• Modern Healthcare Online published an interesting, wide ranging interview with HHS Secretary Mike Leavitt. Secretary Leavitt discussed the problems created by the “‘silo syndrome.’ Everything is paid for separately. You can’t possibly expect to get any kind of efficiency or coordination, and we have all kinds of bad things that happen as a result, not to mention dramatic amounts of overpayment.” It’s therefore not surprising that the Centers for Medicare and Medicaid Services announced last week “a new demonstration for hospitals to test the use of a bundled payment for both hospital and physician services for a select set of episodes of care to improve the quality of care delivered through Medicare fee-for-service.”

• Government Health IT Magazine reported that following privacy protections crafted by Sen. Patrick Leahy (D Vt) will be added to the Senate’s Wired for Health Care Act:
  

  • Eliminate what Leahy called a loophole in the original bill that would have allowed operators of personal health information databases to give sensitive health records to virtually anyone under the Health Insurance Portability and Accountability Act Privacy Rule.

  • Ban certain health care providers from using or disclosing health records for marketing purposes.

  • Direct the HHS Secretary to submit a report to Congress recommending privacy and security protections for personal health records.

  • Give patients the right to inspect their e-health records and receive electronic copies of the records. Under the HIPAA Privacy Rule, individuals have a right to see their medical records, but there is no clear right to electronic ones.

  • Strengthen congressional oversight over federal health privacy compliance and enforcement of the HIPAA Privacy Rule.

  However, the article also reports that it is unlikely that Congress will pass the bill this year.

• The Federal Times reports on a new FAR Council proposal to expand the proposed contractor code of ethics rule to commercial items and contracts performed in foreign countries. The dollar threshold for application of the rule is $5 million.

• The New York Times reported yesterday on a Centers for Disease Control report on the problems at the Endoscopy Center of Southern Nevada and related clinics that caused 85 hepatitis cases to date.

• Looking forward, Friday May 23 is that date on which Medicare will begin rejecting provider claims that include any provider identifier other than the HIPAA National Provider Identifier and the tax identification number.

• On May 12, Rep. Henry Waxman (D Calif), chairman of the House Oversight and Government Reform Committee, and Rep. Danny Davis (D Ill.), chairman of the Committee’s Federal Workforce Subcommittee, sent letters to OPM Director Linda Springer and Acting CMS Administrator Kerry Weems asking for an explanation of why approximately 200,000 federal annuitants covered by the FEHB Program are enrolled in Medicare Part D and why FEHB plans are not coordinating benefits with Medicare Part D. The representatives requested a reply by Friday May 16.

  It’s my understanding that many of these annuitants are so-called dual eligibles who were automatically enrolled in Medicare Part D because they also are covered under Medicaid. For others, it’s a personal choice. As FEHB plans carriers hold the insurance risk for their plans, they have every reason to coordinate benefits with Medicare.

• HHS’s Office for Civil Rights, which is responsible for the HIPAA Privacy Rule, has created a web page of compliance and enforcement statistics.
• A Medco study concludes that 51% of insured Americans regularly take at least one drug for a chronic health condition according to this AP report.
• Modern Healthcare Online reports that
  

  Average annual medical costs increased by 7.6%, or $1,109, for the typical American family of four from 2007 to 2008, according to the fourth annual Milliman Medical Index. The rate of increase was lower than the previous year—8.4%—and also represented the lowest rate of the past five years, according to the index.

Happy Mother’s Day!

• On May 8, the House Committee on Energy and Commerce’s Oversight Committee held a hearing on direct to consumer advertising of prescription drugs, in particular television advertising. According to an AP report, “Stupak, the oversight subcommittee chair, said he is considering new restrictions to ‘protect American consumers from manipulative commercials.'”
• Tragically, as the AMA News reports that disciplinary actions against doctors are down for the third straight year, the Las Vegas Sun reported that
  

  The Regional Health District of Southern Nevada announced today [May 8] that 77 cases of potential hepatitis C cases have been identified from those who have been tested since an outbreak was announced in January. The 77 cases are not acute hepatitis C, said Jennifer Sizemore, a spokeswoman for the health district. Of the 49,000 people notified by health officials, these 77 people were then interviewed and identified, she said. To date there have been eight cases of acute hepatitis C cases identified with links to a clinic that reused syringes and provided anesthesia to two or more patients from single dose vials. Seven of them have been linked to the Endoscopy Center of Southern Nevada operated by Dr. Dipak Desai, who is not allowed to practice medicine and is under investigation by state and local authorities. Seven of the acute hepatitis C cases have been linked to the clinic at 700 Shadow Lane and the eighth to another clinic owned by Desai.

• A Congressman, who is an MD, has refused FEHB coverage according to Scientific American.

