FEHBlog

We start off with a little housekeeping. OPM has posted an updated organization chart on its website. Last week, the House Oversight and Government Reform Committee identified the members of its subcommittee with FEHBP oversight responsibility:

The Subcommittee on Federal Workforce, U.S. Postal Service and Labor Policy

• Republicans
  • Chair: Rep. Dennis Ross (FL-12)
  • Vice Chair: Rep. Justin Amash (MI-3)
  • Jim Jordan (OH-4)
  • Jason Chaffetz (UT-3)
  • Connie Mack (FL-14)
  • Tim Walberg (MI-7)
  • Trey Gowdy (SC-4)
• Democrats
• Stephen Lynch, Ranking Member
• Eleanor Holmes Norton
• Gerald E. Connolly
• Danny Davis

The FEHBlog’s house has been without power since early Wednesday evening which has placed a damper on postings.

The House Ways and Means and Budget Committees had spirited hearings on the Affordable Care Act on Wednesday.  The AP reports that CMS Chief Actuary Richard Foster, a real straight shooter in the FEHBlog’s view,

was asked by Rep. Tom McClintock, R-Calif., for a simple true-or-false response on two of the main assertions made by supporters of the law: that it will bring down unsustainable medical costs and will let people keep their current health insurance if they like it.On the costs issue, “I would say false, more so than true,” Foster responded. As for people getting to keep their coverage, “not true in all cases.”

On the heels of the Government’s report on its efforts to fight health care fraud, AHIP released a report on insurer anti-fraud efforts which indicates that insurers place their focus on proactively prevention of fraudulent payments rather than recoupment of fraudulent payments. As discussed in Tuesday’s post the federal government now is moving from a reactive to a proactive posture.

The Politico Pulse reported this morning that “Judge Roger Vinson [of the U.S. District Court for the Northern District of Florida] is likely to issue his ruling on the multi-state lawsuit against health care reform on Monday, his office tells PULSE. Twenty states (plus six that joined this month) and the NFIB are asking Vinson to strike down the individual mandate and the Medicaid expansion.” Stay tuned and warm.

The AMA News salivates over the prospect that the non-profit company FAIR Health will increase rates for out of network doctors in the fee schedule which FAIR Health is developing to replace the long standing Ingenix fee schedule. United Healthcare which owns Ingenix settled a New York Attorney General investigation and an AMA lawsuit about two years ago by agreeing to turn over its “usual reasonable and customary” data bases to a non-profit and to pay $300 million into a settlement fund.  Health plans and insurers use these schedules to set a ceiling on payments to doctors who do not participate in their PPO networks. The article notes that the FAIR Health database under development faces competition from a number of sources, including the Medicare Part B resource based relative value schedule which is well known to physicians.

HHS Secretary Sebelius announced today record recoveries in healthcare fraud cases obtained during the last federal government fiscal year. She also announced new final regulations to tighten Medicare and Medicaid controls designed to prevent fraudulent payments. It strikes the FEHBlog that most of the new controls already are in use by private sector health plans.

The House Ways and Means Committee is holding an Affordable Care Act hearing tomorrow at 9 am. “The hearing will examine the economic and regulatory burdens imposed by the enactment and implementation.”

Business Insurance reports that the Senate leadership will be introducing a bill to repeal the Affordable Care Act’s expanded Form 1099 tax reporting requirements and that a bipartisan group of House members has introduced a bill (H.R. 5) to cap damages and limit contingent attorrney’s fees in medical malpractice cases.

On Thursday, the House passed House Resolution 9 with the support of all Republicans and 14 Democrats according to the Hill. This resolution, which is an internal House directive, states that “the Committee on Education and the Workforce, the Committee on Energy and Commerce, the Committee on the Judiciary, and the Committee on Ways and Means shall each report to the House legislation proposing changes to” the Affordable Care Act. Among the topics to be considered is a permanent fix to Medicare’s sustainable rate of growth formula for compensating doctors under Medicare Part B.

The Republican controlled House also is exercising its rights under the Congressional Review Act. The Harvard Law Review in 2009 published an article on the mysteries of this 1996 law. Rep. John Carter (R Tex) has introduced H. Jt. Res. 19 which if enacted by the House and Senate under expedited procedures (and signed by the President) would block the HHS rule implementing the Affordable Care Act’s minimum loss ratio applicable to health insurers. The resolution has been referred to the House Energy and Commerce Committee.

Business Insurance reports that the newly minted House Energy and Commerce Committee Chairman Rep. Fred Upton (R Mich) has sent HHS Secretary Sebelius a letter asking why the office responsible for implementing the Affordable Care Act is being shifted from her office to the Centers for Medicare and Medicaid Services. “Washington observers have said the real reason for the move was to limit Republican efforts to gut implementation of the law by blocking funding for the CCIIO and preventing development of rules to implement and enforce the reform law.”

