• The big news of the past week was the United Healthcare and Aetna settlements with the NY Attorney General and the American Medical Association to replace the Ingenix usual reasonable and customary databases with an “independent” database created by a “qualified university” to be appointed by the NY Attorney General. A copy of the NY Attorney General’s report is here. A copy of the Aetna settlement is here. The response by the managed care industry trade association is here. While this is a happy outcome for doctors who operate outside of health plan networks, it’s not a good deal for consumers or doctors who participate in health plan networks.
• Last October, the Department of Health and Human Services’ Office of the National Coordinator of Health Information Technology held a conference on medical identity theft. Last week, Booz Allen issued a final report on that topic to the ONC. The New York Times reports today that privacy issues may interfere with the President elect’s plans to include electronic medical record funding in the next stimulus package.
• Eli Lilly & Co. conceded that it violated federal law by encourage the off label use of its blockbuster drug Zyprexa. Forbes.com explains that
  

  Lilly admitted to promoting the drug to elderly patients for off-label use as a treatment for dementia. The drug caused increased risk of death in this patient group. Zyprexa was approved in 1996 and will lose patent protection in 2011. It had annual sales of $4.7 billion in 2007.

  According to a U.S. Justice Department press release,

The global resolution [with Eli Lilly] includes the following agreements: A plea agreement signed by Eli Lilly admitting guilt to the criminal charge of misbranding. Specifically, Eli Lilly admits that between Sept. 1999 and March 31, 2001, the company promoted Zyprexa in elderly populations as treatment for dementia, including Alzheimer’s dementia. Eli Lilly has agreed to pay a $515 million criminal fine and to forfeit an additional $100 million in assets.

A civil settlement between Eli Lilly, the United States and various States, in which Eli Lilly will pay up to $800 million to the federal government and the states to resolve False Claims Act claims and related state claims by Medicaid and other federal programs and agencies including TRICARE, the Federal Employees Health Benefits Program, Department of Veterans Affairs, Bureau of Prisons and the Public Health Service Entities. The federal government will receive $438,171,544 from the civil settlement. The state Medicaid programs and the District of Columbia will share up to $361,828,456 of the civil settlement, depending on the number of states that participate in the settlement.

The qui tam relators will receive $78,870,877 from the federal share of the settlement amount.

A Corporate Integrity Agreement (CIA) between Eli Lilly and the Office of Inspector General of the Department of Health and Human Services. The five-year CIA requires, among other things, that a Board of Directors committee annually review the company’s compliance program and certify its effectiveness; that certain managers annually certify that their departments or functional areas are compliant; that Eli Lilly send doctors a letter notifying them about the global settlement; and that the company post on its website information about payments to doctors, such as honoraria, travel or lodging. Eli Lilly is subject to exclusion from Federal health care programs, including Medicare and Medicaid, for a material breach of the CIA and subject to monetary penalties for less significant breaches.

• CMS issued three Medicare national coverage determinations holding that
  

  Wrong surgical or other invasive procedures performed on a patient; Surgical or other invasive procedures performed on the wrong body part; and Surgical or other invasive procedures performed on the wrong patient.

  are “never events” for which no Medicare reimbursement will be made.

HHS announced today that HIPAA covered entities (health plans, heath care providers who use electronic transactions, and health care clearinghouses) must adopt the ANSI X12 5010 electronic transaction standards by January 1, 2012, and the ICD-10 diagnosis and hospital procedure code sets by October 1, 2013. HHS adopted the health care industry’s recommended implementation schedule. This conversion is a huge undertaking.

• United Healthcare and its Ingenix subsidiary raised the white flag again today by agreeing to settle the American Medical Association’s lawsuit over the validity of the Ingenix usual reasonable and customary (UCR) databases that insurers often use to set out-of-network provider rates. While not conceding liability, the defendants agreed to pay $350 million into a fund to be distributed to doctors and consumers. The lawsuit had been pending since 2000 in the federal district court in Manhattan. The AMA claims victory here.
• The New York attorney general announced today that Aetna has agreed to contribute $20 million toward the cost of retaining a qualified university to create an independent UCR database. According to Aetna’s press release, Aetna
  

  will stop using the Ingenix databases for the purpose of determining “prevailing” or “usual, customary and reasonable” charges when members receive covered care from providers outside a health plan’s network. Aetna will instead help the Attorney General to create a new independent database for this purpose, and will use the new database when it is ready for use. Aetna is contributing $20 million to a nonprofit organization to help create the new database and to help educate members about reimbursement rates.

• The New York AG’s press release provided more details:

Under Attorney General Cuomo’s agreement with Aetna:

Aetna will pay $20 million toward a new, independent database run by a qualified nonprofit organization;

The nonprofit will own and operate the new database, and will be the sole arbiter and decision-maker with respect to all data contribution protocols and all other methodologies used in connection with the database;

The nonprofit will develop a website where, for the first time, consumers around the country can find out in advance how much they may be reimbursed for common out-of-network medical services in their area;

The nonprofit will make rate information from the database available to health insurers;

The nonprofit will use the new database to conduct academic research to help improve the health care system;

The nonprofit will be selected and announced at a future date.

• The AMA in another press release called upon insurers to follow Aetna’s lead. However, the Ingenix databases are not the only show in town. Many insurers use Medicare’s resource based relative value schedule (RVRBS) to set their out of network rates.

