FEHBlog

• Last year, Congress paid for avoiding a statutorily prescribed reduction in Medicare Part B reimbursement to physicians by mandating that insurers and other payers report Medicare related coordination of benefits information to the Centers for Medicare and Medicaid Services (CMS). Payers generally had been providing this information to CMS under Voluntary Data Sharing Agreements with CMS. The new mandate is effective January 1, 2009. CMS has posted a timeline for implementation of this mandate and a paper explaining how payers with VDSAs will be affected by the new mandate. 
• The HHS Office for Civil Rights, which is responsible for enforcing the HIPAA Privacy Rule, has posted guidance for consumers/patients and health care providers on the extent to which the Privacy Rule allows providers to share protected health information with the patient’s family members and friends.

• On Friday, the Centers for Medicare and Medicaid Services announced that the Medicare Part B premium — currently $96.40 will not increase for 2009. This CMS fact sheet explains the rationale for the freeze and it provides the income related premium adjustments for Medicare beneficiaries with taxable income over $85,000. Finally the fact sheet informs us that the 2009 Medicare Part A deductible will be $1,068, a $44 increase over the 2008 Medicare Part A deductible. Medicare Part A pays for inpatient hospital, skilled nursing facility, hospice, and certain home health care services. These changes are significant to the FEHB Program because there is a large contingent of FEHBP annuitant enrollees with primary Medicare coverage.
• The Washington Post reports that in the coming week the Senate will consider the alternative minimum tax / tax extenders bill (H.R. 6049), which now includes the compromise mental health parity bill. According to the Kaiser Daily Health Policy Report, the House leadership, which is not enamored with this expensive bill, plans to take up the mental health parity bill as a stand-alone bill this coming week under suspension of the rules, a procedure that prohibits amendments and requires a two-thirds majority
  for the bill to pass.
• The Wall Street Journal reports that “To pinpoint hereditary sources of longevity, researchers at the Scripps Research Institute in La Jolla, Calif., are recruiting 2,000 healthy people over 80 years old to compare the entire genetic sequences of these “wellderly” to those from people who died of common age-related illnesses before they reached 80.” Keep your fingers crossed. The article cautions that
  

  Many experts in aging are skeptical. “We seem to know a lot about longevity in worms, but we don’t know if any of it is relevant for humans,” says Jan Vijg, who studies the genomics of aging at the Albert Einstein medical college. “The problem is that we don’t really know the basic cause of aging.”

At a February 2007 Senate hearing, GAO banged on HHS for failing, among other things, to create privacy milestones in its efforts to create a nationwide electronic medical records system. This week GAO issued a follow-up report finding that while HHS has made progress, “they have fallen short of fully implementing GAO’s recommendation” — “that HHS include in its overall privacy approach a process for ensuring that key privacy principles and challenges are completely and adequately addressed.”

Senate leaders from both parties agreed yesterday on an alternative minimum tax patch and tax extenders bill (S 6049) that includes as Section 507 the enhanced mental health parity law. According to an AP report, “the tax package is one of the last major issues that Congress must
address in the last weeks before its scheduled adjournment for the year [later this month].” If Congress passes this law before adjournment, the law would be applicable to the FEHB Program in 2010. The major difference between the new law and the FEHBP status quo is that the new law would require parity in network and out of network while the current FEHBP policy is to require parity in-network only.

The Senate Finance Committee held a health care reform-related hearing yesterday titled Aligning Incentives: The Case for Delivery System Reform. The testimony may be found here, and a Kaiser report on the hearing there.

Rep. Pete Stark (D CA), chairman of the Health Subcommittee of the House Ways and Means Committee, has introduced a bill to promote the adoption of health information technology by the medical community (HR 6898). It appears that this issue is being booted into the next Congress.

• The fallout from the Endoscopy Center of Southern Nevada tragedy continues. The Las Vegas Review-Journal reports that

  A 70-year-old woman who has tested positive for hepatitis C filed a lawsuit today against [her HMO] Pacificare of Nevada for referring her to a physician associated with the Endoscopy Center of Southern Nevada for treatment. Alynne Griffiths, who underwent two procedures at the Shadow Lane facility where health officials have linked eight hepatitis C cases due to unsafe injection practices, claims Pacificare won’t pay for her to see a hepatitis specialist outside her network.

  Pacificare is part of United Healthcare.

