• The Markle Foundation’s Connecting for Health Program framework for protecting the privacy and security of electronic personal health records has gained the support of Microsoft, Google, WebMD, the American Medical Association, the Blue Cross Blue Shield Association, and American’s Health Insurance Plans (“AHIP”) according to a press release. According to an AP report,
  

  The new “Connecting For Health” guidelines aim to give electronic PHRs at least the same level of protection already governing paper medical records. The rules also call for patients to be notified in a “timely way” if their medical information is released by mistake, computer hacking or other mischief.

• AHIP’s Board of Directors released principles on the patient centered medical home concept.

Earlier this month, the Internal Revenue Service (“IRS”) published Notices 2008-51 and 2008-52.

Notice 2008-51 “provides guidance on a qualified Health Savings Account (“HSA”) funding distribution from an individual’s Individual Retirement Account (IRA) or Roth IRA to a Health Savings Account (HSA). The qualified HSA funding distribution is a one-time transfer from an individual’s IRA to his or her HSA and generally excluded from gross income and is not subject to the 10% additional tax under Internal Revenue Code (“IRC”) § 72(t).”

Notice 2008-52 provides guidance on contributions to HSAs under IRC amendments made by §§ 303 and 305 of the Health Opportunity Patient Empowerment Act of 2006 (the Act) included in the 2006 Tax Relief and Health Care Act , Pub. L. No. 109-432.

The House approved a Medicare fix bill today by a veto-proof margin. The National Journal reports that Senators Baucus and Grassley have reached a compromise that may lead to enactment of a law this month. According to the National Journal,

Baucus did not discuss details of the compromise he worked out with Senate Finance ranking member Charles Grassley, but industry sources say the compromise prevents a 10.6 percent Medicare physician pay cut for 18 months by giving physicians a 0.5 percent Medicare payment increase in 2008 and freezing payments in 2009. By contrast, the House-passed measure bumps up physicians’ pay 1.1 percent in 2009.

Previously CMS announced that any Medicare fix law enacted after June 16 must be applied retroactively.

Your FEHBlog learned from the Business Insurance reporter that the House and Senate negotiators adopted the effective date provision from the Senate bill (S 558) which reads as follows:

The provisions of this Act shall apply to group health plans (or health insurance coverage offered in connection with such plans) beginning in the first plan year that begins on or after January 1 of the first calendar year that begins more than 1 year after the date of the enactment of this Act.

Assuming enactment in 2008, the new mental health parity provisions would apply to FEHB plans for the 2010 contract year, which is a relief.

Business Insurance reports that House and Senate negotiators have resolved the benefit related differences between the mental health parity bills that their respective chambers passed. Earlier the House backed off on its provision requiring health plans to cover all mental disorders identified by the American Psychiatric Association.

According to Business Insurance, “Negotiators now have also set the date for plans to comply with the new parity requirements at Jan. 1 of the first calendar year after the date of enactment.” I hope that’s an error because if this account is accurate then the new requirements would apply to health plans, including FEHB plans, on January 1, 2009, if the bill is enacted this year. 2010 would be much more reasonable in my view for such a major change. The negotiators now are turning to the pay go provisions adopted by the House that the Administration has threatened to veto. Stay tuned.

Mark your calendars now. The Indian generic drug manufacturer Ranbaxy has struck a deal with Pfizer to begin marketing a generic version of the blockbuster anti-cholesterol drug/statin Lipitor at the end of November 2011 according to the Financial Times. Ranbaxy will have 180 days of exclusive marketing rights to generic Lipitor.

Daiichi Sankyo of Japan is seeking to acquire Ranbaxy. The Indian business press reports today that the Bombay stock market which lists Ranbaxy reacted unfavorably to the deal. Reuters reports that the deal caused UBS to cut ratings on two large U.S. prescription benefits managers Medco and Express Scripts as a result of this deal because the UBS analysts expected Lipitor to go generic in 2010.