Interesting NFL games were played this weekend. I was in South Carolina when Arizona beat the Carolina Panthers to much local consternation. It would be astonishing if the Cardinals reached the Superbowl. Having watched the Eagles lose to the Redskins on December 21, I was surprised that the Eagles have reached the NFC championship game. Next week’s Steelers – Ravens game will be fun to watch. But onto the business at hand.

There were several FEHBP developments this past week.

The OPM Inspector General’s office posted on the web its semi-annual report to Congress for the period ending September 30, 2008.

OPM released the results of its 2009 Federal Human Capital Survey:

Satisfaction with health insurance and the flexible spending account programs show improvement since 2004. Employee satisfaction with health insurance (Q.65) continues to increase, up 6 percentage points since 2004. While satisfaction with flexible spending accounts (Q.68) was up 5 percentage points since 2004.

The Office of Management and Budget released an FY 2008 report on performance of the federal government. According to that report, Federal Employees Health Benefit Plan (FEHBP) overall enrollee satisfaction was 78% vs. health care industry standard of 60% (percent).

OMB also released agency performance and accountability scorecards. OPM received a green light on both its progress in eliminating improper payments and its health care quality and transparency initiative. According to OPM’s Improper Payments Improvement Act report for FY 2008, the improper payment rate for the FEHB Program as reported by OMB is 0.2%. In contrast, Medicare’s rate is 3.6%.

Events also transpired outside the FEHBP world. AHIC Successor, Inc. renamed itself the National eHealth Collaborative (is that really more catchy?). The collaborative also refreshed its website. Government Health IT News reports that

With a new administration coming to Washington, D.C., and a massive federal stimulus plan under consideration, some policy experts believe the environment for overhauling the country’s health care system is favorable. The Health Information and Management Systems Society has called on the new administration to spend a minimum of $25 billion on the adoption of electronic medical records by nongovernmental hospitals.

“Twenty-five billion [dollars] moving into this area could be a game-changer,” said John Loonsk, director of interoperability and standards at the Office of the National Coordinator of Health IT, at the board meeting.

Some critics have suggested that allocation of those funds should be deferred until interoperability standards are in place. But Loonsk, remarking on recent progress made in that area, told the board that a lack of technical standards is “no longer the major obstacle to advancing interoperability.”

He nonetheless conceded that implementing those standards “is very challenging.”

Business Insurance reported on another stimulus development. Congress is planning to provide a government contribution of the 50-60% of the COBRA continuation coverage premiums for workers who lose their jobs (perhaps subject to other eligibility criteria such as an earnings ceiling). The FEHBP analog is COBRA continuation coverage is TCC. The article does not explain whether the expected subsidy would be extend to TCC.

Finally, last week the Centers for Medicare and Medicaid Services (CMS) announced that the agency has

notified more than 3,000 of the nation’s hospitals that they will receive the full payment update for calendar year (CY) 2009 as part of the new Hospital Outpatient Quality Data Reporting Program.

The successful hospitals represent 99.3 percent of all hospitals that participated in the program that began in 2008 as an effort to strengthen the tie between the quality of care furnished to people with Medicare in hospital outpatient departments and the payments hospitals receive for those services.

The Centers for Medicare and Medicaid Services (CMS) actuaries issued their report on 2007 healthcare spending, which continued to outpace the CPI-U.  CMS explained in a press release that 

The 111th Congress convenes on Tuesday, January 6, at noon. I expect that the most pressing health care items on its agenda will be reauthorizing the State Children’s Health Insurance Program, which otherwise expires on March 31, 2009, and providing up to $25 billion in funding for interoperable electronic medical records in the anticipated economic stimulus bill.

Speaking of Congress, Modern Healthcare.com reports that “Democratic leaders on Capitol Hill have named Douglas Elmendorf, a former Clinton administration economist, to head the Congressional Budget Office. He will replace Peter Orszag, who resigned in November to head incoming President Barack Obama’s White House budget office.”

On the Medicare front, CMS announced on December 29 the publication of a final regulation requiring certain durable medical equipment suppliers to post a $50,000 surety bond by October 2, 2009 (May 4 for new suppliers). According to CMS, “[t]his requirement was due in part to the large number of improper and potentially fraudulent payments to medical equipment suppliers for furnishing medical equipment and devices to people with Medicare. The 2007 Medicare error rate report found approximately $1 billion in improper payments for medical equipment and supplies.”

The Drug Benefit News featured an interesting article on health insurer funding of clinical drug trials. “[M]ore and more health plans are covering medical expenses of members participating in clinical trials, as well as the experimental drugs. Some insurers urge all plans to develop clear policies around clinical trials as a way to benefit both members and themselves.”

CAQH announced on December 30 the continuing expansion of it CORE initiative. CORE is “an all-payer solution that enables provider access to patient insurance information before or at the time of service using the electronic system of their choice. [CAQH] has brought together more than 100 industry stakeholders to collaborate on a multi-phase set of uniform business rules to achieve that goal.”

Another CAQH initiative is its “Save Antibiotic Strength” campaign. “Through the program, CAQH and our partners – including the U.S. Centers for Disease Control and Prevention (CDC) – are educating Americans about the importance of using antibiotics safely, and providing physicians with information and tools to deliver this message to their patients. Together, we are addressing one of America’s most pressing public health concerns.” Last week, Giant Food, a DC metro area grocery chain, and its sister company Stop & Shop, a New England grocery chain, announced that their pharmacies will supply 14 days of generic antibiotics at no charge with a prescription during the period January 2 through March 21, 2009. I think that the trend of charging $4 generics is good for everyone, but I’m not so sure about free antibiotics.