• Government HIT magazine reports on a recent Brookings Institution conference on e-prescribing. I did not realize that Dr. Mark McClellan, the former CMS administrator, had landed at Brookings. Interesting stats from the article:
  

  Although e-prescribing is increasing, it is still practiced by fewer than 85,000 of the country’s more than 560,000 doctors. The holdouts tend to physicians in smaller practices who lack technical expertise.

  In some cases, their local pharmacies do not accept e-prescriptions, although most large chain drug stores are equipped to handle them. Small, rural drug stores are less likely to be able to fill e-prescriptions.

• The AIS Health Business Daily featured an article suggesting that FEHB enrollees are migrating to lower premium plans. In fact, that trend has been a feature of the FEHB Program for over 25 years. In 1981, the Reagan Administration forced carriers to cut benefits which made lower premium plans more attractive. That action result in a mass migration of enrollees into lower premium plans. The pace has slowed but it’s never stopped.
• Govexec.com includes a column on the debate on Capitol Hill over whether or not to increase the dependent child age limit from 22 to 25. The column notes that
  

  While no official cost estimate has been calculated, Daniel Green, deputy associate director of the Office of Personnel Management’s Center for Employee and Family Support Policy, said covering dependents already in FEHBP for an extra three years could cost approximately $200 million per year. He said the estimate was calculated by multiplying the number of dependents in the 22-to-25 age bracket (245,000) by the annual cost of health care for a young adult ($1,640).Green added that the government would take on $160 million of the additional cost, with the remainder paid by enrollees through increased premiums.But Kelley and John Gage, president of the American Federation of Government Employees, argued that increasing the dependent age by three years is likely to decrease premiums, since infusing a large number of young and generally healthy adults into a risk pool of typically older or retired federal employees should come at very little to no cost.”It’s not a matter of simple math,” Gage said. “I can’t believe that this is a simple matter of multiplying the number of potentials times the cost for young adults, who should be very good at underwriting risk.”

  Give me a break. I am not an actuary, but common sense tells you that savings only occurs when FEHB plans add young, healthy employees who pay the full premium. However, as OPM points out, adding members to an existing family enrollment only increases the cost of the enrollment.

• Taking a page out of the federal government’s Service Contract Act playbook, Aetna is planning to require its subcontractors to offer health benefits to their employees according to this Boston Globe report.
• USA Today reported this week on identity thiefs who prey on medical records.

• Wal-Mart announced today that it is expanding its $4 generic drug pricing program to six additional drugs, is offering the generics at $10 for a 90 day supply, and is selling more than 1,000 over the counter drugs for $4. A Goldman Sachs analyst, according to the AP, opined that these changes would not adversely impact CVS/Caremark financially.
• The American Medical Association is militating against Medicare’s never events policy according to the AMA News.
• The AMA News also justifiably warns doctors that beginning May 23 health plans and Medicare will deny electronic claims that are include any provider ID numbers other than the HIPAA mandated National Provider Identifier. (The tax identification number is OK.) “Near the end of April, about 20% of all Medicare claims were being submitted with NPIs only, according to the Centers for Medicare & Medicaid Services.”

• Modern Healthcare.com reports that a RICO lawsuit has been filed against Ingenix and its parent United Healthcare in the federal district court in Hartford, Connecticut. The suit is based on the allegations of artificially low reimbursement rates for out of network provider first publicized by New York State Attorney General Andrew Cuomo. The suit is captioned Weintraub v. Ingenix Inc et al., Civil Action No. 3:08-cv-00654-CFD, and thanks to PACER, I have learned that Aetna, CIGNA, GHI, Empire Blue Cross, Humana, and Healthnet, among others, also are named defendants. The plaintiff is a New York resident who belongs to an Aetna plan. The suit is assigned to U.S. District Judge Christopher Droney.
• AHIP announced this week that “More than 6.1 million Americans are covered by Health Savings Account (HSA)-eligible insurance plans, a 35 percent increase since last year.” The Government Accountability Office issued a report this week finding that while this number has increased since 2004, “in all years, many HSA-eligible plan enrollees did not open an HSA.” The Wall Street Journal has featured a report on this problem, which is not found in the FEHB Program where the carriers seed the HSA accounts for their members. In response to the GAO report, Representatives ” Waxman and Stark renewed calls for legislation that would require enrollees in health savings accounts to prove that withdrawals were for medical expenses” according to the San Francisco Chronicle.
• I attended a conference last Tuesday sponsored by the Galen Institute, the Heritage Foundation, and the American Enterprise Institute that featured a speech by Health and Human Services Secretary Michael Leavitt titled “Medicare Drifting Toward Disaster / Solutions for Sustainability.” A webcast of the 2 hour conference is available here. Secretary Leavitt intends to append his speech to the minutes of the March 26 Medicare Trustees meeting at which the Trustees released a report predicting that the Medicare Part A trust will be insolvent in 2019. Secretary Leavitt called for political courage to address the problem now. Sen. John Breaux (ret. D La) agreed but noted that political courage increases as the deadline approaches. He predicted that Congress will be addressing the issue in 2018.

