OPM announced last week that its flexible spending account (FSA) contractor SHPS is piloting a debit card for GEHA enrollees to use with their optional FSA. According to OPM, the FSA program has 7,600 GEHA participants, and “these pilot participants must continue to save all receipts so that SHPS, Inc., the FSAFEDS administrator, may verify expenses that can’t be substantiated through paperless reimbursement. (For example, over-the-counter medicines.)” A good explanation of how these FSA debit cards work can be found here.

On June 12, I blogged about a new Merck blockbuster diabetes drug called Januvia, which is awaiting FDA approval. It turns out that next Friday June 23 Merck will lose its patent protection on a current blockbuster heart drug, the statin Zocor ($4.4 billion in 2005 sales — estimated zero dollars in 2007).

According to Forbes Magazine, the Israel based generic drug powerhouse Teva Pharmaceutical Industries expects to receive FDA approval of its generic version of Zorcor, known as simvastatin , later this month. Although Pfizer’s patent on the best selling statin Lipitor ($13 billion in sales) does not expire until 2011, prescription benefit managers are expected to encourage switchovers from patent medications like Lipitor and Crestor to the generic version of Zocor, particularly in low risk patients. Indeed, a research company Decision Resources recently found that “primary care physicians and cardiologists expect to substantially decrease their prescribing of Lipitor when generic simvastatin is available in June 2006.”

What’s more, Pfizer’s patent on the best selling anti-depressant drug Zoloft ($3.3 billion in 2005 sales) expires on June 30. A US subsidiary of Teva, Ivax, received FDA approval of a generic version of another best-selling anti-depressant Lexapro ($1.2 billion in 2005 sales) on May 23. However, Teva cannot market that generic until Forest Lab’s patent on Lexapro expires in 2009 unless it wins its legal challenge to that patent.

Express Scripts, one of the major PBMs, issued a report earlier this month estimating that there are $20 billion in untapped generic drug savings.

Two major OPM initiatives are requiring fee-for-service FEHB plans to adopt certain HEDIS quality measures and to provide price and quality transparency. The American Medical Association voted at its annual meeting this week to adopt these related policies:

“Patient adherence to treatment plans: The AMA voted to recognize that patient adherence to any medical treatment program is necessary in order to achieve high quality and cost-effective health care, and agreed to develop a list of resources to help physicians and patients optimize adherence. “‘For any health or wellness program to succeed, we must find ways to help patients follow through on treatment plans,” said AMA President-elect Ronald M. Davis, MD. “The best health outcomes occur when the physician and patient work together toward a common goal.'””Health plan and insurer transparency: In support of consumer-directed health care and an end to the mystery of medical prices, the American Medical Association (AMA) today called on the health insurance industry to end efforts to conceal their pricing systems for medical services. “Physicians at the AMA Annual Meeting agreed that patients need price transparency from all sectors of the health care system, but noted that pricing is largely outside of physicians’ control. It is based on a complex array of factors that are controlled by health insurers and often imposed upon physicians. [Blog note — That’s rich. Health benefits are a more a price support for doctors than an insurance product — will you be upset if you don’t get a home owners insurance claim payment this year — no, because that’s real insurance covering a risk that you don’t want to materialize. ]
“AMA pledged to take actions that would promote true price transparency, including calling on health plans to make their payment policies, claims edits, benefit plan provisions and fee schedules available for public viewing.”As I have said on the blog in the past, doctors have to bury the hatchet with health plans and work cooperatively to control health care costs. Improving patient compliance with doctor directions is a step in the right direction but refusing to recognize their role in the price setting process is a step back.

Both the House Energy and Commerce Committee (28-14) and the House Ways and Means Committee (23-17) reported out their respective versions of H.R. 4157, a health information technology promotion law. There are several difference between the two bills, the most significant of which from a health plan prospective is that the Ways and Means bill mandates implementation of the ICD-10 coding system in 2009 while the Energy and Commerce bill does not. The House leadership now will have to reconcile the two bills if they want to have a productive Health Week.

The U.S. Supreme Court ruled today that federal courts do not have jurisdiction over an FEHB carrier’s lawsuit to enforce its subrogation/reimbursement rights against an FEHB plan member. Empire Healthchoice Assurance, Inc. v. McVeigh, — U.S. — , No. 05-200 (PDF copy), affirming the Second Circuit’s opinion. According to the majority opinion, written by Justice Ruth Bader Ginsburg, in this 5-4 decision, “Federal courts should await a clear signal from Congress before treating” these recovery cases as arising under federal law for purposes of federal court jurisdiction under 28 U.S.C. § 1331 (Slip op, p. 2). Justice Breyer, supported by Justices Kennedy, Souter, and Alito, wrote a strong dissent that makes perfect sense to me.

