FEHBlog

Business Week reports on the practice of health care providers balance billing patients for expenses that insurance does not cover. Medicare strictly regulates this practice, but there are bills pending in Congress to override this restriction, according to the article. A provider’s right to balance bill FEHBP members (other than those with primary Medicare coverage) generally depends on the health plan’s contracts with its PPO network and participating providers.

Reports, reports, reports!

• The Segal Co. issued its 2009 Health Plan Cost Trend Survey. The report predicts single digit trend increases in prescription drug spending (excluding specialty drugs) for the first time in the reports 12 year history.
• USA Today has posted a website reporting on hospital death rates for heart attack, heart failure and pneumonia using CMS data.
• The Harris Poll and the Center for Studying Health System Change have published reports on public use of the internet to investigate health care issues.
• The Wall Street Journal reports on a study of the cost-effectiveness of Merck’s new Gardasil vaccine.
  

  “The study published by researchers from the Harvard School of Public Health suggests Gardasil’s cost is justified in pre-adolescent girls, partly because they are less likely to have already been exposed to HPV. But among older females, the cost-effectiveness of Gardasil becomes less and less favorable, researchers concluded. ‘Under most scenarios, extending the catchup to 26 wasn’t cost effective,’ Jane Kim, an assistant Harvard professor, said in an interview.”

• Meanwhile, the AP reports that “Measles cases in the U.S. are at the highest level in more than a decade, with nearly half of those involving children whose parents rejected vaccination, [according to] health officials” at the Centers for Disease Control.
• Finally, the New York Times headlined a confidential HHS Inspector General report questioning the effectiveness of Medicare’s anti-fraud efforts. How much of a surprise is this considering the recent story about Medicare paying claims based on prescriptions “written” by dead doctors?

The AMA News reports that “Legislation creating an approval process for generic biopharmaceuticals could save billions of dollars in the next decade, but a crowded congressional agenda and a lack of consensus among lawmakers may prevent passage of a bill this year.” The generic and brand name manufacturers are fighting over the patent exclusivity period. I was surprised to read that the AMA is agnostic on the legislation:

The American Medical Association has not taken a position on the bills. It is concerned about any measure’s effect on patient safety, incentives for innovation and physicians’ independence. Legislation should not compel doctors to treat biogenerics as interchangeable with brand-name biologics and should balance the need for market exclusivity with competition, according to the AMA.

How can we ever expect the price of these specialty drus to come down without generic alternatives? But of course no one expected the price of gasoline to come back down.

In more heartening news, Medco is teaming up with the Food and Drug Administration to “study
pharmacogenomics, or “personalized medicine” – the way genes can
alter the effectiveness of drugs. At the 2007 OPM AHIP FEHBP conference, Medco CEO David Snow explained how genetic tests can help doctors identify the appropriate dosage at an individual patient level for certain widely prescribed medicines like the blood thinner warfarin (brand name Coumadin).

• OPM is beginning to gear up for the upcoming Federal Benefits Open Season which will begin on November 10 and end on December 8, 2008.
• On a related Open Season note, the Centers for Medicare and Medicare Services (CMS) “estimates that the average monthly premium that beneficiaries will pay for standard Part D coverage in 2009 will be $28. This is about 37 percent lower than originally projected when the benefit was established in 2003.” Medicare beneficiaries will have their annual Open Season later this year as well. “In addition to average premiums for 2009, CMS has announced: the 2009 national average monthly bid; the base beneficiary premium; the regional low-income subsidy premium amounts for 2009; and the 2009 Medicare Advantage regional preferred provider organization benchmarks.”
• The Washington Post reported on a Bethesda MD company Wellnet Healthcare which is launching a social network for doctors,patients, and insurance company disease / case managers called Point to Point Healthcare. The article points out that the unproven service has competitors like Google Health, Steve Case’s Revolution Health, and an Arlington VA start-up Healthcentral. I was struck by this comment from an HR manager whose company has signed up with Wellnet:
  

  Janice Algie, Peterson’s director of human resources, said she wondered if her employees would use more online tools like Point to Point. “It’s difficult to get them involved in their own health care,” she said. “Every time a claim is processed, whether it’s health insurance and dental insurance, it’s submitted and tells them what they owe. I can’t tell you how many employees look at those. Even though they have online access, they still don’t look at them.” But perhaps it’s generational, Algie said. With few entry-level positions, about 45 percent of Peterson’s workforce is age 40 and above.

The U.S. Department of Health and Human Services announced on Friday a proposed regulation (required by HIPAA) “that would replace the ICD-9-CM code sets now used to report health care diagnoses and procedures with greatly expanded ICD-10 code sets, effective Oct. 1, 2011. In a separate proposed regulation, HHS has proposed adopting the updated X12 standard, Version 5010, and the National Council for Prescription Drug Programs standard, Version D.0, for electronic transactions, such as health care claims. Version 5010 is essential to use of the ICD-10 codes” effective April 1, 2010.

The announcement further explains

Developed almost 30 years ago, ICD-9 is now widely viewed as outdated because of its limited ability to accommodate new procedures and diagnoses. ICD-9 contains only 17,000 codes and is expected to start running out of available codes next year. By contrast, the ICD-10 code sets contain more than 155,000 codes and accommodate a host of new diagnoses and procedures.

These coding changes will require a host of claims system changes.

• The U.S. Court of Appeals for the Federal Circuit today affirmed a lower court opinion invalidating an OPM regulation prohibiting final year SSSG pricing reconciliations as in conflict with the FEHB Act, 5 U.S.C. § 8902(i). HMOs participating in the FEHB Program use the similarly sized subscriber group (“SSSG”) methodology to set the community rates for their FEHB plans.
• Speaking of OPM, Director Linda Springer left office today. The Washington Post’s new Federal Diary columnist, Joe Davidson, reported on Ms. Springer’s reflections concerning this transition.
• CVS Caremark acquired the West Coast based Long’s Drug Store chain. The AP reports that “Longs operates 521 drug stores in California, Hawaii, Nevada and Arizona, which will give CVS about 6,800 stores when the deal is completed. It also operates the Rx America pharmacy benefits management business, which provides services to about 8 million members and prescription drug coverage to about 450,000 Medicare beneficiaries.”
• The Consumer-Purchaser Disclosure Project announced today that it “has named the nonprofit National Committee for Quality Assurance (NCQA) as an independent reviewer to certify that health insurers and other organizations assess and report on the quality of physicians in an effective and fair manner. NCQA is the first approved independent
  reviewer that can ensure that organizations follow the guidelines of the Patient Charter for Physician Performance Measurement, Reporting and Tiering Programs.”

According to a press release issued today “Aon Consulting surveyed more than 70 leading health care insurers, representing more than 100 million insured individuals, and found that health care costs are projected to increase by 10.6 percent for HMOs, 10.5 percent for POS plans, 10.7 percent for PPOs and 10.5 percent for CDH [consumer driven health] plans. These represent the lowest trend rate increases since the study began in 2001, and are slightly lower than one year ago, when HMO cost increases were 10.9 percent, 10.8 percent for POS plans, 11.2 percent for PPOs and 10.7 percent for CDH plans.” These are trends before benefit changes are made, and employers sponsoring self-insureds have an opportunity to make benefit changes to bring their increase below the benchmark according to Aon.

According to a San Francisco Chronicle report, “Aon’s findings mirror a similar study released late last month by PricewaterhouseCoopers, which estimated a nearly 10 percent increase in health costs for next year. The study pointed out that the percentage rate of increases has
diminished each year since 2003 and attributed some of the deceleration to similar cost-saving programs, including those that encourage people to select generics over brand-name drugs.”