Happy Super Sunday!

Govexec.com reports that Senate Appropriations Committee Chairman Daniel Inouye (D Hawaii) is predicting another short extension of the continuing resolution funding the federal government which now is scheduled to expire on March 4. The House was on recess last week, although the Budget Committee did issue a proposal for cuts to discretionary spending for the current Government fiscal year which the House Appropriations Committee will implement this week and the full House will take up during the week of February 14. That’s the same week that the Administration will issue its budget proposal for the federal fiscal year that begins October 1, 2011. The Senate will be on break the week of February 21 and is not expected to rubber stamp the House bill. That brings us to another short extension of the current continuing resolution. 

The FEHBlog ran across this interesting commentary about the looming U.S. doctor shortage in the AMA News. The commentary notes that “The number of Medicare-funded residency programs was capped at about 100,000 by the Balanced Budget Act of 1997.”  A Wall Street Journal op-ed in the Wall Street Journal seconds the point that “The doctor shortage was fostered in 1996 when Congress capped the number of new doctors Medicare would pay to train, a practice that continues to this day.” The Affordable Care Act funds 889 new primary care residencies according to the AMA commentary. That’s less than a 1% increase in the current cap. The shortage is expected to be 125,000 in 14 years. Puzzling.

Last week, the Centers for Medicare and Medicaid Services published a proposed rule which would require all Medicare participating providers to give Medicare beneficiaries written notice about their right to contact a Medicare Quality Improvement Organization (QIO) with concerns about the quality of care they receive under the Medicare program.  Currently, hospitals are subject to this obligation. The proposed rule would extend the requirement to doctors and other providers. This rule likely would not go into effect until 2012.

The Wall Street Journal published an article on the rapidly growing practice of employers offering wellness programs to their employees.

Employers spent an average $220 per worker on wellness incentive awards last year, up 35% from $163 in 2009, according to a survey of more than 1,200 employers from Buck Consultants, a benefits-consulting group based in New York. About 11% spent more than $500 per employee last year. Nearly three out of four North American employers have some sort of wellness program, according to the survey

OPM offers federal employees the healthierfeds program and it encourages FEHB plans to offer wellness programs. OPM’s principal focus this year is on its stop smoking program.

Business Insurance reports that the Virginia Attorney General plans to ask the U.S. Supreme Court to review the federal  District Court’s decision holding the Affordable Care Act’s individual mandate unconstitutional without taking the time for an intermediate appeal to the 4th Circuit. Ultimately the Supreme Court will decide this issue but my best guess is that the Supreme Court will allow the Circuit Courts of Appeal to weigh in fiirst.

AHIP Hi-Wire reports on the House hearings about the Affordable Care Act held on January 26 and the slew of Affordable Care Act related bills that already have been introduced in Congress. Among them is the following

Rep. Darrell Issa (R-CA) introduced a bill (H.R. 429) proposing to repeal the health reform law and establish a program administered by the Office of Personnel Management to offer federal employee health benefits plans to individuals who are not federal employees

Mr. Issa is the chairman of the House committee with FEHBP oversight responsibility.

Inside Health Reform via AHIP HI-Wire reports that at a recent Brookings Institution meeting CMS Administrator Donald Berwick announced that CMS soon will release a proposed rule on the new “accountable care organization” concept and unveil ACO demonstrations to include Medicare beneficiaries and private payer plan participants. According to the article, “CMS is talking to private payers about public-private partnerships and about how clinically integrated organizations can align what they are doing for patients with private insurance with the goals of ACOs, Berwick told reporters after his presentation. (The Federal Trade Commission has warned that broad-based ACOs involving private payers could raise antitrust concerns, but the FTC has been working out those matters with CMS.)”

AIS reports that “Several Blue Cross and Blue Shield plans are moving forward on patient-centered medical home (PCMH) development and starting discussions with providers about accountable care organization (ACO) formation. And a handful of Blues plans actually have ACO pilots in operation.”  The article surveys these efforts.

BlueCross BlueShield of Tennessee is typical of the plans that are closely watching what’s going on in the ACO space. “At this point, BCBST is looking at the market and proceeding slowly regarding ACOs,” says Tom Lundquist, M.D., vice president of performance measurement and improvement. “There’s a lot of talk about ACOs, and some provider groups and hospitals have said they’re interested in having discussions.” Trouble is, he adds, “some [of the providers] believe they’re ready to become an ACO without really discussing the finer points. We’re still not sure what the definition is, so we’re waiting for ACOs to be fully defined.”

The Senate today rejected a Republican proposal to repeal the Affordable Care Act on a straight 47-51 party line vote. Sixty votes were required for approval of this amendment to the FAA Reauthorization Act (S. 223) because the CBO has opined that repeal would increase the federal budget deficit. However, the Senate did approve by a 81-17 bipartisan vote an amendment to S. 223 that would repeal the Affordable Care Act’s vastly expanded IRS Form 1099 reporting requirements.

Business Insurance reports that HHS has officially moved its Affordable Care Act implementation office from the Secretary’s office to the Centers for Medicare and Medicaid Services.  The name of the office has been changed from the Office of Consumer Information and Insurance Oversight (an acronym I liked) to Center for Consumer and Insurance Oversight. (Rhetorical question — Why do consumers require oversight?)  The office has a new director, Steve Larsen, who formerly was Maryland’s insurance commissioner. Jay Angstrom who lead OCIIO will remain in the Secretary’s office. The new Center’s website is up. CMS’s new organization chart is here.

Yesterday, the U.S. District Court for the Northern District of Florida struck down the Affordable Care Act as unconstitutional at the request of 26 States, the NFIB, and two individuals. The Court in a 78 page opinion  held that the Commerce Clause of the U.S. Constitution and the related Necessary and Proper clause does not grant Congress the power to regulate inactivity, specifically the failure to buy health insurance.  The federal government has appealed the decision to the U.S. Court of Appeals for the 11th Circuit.

The U.S. Court of Appeals for the 4th Circuit has decided to expedite its consideration of the government’s appeal of the U.S. District Court for the Eastern District of Virginia’s decision similarly holding the Affordable Care Act’s individual mandate unconstitutional according to Business Insurance.  The Court will hear argument in May 2011. It certainly appears that we are headed toward a Supreme Court decision in 2012. Ever since the Supreme Court’s decision in the most recent case concerning the FEHB Program, the FEHBlog has given up predicting Supreme Court decisions.

The Senate Judiciary Committee is holding a hearing on the Constitutionality of the Affordable Care Act tomorrow at 10 am. The Chairman of the House Judiciary Committee has promised a hearing on the same topic later this month.

The Hill healthcare blog reports that the Senate may vote tomorrow on a  Senate Minority Leader proposed  amendment to an FAA reauthorization bill (S. 223) that would repeal the Affordable Care Act. “Democrats will likely use a maneuver that would force the GOP to round up an impossible 60 votes to repeal the reform law, meaning that 13 Democrats would have to vote with Republicans.” The Senate also will vote on a separate measure to repeal the Affordable Care Act’s expansion of 1099 tax reporting.

The AMA News reports on the progress of a House measure to control health care provider liability for malpractice. The article notes that 

“The AMA does not favor repealing the entire health reform law, but it would support amending it with medical liability reform legislation, a measure to fix the Medicare physician pay formula, and a bill to repeal a provision in the law requiring additional expense reporting by businesses that would apply to some physician practices, said AMA President Cecil B. Wilson, MD. Obama and many Democrats in Congress have said they would support repealing the business expense reporting provision.”

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