The House of Representatives approved the Senate’s version of the Genetic Information Non-Discrimination Act (GINA, H.R. 493) by a vote of 414-1, and the AP reports that President “Bush was expected soon to sign the Genetic Information Nondiscrimination Act, which lawmakers and advocates called ‘the first major civil rights act of the 21st century.'” The law takes effect 18 months after enactment.

The outcome of the House Federal Workforce subcommittee hearing on Tuesday, April 29, was a substitute bill (HR 5550) to create a voluntary, supplemental health insurance program for young adults who lose FEHB coverage at age 22. According to a Federal Times report, the program which would be similar to the FEDVIP program is expected to offer lower programs than the current temporary continuation of coverage offered to folks who lose their FEHB coverage (similar to COBRA continuation coverage in the private sector.

Govexec.com reports that Sen. Clinton has introduced a bill (S 2916) to require government contractors, including FEHB plan carriers, to self-report criminal conduct and overpayments. Her bill’s objective is similar to a bill that the House of Representatives approved last month. Goveexec.com explains that

Clinton’s bill would build on the Close the Contractor Fraud Loophole Act (H.R. 5712), which passed the House by a voice vote on April 23. Sen. Claire McCaskill, D-Mo., introduced an identical companion bill in the Senate, which she expects to include in the National Defense Authorization Act.Sponsored by Rep. Peter Welch, D-Vt., the House bill closes the overseas loophole in proposed changes to the Federal Acquisition Regulation, which would require contractors to self-report certain procurement violations. The administration has said the exemption was a “drafting error” and that it is fixing it through a standard regulatory process.

• In addition to sponsoring a very useful Hospital Compare website, the Centers for Medicare and Medicaid Services (“CMS”) sponsors a Nursing Home Compare website. CMS announced this week that
  

  For the first time, information about nursing homes on the Compare Web site will list whether a home is or has been on CMS’ special focus facility (SFF) list. The agency’s SFF initiative gives heightened scrutiny to nursing homes that have a history of poor performance or repeated violations of state and federal health and safety rules.“Today’s expansion of information on Nursing Home Compare will give beneficiaries a more complete picture of a nursing home’s history of providing quality care,” CMS Acting Administrator Kerry Weems said.

• Modern Healthcare.com published an interesting article about criminal prosecutions related to violations of the HIPAA Privacy Rule.

According to the Subcommittee’s website,

The Subcommittee on Federal Workforce, Postal Service and the District of Columbia will hold two hearings, under the title, “Catching Up: Benefits That Will Help Recruit and Retain Federal Employees,” on Tuesday, April 29, 2008, at 2:00 p.m. in room 2154 of the Rayburn House Office Building. Panel one will discuss improvements to the Federal Employee Thrift Savings Plan (automatic enrollment and default to the Life Cycle Fund) and the second panel will examine providing health insurance to young adults enrolled as dependents in the Federal Employee Health Benefits Program (FEHBP). Immediately following the hearing, the Subcommittee will markup [among other bills]: H.R. 5550, a bill “To amend title 5, U.S.C, to increase the maximum age to qualify for coverage as a ’child’ under the health benefits program for Federal Employees.” Chairman Davis may offer an amendment to H.R. 5550, which he introduced on March 6, 2008.

The FEHB Act (§ 8901) currently defines an eligible family member as

(5) “member of family” means the spouse of an employee or annuitant and an unmarried dependent child under 22 years of age,
including–
(A) an adopted child or recognized natural child; and
(B) a stepchild or foster child but only if the child lives with the employee or annuitant in a regular parent-child relationship;

or such an unmarried dependent child regardless of age who is incapable of self-support because of mental or physical disability which existed before age 22;

Chairman Davis’s bill would increase the age ceiling from 22 to 25. Adult children in that age group currently are eligible for FEHB coverage on a self-pay basis under the Temporary Continuation of Coverage law, which in my opinion is a pretty good deal. Of course, if the Chairman’s bill were to be adopted the TCC would be available for three years beginning at age 25. However, even under the Chairman’s bill, adult children would continue to be cut off from FEHB coverage as soon as they marry. Perhaps the Chairman’s amendment would modify this restriction.

The Senate passed the Genetic Information Non-Discrimination Act (H.R. 493) today 95-0. The bill must now be presented again to the House or Representatives because the Senate amended the House approved bill in response to concerns raised by Sen. Tom Coburn (R Okla) and the White House. It is expected that the House will approve the Senate version of the bill next week, and according to Bloomberg, HHS Secretary Leavitt has announced the Administration’s support for the bill that the Senate approved. The deal appears to be done.