FEHBlog

Former HHS Secretary Tommy Thompson is predicting that the U.S. health care system stressed by an aging population will collapse under its own weight by 2013. To avoid this outcome, he recommends increasing the cigarette tax by $1, somehow convincing Americans to eat less/better, and improving patient safety through health information technology.

June 7 is National Health IT Day. I will celebrate the day by attending the keynote speeches by Former Speaker Newt Gingrich, Dr. David Brailer, and others.

June 13 is the date for the House Federal Agency and Workforce Organization Subcommittee’s hearing on H.R. 4859, the Family Friendly Health Information Technology Act of 2006. The lead article in this week’s issue of the Federal Times discusses this bill and OPM’s HIT issues described in the 2007 benefit and rate proposal call letter.

Yesterday, the U.S. Supreme Court unanimously handed the ERISA-governed health plan community a major victory. Chief Justice Roberts’ opinion in Sereboff v. Mid Atlantic Medical Services, Inc., — U.S. –, No. 05-260, now permits ERISA-governed plans to enforce in federal court equitable liens on judgments and settlements that are subject to the plan’s contractual subrogation rights. I believe that this opinion undoes much of the damage to legitimate ERISA plan subrogation efforts created by the Supreme Court’s 2002 opinion in Great-West Life & Annuity Ins. Co. v. Knudson, 534 U. S. 204.

If private sector ERISA plans can enforce their subrogation rights in federal court, why shouldn’t the Court similarly rule in the McVeigh case (argued April 25) that FEHB plans have the same right, particularly when the funds which they recover are deposited in the U.S. Treasury. Sereboff adds support to my prediction that the Supreme Court will rule in Empire Blue Cross’s favor in the McVeigh case (see April 26 post).

I am in rainy Madison Wisconsin, attending my daughter’s graduation (ON WISCONSIN!) from the University of Wisconsin so I am a little delinquent in reporting that the Senate Health Week ended anticlimatically. On Thursday night, the Senate Republican majority was only able to round up 55 votes — five short of the 60 votes needed to end the filibuster over Sen. Enzi’s small business health care reform bill. I think that’s no great surprise.

My family and I visited the Mustard Museum in nearby Mount Horeb, Wisconsin today. Much fun!

On May 3, 2005, Rep. Eric Cantor (R-VA), the Chief Deputy Majority Whip in the House, introduced a bill (HR 5262) that embraces the Health Savings Account / High Deductible Health Plan improvements that President Bush proposed in the year’s State of the Union address:

• Increasing HSA contribution limits to the plan’s out-of-pocket maximum;

• Making premiums for HSA-compatible insurance tax-deductible;

• Providing a low-income tax credit the purchase of HSA-compatible insurance;

• Allowing employers to make greater HSA contributions for chronically ill employees;

• Allowing flexibility to coordinate HSAs with existing health coverage options like Flexible Spending Accounts (FSAs) and Health Reimbursement Arrangements (HRAs);

• Allowing early retirees to use HSA savings to pay for insurance coverage premiums;

• Providing an income tax credit equal to amount of payroll taxes paid on HSA-compatible insurance premiums;

• Providing an income tax credit equal to the amount of payroll taxes paid on HSA contributions, and

• Providing pre-tax treatment of health care expenses incurred under HSA-compatible health plans before an individual establishes an HSA.

The bill was referred to the House Ways and Means Committee whose chairman, Bill Thomas (R-CA) reportedly supports the bill. Rep. Cantor, who sits on that Committee, would like for the full House to vote on the bill during its Health Week scheduled for the week of June 18th. The stumbling block for this bill may be the Senate.

The Baltimore Sun reports today that “The United States lags “at least a dozen years” behind other industrialized countries in adopting electronic medical records, according to a study published yesterday in the journal Health Affairs” authored by Prof. Gerard F. Anderson, Johns Hopkins Bloomberg School of Public Health and others. The report faults the government and insurance companies for failing to fund the initiative. I have not read the report, but I wonder whether the authors considered the fact that health insurers have spent millions of dollars over the past decade to come into compliance with the HIPAA administrative simplification standards at Congress’s direction?

Prof. Herbert presented an interesting price transparency report to Congress in March 2006. Here’s a link to a PDF copy.

The Senate majority leadership’s push to pass the Enzi small business healthcare reform bill has stalled, according to the Washington Post, and the minority leadership may apply the coup de grace today. The President has endorsed this bill; the House has passed a substantially similar version (H.R. 525) last year, and business community strongly supports it. However, the Democrats, state insurance regulators, many insurance companies, and patient advocate groups oppose it.

Steven Pearlstein of the Washington Post had an interesting health care reform in yesterday’s paper and held an online chat to discuss his article. In his article, he mentioned three “fresh ideas” for small business health care reform:

• A plan offered by Katherine Swartz of Harvard’s School of Public Health to have the federal government provide specific stop loss insurance for claims over $50,000 (subject to 10% coinsurance) funded by a tax on premiums. “This would equalize premiums and reduce the incentive for insurers to ‘cherry-pick’ the healthiest employee groups.”
• A plan offered by Michael Porter of Harvard Business School and Elizabeth Olmsted Teisberg of the University of Virginia’s Darden School of Business to price fix all hospital and physican charges regardless of payor. “That would eliminate the massive cost-shifting that favors big employers and big insurance companies.” (Of course the most massive cost shifting is done by the federal government’s Medicare, Medicaid, and TRICARE program not these payors, and in my view, you can date the health care cost problem from the time when Medicare shifted to a prospective payment/DRG system for compensating inpatient hospital care in 1983. But it’s always easier to blame the insurance companies.)
• The recently enacted Massachusetts state mandate requiring the purchase of health insurance.

If these were the freshest ideas that we’ve got, I would be worried.

The Washington Post reports that the Senate minority leadership is now considering a filibuster of the majority’s small business health insurance reform bill, S. 1955. The Senate majority is trying to line up support for a cloture vote. The President has expressed his support for the bill.

As I mentioned in a recent post to this blog, the recent HHS unified agenda states that the proposed rulemaking for a HIPAA-mandated unique health plan identifier was withdrawn. This surprised me as I had understood that HHS was close to publishing a proposed rule, and there is no privacy issue associated with this identifier. With help from my colleague Theresa Defino, I have learned that HHS has gone back to the drawing board on the unique health plan identifier and the agency therefore described the proposed rule as withdrawn because HHS does not currently have an anticipated publication date for that proposed rule. But it is still in the regulatory pipeline.

The U.S. Senate’s Republican majority leadership is now holding a Health Week to consider health care related bills that the House passed last year in different forms. Yesterday, the Senate leadership failed to break a filibuster over a medical malpractice liability reform bill, S. 22. Today, the Senate is considering a small business health care reform bill, S. 1955. The Senate’s Democrat minority leadership reportedly does not plan to filibuster this bill, but they would like an opportunity to hold a vote on their own small business reform bill, S. 2510, which would create a quasi-FEHBP for small businesses (under 100 employees) that OPM would administer. I’ll keep you posted.