The Federal Workforce Subcommittee of the House Oversight and Government Reform Committee held a hearing this morning on “2009 Blue Cross Blue Shield Health Benefit: What it means for Federal employee.” Chairman Danny Davis (D Ill.), Del. Eleanor Holmes Norton (D DC), Rep. Elijah Cummings (D Md), and Rep. John Sarbanes (D Md) were in attendance. The statements and testimony is available here. Govexec.com reports on the hearing here.
Prescription benefit manager Express Scripts and certain of its customers received extortion demands from data thieves who had stolen confidential Express Script member health information. Express Scripts responded aggressively as explained on its dedicated website.
AIS Drug Benefits News featured an update on the story today.
[Express Scripts} so far has taken all of the right steps, says one security expert. “Textbook-wise, it looks like they’re doing everything possible [to address the issue],” says Harry B. Rhodes, director of practice leadership at the American Health Information Management Association. Among other things, the PBM has examined the audit trail, contacted affected customers and is working with the FBI on the investigation, he notes.Still, Rhodes says that now that Express Scripts has identified where the information came from in its database, the company should be able to start zeroing in on the people that had access to that information. He points out that 80% of data breaches are the result of an inside job.”They need to look at all of their employees, including their current employees,” he suggests. “The current best practice is [that] you do a background check on people who have access to this type of information, especially people who can download or move or copy large portions of information.”
The article also discusses the data security practices of the other two major PBMs, Medco Health Solutions and CVS/Caremark.
There’s not much to catch up on this week due to the short work week. I hope that everyone enjoyed Thanksgiving. I certainly did enjoy Thanksgiving, but not today’s Redskins game.
Mercer, a major consulting firm, issued its 2008 National Survey of Employer-Sponsored Health Plans. According to the study,
Total U.S. health benefit cost rose by 6.1 percent in 2007, the same pace as last year, to an average of $7,983 per employee.
Among large employers (those with 500 or more employees), average in-network PPO deductibles rose by about 11 percent, from $426 to $473 for individuals and from $1,022 to $1,134 for families. Small-employer deductibles, already much higher, rose by only about 2 percent for individuals (from $859 to $872 among employers with 10-499 employees) but by 5 percent for families (from $1,786 to $1,879).
“Given that the majority of covered employees are in PPOs, an increase in deductibles of this size could dampen employers’ total health cost increase by about a point,” said Blaine Bos, Mercer worldwide partner and spokesperson for the survey. But even if employers made no benefit cuts at all, the rate of increase still appears to be slowing. Employers estimated that the cost of their largest medical plan would increase 8 percent in 2008 “before changes.” That’s down from 9 percent in 2007 and 10 percent in 2006. “The slowdown in the underlying trend reflects slowing utilization,” said Mr. Bos. “And that is very likely tied to the proliferation of health management activities and other consumerism strategies.” The survey found that 80 percent of large employers use health management programs as a way to control cost and improve productivity, while 52 percent are actively promoting employee consumerism. The majority of employers using these strategies say they have been successful (63 percent for health management and 62 percent for consumerism). Large employers, which tend to be more proactive in cost management, experienced a somewhat lower average cost increase than small employers in 2007 (5.1 percent compared to 6.6 percent)Another factor that may have served to slow cost increases was the growth in enrollment in consumer-directed health plans, the type of medical plan with the lowest cost by far. In 2007, the percentage of employees enrolled in a CDHP (based on either a Health Savings Account or a Health Reimbursement Account) rose from 3 percent to 5 percent of all covered employees.
Evidence that the plans are cost-effective is accumulating. CDHPs delivered substantially lower cost per employee than either PPOs or HMOs in 2007. CDHP cost averaged $5,970 per employee, compared to $7,120 for HMOs and $7,352 for PPOs . Of the two types of CDHPs, HSA-based plans were less expensive than HRA-based plans ($5,679 compared to $6,224). Employer account contributions are a standard feature of HRAs but not of HSAs: over a third of large HSA sponsors do not contribute. Among those that make an HSA contribution, the average contribution is about the same as the average HRA contribution: $626 and $621, respectively.
CMS has a released an “issues paper” intended to frame the debate over the best way to transition Medicare providers of care to a value based purchasing system. According to Modern Healthcare.com, “[t]he issues paper will serve as a discussion piece at a public meeting that will be held by the CMS on Dec. 9. Issues identified and discussed during this meeting will assist the agency in developing options for its value-based purchasing plan. The deadline for comments on the issues paper is Dec. 16.”
