• Modern Healthcare.com reports that a RICO lawsuit has been filed against Ingenix and its parent United Healthcare in the federal district court in Hartford, Connecticut. The suit is based on the allegations of artificially low reimbursement rates for out of network provider first publicized by New York State Attorney General Andrew Cuomo. The suit is captioned Weintraub v. Ingenix Inc et al., Civil Action No. 3:08-cv-00654-CFD, and thanks to PACER, I have learned that Aetna, CIGNA, GHI, Empire Blue Cross, Humana, and Healthnet, among others, also are named defendants. The plaintiff is a New York resident who belongs to an Aetna plan. The suit is assigned to U.S. District Judge Christopher Droney.
• AHIP announced this week that “More than 6.1 million Americans are covered by Health Savings Account (HSA)-eligible insurance plans, a 35 percent increase since last year.” The Government Accountability Office issued a report this week finding that while this number has increased since 2004, “in all years, many HSA-eligible plan enrollees did not open an HSA.” The Wall Street Journal has featured a report on this problem, which is not found in the FEHB Program where the carriers seed the HSA accounts for their members. In response to the GAO report, Representatives ” Waxman and Stark renewed calls for legislation that would require enrollees in health savings accounts to prove that withdrawals were for medical expenses” according to the San Francisco Chronicle.
• I attended a conference last Tuesday sponsored by the Galen Institute, the Heritage Foundation, and the American Enterprise Institute that featured a speech by Health and Human Services Secretary Michael Leavitt titled “Medicare Drifting Toward Disaster / Solutions for Sustainability.” A webcast of the 2 hour conference is available here. Secretary Leavitt intends to append his speech to the minutes of the March 26 Medicare Trustees meeting at which the Trustees released a report predicting that the Medicare Part A trust will be insolvent in 2019. Secretary Leavitt called for political courage to address the problem now. Sen. John Breaux (ret. D La) agreed but noted that political courage increases as the deadline approaches. He predicted that Congress will be addressing the issue in 2018.

The House of Representatives approved the Senate’s version of the Genetic Information Non-Discrimination Act (GINA, H.R. 493) by a vote of 414-1, and the AP reports that President “Bush was expected soon to sign the Genetic Information Nondiscrimination Act, which lawmakers and advocates called ‘the first major civil rights act of the 21st century.'” The law takes effect 18 months after enactment.

The outcome of the House Federal Workforce subcommittee hearing on Tuesday, April 29, was a substitute bill (HR 5550) to create a voluntary, supplemental health insurance program for young adults who lose FEHB coverage at age 22. According to a Federal Times report, the program which would be similar to the FEDVIP program is expected to offer lower programs than the current temporary continuation of coverage offered to folks who lose their FEHB coverage (similar to COBRA continuation coverage in the private sector.

Govexec.com reports that Sen. Clinton has introduced a bill (S 2916) to require government contractors, including FEHB plan carriers, to self-report criminal conduct and overpayments. Her bill’s objective is similar to a bill that the House of Representatives approved last month. Goveexec.com explains that

Clinton’s bill would build on the Close the Contractor Fraud Loophole Act (H.R. 5712), which passed the House by a voice vote on April 23. Sen. Claire McCaskill, D-Mo., introduced an identical companion bill in the Senate, which she expects to include in the National Defense Authorization Act.Sponsored by Rep. Peter Welch, D-Vt., the House bill closes the overseas loophole in proposed changes to the Federal Acquisition Regulation, which would require contractors to self-report certain procurement violations. The administration has said the exemption was a “drafting error” and that it is fixing it through a standard regulatory process.

• In addition to sponsoring a very useful Hospital Compare website, the Centers for Medicare and Medicaid Services (“CMS”) sponsors a Nursing Home Compare website. CMS announced this week that
  

  For the first time, information about nursing homes on the Compare Web site will list whether a home is or has been on CMS’ special focus facility (SFF) list. The agency’s SFF initiative gives heightened scrutiny to nursing homes that have a history of poor performance or repeated violations of state and federal health and safety rules.“Today’s expansion of information on Nursing Home Compare will give beneficiaries a more complete picture of a nursing home’s history of providing quality care,” CMS Acting Administrator Kerry Weems said.

• Modern Healthcare.com published an interesting article about criminal prosecutions related to violations of the HIPAA Privacy Rule.

