Rep. Danny Davis (D IL) who chairs the Federal Workforce Subcommittee of the House Oversight and Government Reform Committee, has scheduled a hearing on December 3 at 10 am concerning “2009 Blue Cross Blue Shield Health Benefits: What it means for Federal employees.”   The hearing will examine changes in Blue Cross Blue Shield FEP’s premiums and benefits for 2009. BCBS FEP covers over 50% of the FEHBP’s total enrollment. 

Recent Open Season articles here and here.

The Washington Post’s health section reported on the unwillingness of many doctors to use electronic prescribing. According to the article,

As part of its e-prescribing project, CareFirst provided hand-held devices, software and training to 500 physicians. Today, 350 are still enrolled. Some of the remaining 150 doctors have graduated to more sophisticated electronic medical records, but many simply returned to pen and pad. “Providers are creatures of habit; they have processes they are used to,” said Pete Stoessel, a CareFirst administrator involved in the initiative. “They are very, very averse to change.”

Actually that’s not a bad result, and the new Medicare incentive/mandate should help increase adoption.The American Medical Association, at its November meeting, expressed support for the patient centered medical home concept according to the AMA News. Deloitte Consulting recently released a study on the concept which it described as follows:

“In a medical home model, primary care clinicians and allied professionals provide conventional diagnostic and therapeutic services, as well as coordination of care for patients that require services not available in primary care settings. The goal is to provide a patient with a broad spectrum of care, both preventive and curative, over a period of time and to coordinate all of the care the patient receives.

The AMA wants more “deets” on how insurers will reimburse physicians for operating a medical home.

The U.S. Office of Personnel Management (“OPM”) recently posted on its website its FY 2008 Performance and Accountability Report which includes the following FEHB Program discussion on page 120.

Challenge — FEHBP

Action:

OPM issued a request for proposal to acquire a health benefits carrier to offer a nationwide Indemnity Benefit Plan under the FEHBP beginning January 2010. The primary purpose of adding the Indemnity Benefit Plan is to mitigate the risk should any carrier with a sizeable share of the market leave the FEHBP for any reason.

OPM established a working group to develop steps to strengthen the controls and oversight of the FEHBP pharmacy benefits. To help formulate a better understanding of this area, the group has completed or planned the following activities:

* Conducted a literature search on bestpractices in managing drug programs

* Met with officials that run pharmacy programs for other large government sponsored health care programs (i.e., TRICARE, Centers for Medicare and Medicaid Services (CMS), and U.S. Department of Veterans Affairs) to understand the controls they have established

* Obtained consulting contract with industry experts on drug pricing and Pharmaceutical Benefits Manager (PBM) contract management/oversight to review FEHB carriers PBM contracts.

The long-term goal is to develop options for future enhancements of FEHBP pharmacy programs based on the results for the literature search, CMS/TRICARE benchmark evaluations, and recommendations from the expert consultant. Further, OPM will have responsibilities and challenges as insurance carriers begin to implement Health Information Technology (HIT) initiatives. HIT (or e-health) covers a broad range of initiatives, including electronic personal health records, e-Prescriptions, and disease-management programs.

OPM issued the Federal Employees Health Benefit (FEHB) Program Carrier Letter 2007-07 that states OPM expects all FEHB carriers to be committed to these four cornerstones: standards for information technology, quality care reporting, transparency of health services costs, and providing incentives for quality care at competitive prices. The Program Carrier Letter reiterates OPM’s commitment to the cornerstones and to promoting state-of-the-art health information technology. In 2008, OPM issued a second carrier letter (2008-06) in which it restated the expectation that all FEHB carriers need to continue their important efforts to make fundamental information about health care quality and costs available to consumers.

Progress: Moderate

Next Steps:

The long-term goal is to develop options for future enhancements of FEHBP pharmacy programs based on the results for the literature search, CMS/TRICARE benchmark evaluations, and recommendations from the expert consultant. Further, OPM will have responsibilities and challenges as insurance carriers begin to implement Health Information Technology (HIT) initiatives. HIT (or e-health) covers a broad range of initiatives, including electronic personal health records, e-Prescriptions, and disease-management programs.

OPM will continue working with insurance carriers to implement and improve upon HIT initiatives as well as with OMB on its related scorecard initiatives.

See also the discussion of Improper Payments in the FEHBP found on pages 132 – 133.

