• Last week, the Senate continued to debate, but made no real progress toward adopting, a Medicare bill that would avoid a 10.6% cut to physician reimbursement on July 1. CMS has warned that any reimbursement change will have to be made retroactively if a law is not passed by June 16.
• The Office of the National Coordinator for Health Information Technology awarded Booz Allen Hamilton a $450,000 contract to assess and evaluate the scope of the medical identity theft problem in the U.S.
• The eHealth Initiative issued a report on the state of electronic prescribing.

FCW.com reports that

On June 6, the Bush administration issued an executive order saying that all companies hired to perform work for federal agencies must use an electronic verification system to ensure that their employees are legally eligible to work in the United States. On June 9, the Homeland Security Department designated its online E-Verify system for use in the verification process. The Executive Order will be implemented through a Federal Acquisition Regulation contract clause that is being proposed this month.

The U.S. Citizenship and Immigration Services has posted FAQs on E-Verify for federal contractors. The first FAQ is very helpful:

As a current or prospective Federal contractor, am I required by the Executive Order or the proposed rule to enroll in E-Verify now? Not at this time. At this time, the E-Verify program remains a voluntary program for employers, including federal contractors. The Executive Order instructs Federal agencies to require contractor participation in E-Verify as a term of future contracts, and the proposed rule provides detailed guidance on how that requirement is to be implemented. However, the proposed rule is not a final rule; it is a proposal that is open for public comment at this time. There may be substantive changes to the rule before it becomes final. Moreover, the final rule will not be effective until 30 days after publication. Under the proposed rule, you would only be required to enroll in E-Verify if and when you enter into a Federal contract or subcontract that requires participation in E-Verify as a term of the contract. Although Federal Contractors are not yet required to participate in E-Verify, you are encouraged to enroll in E-Verify now to verify the employment eligibility of your new hires.

• Modern Healthcare Online reports that Sen. Max Baucus (D Mont), the chair of the Senate Finance Committee, has released his “Medicare reform” bill that would retain the current 0.5% increase in doctor reimbursement from Medicare in 2008 and allow a 1.1% increase in 2009. This is higher than the increase that Sen. Baucus initially proposed. Absent the enactment of this legislation, a 10.6% reduction in doctor reimbursement from Medicare will take effect on July 1, 2008. What’s more unless this legislation is enacted by June 16, Medicare will be required to implement the change retroactively according to the Centers for Medicare and Medicaid Services.
• The New York Times reports today on a Capitol Hill controversy over Medicare reimbursement of doctor owned or specialty hospitals.
• Today’s Washington Post includes a Jane Bryant Quinn column on a health care reform proposal offered by the ERISA Industry Committee. Meanwhile, AHIP, the health insurance carrier’s trade association, offered its own reform proposal recently.

• Government Health IT reported on the June 4, 2008, House Energy and Commerce Health Subcommittee hearing on the bipartisan health information technology bill that has emerged from the leadership of that committee. What caught my eye were two points: (1) that the Bush Administration warned that
  

  The adoption of health IT standards, implementation specifications, and certification criteria through the use of rulemaking should be avoided. We have seen from prior statutory requirements that it significantly delays the applicability and usage of new and improved standards.

  Amen! and (2) that there were voices in opposition to the privacy zealots who testified.

• The American Health Information Community (AHIC) met on Tuesday June 3. Healthcare IT News reports that
  

  Officials at Tuesday’s meeting received a positive report on the progress of healthcare IT policy efforts. However, experts cautioned, doctors are still slow to adopt electronic health records, and few of the approved standards for healthcare IT data exchange have made it into use in the real world.

Last December, Congress provided doctors, who were facing a 10.6% cut in Medicare reimbursement, with a stay of execution that expires on June 30. The House of Representative’s rules prevented a longer extension. (In fact, Congress gave doctors a 0.5% reimbursement boost for the first six months of 2008).