According to the Subcommittee’s website,

The Subcommittee on Federal Workforce, Postal Service and the District of Columbia will hold two hearings, under the title, “Catching Up: Benefits That Will Help Recruit and Retain Federal Employees,” on Tuesday, April 29, 2008, at 2:00 p.m. in room 2154 of the Rayburn House Office Building. Panel one will discuss improvements to the Federal Employee Thrift Savings Plan (automatic enrollment and default to the Life Cycle Fund) and the second panel will examine providing health insurance to young adults enrolled as dependents in the Federal Employee Health Benefits Program (FEHBP). Immediately following the hearing, the Subcommittee will markup [among other bills]: H.R. 5550, a bill “To amend title 5, U.S.C, to increase the maximum age to qualify for coverage as a ’child’ under the health benefits program for Federal Employees.” Chairman Davis may offer an amendment to H.R. 5550, which he introduced on March 6, 2008.

The FEHB Act (§ 8901) currently defines an eligible family member as

(5) “member of family” means the spouse of an employee or annuitant and an unmarried dependent child under 22 years of age,
including–
(A) an adopted child or recognized natural child; and
(B) a stepchild or foster child but only if the child lives with the employee or annuitant in a regular parent-child relationship;

or such an unmarried dependent child regardless of age who is incapable of self-support because of mental or physical disability which existed before age 22;

Chairman Davis’s bill would increase the age ceiling from 22 to 25. Adult children in that age group currently are eligible for FEHB coverage on a self-pay basis under the Temporary Continuation of Coverage law, which in my opinion is a pretty good deal. Of course, if the Chairman’s bill were to be adopted the TCC would be available for three years beginning at age 25. However, even under the Chairman’s bill, adult children would continue to be cut off from FEHB coverage as soon as they marry. Perhaps the Chairman’s amendment would modify this restriction.

The Senate passed the Genetic Information Non-Discrimination Act (H.R. 493) today 95-0. The bill must now be presented again to the House or Representatives because the Senate amended the House approved bill in response to concerns raised by Sen. Tom Coburn (R Okla) and the White House. It is expected that the House will approve the Senate version of the bill next week, and according to Bloomberg, HHS Secretary Leavitt has announced the Administration’s support for the bill that the Senate approved. The deal appears to be done.

The Genetic Information Non-Discrimination Act (GINA, HR 493) will be considered on the Senate floor tomorrow according to the Associated Press after Sen. Tom Coburn (R. Okla.), who is an MD, agreed to lift his hold on the bill. The AP story explains that

The compromise tightens language to ensure there is a “firewall” between the part dealing with health plans and the section regarding employment so as to discourage inappropriate claims.It also makes clear that, while individuals are protected from discrimination based on genetic predisposition, insurance companies still have the right to base coverage and pricing on the actual presence of a disease

The House already has passed the bill, and presumably the compromise that lead Sen. Coburn to release his hold will satisfy the White House’s concerns about GINA as well.

The New York Times article accurately notes that federal law (HIPAA) already prohibits group health plans from discriminating in coverage based on genetic testing so this law primarily impacts individual health insurers and employers. Furthermore, as noted in genome.gov, “

President Clinton issued an executive order ( Executive Order 13145 to Prohibit Discrimination in Federal Employment Based on Genetic Information) in February 2000 prohibiting agencies of the federal government from obtaining genetic information about their employees or job applicants and from using genetic information in hiring and promotion decisions

But it is a complicated law. Privacy advocates already are criticizing its “limited” scope.

• The FEHBlog schedule has gotten offtrack because my wife and I enjoyed a weekend off in Connecticut.
• The Tier 4 controversy continues. Sen. Barack Obama (D Ill) sent OPM Director Linda Springer a letter last week requesting by April 30 a report on “skyrocketing copayment costs for prescription drugs.” USA Today followed the New York Times in opining against the growing practice of increasing cost sharing on biologic or specialty drugs. AHIP President Karen Ignani presented a counterpoint to the USA Today’s editorial — urging Congress to create a pathway to biogenerics and “a national institution to compare the effectiveness of new and existing therapies, and provide patients and doctors with data about which are safest, work the best and are most cost-effective.”
• I ran across two interesting articles in the AMA News. One discussed a healthcare marketplace website — www.carol.com — that according to the about us page on the siete allows Twin Cities (Minneapolis / St. Paul MN) consumers to compare health care services, practitioner credentials, quality dimensions, and costs—with or without insurance. Carol works with insurance companies to verify membership and provide cost estimates for care packages.” The AMA News provides this background information on Carol:
  

  Carol’s founders include Tony Miller, co-founder and former chief executive officer of Definity Health, one of the first companies to offer consumer-driven health plans such as health savings accounts. United bought Definity, its fellow Minneapolis-area company, in December 2004. Miller then formed Lemhi Ventures, which put $25 million into the startup of Carol. For now, Carol’s reach extends only to the Minneapolis-St. Paul vicinity, though the company says talks are under way with physicians and hospitals in Seattle and Cincinnati to offer services there.