Congress was gavelled back to order this week for a short three week session before last election season push. I have my eye on the mental health parity bill. The House and Senate have resolved the benefit design issues and now they have to resolve the pay-go or funding issues. I expected that those issues would be resolved by now. But they haven’t. The Kaiser Daily Health Policy Report tells us that the Senate Finance Committee is trying to find funding and that time is running out. CQ reports of talk about a lame duck session that principally is coming from the minority right now.

The Health Now! Coalition lead by former Rep. Nancy Johnson is pushing for health information technology legislation. Be careful what you wish for because, according to the Kaiser Daily Health Policy Report, Rep. Pete Stark (D Ca.) is thinking about financially penalizing health care providers who don’t timely adopt electronic health records.

Newsweek columnist Robert Samuelson wrote an excellent column titled “Getting Real about Health Care.” He makes two key points:

On average [according to data from Brookings economist Gary Burtless], annual health spending per person—from all private and government sources—is equal for the poorest and the richest Americans. In 2003, it was $4,477 for the poorest fifth and $4,451 for the richest.Probably in no other area, notes Burtless, is spending so equal—not in housing, clothes, transportation or anything. Why is this? One reason: government already insures more than a quarter of the population * * * .Medicare is so large and influential that by altering how it operates, government can reshape the entire health-care system. This would require changes in rules and reimbursements to encourage more electronic record-keeping, better case management, fewer dubious tests and procedures, and a fairer sharing of costs between the young and the old. The work would be unglamorous and probably unpopular. But if the next president won’t—or can’t—do it, his presidency will fail in one fateful way.

HHS Secretary Leavitt made essentally the same point about reforming Medicare at a conference that I attended last Spring. In that regard, the Senate Finance Committee held a hearing yesterday on “Improving health care quality: an Integral step toward health reform. Healthcare IT News reports that “Transparency in healthcare, pay-for-performance (P4P) and healthcare IT are among the top ways experts say the country could overhaul its healthcare system to not only improve care, but also reduce costs.”

I noted recently that the EU has begun to approve biosimilar drugs — a topic which our Congress has yet to address. This American Magazine interview with Genentech’s product development president, Susan Desmond – Hellman provides an interesting EU vs. US perspective on specialty drugs:

The biotech industry gets heat from critics who claim that they charge overly high prices for their products. What do you make of this critique?
We challenge ourselves to make important, valuable new medicines. We’re not trying to do something new for small problems. We’re trying to innovate and make a difference for big problems. And the investments necessary and the risk the company takes and the failure rates are such that the business model of biotechnology relies on premium pricing. But we’re sensitive to the most important thing of all for us, which is patient access. My team and the folks at Genentech who work in research and development don’t just want to make drugs that make a difference. We want patients to have access to them. Genentech works very hard to have a strong support mechanism for patients who can’t pay or for patients who can’t afford their copayments, which is more and more common these days. I understand that it has been harder for women in countries outside the United States to get access to Herceptin for breast cancer due to regulatory obstacles. Could you discuss this?
It’s a huge issue for cancer patients. HER2-positive metastatic breast cancer is a very special form of breast cancer. We made a remedy, Herceptin, specifically for the 20 percent of breast cancer patients who have this form of breast cancer that is especially difficult to treat. When a company does trials, it isn’t enough just to do the trial; then one must go to the regulators, not just in the United States but outside the United States, and request approval. An extra layer is that in Europe one has to get approval for the pricing of the product as well. We really find that difficult for patients. The FDA approved Herceptin in less than five months. It was really outstanding. Everyone knew patients were waiting. The sense of urgency that we had, that the FDA had, that physicians in practice had, was huge. That’s what patients deserve. This is the balance that all of us are facing over the next several years as more and more pressure to control healthcare costs comes about. My plea is not to squash innovation. I would submit that in countries like the United Kingdom, where access to Herceptin was delayed because of concerns over the cost of healthcare, there needs to be a healthy public policy debate about patients waiting, their need for new medicines and for innovation, and balancing that with the cost of healthcare.

• Congress returns to work this week. We should learn this month whether the mental health parity act will be enacted. However, the Washington Post is reporting that appropriations battles in this major election year may lead to a federal government shutdown, which can disrupt the Open Season. The House Ways and Means Committee’s Health Subcommittee will hold a hearing on Sept. 11 on the difficult issue of reforming Medicare’s physician reimbursement system.