The Centers for Medicare and Medicaid Services have warned Congress that unless a new extension is enacted by June 16, the wheels implementing the 10.6% cut on July 1 will be set in motion. While both parties want to create an 18 month extension of the status quo, there is disagreement over how to fund it. Therefore, it is likely that the cut will be implemented and then retroactively reversed by Congress. This eventuality, which has occurred a few times in the recent past, causes problems not only for doctors and Medicare payers but also for FEHB plans which pay thousands of claims secondary to Medicare.

The Treasury Department has released here the 2009 indexed amounts on the maximum contribution levels for Health Savings Accounts (HSAs) and out-of-pocket spending limits for High Deductible Health Plans (HDHPs) that must be used in conjunction with HSAs.

• Following up on last Sunday’s post, the Health subcommittee of the House Energy and Commerce Committee will be holding on June 4 at 10 am a business meeting on the discussion draft of the health information technology legislation that a bipartisan group of Committee members has developed.
• Modern Healthcare Online and Government Health IT report no big commercial payer problems associated with the end of the HIPAA National Provider Identifier contingency period on May 23.
• In an interesting development, the State of Connecticut has filed suit in federal court in Boston against McKesson Corp. based on the alleged average wholesale price fixing scheme that is the subject of a private class action in the same court. The private sector class action was brought against McKesson and its alleged co-conspirator First Databank, Inc. (New England Carpenters Health Benefits Fund et al v. First Databank, Inc., et al., Civil Action No. 1:05-cv-11148-PBS. The class plaintiffs counsel and First Databank have proposed a revised settlement to the court after the court reject the first agreement. The class plaintiffs continue to litigate against McKesson. The Connecticut Attorney General sued McKesson, but not First Databank.
• It’s also worth noting that Health Net, a large managed care company, and various class action plaintiffs are proposing a settlement agreement to a federal court in New Jersey where the subject of the dispute is out of network reimbursement levels. Health Net is one of the defendants in the class action filed in Connecticut federal court against Ingenix, the company that develops out of network reimbursement (UCR) schedules, and various managed care companies.

• Kaiser State Health Facts
• AHRQ Medical Expenditure Survey
• AHRQ Healthcare Cost and Utilization Project

What’s more, prescription benefits manager Medco Health Solutions Inc., has released its 2008 Drug Trend Report.

• Good news! The House of Representatives has dropped its plan to statutorily require health plans to cover all mental illnesses identified by the American Psychiatric Association in its Diagnostic and Statistical Manual according to Workforce Management. This compromise with the Senate increases the chances that a stronger mental health parity law will be enacted this year.
• A bi-partisan group of Representatives produced the outline of a House health information technology bill. Meanwhile, the Congressional Budget Office produced a report concludes, according to Government Health IT magazine, that
  

  “there still are many unknowns about the adoption of health information technology, including what its true costs and benefits might be.

  The report, “Evidence on the Costs and Benefits of Health Information Technology,” does not recommend what Congress should do about health IT, but it states that “if policymakers are interested in promoting health IT, some version of a requirement or an explicit or implicit penalty for providers who fail to adopt health IT is likely to be more cost-effective for the federal government than a subsidy.”

• The National Alliance for Health Information Technology forwarded to the American Health Information Community a report including consenus definitions of the following six terms
  

  Electronic Health Record;

  Electronic Medical Record;

  Health Information Exchange;

  Health Information Organization;

  Personal Health Record; and

  Regional Health Information Organization.

• The Federal Trade Commission reported to Congress last week that “Brand name pharmaceutical companies struck 14 deals that led to delayed sale of cheaper generic drugs in the 2007 fiscal year” according to Reuters. The FTC is encouraging Congress to enact a law restricting this practice which the FTC considers to violate antitrust laws.
• On Friday, Medicare began denying electronic claims that included any provide identifying numbers other than the HIPAA National Provider Identifier and the employer or tax identification number. CMS, which enforces HIPAA standards transaction and identifier rules, advised health plan covered entities to similarly terminate their NPI contingency plans.