One of the new Medicare Advantage options for seniors is the Private Fee for Service Plan. The insurance company offers a traditional indemnity plan, and the providers have to accept Medicare level reimbursement. The Wall Street Journal reports today that seniors are flocking to these plans. (The link is to a reprint in the Pittsburgh Post Gazette that works.)

The Journal article quotes David Lewis, acting director of the Medicare Advantage Group at the Centers for Medicare and Medicaid Services (Mr. Lewis previously was an FEHBP Contracting Officer), “Enrollment in private fee-for-service plans alone jumped to 802,068 as of Aug. 1 from just 20,000 three years ago.” Wellpoint, Aetna, and Humana are expanding their private FFS offerings.

The illuminating article explains

As with most [Medicare] Advantage plans, premiums are often lower than the combined premiums for government-run Medicare benefits for physician and hospital services and drugs. Advantage members must still pay the Medicare part B premium for physician and outpatient services, which is $88.50 a month. But Advantage plans may wrap in other benefits such as additional days in the hospital and drugs. As insurers expand their private fee-for-service offerings, the plans will see “dramatic growth” next year, says Dan Mendelson, president of Avalere Health. But some wonder how long seniors can take advantage of this program. The Medicare Payment Advisory Commission, which advises the government on Medicare, has warned that the government pays 11 percent more on average to Medicare Advantage plans for physician and hospital services than the traditional ones.

I wonder how many FEHBP eligible annuitants have dropped their FEHBP coverage in favor of a Medicare private FFS plan? Under OPM’s rules, an annuitant can suspend his or her FEHBP coverage to enroll in a Medicare Advantage plan with the option to later reenter the FEHBP. Under the general rule, if an annuitant drops FEHBP coverage, the decision is permanent.

The U.S. Attorney for the District of Massachusetts announced earlier today that the Schering Sales Corp., a subsidiary of the Schering-Plough Co., a major drug manufacturer, has agreed to plead guilty to a criminal conspiracy charge and pay a $180,000 criminal fine. Schering-Plough has agreed to settle False Claims Act charges by paying $159,502,000, plus interest, to the United States in civil damages for losses suffered by the Medicare program, the federal portion of the Medicaid program, the Veteran’s Administration, the Department of Defense and the Federal Employees Health Benefits program as a result of Scherings’s improper drug promotion and marketing misconduct. Schering-Plough’s payments to the Government total $435,000,000. These appear to be the Government’s False Claim Act claims that related to the FEHBP as described in the government’s press release:

• Schering induced physicians to start patients on Intron A for Hepatitis C by paying them remuneration through three marketing programs.
• Schering induced physicians to use Temodar for certain patients with brain tumors and brain metastases and to use Intron A for certain patients with superficial bladder cancer through improper preceptorships, sham advisory boards, lavish entertainment, and improper placement of clinical trials; and
• Schering knowingly promoted off label uses of Temodar for certain brain tumors and brain metastases and Intron A for superficial bladder cancer despite not having FDA approval.

Schering Plough subsidiary Schering Sales Corp. also was debarred from participating in federal health care programs.

As I blogged this week, August 2006 marks the 10the anniversary of the Health Insurance Portability and Accountability Act (HIPAA) as well as Tiger Woods’ entry into the world of professional golf. HIPAA provides for four standard identifiers to be used with the standard transactions:

1. Standard employer identifier, which is the employer’s employer identification number — the compliance date for use of this identifier was July 30, 2004 (July 30, 2005 for small health plans as defined by HIPAA).

2. Standard provider identifier, which is an “intelligence-free” ten digit number — the compliance date for use of this identifier is May 23, 2007 (May 27, 2008. for small health plans). The National Uniform Claim Committee has created a revised HCFA 1500 claim form (8/05) which incorporates the HIPAA standard provider identifier. According to NUCC’s recommended timeline, health plans, clearinghouses, and information support vendors are expected to be able to receive the revised HCFA form on October 1, 2006.

3. Standard health plan identifier, which has not yet been proposed by HHS., and according to an American Bar Association report, HHS has no plans to issue this identifier in the near future because there is no industry push for this identifier. However, I understand from health plan clients that this identifier would be useful for coordination of benefits purposes.

4. Standard patient (or individual) identifier, which has not yet been proposed by HHS because since 1998 Congress has prohibited HHS from spending appropriated funds on this initiative. However, the day of reckoning may be approaching because the national health information network, a major HHS goal, will need a standard patient identifier or other means of patient identification in order to operate.

The U.S. Office of Personnel Management has posted its observations on implementing the President’s recent Executive Order about health care quality and pricing tranparency and health information technology interoperability. Also available online are the President’s remarks on the Executive Order also are online and the transcript of a “press gaggle” aboard Air Force One during which HHS Secretary Leavitt describes the Executive Order as “a significant step toward an interoperable system of value-based competition.”

