FEHBlog

CQ Politics reports that “House Democratic leaders said Monday that they will not take up a Senate-passed six-month patch to Medicare provider payments unless the Senate moves to pass certain jobs measures.”

On Friday afternoon, the Senate approved by unanimous consent a 2.2% increase in Medicare Part B reimbursements to doctors for the period June 1 through November 30, 2010, at which point the sustainable rate of growth (SGR) formula will kick in again absent a longer fix. The Senate bill has to be approved by the House which will return to session on Tuesday evening June 22.  Modern Healthcare reports that CMS nevertheless directed its Part B claims administrators to begin processing the claims with the 21.2% SGR cut that took effect on June 1. If the House approves the Senate action, these claims will have to be reprocessed.

Speaking of bending the health care curve up, Fair Health Inc. which at the direction of the NY State Attorney General will replace http://www.blogger.com/post-create.g?blogID=26107310Ingenix as the PHCS and MDR usual reasonable and customary database administrator announced last week that it will be releasing its first set of benchmarking products early next year. The UCR databases are used to price out of network claims. According to its announcement, “FAIR Health’s product modules in 2011 will mirror Ingenix’s existing product modules and our release schedule for each module should be identical to the schedule to which Ingenix has been adhering. With customer input and advance notification, we plan to introduce in late 2011 additional and revised product offerings for distribution in 2012.”  It’s worth providing a link to the America’s Health Insurance Plan’s (AHIP) 2009 survey on the role of out of network charges in bending the cost curve up.

The American Medical Association, which pressed hard for this UCR change, released last week its third annual national health insurer report card. Not surprisingly given the AMA’s unfriendly attitude toward insurers, the report card finds the health insurers make a processing error in one out of five claims, which strikes me as way too high.  I therefore appreciated the retort from America’s Health Insurance Plans:

Health plans and providers share the responsibility of making the innovations and investments needed to improve efficiency in our health care system. A recent AHIP survey found that nearly one-fifth of all provider claims are not submitted to health plans electronically, and more than 1 in 5 claims are submitted by providers at least 30 days after the delivery of care.
“Health plans are investing in cutting-edge technologies to make it easier for providers to submit claims electronically and receive payment quickly. For example, health plans are working with providers in New Jersey and Ohio to implement portals that would simplify administrative processes and enable doctors in these states to spend more time with their patients.
“Government data show that soaring medical costs – not health plan administrative costs – are the key drivers of rising health care costs. In fact, the percentage of premiums going toward health plans’ administrative costs has declined for six straight years.”

Reuters reports that CVS Caremark and Walgreen Pharmacies have settled their eleven day long feud. The parties have entered into a new “multi-year” PBM pharmacy agreement that will allow Caremark members to fill prescriptions at Walgreen Pharmacies.  Reuters notes that “Walgreen operates about 7,500 stores out of the 64,000 pharmacies served by Caremark’s network.”

Politico reports that the Senate tonight failed to break a filibuster over the Tax Extenders bill which now includes a 2.2% increase in Medicare Part B reimbursements to doctors through November and does not include an extension of the COBRA/TCC subsidy program which expired on May 31, 2010.  This means that CMS contractors will begin to process Medicare Part B physician claims incurred in June with the statutorily prescribed 21.3% cut.  With respect to the COBRA/TCC subsidy program, Business Insurance reports that

An amendment to the tax bill proposed by Sen. Robert Casey, D-Pa., would extend the subsidy to employees laid off through Nov. 30. But the Senate has not yet taken up the Casey amendment, which faces an uphill battle to win approval as Senate Democratic leaders look for ways to reduce the cost of the overall bill.

There’s a good chance that the COBRA/TCC subsidy program is over.

I learned from a Wall Street Journal article that the feud between CVS Caremark and Walgreen’s Pharmacies continues.

The two pharmacy giants have been publicly quarreling for more than a week, following Walgreen’s announcement last Monday it was pulling its 7,500 stores from CVS Caremark’s network of 64,000 pharmacies beginning next year. But two days later CVS Caremark said it planned to drop Walgreen by July 9.

If no compromise between the two is struck before then, most CVS Caremark patients would be blocked from filling their prescriptions at Walgreen’s and its recently acquired Duane Reade stores. Medicare plans would be affected starting in January.

Don’t overlook this Bloomberg Businessweek article which reports on a RAND study which found that “Cuts in Medicare payments to doctors who administer outpatient chemotherapy drugs actually led to an increase in treatment rates among Medicare recipients.”

Thomson Reuters Healthcare published a paper making recommendations on how to control waste in the U.S. health care system. The paper discusses “five proven, market-tested strategies — engaging consumers, coordinating care, managing disease and maintaining wellness, designing for patient safety and quality, and reducing opportunities for fraud.”

