and effective enforcement of the requirement that all individuals purchase and maintain coverage;

Promote affordability by: providing refundable, advanceable tax credits for moderate-income individuals and working families; and promoting tax equity whether coverage is obtained through an employer or the individual market; and

Ensure premium stability for those with existing coverage through a broadly funded reimbursement mechanism that spreads costs for the highest-risk individuals.

• The Boston Globe reported last week that “Leaders of some large academic medical centers and community hospitals [in Massachusetts] called for [Massachusetts] Governor Deval Patrick to examine how Massachusetts General Hospital, Brigham and Women’s Hospital, Children’s Hospital, and a few other institutions are able to obtain higher prices from health insurers even though there is, especially for the most common procedures, often no demonstrated difference in the quality of the care delivered by those hospitals.” [Hint — It’s called leverage.]
• CMS created a new Dialysis Facility Compare website for consumers. There is a special category of Medicare coverage for persons with end stage renal disease (regardless of age). Suprisingly, only 6% of Kaiser Family Foundation survey participants had heard of CMS’s very useful Hospital Compare website, according to a survey conducted in August 2008. Avery Comarow, of U.S. News and World Report, which publishes its own hospital rankings, thoughfully comments on the KFF study here.

McKesson has agreed to pay $350 million to settle allegations that it engaged in average wholesale price fixing with First Databank, an AWP publisher. The AWP is traditionally used to set the price that health plans pay prescription benefit managers for prescription drugs. According to McKesson’s press release,

The settlement terms, which are subject to final court approval, include an express denial of liability of any kind. The company will also record a reserve for outstanding and expected future AWP-related claims by public entities, which is currently estimated to be $143 million.* * * “As we have consistently stated, we believe the plaintiffs’ allegations are without merit, and that McKesson adhered to all applicable laws,” said John H. Hammergren, chairman and chief executive officer. “Yet when faced with the inherent uncertainty of this litigation, we determined that entering into the settlement agreement was in the best interest of our shareholders, customers, suppliers, and employees.”The settlement will now be submitted to the court for preliminary approval, followed by notice to the class and a final approval hearing, which has not yet been scheduled.

The plaintiffs class counsel also have entered into a proposed class settlement with First Databank. That settlement in stark contrast provides for a $1 million payout and unnecessary disruption of the PBM contracts with health plans (because the underlying problem which arose seven years ago has been resolved contractually.) The court holds a fairness hearing on the First Databank settlement next month.

There are several press reports that former Sen. Tom Daschle will be HHS Secretary and that Congressional Budget Office Director Peter Orszag will be the Office of Management and Budget Director in the Obama Administration. Sen. Daschle published a book this year titled “Critical: What We Can Do About the Healthcare Crisis.” Amazon.com provides the following review excerpted from Publisher’s Weekly:

The U.S. is the only industrialized nation that does not guarantee necessary health care to all of its citizens, and as former senator Daschle observes, Skeptics say we can’t afford to cover everyone; the truth is that we can’t afford not to because U.S. economic competitiveness is being impeded by the large uninsured population and fast-rising health costs. Daschle’s book delineates the weaknesses of previous attempts at national health coverage, outlines the complex economic factors and medical issues affecting coverage and sets forth plans for change. Daschle proposes creating a Federal Health Board, similar to the Federal Reserve System, whose structure, functions and enforcement capability would be largely insulated from the politics and passion of the moment, in addition to a merging of employers’ plans, Medicaid and Medicare with an expanded FEHBP (Federal Employee Health Benefits Program) that would cover everyone. There is no more important issue facing our country, Daschle asserts, than reform of our health-care system, and the book’s health-care horror stories bring this immediacy home.

Director Orzsag also has strong opinions on the need to rein in health care costs. You can watch a webcast of his recent presentation to the Center for Public Health, Stanford University here.