The Supreme Court soon will grant certiorari and remand the related Cruz case (No. 04-1657) back to the Seventh Circuit for reconsideration in light of McVeigh.

This is the first time that the Supreme Court has issued an opinion interpreting the FEHB Act, a statute that the Wall Street Journal’s Law Blog described as “relatively obscure.” (What does that say about my blog??)

The Institute for Health Care Improvement sponsors the 100,000 Lives Campaign to improve hospital care by implementing up to six evidence-based and life-saving interventions at participating hospitals. The Institute reported today that over the first 18 months of this program has avoided an estimated 122,300 deaths at 3,000 participating U.S. hospitals. What’s more,

As a result of the Campaign, many patients have begun to enjoy a new standard of care. Over 20 facilities have reported that they have gone over a year without a Ventilator-Associated Pneumonia, a leading killer among all hospital-acquired infections, demonstrating that this sort of complication can be avoided and is not inevitable. Hundreds of hospitals have also now instituted rapid response teams, a relatively new concept that is saving lives. Participating hospitals have also made great headway in delivering reliable care for Acute Myocardial Infarction, preventing adverse drug events, and preventing surgical site and central line infections.

Now that’s the Hippocratic Oath in action!

The House of Representatives reportedly is planning to hold a health week beginning June 20. The marquee attraction may be H.R. 4157, the Health Information Technology Improvement Act of 2006. As noted in a prior entry, the Ways and Means Committee’s health subcommittee reported out a version of the bill that mandated health plans to implement the new ANSI 5010 837 standard electronic claim in March 2009 and the ICD-10 diagnosis and inpatient procedure coding system in September 2009. (The full Committee has not scheduled a markup of this bill yet.)

AHIP urged Congress to delay ICD-10 implementation until 2012. On June 8, the Energy and Commerce Committee’s health subcommittee reported out a different version of HR 4157, titled the Better Health Information System Act that does not include the ICD-10 mandate, among other differences between the two bills. (A victory for common sense.) The full Energy and Commerce Committee plans to mark up this bill tomorrow morning. It appears that the Energy and Commerce version of the bill has the big mo. (Meanwhile the medical community continues to question the financial and time investments required for HIT implementation.)

The Senate already has passed a bipartisan health information technology bill, S. 1418.

On May 15, the initial open enrollment period for Medicare’s prescription drug program known as Medicare Part D ended. CMS reported a surge in enrollments before the open enrollment concluded. CMS also reported that the average Medicare Part D premium for 2006 is under $24 per month, significantly below the $36 benchmark price that CMS projected soon after the law was enacted.

Medicare Part D plans submitted their 2007 bids on June 5 (similar to FEHB plans which submitted their 2007 benefit and rate proposals on May 31). According to BNA, experts are predicting that 2007 Medicare Part D premiums will be 5% to 8% lower than 2006 premiums because the Medicare law provides for aggregate reinsurance to help Part D sponsors launch the new product. The thresholds for these “risk corridor” payments double in 2008 so plans may want to build enrollment in 2007. CMS is expected to announce the 2007 benchmark premium in August 2006.

On June 8, the Blue Cross and Blue Shield Association announced its new Blue Distinction program which, according to the Association, includes the following components:

• “Blue Distinction National Transparency Demonstration — A national transparency demonstration by 17 Blue Plans ensures that we are providing consumers with the most effective ways to learn about absolute and relative healthcare costs.
• Blue Distinction CentersSM — The Blue Distinction Centers identify quality providers of bariatric surgery, cardiac care and transplant services nationwide.
• Blue Distinction Provider Measurement and Improvement ProgramSM — The Blue Distinction Provider Measurement and Improvement Program integrates provider performance metrics from public sources into a national framework for improving healthcare quality.”

The Federal Workforce and Agency Organization subcommittee of the House Government Reform Committee held a second hearing today on H.R. 4859, the Federal Family Health Information Technology Act, which Chairman Jon Porter (R NV) and Rep. Lacey Clay (D MO) have sponsored. Chaiman Porter indicated that he plans to markup the bill soon.