• Congress is now in its August recess. Congress recessed without taking further action on mental health parity or health information technology legislation. The House of Representatives did pass a bill (HR 2851) “to ensure that dependent students who take a medically necessary leave of absence do not lose health insurance coverage.” The bill would not affect the FEHB Program whose dependent children coverage does not extends until age 22 whether or not the child is a student (5 USC Sec. 8901(5)). The House returns on September 6 and its target adjournment date is September 26. The Senate returns on Sept. 6 but it has not yet set a target adjournment date.
• Senators Kent Conrad (D ND), Chairman of the Senate Budget Committee, and Max Baucus (D. Mont.), Chairman of the Senate Finance Committee, introduced a bill called “The Comparative Effectiveness Research Act of 2008 [which would] establish the Health Care Comparative Effectiveness Research Institute to gather and produce data on what works best when it comes to how diseases, disorders, and other health conditions are treated.” AHIP, the managed care industry’s trade association, promptly endorsed this initiative. The AHIP Board of Directors previously released a statement supporting comparative effectiveness research.
• Senator Baucus’s Finance Committee held a hearing last Thursday on the role of the tax code in the health care system.
• The federal district court in New Jersey approved a class action settlement under which Health Net has agreed, without conceding liability, to pay $255 million and change its out of network reimbursement methodology. According to an AIS report, “[t]he suits charge Health Net and several regional subsidiaries with using a flawed database produced by Ingenix, a subsidiary of UnitedHealth Group, to ‘improperly reimburse’ its members for insurance claims for out-of-network medical treatment. The class period extends back to 1997 and involves more than 2 million people in several states.” The AP quotes that plaintiffs’ lead counsel as reflecting ““We feel that the settlement has
  significant implications for the health insurance industry because
  they’re all using the Ingenix database or a form of it for this kind of
  reimbursement.”
• The AP reported on growing consumer use of retail clinics (which I get) and medical tourism (which I don’t get).
• The Leapfrog Group is now offering consumers a hospital comparison tool on its website.
  

President Bush today nominated Michael Hager, the assistant secretary for human resources and administration at the Veterans Affairs Department to replace Linda Springer as the OPM Director According to Govexec.com,

Hager also was senior vice president for human resources at federally chartered mortgage buyer Freddie Mac. Between his stints at Freddie Mac and VA, he was associate administrator in the Office of Capital Access at the Small Business Administration, where he managed a variety of investment programs.During a 15-year stint at Banc One Corp., Hager oversaw a large hiring wave like the one projected to hit the federal government in the coming years as baby boomers retire. The Columbus, Ohio-based holding company, which has since merged with JPMorgan Chase, expanded from 7,000 to 50,000 employees during Hager’s tenure.

The nomination requires Senate approval. According to the White House personnel announcement, Mr. Hager will take office as Acting Director when Ms. Springer leaves office on August 13.

Healthcare IT News reports that the AHIC’s Consumer Empowerment Panel complimented Microsoft, Google, and Dossia for advancing the use of personal health records. Several health care providers, such as CVS and Longs Drugs, and health plans, such as Kaiser Permanente, recently have announced arrangements with these vendors. Meanwhile, some privacy advocates express concern over the fact that these vendors are not subject to the HIPAA Privacy and Security Rules, and Congress is considering a law (the Pro(tech)t Act, HR 6357) that could lead to a change in that status. All three organizations have been participating in the Markle Foundation’s Connecting for Health Initiative, and Dr. Deborah Peel, the ne plus ultra of privacy advocates, has endorsed Microsoft’s Healthvault project. It will be interesting to see how this plays out.

The Centers for Medicare and Medicaid Services announced today that the agency has finalize the rule on changes to Medicare’s acute hospital care payment methodology for discharges occurring on or after October 1, 2008, the beginning of the federal government’s fiscal year. The announcement explains various revisions to Medicare’s never events and quality improvement programs:

The IPPS rule adds conditions, including one NQF never event, to the list of conditions that have been determined to be reasonably preventable through proper care. Beginning last year, as required by the Deficit Reduction Act of 2005 (DRA), CMS began selecting hospital-acquired conditions (HACs) that were determined to be reasonably preventable. If a condition is not present upon admission, but is subsequently acquired during the hospital stay, Medicare will no longer pay the additional cost of the hospitalization. The patient is not responsible for the additional cost. Rather, the hospital is being encouraged to prevent an adverse event and improve the reliability of care it is giving to Medicare patients. In last year’s final rule, CMS listed eight preventable conditions for which it would not make additional payments. In this year’s proposed rule, CMS identified nine potential categories of conditions, but based on public comments, is finalizing three of these. The new additional conditions in this year’s final rule include: · Surgical site infections following certain elective procedures, including certain orthopedic surgeries, and bariatric surgery for obesity · Certain manifestations of poor control of blood sugar levels · Deep vein thrombosis or pulmonary embolism following total knee replacement and hip replacement proceduresThe final rule issued today also expands the Reporting Hospital Quality Data for Annual Payment Update Program. The Medicare law requires CMS to reduce payments to hospitals that do not successfully report quality measures adopted under the program by two percent from the percentage increase that would otherwise apply to their payment rates. The quality measures are publicly reported on the CMS Hospital Compare Web site, a tool that can be used by beneficiaries in choosing where to receive treatment. Hospitals are currently required to report 30 quality measures on their claims for Medicare inpatient services to qualify for a full update to their FY 2009 payment rates. CMS had discussed 43 new quality measures in the proposed rule and requested public comment on those measures. After reviewing public comments on the proposed rule, CMS decided to add only 13 measures.