The Senate is proceeding full steam ahead on health care reform. Sen. Kennedy has created a team to work on his initiative. According to the Washington Post Sen. Hillary “Clinton (D-N.Y.) will lead “a committee working group” on insurance coverage, Kennedy announced, while Sen. Tom Harkin (D-Iowa) will oversee a subgroup on prevention and Sen. Barbara Mikulski (D-Md.) is heading up the quality task force.” Modern Healthcare reports that

Key lawmakers met to discuss a path that would lead to a broad healthcare-reform bill, though discussions over process and jurisdiction trumped talks on the actual substance of such a bill, according to lawmakers who attended the meeting. Sen. Chuck Grassley, the ranking Republican on the Senate Finance Committee, called the confab, which included Sens. Edward Kennedy (D-Mass.) and Max Baucus (D-Mont.), “very positive,” adding that the groundwork being laid now will pay dividends early next year when lawmakers tackle the herculean task of reforming the healthcare system.

2009 is shaping up to be an interesting year.

• The Labor Department published a major set of Family and Medical Leave Act regulations today. A summary may be found here.
• An AP news report provides an overview of the current generic drug discount programs offered, at this point, by most pharmacy chains.
• AHIC Successor, Inc., has posted its first online newsletter.
• The Cleveland Clinic announced the top 10 medical innovations of 2008. Number 10 is the national health information exchange.
• The AMA News reports that health insurers profits are declining.

The Weekend Update is being written on Monday morning because I spent the weekend with my family in frigid Madison, Wisconsin. (Go Big Red.) Why couldn’t UW schedule Freshman Parents Weekend for early October, rather than the weekend before midterms? The Medicare annual coordinated election period for Medicare Advantage and Medicare prescription drug plans began on November 15 and continues through December 31, 2008, according to a CMS press release. The ongoing Federal benefits open season ends on December 8. The Oh My Gov! website discussed the Plan Smart Choice web tool available to help federal employees and annuitants choose a plan and its underwriting support from Health Grades. Many federal agencies offer employees access to Consumer Checkbook’s online FEHBP open season tool.
Several articles follow up on the final AHIC meeting held last week. According to Government HIT News, a study reported that while 78% of hospitals use at least one component of a complete electronic health records (“EHR”) system, i.e., electronic reporting of lab test results, only a small percentage of hospitals have complete EHR systems. According to the author of the study,

e-prescribing is the biggest hurdle facing most hospitals at this time. They cited cost as a major barrier.

[HHS Secretary Mike] Leavitt expressed disappointment at the way the data was presented to the AHIC. “It belies the actual progress to simply measure those who have arrived” at the goal of comprehensive EHRs, he said.

[Study author Dr. Ashish Jha] said that in many cases the hospitals have laid the foundations for more automation and can now move ahead with implementation.

AHIC recommended that HHS developed EHR templates in the same manner that it developed templates for electronic claims. According to Government Health IT News, “The plan is for HHS to convene an expert panel to determine what medical and related data is required for regulatory, licensing, accreditation, quality reporting and payment purposes.” Such a panel presumably would be more pro-active than the existing Certification Commission on HIT, which reportedly will continue to have a role going forward.
The labor union coalition, Change to Win, has launched a website Alarmed About Caremark where you can download the report CVS Caremark: An Alarming Prescription. According to an AP report,

At issue is a mailing sent by Caremark and paid for by drugmaker Merck and Co. to doctors who treat Caremark patients with type 2 diabetes. The letter touts Januvia’s potential benefits in improving blood sugar control, and suggests doctors may want to consider talking to their patients about using Merck’s drug Januvia in addition to their current treatment.

The Change to Win union coalition says the mailings are intrusive and an improper use of CVS Caremark’s relationship with its patients. Merck and CVS Caremark say they are trying to make physicians aware of a drug that may be more effective than older therapies, and that personal information on patients is not being shared.