The New York Times reports today that “The Obama administration has become so concerned about the slowing pace of new drugs coming out of the pharmaceutical industry that officials have decided to start a billion-dollar government drug development center [within the National Institutes of Health] to help create medicines.” The action struck the FEHBlog as an Admnistration slap to the face of  the pharmaceutical industry, whose trade organization PhRMA strongly supported enactment of the Affordable Care Act. But Noooo. PhRMA issued a press release supporting the action thereby indicating industry collaboration. Quelle surprise!

The FEHBlog ran across this survey of doctors conducted by HCPlexus and Thomson Reuters. According to the executive summary,

Sixty-five percent of respondents believe that the quality of health care in the country will deteriorate in the near term. Many cited political reasons, anger directed at insurance companies, and critiques of the reform act – some articulating the strong feelings they have regarding the negative effects they expect from the PPACA [“the Affordable Care Act”].

Wow.  This afternoon, according to an LA Times report, the House voted to repeal the Affordable Care Act with all Republicans and three Democrats supporting the measure. The Senate Majority Leader has promised that the House bill will not be considered by the Senate and of course if lightening were to strike and the Senate passed the bill, then the President would veto it. So this is the start of the political process leading up to the 2012 Presidential election.

Another outcome of the 2010 elections is that the number of states participating in the Florida lawsuit challenging the constitutionality of Affordable Care Act has risen from 20 to 26 according to an AP report. The judge in that case heard oral arguments on December 17 and is expected to render a decision within the next month or so. Virginia has filed its own lawsuit. The government appealed the decision of the judge in that case holding the Act’s individual mandate unconstitutional according to Reuters. The Washington Post is tracking all of the cases challenging the Act’s constitutionality here.

The Affordable Care Act, as interpreted by the Act’s regulators in a June 28 interim final rule, requires non-grandfathered health plans to cover certain preventive services without any enrollee cost sharing when the services are provided on an in-network basis. All FEHB plans, whether or not grandfathered, are adhering to this requirement for 2011. The adult preventive services within the ambit of this requirement are those services graded “A” or “B” by the U.S. Preventive Services Task Force. An article in yesterday’s Wall Street Journal explains how a preventive service makes the grade. It’s always interesting to peer behind the curtain.

The FEHBlog trusts that its readers have enjoyed a restful King Day weekend. Over the weekend, the FEHBlog’s law firm has been renamed the Ermer Law Group, PLLC, following a partner’s departure to start her own firm.  Clients will receive an informational letter shortly.

The House of Representatives resumes its work tomorrow.  The Senate does not resume its business until a week from tomorrow.

Govexec.com reports that TRICARE, the health care program for military dependents and retirees, is implementing a special coverage program for young adults up to age 26. TRICARE supporters fought so hard to keep TRICARE out of the Affordable Care Act that the age 26 coverage mandate is not applicable to TRICARE. This new program created by the recent defense authorization act is a self pay program– the young adults or their parents must pay for the coverage —  in contrast to the Affordable Care Act which requires plans to cover children up to age 26 under self and family coverage. As the old saying goes, be careful what you wish for.

Kaiser Health News features a story about “UNC Health Care System and Blue Cross Blue Shield of North Carolina plans to cut the ribbon late this year on a new project, part clinic and part laboratory for reinventing health care, for around 5,000 patients in either Durham or Chapel Hill.”  The new project may become an accountable care organization according to the story. The FEHBlog really appreciates these stories about cooperative efforts between insurers and providers.

BNA called the FEHBlog’s attention to a December 30, 2010, Congressional Research Service report titled “Health Savings Accounts – Rules for 2011.”  The report explains that

Health Savings Accounts (HSAs) are one way people can pay for unreimbursed medical expenses (deductibles, copayments, and services not covered by insurance) on a tax-advantaged basis. HSAs can be established and funded by eligible individuals when they have a qualifying high deductible health plan and no other health plan, with some exceptions. For 2011, the deductible for self-only coverage must be at least $1,200 (with an annual out-of-pocket limit not exceeding $5,950); the deductible for family coverage must be at least $2,400 (with an annual out-of-pocket limit not exceeding $11,900). 

The annual HSA contribution limit in 2011 for individuals with self-only coverage is $3,050; for family coverage, it is $6,150. Individuals who are at least 55 years of age but not yet enrolled in Medicare may contribute an additional $1,000. 

The tax advantages of HSAs can be significant for some people: contributions are deductible (or excluded from income that is taxable if made by employers), withdrawals are not taxed if used for medical expenses, and account earnings are tax-exempt. Unused balances may accumulate without limit. HSAs and the accompanying high-deductible health plans are one form of what some call “consumer-driven health plans.” One objective of these plans is to encourage individuals and families to set money aside for their health care expenses. Another is to give them a financial incentive for spending health care dollars prudently. Still another goal is to give them the means to pay for health care services of their own choosing, without constraint by insurers or employers. Since HSAs are still relatively new (they have been authorized for less than six years), the extent to which they will further these objectives is not yet known with any assurance, notwithstanding some early data. 

