• The House last month approved an FDA appropriations bill (HR 3161) that would permit prescription drug reimportation from foreign countries. The White House has advised Congress that it would veto this bill because, among other reasons, the drug importation provisions threaten the safety of the U.S. drug supply. A friend reminded me yesterday about the deaths of over twenty Panamanians last year due to adulterated cough syrup imported from China. The White House has issued formal veto warnings, known as Statements of Administration Policy, about several appropriations bills, including the bill that funds the FEHB Program (H.R. 2989).
• The House Committee on Small Business held a hearing on August 1 at which health care provider group representatives urged Congress to pass a federal prompt payment law that would define the meaning of the term “clean claim.” No insurance industry representatives testified at the hearing.
• URAC has released voluntary accreditation standards for prescription benefit management companies.
• HHS’s Agency for Healthcare Research and Quality (AHRQ) recently released a set of reports titled Privacy and Security Solutions for Interoperable Health Information Exchange. The reports review 34 state Health Information Exchange plans and identify the challenges and feasible solutions for ensuring the safety and security of electronic health information exchange. These reports are intended to form the basis for the development of privacy and security milestones in the National Health Information Network development process. According to BNA, HHS Secretary Mike Leavitt remarked that he was “impressed by the progress but daunted by what needs to be done.”
• Sen. Max Baucus (D MT) has introduced a bill (S. 1951) that would significantly alter the recent Medicaid rule on generic drug reimbursements in favor of pharmacies.

At the August 2 hearing, House Federal Workforce Subcomittee chairman Danny Davis (D IL) announced that his federal employee short term disability bill will include a provision increasing from 22 to 25 the maximum age for unmarried dependent children to remain covered under the FEHB Program. (There is a separate rule for seriously disabled dependents.) A Govexec.com article report published today informs us that “[A]ccording to [OPM Associate Director Nancy] Kichak, OPM does not view such a proposal favorably. Agency officials believe increasing the dependent care age would actually hike the costs of FEHBP group insurance, Kichak said. She did not indicate whether any studies have been conducted to assess the cost of boosting the age.” Ms. Kichak added that dependents who lose coverage as a result of reaching age 22 may purchase temporary continuation of coverage to age 25.

CMS announced today that the average Medicare Part D (prescription drug) plan premium will increase from $22 to $25 per month, or 14%, beginning January 1, 2008. Medicare beneficiaries will have an open season later this year.

• CMS has released its final Fiscal Year 2008 rules on changes to Medicare’s inpatient propective pricing system (IPPS) and its physician reimbursement system. The changes are largely driven by statute and the hospital and physician trade associations have expressed strong opposition to the changes, several of which may be overridden through the FY 2008 appropriations process and/or the SCHIP reauthorization process. Today’s NY Times features an article about hospital earmarks found in the House State Childrens Health Insurance Program (SCHIP) reauthorization bill. The article includes the following quote from Rep. Pete Stark (D CA): “Under Medicare, he added, ‘you are basically setting prices, and the system is clumsy.’” The Newark Star Ledger headlined an article about an interesting feature of the Medicare IPPS rule — its new Medicare exclusion for six hospital created medical problems.
• News reports indicate that Senate Finance Committee Charles Grassley (R IA) is urging a pre-conference committee talks with the House this month about resolving the differences between the House and Senate SCHIP reauthorization bills. According to the National Journal, Sen. Trent Lott (R MS) predicted that ” If [the conference report] goes one iota beyond what was in this bill, we will be able to sustain the veto,” he said. Former acting CMS Administrator Leslie Norwalk is predicting that the President and Congress will compromise by agreeing on a shorter extension of SCHIP, e.g., two years as opposed to five years, which would punt the issue to the next Administration.

• The Fiscal Year 2008 FDA appropriations bill passed by the House of Representatives last week (HR 3161) includes a provision “effectively permitting the importation of lower-cost prescription drugs from places such as Canada, Australia and Europe,” according to the Associated Press. The bill now moves onto the Senate
• CMS announced today that HIPAA National Provider Identifiers will be publicly disclosed over the National Plan and Provider Enumeration System (NPPES) beginning September 4, 2007.

• Congress has adjourned for its summer recess after the House and the Senate had passed their respective versions of the State Childrens Health Insurance Program reauthorization bill, which the House leadership has rechristened as the CHAMP (Children’s Health and Medicare Protection) bill. The two Houses will have to hold a conference committee to reconcile the two bills. The President has stated that he would veto both bills, but the Senate version passed with 68 votes which is sufficient for a veto override in that House. The AMA, other health care provider groups and the AARP are lining up to support the CHAMP bill because it also would improve Medicare reimbursement to providers in part by taking money from the Medicare Advantage plans. AHIP, the health insurance lobby, supports the Senate bill which provides for a SCHIP expansion funded by a tobacco tax increase.
• HHS is seeking public comment on its proposal to convert the American Health Information Community from a federal advisory committee to an independent public/private partnership. September 10 is the deadline for submitting comments.
• This was a busy week for the OPM Director, Linda Springer. The FEHBlog has noted her testimony on federal employee benefits before the House Federal Workforce subcommittee on Thursday. But she also testified on federal employee pay issues before that subcommittee on Tuesday. On Friday, she applauded the introduction of a bill in the Senate (S. 2003) to encourage federal annuitants to return to part-time federal employment. At Thursday’s hearing, Director Springer described this bill as OPM’s most important legislative initiative.
• The Senate Homeland Security and Government Operations Committee approved a federal procurement reform bill (S. 680).