• Senate Finance Committe Chairman Sen. Max Baucus (D Mont.) released his health care reform plan blueprint today. The Baucus plan is similar to the current Massachusetts connector system which requires individuals to purchase health insurance, a so-called individual mandate. President elect Obama’s plan involves mandatory coverage of children, an employer play or pay mandate, similar to that in San Francisco, and expanded coverage of adults though a national health insurance exchange. Neither plan evidently would affect the FEHBP directly. However, there is the Medicare for All approach exemplified by H.R. 676 that would scrap all employer sponsored coverage, including the FEHBP: “SEC. 104. PROHIBITION AGAINST DUPLICATING COVERAGE. (a) IN GENERAL.—It is unlawful for a private health insurer to sell health insurance coverage that duplicates the benefits provided under this Act.”
• Business Insurance reports on a PriceWaterhouseCoopers study of the projected cost of the President elect’s plan. “’Obama’s proposal is likely to increase revenues but lower margins for providers, pharmaceutical companies and health plans that increasingly depend on government payment,’” the report said.”
• Speaking of transitions, Govexec.com reports on the top vacancies at OPM that the new President will be filling and Government Health IT reports on AHIC Successor Inc.’s operational approach, which involved value cases.
• CMS has selected four companies — Google Health, HealthTrio, NoMoreClipboard.com, and PassportMD — for a pilot personal health record (“PHR”) program under which traditional Medicare beneficiaries in Arizona and Utah can choose one of the selected PHR companies to maintain their health record information electronically.
• Indystar.com reports that Wellpoint, in cooperation with a self funded employer sponsored health plan, is “testing the concept of arranging and paying for you and a companion to travel to India for a joint-replacement procedure that could cost a fraction of what it would at your local hospital.”
• Bloomberg.com reports on a drug study funded by the prescription benefit manager Medco Health Solutions. According to Medco’s press release,
  

  In the largest study of its kind to date, researchers at Medco report that [proton pump inhibitors] PPIs [such as Nexium] inhibit the effectiveness of clopidogrel, the number two prescription drug in the world, thus increasing the risk of a major cardiac event, such as heart attacks and strokes by 50 percent. Since PPIs mimic the effect of a variant gene, which also renders clopidogrel ineffective, this study further suggests a potential role for genetic testing. “Considering the widespread use of these two medications, this important research adds to a growing body of evidence raising questions about their concurrent use and suggests further research is needed,” said Dr. Robert Epstein, a lead study author, chief medical officer, Medco. “With this research in hand, we intend to open a dialogue with the major clinical organizations to advance the discussion around the guidelines that govern the use of Plavix.”

• The American Medical Association is developing a health insurer code of conduct. According to the AMA’s press release — issued in the middle of Heal the Claim month — “ninety-two percent (92%) of physicians polled said that insurance company incentives and disincentives regarding treatment protocols may not be in the best interest of the patients.”” But then again may be they are, and doctors are not refusing the insurers’ Benjamins.

Happy Veterans Day! 90 years ago today the guns fell silent on the Western Front. Thanks to everyone who has served in our Nation’s military services.

• AIS offers the perspective of various FEHBP carriers on the current Open Season. AIS also provides various viewpoints on how consumer driven health care will fare in the next Administration.
• The Justice Department reported on False Claims Act recoveries during the government fiscal year that ended on September 30, 2007.
• The Midwest Business Group on Health released its 2008 National Benchmarking Survey of Employers and Regional Focus Groups of Employees and their respective Readiness to adopt Value-based Benefits Strategies. Not surprisingly to me at least, the Group found that “The premise of value-based benefit design programs for health care – higher quality care at a lower cost – is counterintuitive to employees’ perception of the consumer marketplace. Employees perceive higher quality health care equals higher cost.” The Group recommends more employee education.
• The Wall Street Journal featured today an article on the impending ICD-10 code set conversion. The ICD provides the codes that all providers use to classify providers diagnoses and that hospitals use to classify the care that they provide to patients. (Doctors use the AMA’s CPT). “The new system of 155,000 codes includes 68,000 codes describing diagnoses, up from 13,000 currently, and 87,000 codes for different medical procedures, compared with 3,000 in the current system.” The Journal summarizes the pros and cons as follows:
  

  The new codes can offer more detail on patients’ conditions.

  Doctors complain that changing to the new system will eat up time and money.

  Hospitals could get higher payments for performing more-advanced surgeries.

  Consumers may see more billing errors as the new system rolls out.

  Actually everyone agrees on the need to convert, the disagreement is over the length of time necessary for a smooth conversion. Hopefully, cooler heads will prevail, and HHS will set October 1, 2013 as the conversion date.