There are several consumer driven offerings in the FEHB Program

This excerpt from this morning’s Politico Pulse about yesterday’s open hearing on “essential health benefits” is noteworthy because it indicates that AHIP was not alone in advocating the FEHB Act’s approach of identifying broad categories of benefits (which approach also is used in Affordable Care Act Section 1302 but the final decision is left to the HHS Secretary):

Many of the experts who weighed in argued that keeping the definition of essential benefits broad would be the best thing for the government, the consumer and the market. The purposely vague categories for EHB’s gives “more Americans the ability to choose with their feet,” said Katy Spangler, a top adviser to Senate HELP Committee Republicans. “The details would and should be left up to the market to avoid huge increases in premiums.” David Schwartz, health counsel for Senate Finance Dems agreed “We need to allow for these things to change over time. Too many specifics won’t provide enough flexibility in the market.” David Bowen, former HELP health policy director, said that while the creation of the bill was “fraught with melodrama, the pages around essential benefits were melodrama free,” —indicating an oh-so-rare degree of bipartisan support. “It’s nice to see both sides of the aisle agree on something,” John Ball, the committee’s chair, said.

At this afternoon’s meeting, the parties advocating for precise descriptions will be speaking. In any event, this is encouraging.

Today was the first day of the Institute of Medicine’s open hearings on the develop of the essential health benefits package mandated by the Affordable Care Act for plans participating in the state health insurance exchanges. As discussed in Tuesday’s FEHBlog, this process also will impact the FEHBP and other group health plans. An audiocast of today’s hearing is available here.

The Hill blogs about AHIP’s sensible testimony today urging “federal advisers against recommending specific ‘essential’ items or services that must be included in health plans offered on new insurance exchanges starting up in 2014.” As AHIP points out, specifying coverage of certain broad categories of benefits (see 5 U.S.C. Sec. 8903, 8904) has worked in the FEHB Program for the past fifty years.

Healthleaders Media reports on the efforts of health insurers to mend fences with providers by streamlining the claims processing system and resolving provider misunderstandings. For example, 

CIGNA research showed that each billing department had its own approach to interim billing. Some facilities didn’t do any interim billing, while others begin billing as soon as the patient’s information hits the system. In some instances, this caused bills to appear as though they are outstanding with the payer by over 60 to 90 days, when in fact the bills had just been submitted.

On the flip side, the Wall Street Journal reports on how the big biological drug companies are trying to convince the FDA to narrow the pathway to generic or biosimilar versions of their very expensive “large molecule” drugs mandated by the Affordable Care Act. The law provides for a 12 year period of market exclusivity for the manufacturer that patents the drug. This pathway has been up and running in Europe for several years. According to the Journal ,

A bipartisan group of senators including Sen. Orrin Hatch (R., Utah) and Sen. Kay Hagan (D., N.C.) sent a letter Jan. 7 calling on the Food and Drug Administration to interpret the law in ways favorable to the brand-name makers.

The letter says companies should get an additional 12 years of exclusivity if manufacturers alter an existing product to improve safety or potency. It also calls on the FDA to define “exclusivity” in a way that might help delay generic applicants. The Biotechnology Industry Organization helped draft the letter, their counsel said.

 This seems like a big bowl of wrong to the FEHBlog.

While on the topic of generics, The Medical News reports on a new Caremark funded study concerning prescriber’s suspicions about traditional, “small molecule generic drugs like Amoxocillin that you find in your medicine cabinet. “Physicians 55 or older were 3.3 times more likely to have negative perceptions about generics than those between 25 and 34.  While the doctors said they were aware some patients struggle with the costs of medications, there was little relationship between the doctor’s perception of cost burden and their perceptions of generics, the researchers said.”  This perception difference surprises me as generics have been around for almost 30 years and they do save health plans and consumers lots and lots of money. (Hence the biologic drug manufacturers concerns.)  The study concludes with the recommendation that  “Payors and policy makers attempting to stimulate cost-effective medication use should consider educating physicians, particularly older ones, to improve their comfort with generics.”

Finally, Drug Store News reports that “CVS Caremark’s retail-based clinic operator MinuteClinic is experiencing exponential gains in utilization and posted a 22% increase in acute visits during the past year.” Wow.

The Affordable Care Act requires the Secretary of Health and Human Services to define a package of “essential health benefits” which a qualified health plan participating in a state health insurance exchange must offer. FEHB plans and other group health plans operating outside the exchanges do not have to offer essential health benefits, but to the extent that they do those benefits cannot be subject to annual or lifetime dollar limits according to the new law.