PriceWaterhouseCoopers published its Medical Trends Report for 2011 . Acccording to the AP, the report predicts the medical costs will rise 9% next year and that most employees will encounter calendar year deductibles of $400 or more. “Two years ago, only 25 percent of companies participating in the annual survey said they asked employees to pay deductibles of $400 or more. That grew to 43 percent in 2010 and is expected to pass 50 percent next year.”

The AHIP HiWire  published an interesting article on the development of value based insurance design, an initiative which OPM has supported in its recent benefit and rate proposal call letters to FEHB plan carriers.

“There is substantial underutilization of high-value health services,” including wellness, screening, diagnostic testing, various therapies, and monitoring, said A. Mark Fendrick, MD, codirector, Center for Value-Based Insurance Design, at the University of Michigan.

“The current approach to cost sharing is predominately based on the cost – not value – of medical services,” he said. For example, generic drugs require the lowest co-pay and non-preferred brands the highest. Yet, this “one size fits all” cost shifting does not recognize that some non-preferred brands may have high value in controlling a chronic illness

There is no logic for requiring the same co-pay for a toenail fungus drug as for a drug that controls asthma, he said.

Research has shown that high co-pays reduce adherence to appropriate medication use. Up to 60 percent of chronically ill patients have poor adherence to evidence-based treatment, with costs from poor adherence estimated to exceed $100 billion annually, Fendrick said.

The Health and Human Services Department, the Labor Department, and the Internal Revenue Service did make the grandfathered plan regulation public yesterday. Here are links to the regulation, the Departments’ fact sheet, and the Departments’ questions and answers. Essentially grandfathering permits the plan sponsor, OPM in the case of the FEHB Program, to retain more control over its plan/program. The regulation was issued as an interim final rule. The Departments will be accepting public comments for sixty days from the date the regulation is published in the Federal Register.

Footnote 7 of the regulation’s preamble explains that

Independent of these rules regarding the impact on grandfather status of newly adopted or reduced annual limits, group health plans and group or individual health insurance coverage (other than individual health insurance policies that are grandfathered health plans) are required to comply with PHS Act section 2711, which permits restricted annual limits (as defined in regulations) until 2014. The Departments expect to publish regulations regarding restricted annual limits in the very near future.

This is the last piece of the 2011 puzzle.

Yesterday, CMS extended the hold on Medicare Part B claims processing through this Thursday in the hope the Senate will act on the doctor fix this week according to Kaiser Health News.

The FEHBlog recently explained that there are a lot of time consuming operational / computer programming issues associated with PPACA’s expansion of dependent children coverage.  AIS Health Plan Week adds support for the FEHBlog’s position.

Welcome to FEHBlog post number 1,000 counting from the time when I started this blog in April 2006.

The Senate returns to work on HR 4213 tomorrow. Yesterday President Obama and the minority leadership in Congress sparred over the Medicare “doc fix” according to Politico. From a practical standpoint, the ten business day hold that the Centers for Medicare and Medicaid Services placed on the processing of Medicare Part B claims incurred this month ends tomorrow. That means that unless CMS extends the hold (because work on HR 4213 will not be completed tomorrow), Medicare claims administrators on Tuesday June 15 will start processing Part B claims with the statutorily scheduled 21.3% cut in physician reimbursements. Medscape Medical News describes the impact on doctors. This dispute affects the FEHB Program because of the large number of annuitants over 65 who are FEHB Plan members. If the annuitant is enrolled in Medicare Part B, FEHB plan reimburements as secondary carrier will increase. If the annuitant is not enrolled in Medicare, FEHB plan reimbursemetns as primary carrier will increase because non-HMO FEHB plans are entitled by law to Medicare reimbursement rates on annuitants over 65 without Medicare Part B (5 U.S.C. Section 8904(b).

On Friday June 11, the Office of Management and Budget approved HHS’s interim final grandfathered plan regulation for publication in the Federal Register.  The Associated Press, among others, reports, that “an early version” of the regulation has been floating around lobbying firms unofficially. According to the AP,

The main issue in the 83-page regulation is how to deal with what the government calls “grandfathered” health plans.

Those are plans that predated the health care law and are exempt from many, but not all, of its consumer protections. Lawmakers created the special category to deliver on Obama’s promise that people can keep the coverage they have if they like it.

But health plans change frequently. Premiums and copayments keep rising. Coverage is expanded for some services and restricted for others. Lawmakers asked regulators to spell out how much an employer can change a plan and still claim it to be grandfathered, exempting it from closer federal regulation.
[James] Gelfand, the Chamber of Commerce expert, said the draft rules are too inflexible. Generally plans can lose their protected status by increasing copayments and deductibles above certain limits, and Gelfand said they’re too narrow.

But Maria Ghazal, health policy director for the Business Roundtable, said she saw signs that the administration is trying to be responsive to employers. For example, plans that only cover retirees would be exempt from the new regulatory requirements — an important clarification. “We think there is some recognition of the challenges ahead for employers,” she said.

We shall see.