• The Centers for Disease Control is reporting that childhood vaccination rates are at an all time high. “According to the U.S. Centers for Disease Control and Prevention, immunization rates remain at or near record levels, with at least 90 percent coverage for all but one of the vaccines in the recommended series for children.” Furthermore, the San Francisco Chronicle reports that “New research further debunks any link between measles vaccine and autism, work that comes as the nation is experiencing a surge in measles cases fueled by children left unvaccinated.”

• U.S. News and World Report informs us that “Potentially groundbreaking discoveries involving genetic mutations of two deadly cancers — the brain cancer glioblastoma [which afflicts Sen. Ted Kennedy and Robert Novak] and pancreatic cancer [which afflicts Steve Jobs] — may lead to new treatments and even cures, researchers say.” Scientists are mapping the genomes of these cancers. The Wall Street Journal explains that “Now, scientists are using powerful gene-sequencing machines to identify which genetic alterations cause which cancers — an ambition reflected in three papers published this week. The hope is to offer differentiated treatment to patients based on their different tumor profiles. But the picture is enormously complicated.” U.S. News concurs in this assessment.

• In response to new federal law, the Food and Drug Administration (FDA) issued its first quarterly report on FDA-approved drugs that are under investigation for adverse side effects. Modern Healthcare.com explains that “Under the FDA Amendments Act signed in September 2007, the FDA is required to alert the public to new safety information and potential drug risks based on events analyzed through its events reporting system. Subsequent reports will not be cumulative; each quarter will list only drugs for whichever safety issues have been identified during the previous quarter, according to the FDA.”

• OPM issued a proposed amendment to the Federal Employees Health Benefits Acquisition Regulation that closes that saga of the GHS v. OPM case. The Federal Register preamble explains that In prior years, carriers were not subjected to rate reconciliation in the final year of their contracts. [That was the issue in the GHS case. The courts invalidated this regulation.] Information technology and electronic transmission and storage of data now make it possible to efficiently perform rate reconciliation for the final contract year. Therefore, OPM will begin conducting such rate reconciliation on community rated contracts that terminate after January 1, 2009.

• The Baltimore Sun reported on a Mercer consulting report on rising deductibles and co-pays. Health Plan Week reports that
  

  At a recent briefing sponsored by the Washington, D.C.-based Council for Affordable Health Care, several reinsurers told attendees that their high-dollar claims had increased by a factor of 10, according to CAHI Director MerrillMatthews, Ph.D.Over the past six years, ING Reinsurance says, it has seen an increase in the number of million-dollar claims. The three most frequent diagnoses for these high-dollar claims, according to the company, are (1) premature infants, (2) congenital defects and (3) cancer.

  The Pittsburgh Post Gazette reported on creative health care cost cutting measures undertaken by employers. The article notes that

  For sheer innovation, it would be tough to top the Hannaford Brothers Co. grocery chain of Portland, Maine. When health costs spiraled upward, Hannaford went international, offering employees full coverage for knee replacements in Singapore, where a hospital charged $10,000, instead of U.S. hospitals where the cost typically ran $30,000. Once the program was publicized, though, Hannaford Brothers started hearing from U.S. hospitals willing to match or beat what Singapore charged. Those negotiations are ongoing. “The hope is that we never have to send anyone to Singapore,” said Chris Washburn, employee benefits supervisor.

• AHIP reported on consumer and provider heath fraud schemes.

• The National Center for Policy Analysis discussed the recent Census Bureau report finding that the number of uninsured fell last. “In fact, the proportion of people without health insurance was a percentage-point lower in 2007 than a decade earlier (16.3 percent in
  1998). The slight increase in the number of uninsured over the past decade is largely due to immigration and population growth — and to individual choice.”

• Inside Consumer Directed Care and the Society for Human Resource Management discussed think tank reports on the future of health savings accounts.

The Michigan Business Review reports today that

An estimated 70 million people do have access to basic personal health records through their health insurers, with millions more scheduled to receive the service this year, according to health care benefit company Aetna. A July 2007 survey by the Financial Planning Association and Aetna found that 64 percent of respondents said they didn’t know what a personal health record was and of those who did, only 11 percent said they were currently using one.

Why aren’t people more interested in personal health records? Are there any studies on that? Perhaps people don’t consider PHR’s a priority because they are basically satisfied with their health status. Perhaps people are concerned about the security of PHRs. A recent Harris Poll found that “four percent or an estimated nine million American adults believe that they or a family member have had confidential personal medical information either lost or stolen.” It appears to be an uphill battle to gain consumer acceptance of PHRs.