OPM announced today that Blue Cross Blue Shield FEP has modified its 2009 Standard Option out of network surgical benefit that was the subject of a December 3, 2008, Federal Workforce subcommittee hearing. According to OPM, 

Under the revised benefits provision, BCBS Standard Option enrollees will be responsible for 30 percent of the plan’s payment allowance for the surgery to be performed, plus the difference between the plan’s allowance and the amount billed by the surgeon. In addition, Blue Cross and Blue Shield will, for the first time, provide prior approval for all non-emergency, out-of-network surgeries of $5,000 or more, enabling enrollees to know in advance how much BCBS will pay for the surgery. BCBS also will provide additional information and assistance to make the patient’s costs more transparent. Enrollees must initiate this prior-approval process.  * * * With the change in benefits in Blue Cross and Blue Shield, OPM has instructed federal agencies to accept belated Open Season enrollments through the end of January 2009.

Here are OPM’s FAQs on the belated enrollment process and BCBSA FEP’s letter to Standard Option subscribers explaining the change.

It’s been a rough day for Redskins fans, but we need to push the ball forward. This is the 700th FEHBlog entry since April 2006.

• It has been my theory for many years that low Medicare and Medicaid reimbursement rates have been a major driver of increasing health insurance premiums. This week, the actuarial consulting firm Milliman issued a report finding that, according to Workforce Management, “employers pay an additional $1,115, or 10.6 percent more, for a family of four’s health insurance premium to help doctors and hospitals make up for lower payments they receive from Medicare and Medicaid.” (More information on the study can be found in this BCBSA press release.) If you think of health care costs as filling a giant balloon, pushing down on the balloon’s public sector side shifts costs to the private sector side. The solution is to reduce the size of the balloon. I think that genomic medicine will be a key component of the long term solution.
• Of course, there are other ways to reduce the size of the balloon. President Bush and President elect Obama both have a great deal of confidence in the ability electronic health records to increase efficient delivery of care and reduce costs. We have a long way to go. Reuters reports that “Just under than 40 percent of U.S. doctors use electronic medical records and many say the system they use is only minimally functional, according to federal survey results released on Thursday. Only 4 percent of the 2,000 doctors surveyed by the National Center for Health Statistics said their systems were fully functional.” A fully functional system according to the survey includes patient demographics, problem lists, clinical notes, medical history and follow-up, orders for prescriptions, orders for tests, prescription orders sent electronically, viewing laboratory and imaging results, warnings of drug interactions or contraindications, out-of-range test levels, and reminders for guideline-based interventions. As mentioned earlier this week. funding for electronic medical records will be included in the first Obama federal stimulus package.
• Medicare will begin incenting doctors to use electronic prescribing systems in 2009. “Electronic prescribing (e-prescribing) systems that allow doctors to select lower cost or generic medications can save $845,000 per 100,000 patients per year and possibly more system-wide, according to findings from a new study [released last week and] funded by Department of Health and Human Services’ (HHS) Agency for Healthcare Research and Quality (AHRQ).
• Also on the bright side, the AP reports that
  

  The ultra-low prices for generic prescriptions offered by giant retailers and drugstore chains and intense competition among the many generic drugmakers fighting for sales, according to health information firm IMS Health. (NYSE:RX)Those pricing pressures forced down dollar sales of generic drugs in the U.S. by 2.7 percent in the year ending in September, even though the number of generic prescriptions filled actually increased by 5.4 percent over the year before, IMS reported Wednesday.”We’re seeing the combination of pressure from large retailers to make generics available at ever-lower prices for their customers” and the intensified competition among generic drugmakers leading them to cut prices, said Murray Aitken, senior vice president of the Healthcare Insight unit at IMS.

• Finally the Prescription Benefit Management Institute released its annual Prescription Drug Benefit Cost and Plan Design Survey.

In anticipation of Congress enacting a law that creates a regulatory pathway for creating generic versions of expensive specialty drugs, Merck, the pharmaceutical giant, announced that it is creating a division to manufacture biogenerics also known as “follow-on” biotech drugs. According to a Forbes.com article, Pfizer is making a similar move.

Forbes.com explains that “biotech drugs are hard-to-make proteins that will require their own clinical trials. It might cost $300 million to develop a biotech copycat. As a result, these drugs will cost only 30% or so less than branded versions, meaning a single biogeneric could generate hundreds of millions in sales.” Nevertheless, I have heard industry leaders such as Medco’s CEO David Snow express excitement over the savings that biogenerics will create for consumers and health plans. I hope that 2009 will be the year that Congress finally gets off its tail and passes the necessary law.

OPM has created a “Fast Facts” page on its website that provides basic information about Open Season, a step-by-step process of what to think about during Open Season, and guidance on evaluating health plan quality. OPM is allowing a belated Open Season enrollment opportunity through January 2009.

Asparity Decision Solutions issued a press release last week reporting that its PlanSmartChoice [Open Season decision making web tool] “had 22,000 unique visitors and 34,000 total visits by federal employees, who spent an average of 13 minutes on the site (as reported by Google Analytics).” There are 4 million federal and Postal employees and annuitants eligible to participate in the Open Season.

• Last week, the Centers for Medicare and Medicaid Services proposed three national coverage determinations concerning these never events — (1) Wrong surgical or other invasive procedures performed on a patient; (2) Surgical or other invasive procedures performed on the wrong body part; and (3) Surgical or other invasive procedures performed on the wrong patient. Interestingly, the American Hospital Association and the American Medical Association both objected to the proposed determinations. According to Modern Healthcare.com, “While such a rule might sound simple on the surface, the two groups are both arguing that it’s not–that CMS will need to do a better job of defining what can be reimbursed and what can’t be before it begins withholding funds.”
• Government HIT News reports that “President-elect Barack Obama on Saturday [December 6] said health information technology will be included in an economic recovery plan that is now being worked out with members of Congress.”
• HHS has rolled out version 2.0 of its free personal health record called My Family Health Portrait. AIS reports that the “The tool can be downloaded and customized by other health organizations for their own uses. Aetna is encouraging its health plan members and its own employees to use the tool and then enter the results in their Aetna CareEngine-powered PHRs so they can share the data with their physicians.”
• Health Day reports today on a new study that finds – not surprisingly — that “an electronic prescribing system that tells doctors which drugs are the least expensive can save millions a year.”
• Finally, AIS reports on the potential impact of a recent U.S. Court of Appeals for the First Circuit opinion finding that New Hampshire’s law prohibiting the commercial data mining of prescription records is constitutional. If you are interested in the First Amendment, the lengthy opinion is worth a read.

Here’s the notice that OPM provided federal employees on the belated open enrollment opportunity and the related benefits administration letter to federal agencies. More details are found on OPM’s web site.

Here’s a round up of the articles on this development:

• Washington Post Federal Diary column December 6
• Federal Times December 8
• Govexec. com December 8

• Kaiser Daily Health Care Policy Report, December 8

Here’s a link to Chairman Danny Davis’s press release applauding OPM’s solution.

Here’s a round up of the articles on yesterday’s Federal Workforce Subcommittee hearing to examine the changes to the 2009 Blue Cross Blue Shield Service (BCBS) Standard Option Benefit Plan.

• Joe Davidson’s Federal Diary column

This column mentions a statement from Subcommittee Chairman Danny Davis and statement from Sen. Ben Cardin (D Md) urging various actions.

• Federal New Radio

• Federal Times