Finally, the New York Times started a series of the ten anniversary of the successful mapping of the human genome.

The Senate continues to consider HR 4213, the Tax Extenders bill.  Yesterday, the Senate acting on a point of order defeated an amendment proposed by Sen. Ben Cardin (D Md) that could have accelerated the FEHB dependent child age increase into this year. As it stands, the dependent eligibility rules for the FEHB Program will change on January 1, 2011, at which point adult children up to age 26 will continue coverage under self and family enrollment regardless of marital status. This big change in the Program’s long standing eligibility rule  requires significant operations planning and computer program changes. The January 1, 2011 implementation date allows for that planning to occur.

OPM issued in today’s Federal Register its annual rule identifying the medically underserved states for 2011. The only change for next year is the addition of Oklahoma to the list. OPM explains that the FEHB Act, 5 USC Section 8902(m)(2), requires non-HMO FEHB plans to reimburse beneficiaries, subject to their contract terms, for covered services obtained from any licensed provider in these States.” The list of medically underserved states for this year includes Alabama, Arizona, Idaho, Illinois, Kentucky, Louisiana,
Mississippi, Missouri, Montana, New Mexico, North Dakota, South Carolina, South Dakota, and Wyoming.

Business Insurance reports that the interim final rule interpreting the Affordable Care Act’s ambiguous grandfathered plan provision will be made public soon.

Businessweek reports that the Caremark and Walgreens pharmacy chains, which also own prescription benefit managers, may be seeking a negotiated settlement of their dispute discussed in yesterday’s FEHBlog entry.

Finally, Modern Healthcare reports that President Bill Clinton told an AHIP conference today that “Americans tend to blame insurers for problems that may be caused by providers,” to applause from the audience.

The Senate continues to consider the tax extenders bill (HR 4213).  I was under the impression that the version of this bill that the House of Representative passed on  May 28 extended the COBRA/TCC subsidy program from May 31, 2010, through the end of November, 2010. I was wrong.  The House bill did not extend that program which expired at the end of last month due to its $8 billion price tag. As a result employees who are involuntarily terminated from employment after May 31 generally are ineligible for the 65% government subsidy toward the COBRA/TCC premium. The Senate leadership version of the tax extenders bill followed the House lead on this issue. Business Insurance reports that Sen. Robert Casey (D Pa) has proposed an amendment to the bill which would create the extension to November 30. We’ll see.

Walgreen’s Pharmacy and CVS Caremark are at war, and consumers may be caught in the middle. On Monday, Walgreen’s announced that it would no longer fill prescriptions for participants in plans that initiate or renew a contract with the CVS Caremark PBM. Today, CVS Caremark announced that its CVS pharmacies will be terminating their participation in Walgreen’s retail pharmacy network for its PBM operation effective July 9 (or later if contractually or legally required). The Business Journal of Milwaukee notes that The two companies have a history of conflict: they fought over California-based Longs Drug Stores in 2008, with CVS emerging the eventual victor. Jeffrey Rein quit as CEO of Walgreen Co. after that company lost the battle for Longs.”

Looking forward, the Senate resumes its session tomorrow and the House on Tuesday following the a district work period that coincided with the Memorial Day holiday. The most pressing order of business for the Senate are the bills which the House passed just before the holiday that extend the COBRA/TCC subsidy program until the end of November and avoid a scheduled 21.3% cut in Medicare Part B payments to doctors. The Hill newspaper reports that the American Medical Association “is pressing seniors to call their senators and urge them to approve legislation preventing a 21.3 percent cut to Medicare payments. AMA on Thursday launched a multi-million dollar TV, radio and print ad campaign on the issue.” Medicare contractors are expected to implement the reduction next week if the Senate fails to act.

Speaking of Medicare, the Congressional Research Service published a report on the Affordable Care Act’s plethora of provisions affecting the Medicare program. Meanwhile, National Underwriter reports that “Congressional Democrats who voted for big cuts in Medicare Advantage spending now are asking regulators to keep the cuts from affecting MA rates and benefits.”  This reminds me of a family story. My Dad owned a small boiler cleaning business. He always owned old trucks. One day, he was driving through town one day and the transmission dropped out of his truck. A police officer drove up and told my Dad to move the truck. Dad replied “How?” Medicare Advantage plans must submit their 2011 benefit and rate proposals tomorrow. FEHB plan carriers submitted their 2011 proposals to the Office of Personnel Management on June 1.

Reginfo.gov alerts us that the Department of Health and Human Services has submitted for Office of Management and Budget final review it “Interim Final Rules for Group Health Plans and Health Insurance Coverage Relating to Status as a Grandfathered Health Plan under the Patient Protection and Affordable Care Act.” This is a major rule making as the grandfathering provision of the Affordable Care Act (Sec. 1251) is chock full of ambiguities.

NorthJersey.com reports that a New Jersey pharmacist plead guilty to bilking the FEHB Program out of $28,000 using fake prescriptions.