• Sen. Joe Lieberman (I Conn.), proponent of domestic partner coverage in the FEHBP, has been allowed by the Democratic leadership to retain his chairmanship of the Senate committee with responsibility for FEHBP oversight, Homeland Security and Governmental Affairs. The House committee with FEHBP oversight responsibility, Oversight and Government Reform, lost its chairman Henry Waxman (D Calif) to the more powerful Energy and Commerce Committee chair. Rep. Ed Towns (D NY) will become the new Oversight and Government Reform Committee chairman.
• AHIP, the managed care trade association, expressed support for a health care reform based on an individual mandate which is found both in the Obama and Baucus reform plans.
  

Summary of AHIP’s Proposal to Guarantee Coverage for Pre-existing Conditions and Promote Affordability in the Individual Insurance Market:

Guarantee-issue coverage with no pre-existing condition exclusions;

Establish an individual coverage requirement with an insurance coverage verification system, an automatic enrollment process and effective enforcement of the requirement that all individuals purchase and maintain coverage;

Promote affordability by: providing refundable, advanceable tax credits for moderate-income individuals and working families; and promoting tax equity whether coverage is obtained through an employer or the individual market; and

Ensure premium stability for those with existing coverage through a broadly funded reimbursement mechanism that spreads costs for the highest-risk individuals.

• The Boston Globe reported last week that “Leaders of some large academic medical centers and community hospitals [in Massachusetts] called for [Massachusetts] Governor Deval Patrick to examine how Massachusetts General Hospital, Brigham and Women’s Hospital, Children’s Hospital, and a few other institutions are able to obtain higher prices from health insurers even though there is, especially for the most common procedures, often no demonstrated difference in the quality of the care delivered by those hospitals.” [Hint — It’s called leverage.]
• CMS created a new Dialysis Facility Compare website for consumers. There is a special category of Medicare coverage for persons with end stage renal disease (regardless of age). Suprisingly, only 6% of Kaiser Family Foundation survey participants had heard of CMS’s very useful Hospital Compare website, according to a survey conducted in August 2008. Avery Comarow, of U.S. News and World Report, which publishes its own hospital rankings, thoughfully comments on the KFF study here.

McKesson has agreed to pay $350 million to settle allegations that it engaged in average wholesale price fixing with First Databank, an AWP publisher. The AWP is traditionally used to set the price that health plans pay prescription benefit managers for prescription drugs. According to McKesson’s press release,

The settlement terms, which are subject to final court approval, include an express denial of liability of any kind. The company will also record a reserve for outstanding and expected future AWP-related claims by public entities, which is currently estimated to be $143 million.* * * “As we have consistently stated, we believe the plaintiffs’ allegations are without merit, and that McKesson adhered to all applicable laws,” said John H. Hammergren, chairman and chief executive officer. “Yet when faced with the inherent uncertainty of this litigation, we determined that entering into the settlement agreement was in the best interest of our shareholders, customers, suppliers, and employees.”The settlement will now be submitted to the court for preliminary approval, followed by notice to the class and a final approval hearing, which has not yet been scheduled.

The plaintiffs class counsel also have entered into a proposed class settlement with First Databank. That settlement in stark contrast provides for a $1 million payout and unnecessary disruption of the PBM contracts with health plans (because the underlying problem which arose seven years ago has been resolved contractually.) The court holds a fairness hearing on the First Databank settlement next month.

There are several press reports that former Sen. Tom Daschle will be HHS Secretary and that Congressional Budget Office Director Peter Orszag will be the Office of Management and Budget Director in the Obama Administration. Sen. Daschle published a book this year titled “Critical: What We Can Do About the Healthcare Crisis.” Amazon.com provides the following review excerpted from Publisher’s Weekly:

The U.S. is the only industrialized nation that does not guarantee necessary health care to all of its citizens, and as former senator Daschle observes, Skeptics say we can’t afford to cover everyone; the truth is that we can’t afford not to because U.S. economic competitiveness is being impeded by the large uninsured population and fast-rising health costs. Daschle’s book delineates the weaknesses of previous attempts at national health coverage, outlines the complex economic factors and medical issues affecting coverage and sets forth plans for change. Daschle proposes creating a Federal Health Board, similar to the Federal Reserve System, whose structure, functions and enforcement capability would be largely insulated from the politics and passion of the moment, in addition to a merging of employers’ plans, Medicaid and Medicare with an expanded FEHBP (Federal Employee Health Benefits Program) that would cover everyone. There is no more important issue facing our country, Daschle asserts, than reform of our health-care system, and the book’s health-care horror stories bring this immediacy home.