The rule will be posted on the Federal Register’s website tomorrow, and it will be published in the Federal Register’s print edition on August 19.

AHIP, the managed care industry’s trade association, announced today that

A new Government Accountability Office (GAO) report documents a
dramatic surge in the use of high tech imaging under Medicare Part B,
with rapid growth in spending, and draws attention to a substantial
variation in the use of services across regions that suggests not all
utilization is necessary or appropriate. Today, America’s Health
Insurance Plans (AHIP) released “Ensuring Quality through Appropriate
Use of Diagnostic Imaging,” a white paper that supports these findings
and highlights health plan strategies that are working to address the
quality, patient safety, and cost issues that our nation faces in the
use of high tech imaging.

“Potentially preventable medical errors that occur during or after surgery may
cost employers nearly $1.5 billion a year, according to new estimates by the
Department of Health & Human Services’ Agency for Healthcare Research and
Quality (AHRQ).”

• The Providence (RI) Journal reports that “The chairman of the tax-writing Senate Finance Committee, Sen. Max Baucus, D-Mont., announced Friday that he has added the mental-health parity bill to a package of tax-relief measures likely to receive full Senate
  consideration soon.”I do expect this bill to be enacted in 2008, in which case the new law would apply to the FEHB Program in 2010.
• The Health subcommittee of the House Ways and Means Committee held a health information technology hearing on Thursday July 24. The Ways and Means Committee also holds jurisdiction over the Pro(tech)t Act, HR 6357, which the Energy and Commerce Committee approved earlier in the week. According to the Kaiser Health Care Policy Report, Subcommittee Chair Pete Stark (D. Calif.) “said he intends to introduce legislation that would utilize Medicare payments as a way to encourage health care providers to adopt
  EHR systems. In addition, the bill would include patient privacy protection measures that would allow individuals to file suits in the event of a data breach. Stark added that the bill he plans to introduce should not be considered as an effort to override similar measures
  already proposed in Congress. Stark likely could introduce the bill next week, according to sources, CongressDaily reports.”
• According to an Arizona Star report, the House along party lines postponed until next year action on the President’s proposal to control Medicare spending, which was mandated by a trigger in the Medicare Modernization Act of 2003.
• According to an AP report in USA Today, the Government Accountability Office has found that “When federal regulators catch a drug company peddling prescription medications for an unapproved use, it takes them an average of seven months to issue a warning, according to a draft report by congressional investigators. It typically takes four more months for the company to fix the problem. During that time, a lot prescriptions can be written.”

The AP reports on the growth of health advocacy businesses. These businesses assist company human resources departments or individuals directly with navigating the health care system. The article explains that

“The companies grouped into the health advocacy business range from small regional firms operating out of home offices to companies with national call centers the size of football fields. No one seems to have an exact count, but Flagship Global Health, Care Counsel and Enhanced Care Solutions are among the more visible names. Health Advocate claims to be the largest. Founded in 2001, it now has more than 3,500 companies, unions and other organizations as clients, including Johnson & Johnson, American Express and The Home Depot Inc.”

Heal the Claims Process (or pay us more money faster)

Rep. Henry Waxman held a House Government Oversight & Reform Committee hearing today titled, “The Medicare Drug Benefit: Are Private Insurers Getting Good Discounts for the Taxpayer?”Rep. Waxman is upset because Medicare Part D prices are higher than the artificially low Medicaid drug prices.

Under the Medicaid program, a brand name drug manufacturer by law must give the Medicaid program its lowest price, subject to a number of arcane exceptions. If the manufacturer agrees to sell a brand name drug below the Medicaid price floor, then the Medicaid price comes down. Medicare Part D, however, is exempt from the Medicaid price floor. For that reason, I expected that Medicare Part D plans would be able to cut better deals for brand name drugs than FEHB plans. However, according to testimony today from Mark Merritt, President of PCMA, the PBM lobby, “overall savings of PDPs in Part D are comparable to levels achieved by PBMs in the Federal Employees Health Benefits Program (FEHBP), according to analysis conducted by PricewaterhouseCoopers (PwC).”