Judge Stein has not ruled on the Bristol Myers preliminary injunction motion in the Plavix patent infringement case. I took a look at the court’s docket today (Sanofi-Aventis v. Apotex, Inc., Civil Action No. 02-CV-2255 (SHS) (S.D.N.Y.) I surprised to find that the National Association of Chain Drug Stores had filed an amicus brief in opposition to the preliminary injunction motion. The brief argues that Bristol Myers lacks the “clean hands” necessary to obtain such equitable relief and that chain drug stores and their customers would be harmed by the entry of a preliminary injunction that would cause Plavix prices to jump.

Earlier this week, I wrote about the potential public health advantages of electronic medical records and the President’s Executive Order encouraging improvement in health care quality. Health insurers are not waiting for the National Health Information Network to be established in order to reap public health benefits from claims data. I should have mentioned at the time that the Blue Cross Blue Shield Association recently announced that it is pooling its claims data (without personal identifiers) in an effort to help employers and other health care consumers improve the quality of health care. Similarly, a coalition of employers and insurers organized by Mercer Human Resources Consulting under the banner Care Focused Purchasing Inc. has created a similar data warehouse for health care quality improvement purposes. These efforts build on the work of organizations such NCQA and the Leapfrog Group.

I am sure that I am not the first person to think that Americans should take more personal responsibility for their health care. It turns out that in May 2006 the State of West Virginia, with U.S. Department of Health and Human Services approval, implemented a Medicaid reform plan that is intended to reward responsible Medicaid beneficiaries, and other states are considering similar reforms. According to the HHS press release,

West Virginia will offer enrollees a choice of two benefit packages, a basic plan based on the current Medicaid service package and an enhanced package that includes benefits not traditionally offered under Medicaid. To enroll in the new advanced benefit package, enrollees will be asked to sign a member agreement with the state that they will comply with all recommended medical treatment and wellness behaviors. Enrollees who chose not to join the enhanced plan or who decide they do not wish to continue in it will receive the standard Medicaid benefit package.

This week’s issue of the New England Journal of Medicine includes two “perspectives” on the West Virginia reform plan. The perspective of Drs. Bishop and Brodsky is that “The plan asks physicians to violate all three fundamental principles enumerated in the Physician Charter on Medical Professionalism: the primacy of patient welfare, the principle of patient autonomy, and the principle of social justice.” (How was the play Mrs. Lincoln?) The conclusion reached by Dr. Steinbrook in his perspective is that

Although personal responsibility for health and for obtaining health care may seem intuitively attractive, the design and implementation of specific insurance initiatives may be complicated. Before such plans are implemented, it would be best to evaluate them rigorously in a controlled trial conducted by an independent group. If they do not improve health or save money, or have unanticipated negative effects, they can be discarded or revised.

It’s an interesting debate. I believe that jury is still out, and the end result hopefully will be similar to the successful welfare reform that Congress passed ten years ago.

Monday August 21 was the 10th anniversary of the day that President Bill Clinton signed the Health Insurance Portability and Accountability Act of 1996 (HIPAA). The centerpiece of the legislation was a set of changes to ERISA and the Public Health Service Act to improve the portability of employer sponsored health insurance coverage through certificates of creditable coverage and other tools.

HIPAA also included a set of “Administrative Simplification” provisions requiring the Secretary of Health and Human Services (“HHS”) to issue various transaction and code set standards and national identifiers in order to facilitate the electronic transmission of health plan claims and related transactions such as explanations of benefits and eligibility inquiries. The duty also fell to HHS to issue privacy and security rules. Needless to say a cottage industry (of which I am a part) grew up around these Administrative Simplification provisions, and ten years later HHS is still not done issuing the all of the required standards, such as the MIA claims attachment standard, and national identifiers, such as the MIA health plan identifier. Before HHS’s initial HIPAA work is done, the government has moved onto the brave new world of interoperable electronic medical records and personal health records. Modernhealthcare.com recently featured an interesting retrospective on this law.

Govexec.com features an interesting article this morning about the President’s executive order on health care transparency and technology standardization issued yesterday. Several organizations, including America’s Health Insurance Plans and the National Association of Manufacturers have expressed their support for the executive order. The medical community appears to be taking a more nuanced view of the order.

The Govexec.com article mentions a press release by Sen. George Voinovich (R Ohio) who states that

I have been working with Senator Carper on the Electronic Personal Health Records Act — bipartisan legislation we will introduce in September which provides for the establishment and maintenance of electronic personal health records for individuals and family members enrolled in the Federal Employee Health Benefits Plan (FEHBP).

I was impressed when in 2001 Wellpoint successfully petitioned the Food and Drug Administration to convert the non-sedating antihistamine Claritin to an over-the-counter (“OTC”) drug. (An over-the-counter drug can be taken without physician supervision.) Traditionally, when a drug goes to OTC status, health plans stop covering the drug, and the member pays the full cost. This generally was the case with Claritin.

The AMA News (subscription wall) became exercised this week over the practice of two Minnesota insurers to cover OTC versions of Claritin and the proton pump inhibotor Prilosec with a prescription. Its front page headline warns “Physicians are concerned whether patients will get the drugs they need.” The health plans, however, are not forcing members to use OTC drugs, and as a Claritin user I think that the average person recognizes when an OTC drug will work just as well as a stronger prescription drug. My Google search reveals that other health plans have adopted this approach as have many Medicaid plans. Another health plan innovation.