  On a related note the Wall Street Journal reported managed care company earnings for the first quarter of 2008 appear to be unhealthy. However, according to the Journal’s report

  Health insurers have been cushioning problems in their core commercial health-insurance market by expanding into new areas, such as offering plans to Medicare beneficiaries and developing health-information tools and capabilities that might help employers and individuals better control their own costs.

  Some analysts say, for example, that Aetna’s successful packaging of medical-cost and disease-management tools in recent years is one reason it hasn’t seen the same enrollment shortfalls as its competitors. Last year, among the top four carriers — including WellPoint, UnitedHealth and Cigna Corp. — Aetna was the only one that didn’t see a decline in people it charges a premium to insure.

• The other AMA News article of note was an interview with the AMA’s President Ron Davis, MD, who recently has been diagnosed with pancreatic cancer. Dr. Davis, who clearly is a brave man, blogs about his illness at carepages.com, a Revolution Health social website that “connects family and friends during illness or injury.”

• The House passed a tax bill on April 15 that would impose a requirement on health savings account (HSA) trustees, e.g., banks, to substantiate the health care nature of expenses reimbursed out of HSAs. According to Workforce Management, “The 238-179 vote came after intense debate on the House floor in which opponents of the HSA provision—which is part of a broader tax bill, H.R. 5719—warned that such a requirement could cripple HSAs.” The White House issued a statement of administration policy that includes a veto warning over this provision.
  

  These new burdens on HSA administrators are unnecessary for efficient tax administration, inconsistent with the flexibility purposely afforded HSAs at their inception, and could undermine efforts by employers, individuals, and insurers to reduce health care costs and improve health outcomes by empowering consumers to take greater control of health care decision-making. If H.R. 5719 were presented to the President with these provisions, his senior advisors would recommend he would veto the bill.

  We shall have to wait and see what the Senate does with the bill.

• The Centers for Medicare and Medicaid Services published on April 14 a proposed rule concerning changes to the prospective payment system that compensates hospitals for Medicare Part A covered care in the next federal fiscal year that begins October 1, 2008. The CMS fact sheet on the rule is here. Modern Healthcare reports that
  

  Under the proposal, hospitals would receive the full inflation, or marketbasket, update, projected at 3%, but given all the changes in the rule, the CMS projects that on average, hospitals will see an increase in payments of 4.1%, according to the American Hospital Association.

  The proposed rule also expands the number of quality measures on which hospitals must report to CMS and expands the list of never events that Medicare will not cover.

• Healthcare IT News reports that AHIC’s Consumer Empowerment workgroup “considered recommendations on April 15 from the Centers for Disease Control and Prevention on how best to push personal health records.” Among other suggestions, CDC recommended market research on consumers.

• A Wellpoint subsidiary, Healthcore, Inc., is working with the Food and Drug Administration to mine claims data for the purpose of creating a Safety Sentinel System to promptly identify unanticipated health risks associated with prescription drug use. According to Wellpoint’s press release,
  

  Jerry Avorn, M.D., professor of medicine, Harvard Medical School and chief, division of pharmacoepidemiology and pharmacoeconomics, Brigham and Women’s Hospital, said, “The discovery of important risks of drugs like Vioxx(R) and Avandia(R) has demonstrated that the health care system currently has no reliable means of quickly measuring the safety of drugs once they’re in widespread use. I look forward to working with HealthCore and its partners on this project and bringing the value of WellPoint’s Safety Sentinel System to a large number of patients.”

  Ultimately, the system is expected to be capable of continually monitoring WellPoint’s 35-million member database and identifying increases in health problems among members taking a given drug, indicating a potential Serious Adverse Event (SAE). It is anticipated that the company’s Safety Sentinel System will also make it possible to examine whether particular combinations of treatments could cause serious medical problems, especially in patients with certain diseases or health conditions.

  Sam Nussbaum, M.D., chief medical officer for WellPoint, said, “This critical information will allow health care decision-makers including federal agencies, physicians, consumers and manufacturers to move far more quickly than in the past in addressing potential drug risks. “Our company’s Safety Sentinel System will draw upon the vast amount of data generated by WellPoint’s health plans, including the use of specific medications. It will enable us to identify potential hazards and allow faster, more informed decision making by health care professionals.”

  “Our initial developmental work on the system has clearly demonstrated its ability to detect adverse events rapidly,” Nussbaum said. “We were able to pick up a safety signal within a few months on certain drugs even though in some cases in the industry’s current system it can take more than 5 years.”

  “WellPoint’s investment in its Safety Sentinel System demonstrates the company’s commitment to providing the best possible care to its members,” said Marcus Wilson, Pharm.D., president of HealthCore. “What differentiates our system from other safety programs is not only our ability to access massive amounts of data to detect the presence of serious safety issues, but also our ability to work in collaboration with our vast network of health care providers across the country to quickly and effectively evaluate the validity of the signal.”