Finally, a few more Open Season articles — here, here, and here . Open Season ends next Monday December 8.
Rep. Danny Davis (D IL) who chairs the Federal Workforce Subcommittee of the House Oversight and Government Reform Committee, has scheduled a hearing on December 3 at 10 am concerning “2009 Blue Cross Blue Shield Health Benefits: What it means for Federal employees.” The hearing will examine changes in Blue Cross Blue Shield FEP’s premiums and benefits for 2009. BCBS FEP covers over 50% of the FEHBP’s total enrollment.
Recent Open Season articles here and here.
The Washington Post’s health section reported on the unwillingness of many doctors to use electronic prescribing. According to the article,
As part of its e-prescribing project, CareFirst provided hand-held devices, software and training to 500 physicians. Today, 350 are still enrolled. Some of the remaining 150 doctors have graduated to more sophisticated electronic medical records, but many simply returned to pen and pad. “Providers are creatures of habit; they have processes they are used to,” said Pete Stoessel, a CareFirst administrator involved in the initiative. “They are very, very averse to change.”
Actually that’s not a bad result, and the new Medicare incentive/mandate should help increase adoption.The American Medical Association, at its November meeting, expressed support for the patient centered medical home concept according to the AMA News. Deloitte Consulting recently released a study on the concept which it described as follows:
“In a medical home model, primary care clinicians and allied professionals provide conventional diagnostic and therapeutic services, as well as coordination of care for patients that require services not available in primary care settings. The goal is to provide a patient with a broad spectrum of care, both preventive and curative, over a period of time and to coordinate all of the care the patient receives.
The AMA wants more “deets” on how insurers will reimburse physicians for operating a medical home.
The U.S. Office of Personnel Management (“OPM”) recently posted on its website its FY 2008 Performance and Accountability Report which includes the following FEHB Program discussion on page 120.
Challenge — FEHBP
Action:
OPM issued a request for proposal to acquire a health benefits carrier to offer a nationwide Indemnity Benefit Plan under the FEHBP beginning January 2010. The primary purpose of adding the Indemnity Benefit Plan is to mitigate the risk should any carrier with a sizeable share of the market leave the FEHBP for any reason.
OPM established a working group to develop steps to strengthen the controls and oversight of the FEHBP pharmacy benefits. To help formulate a better understanding of this area, the group has completed or planned the following activities:
* Conducted a literature search on bestpractices in managing drug programs
* Met with officials that run pharmacy programs for other large government sponsored health care programs (i.e., TRICARE, Centers for Medicare and Medicaid Services (CMS), and U.S. Department of Veterans Affairs) to understand the controls they have established
* Obtained consulting contract with industry experts on drug pricing and Pharmaceutical Benefits Manager (PBM) contract management/oversight to review FEHB carriers PBM contracts.
The long-term goal is to develop options for future enhancements of FEHBP pharmacy programs based on the results for the literature search, CMS/TRICARE benchmark evaluations, and recommendations from the expert consultant. Further, OPM will have responsibilities and challenges as insurance carriers begin to implement Health Information Technology (HIT) initiatives. HIT (or e-health) covers a broad range of initiatives, including electronic personal health records, e-Prescriptions, and disease-management programs.
OPM issued the Federal Employees Health Benefit (FEHB) Program Carrier Letter 2007-07 that states OPM expects all FEHB carriers to be committed to these four cornerstones: standards for information technology, quality care reporting, transparency of health services costs, and providing incentives for quality care at competitive prices. The Program Carrier Letter reiterates OPM’s commitment to the cornerstones and to promoting state-of-the-art health information technology. In 2008, OPM issued a second carrier letter (2008-06) in which it restated the expectation that all FEHB carriers need to continue their important efforts to make fundamental information about health care quality and costs available to consumers.
Progress: Moderate
Next Steps:
The long-term goal is to develop options for future enhancements of FEHBP pharmacy programs based on the results for the literature search, CMS/TRICARE benchmark evaluations, and recommendations from the expert consultant. Further, OPM will have responsibilities and challenges as insurance carriers begin to implement Health Information Technology (HIT) initiatives. HIT (or e-health) covers a broad range of initiatives, including electronic personal health records, e-Prescriptions, and disease-management programs.
OPM will continue working with insurance carriers to implement and improve upon HIT initiatives as well as with OMB on its related scorecard initiatives.
See also the discussion of Improper Payments in the FEHBP found on pages 132 – 133.
- Summary of AHIP’s Proposal to Guarantee Coverage for Pre-existing Conditions and Promote Affordability in the Individual Insurance Market:
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.