The process of defining the essential health benefits package is bound to be a three ring political circus, and the circus opens tomorrow. The National Academies’ Institute of Medicine has announced that “The Committee on the Determination of Essential Health Benefits will hold its first meeting on January 12-14, 2010 at the National Academy of Sciences Keck Building. The first day, January 12, will be closed to the public to observe committee proceedings. On January 13-14, there will be some open sessions.” The meetings will be held in Washington, DC. The IOM has posted the wide ranging agenda for the open meetings. The first session alone should be fascinating

Kaiser Health News has a lengthy report that gives you a good perspective on all of the conflicting presentations to be presented at the meeting. Here’s an excerpt:

HHS should not get into “the details of each category of care,” America’s Health Insurance Plans says in a letter to the IOM panel.  Essential benefits are those “proven effective based on science” and they should be updated regularly. Additionally, the trade group says HHS should consider allowing restrictions on the number of visits covered in certain situations to keep premiums affordable.

“The broader the benefit package, the higher the cost for families and employers,” says Robert Zirkelbach, spokesman for AHIP.

Don’t set limits on the number of visits, says Stephen Finan, director of policy for the American Cancer Society Cancer Action Network.   “If a patient requires chemotherapy every week for a year… they should not be hindered by an arbitrary rule about only getting 35 visits.”

“If it’s medically necessary, it should be covered,” Marina Weiss, a senior vice president at the March of Dimes, says

California Healthline reports that

According to CQ HealthBeat, it is unclear if officials will seek a specific list of treatments or ask insurers to mirror benefits in particular plans, such as the Federal Employee Health Benefits Program. The rules might enable insurers to design plans differently, as long as they provide a certain value of coverage overall.

IOM will publish recommendations for HHS by September, and HHS will issue its proposed rules by the end of the year, giving insurance companies time to adjust plans before the provisions take effect.

The FEHBlog will be tracking this important rule making process.

The Billings Montana Gazette reports that “Voting 191 for and 240 against, the House on Jan. 5 defeated a Democratic bid to require members to publicly disclose whether they will continue to participate in the Federal Employees Health Benefits Program.” It’s a shame when the FEHB Program is treated like a political football. In 2014 all Members of Congress, Senators, and their staff members will leave the FEHB Program for the state run health insurance exchanges.

A friend forwarded to the FEHBlog this link to an interesting BioCentury report on Senator Orrin Hatch’s (R Utah) work to develop a bill that would create a regulatory pathway for “diagnostics” The report explains that

Top FDA officials and lawmakers have concluded that the current oversight system for diagnostics, which imposes premarket review requirements for in vitro diagnostics (IVDs) but not for the vast majority of laboratory-developed tests (LDTs), is not sufficient to protect the public or to support the development of innovative tests that are at the heart of hopes for widespread adoption of personalized medicine. * * *

Under the Hatch bill, IVDs would no longer be regulated as medical devices. Also, FDA would for the first time routinely regulate tests performed in labs, although lab services and operations would continue to be regulated by the Centers for Medicaid and Medicare Services (CMS) under the Clinical Laboratory Amendments (CLIA).

Hatch hopes to use a new regulatory system to go even farther, as a platform for launching reform of diagnostics reimbursement policies, and shifting Medicare from a payment system based on the complexity of test procedures to one based on the value of tests, according to diagnostics industry executives and attorneys who are advising his staff.

The report discusses other approaches under consideration. These efforts are definitely worth following.

CMS announced on Friday that Federal Register will include a proposed rule “that would establish a new hospital value-based purchasing program that would reward hospitals for providing high quality, safe care for patients. Under the program, hospitals that perform well on quality measures relating both to clinical process of care and to patient experience of care, or those making improvements in their performance on those measures, would receive higher payments under the program.”

Friday’s Federal Register included a final Health and Human Services Department rule establishing a permanent certification program for health information technology under the HITECH Act.  Information Week explains that

While the new permanent certification program does not impact the criteria and standards used to evaluate and certify e-health record and other health IT products, the new program clarifies the rules for the handful of organizations that provide the testing and certification.

Healthcare providers must meaningfully use “certified” health IT in order to be eligible for Centers of Medicare and Medicaid Services (CMS) financial rewards that are estimated to total more than $20 billion. * * *

Testing and certification under the permanent certification program is expected to begin on Jan. 1, 2012 “or upon a subsequent date when the National Coordinator determines that the permanent certification program is fully constituted,”

This rule is relevant to the FEHB Program because FEHB Program carrier contracts include a provision requiring them to use certified health information technology when available and to encourage their network health care providers to do the same. Of course, providers have quite a financial incentive to do so. HHS recently clarified the rules applicable to that incentive program as explained in this iHealthBeat article.