Director Orzsag also has strong opinions on the need to rein in health care costs. You can watch a webcast of his recent presentation to the Center for Public Health, Stanford University here.

The Senate is proceeding full steam ahead on health care reform. Sen. Kennedy has created a team to work on his initiative. According to the Washington Post Sen. Hillary “Clinton (D-N.Y.) will lead “a committee working group” on insurance coverage, Kennedy announced, while Sen. Tom Harkin (D-Iowa) will oversee a subgroup on prevention and Sen. Barbara Mikulski (D-Md.) is heading up the quality task force.” Modern Healthcare reports that

Key lawmakers met to discuss a path that would lead to a broad healthcare-reform bill, though discussions over process and jurisdiction trumped talks on the actual substance of such a bill, according to lawmakers who attended the meeting. Sen. Chuck Grassley, the ranking Republican on the Senate Finance Committee, called the confab, which included Sens. Edward Kennedy (D-Mass.) and Max Baucus (D-Mont.), “very positive,” adding that the groundwork being laid now will pay dividends early next year when lawmakers tackle the herculean task of reforming the healthcare system.

2009 is shaping up to be an interesting year.

• The Labor Department published a major set of Family and Medical Leave Act regulations today. A summary may be found here.
• An AP news report provides an overview of the current generic drug discount programs offered, at this point, by most pharmacy chains.
• AHIC Successor, Inc., has posted its first online newsletter.
• The Cleveland Clinic announced the top 10 medical innovations of 2008. Number 10 is the national health information exchange.
• The AMA News reports that health insurers profits are declining.

The Weekend Update is being written on Monday morning because I spent the weekend with my family in frigid Madison, Wisconsin. (Go Big Red.) Why couldn’t UW schedule Freshman Parents Weekend for early October, rather than the weekend before midterms? The Medicare annual coordinated election period for Medicare Advantage and Medicare prescription drug plans began on November 15 and continues through December 31, 2008, according to a CMS press release. The ongoing Federal benefits open season ends on December 8. The Oh My Gov! website discussed the Plan Smart Choice web tool available to help federal employees and annuitants choose a plan and its underwriting support from Health Grades. Many federal agencies offer employees access to Consumer Checkbook’s online FEHBP open season tool.
Several articles follow up on the final AHIC meeting held last week. According to Government HIT News, a study reported that while 78% of hospitals use at least one component of a complete electronic health records (“EHR”) system, i.e., electronic reporting of lab test results, only a small percentage of hospitals have complete EHR systems. According to the author of the study,

e-prescribing is the biggest hurdle facing most hospitals at this time. They cited cost as a major barrier.

[HHS Secretary Mike] Leavitt expressed disappointment at the way the data was presented to the AHIC. “It belies the actual progress to simply measure those who have arrived” at the goal of comprehensive EHRs, he said.

[Study author Dr. Ashish Jha] said that in many cases the hospitals have laid the foundations for more automation and can now move ahead with implementation.

AHIC recommended that HHS developed EHR templates in the same manner that it developed templates for electronic claims. According to Government Health IT News, “The plan is for HHS to convene an expert panel to determine what medical and related data is required for regulatory, licensing, accreditation, quality reporting and payment purposes.” Such a panel presumably would be more pro-active than the existing Certification Commission on HIT, which reportedly will continue to have a role going forward.
The labor union coalition, Change to Win, has launched a website Alarmed About Caremark where you can download the report CVS Caremark: An Alarming Prescription. According to an AP report,

At issue is a mailing sent by Caremark and paid for by drugmaker Merck and Co. to doctors who treat Caremark patients with type 2 diabetes. The letter touts Januvia’s potential benefits in improving blood sugar control, and suggests doctors may want to consider talking to their patients about using Merck’s drug Januvia in addition to their current treatment.

The Change to Win union coalition says the mailings are intrusive and an improper use of CVS Caremark’s relationship with its patients. Merck and CVS Caremark say they are trying to make physicians aware of a drug that may be more effective than older therapies, and that personal information on patients is not being shared.