AIS Health Business Daily reprinted today an interesting article on how health plans can help avoid security breaches. The article reads in part as follows:

Health plan privacy and security officers interviewed by HPW say that while no information-protection system is totally foolproof, there are certain key steps plans can take to reduce significantly the risk of data being lost, stolen or inappropriately viewed. And they agree that in most cases, the problem is internal mistakes and carelessness rather than threats from hackers. “Typically the weak link is not some exotic hacker,” Craig Shumard, CIGNA Corp.’s chief information security officer, tells HPW. “In many cases, it’s an employee or third-party outsourcer who just didn’t consider the security implications of what they were doing.” Among the weak links cited by privacy and security officers:

• Overlooking the importance of a culture that values information protection;
• Sending PHI or other sensitive data by unsecured channels;
• Using laptops with unencrypted hard drives; and
• Not monitoring an outside vendor’s privacy and security procedures.

These weak links can be addressed by the right blend of administrative practices and technology safeguards. “The most important step you can take is arming your employees with the technology and the knowledge they need to protect this information,” says Mike Elinski, associate vice president for technology and e-business development at Michigan-based Health Alliance Plan. “Doing this puts you and your customers in the best possible position.”

Common sense also helps.

The American Medical Association has announced that it will begin to rank health plans on the quality and timeliness of their claims administration according to the Chicago Tribune. The AMA believes that their ratings will serve as a counterpoint to health plan on-line ratings of physicians. However, the AMA News reports this week that relatively few people select their physicians by using these ratings:

A Harris Interactive poll commissioned by the California HealthCare Foundation found that although more than 80% of the state’s adults turn to the Internet for health-related information, less than one-quarter have looked at physician ratings sites. Only 2% of those surveyed made a change in physicians based on information posted on a rating site.

That lack of reliance on ratings is not limited to choosing a physician. The survey, released in June, also found that only 1% of respondents made a change in their hospital or health plan based on ratings sites devoted to those entities.

The health plan trade association, AHIP, released a statement on the AMA’s actions.

• Last week, the Senate continued to debate, but made no real progress toward adopting, a Medicare bill that would avoid a 10.6% cut to physician reimbursement on July 1. CMS has warned that any reimbursement change will have to be made retroactively if a law is not passed by June 16.
• The Office of the National Coordinator for Health Information Technology awarded Booz Allen Hamilton a $450,000 contract to assess and evaluate the scope of the medical identity theft problem in the U.S.
• The eHealth Initiative issued a report on the state of electronic prescribing.

FCW.com reports that

On June 6, the Bush administration issued an executive order saying that all companies hired to perform work for federal agencies must use an electronic verification system to ensure that their employees are legally eligible to work in the United States. On June 9, the Homeland Security Department designated its online E-Verify system for use in the verification process. The Executive Order will be implemented through a Federal Acquisition Regulation contract clause that is being proposed this month.

The U.S. Citizenship and Immigration Services has posted FAQs on E-Verify for federal contractors. The first FAQ is very helpful:

As a current or prospective Federal contractor, am I required by the Executive Order or the proposed rule to enroll in E-Verify now? Not at this time. At this time, the E-Verify program remains a voluntary program for employers, including federal contractors. The Executive Order instructs Federal agencies to require contractor participation in E-Verify as a term of future contracts, and the proposed rule provides detailed guidance on how that requirement is to be implemented. However, the proposed rule is not a final rule; it is a proposal that is open for public comment at this time. There may be substantive changes to the rule before it becomes final. Moreover, the final rule will not be effective until 30 days after publication. Under the proposed rule, you would only be required to enroll in E-Verify if and when you enter into a Federal contract or subcontract that requires participation in E-Verify as a term of the contract. Although Federal Contractors are not yet required to participate in E-Verify, you are encouraged to enroll in E-Verify now to verify the employment eligibility of your new hires.