Most health plans offer their members three tiers of prescription drug benefits — generic, preferred brand, and non-preferred brand. The co-payments/co-insurance increase as you move from generic to non-preferred brand. The New York Times reported that health plans are beginning to add a fourth tier for specialty drugs.

Specialty drugs are high cost, typically injectable drugs used to treat complex conditions. AIS Health posts a library of articles on specialty drugs here. Specialty drugs are expensive because, among other reasons, there is no legal “pathway” at present for creating generic versions of biological drugs. The New York Times article is noteworthy because it describes the impact of a fourth tier for specialty drugs on a FEHB plan participant. The Times article illustrates the importance of finetuning benefit communications.

In Tuesday’s paper, the Times weighs in with an editorial on the issue:

There is little doubt that the so-called tiered formularies, in which co-payments rise along with the cost of the drugs, are a sensible approach for encouraging consumers to use the cheapest drug suitable for their condition. But the system seems to break down when it moves to Tier 4 drugs where co-payments can be huge and suitable alternatives don’t exist. The insurers say that forcing patients to pay more for unusually high-priced drugs allows them to keep down the premiums charged to everyone else. That turns the ordinary notion of insurance on its head. Instead of spreading the risks and costs across a wide pool of people to protect a smaller number of very sick patients from financial ruin, insurers are gouging the sickest patients to keep premiums down for healthier people.

The Times editorial oversimplifies the issue. Heavy utilizers of healthcare typically pay more than those who don’t through co-insurance. A person who undergoes heart surgery will pay more out of pocket than a person who only receives routine care. The more refined issue is whether the plan places a stop loss on the aggregate co-insurance for the specialty drugs as it would with co-insurance on surgical treatment and if so at what dollar amount is the stop loss threshold set.

• There’s reportedly efforts underway to harmonize the House and Senate mental health parity bills but no details have been released as yet. Meanwhile, Business Insurance reports that Rep. Robert Andrews (D N.J.) has introduced a bill to require prosthetic appliance parity with group health plan medical/surgical benefits (HR 5615). Many health plans, including FEHB plans, cap coverage of prosthetic appliances. OPM’s 2008 call letter provided the following guidance on the broader benefits category of durable medical equipment:
  

  Carriers should review their coverage for durable medical equipment (DME) in light of advances in technology for assistive devices designed for individuals with special needs; including vision, hearing, mobility and movement, and cognition. Examples include augmentative and alternative communication (AAC) products such as speech generating devices and audible prescription reading devices. Please provide a statement concerning your coverage for these types of benefits.

• Business Insurance also reports on a standard methodology for rating health care provider performance known as the “Patient Charter for Physician Performance Measurement, Reporting and Tiering Programs” that was released earlier this month by a multi-stakeholder group known as the Consumer-Purchaser Disclosure Project. The standards comply with last year’s settlement agreement between CIGNA and the New York State Attorney General. AHIP endorsed the Patient Charter. Health care quality transparency has become a standard requirement in OPM’s call letter as it is one of HHS Secretary Leavitt’s four cornerstones.

• While on the topic of disclosure, the AP reports that
  

  For years, the nation’s largest drug and medical device manufacturers have courted doctors with consulting fees, free trips to exotic locales and sponsoring the educational conferences that physicians attend. Those financial ties in most cases need not be disclosed and can lead to arrangements that some say improperly influence medical care. Now, under the threat of regulation from Congress, the two industries are promising to be more forthcoming about their spending. A dozen of the nation’s leading drug and device makers have told Sen. Charles Grassley, R-Iowa, that they have plans or are working on plans to publicly disclose grants to outside groups. The details will be provided on each company’s Web sites.

• The Las Vegas Review Journal reports today that

  Although Southern Nevada Health District officials maintain there is no evidence that the unsafe injection practices they believe led to six people contracting hepatitis C at a Las Vegas endoscopy clinic took place before March 2004, at least one health insurance provider isn’t taking any chances. Anthem Blue Cross Blue Shield plans to alert all members treated at the Endoscopy Center of Southern Nevada at 700 Shadow Lane to speak with their physicians about having tests for blood-borne diseases regardless of procedure date. Anthem spokeswoman Sally Vogler said Friday that the notification will appear in the form of an advertisement in the Review-Journal on Sunday and on April 20. She said the advertisement stems in large part from the possibility of patients who were treated at the clinic before March 2004 testing positive for hepatitis C or another blood-borne disease.

• Finally, Healthcare IT News reports that the Trizetto Group which sells claims payment and related software to health plans has been acquired for $1.4 billion by Apax Partners. Apax plans to take Trizetto private. Trizetto’s press release explains that “BlueCross BlueShield of Tennessee and The Regence Group, both customers of TriZetto, are providing a portion of the funding for the transaction and will be equity investors in the newly private company.”