The House Federal Workforce subcommittee held an entertaining hearing on federal workforce benefits on Thursday August 2. The statements and testimony are now posted on the subcommittee’s website. Steve Barr of the Washington Post and Govexec.com each published accounts of the hearing. OPM also issued a press release.

• According to the Kaiser Daily Health Policy Report, The Senate is proceeding with debate on the State Children’s Health Insurance Program reauthorization bill (S. 1893) and the House can proceed to consider its reauthorization bill (HR 3162) after majority revisions were made to satisfy pay as you go requirements. The President sent veto threats to the Senate on Monday and to the House today.
• The Centers for Medicare and Medicaid Services have further delayed opening the public database of HIPAA National Provider Identifiers (NPPES).
• According to Government HIT magazine, OMB added compliance with the President’s August 2006 health information technology executive order as an element of OPM’s management agenda scorecard card.
• NCQA released its final HEDIS quality measure standards for PPO plans today.
• OPM Director Linda Springer testified before Congress on federal employee pay issues yesterday.

The House Subcommittee the Federal Workforce, Postal Service, and the District of Columbia will be holding a hearing on “Federal Compensation, Part 2 – Benefits” on Thursday, August 02, 2007, 2:00 PM at 2154 Rayburn House Office Building. The hearing will be an overview of existing federal employee benefit programs – Federal Employees Group Life Insurance Program (FEGLI), Federal Employees Long Term Care Insurance Program, Federal Employers Health Benefits Program, the Thrift Savings Plan and the Federal Employees Dental and Vision Insurance Program. Witnesses are expected to be: Rep. Steny Hoyer (D Md) , Rep. Jim Moran (D Va), OPM, Thrift Retirement Board, OPM Inspector General, Congressional Research Service, American Federation of Government Employees (AFGE), National Treasury Employees Union (NTEU), and the National Active and Retired Federal Employees Association (NARFE).

• The Kaiser Family Foundation’s Health Policy Report noted that the House leadership version of the State Children’s Health Insurance Program’s reauthorization bill (HR 3162) requires revised to meet pay as you go requirements before the entire House considers the bill. Congressional Quarterly reports that the Senate leadership plans a vote on the Senate bill on Monday July 30.
• Sen. Tom Coburn (R. Okla.) and four other Republican colleagues introduced the market based “Every American Insured Health Act” as an alternative to the major SCHIP expansion proposed by the House and Senate.
• The American Hospital Association News reported that House approved an amendment as part of the Labor-HHS-Education appropriations bill (HR 3043) that would delay by one year (from Oct. 1, 2007, to Oct. 1, 2008) CMS’s initiative to implement the Medicare Severity Diagnostic Related Groups classification system. CMS has projected that the new system which included a 2.4% “behavioral reduction” in payments to hospitals would save Medicare $24 billion over the next five government fiscal years. The Senate is expected to take up the bill after the August recess.
• There were several articles published this week about how college students will be facing higher prices for oral contraceptives when they return to school in the fall. These articles illustrate the arcane nature of drug pricing in the U.S. The Wall Street Journal reports that
  

  For years, drug companies sold birth-control pills and other contraceptives to university health services at a big discount. This has served as an entree to young consumers for the drug companies, and a profit center for the schools, which sell them to students at a moderate markup. Students pay perhaps $15 a month for contraceptives that otherwise can retail for $50 or more. But colleges and universities say the drug companies have stopped offering the discounts, and are now charging the schools much more. The change has an unlikely origin: the Deficit Reduction Act signed by President Bush last year. The legislation aimed to pare $39 billion in spending on federal programs, from subsidized student loans to Medicaid. And among the changes was one that, through an arcane set of circumstances, created a disincentive for drug makers to offer school discounts. The contraceptive prices offered to schools are now included in a complex calculation that determines certain Medicaid-related rebates that drug makers must pay to states. In this calculation, deep discount prices would have the effect of increasing drug makers’ payments.

  Under the 2005 Deficit Reduction Act, the discounts remain available to “safety net” providers serving the low income population.

• Today’s NY Times featured an article on cancer treatment. The article explains that
  

  [Cancer t]reatment guidelines approved by experts already exist for 70 to 80 types of cancer (http://www.nccn.org/), but the new measures are the first to be formally endorsed by cancer organizations to assess whether hospitals are performing up to par. The measures were developed by the American College of Surgeons’ Commission on Cancer, the American Society of Clinical Oncology and the National Comprehensive Cancer Network, and are available online at www.facs.org/cancer/qualitymeasures.html.