Weekend Wrap-Up / Miscellany

This is my last post of 2007. I hope that you find the FEHBlog useful. We are moving our website from gordon-ermer.com to ermerlaw.com effective January 1. Please continue to visit the FEHBlog on the website of our new law firm, Ermer & Brownell, PLLC.

The Equal Employment Opportunity Commission (EEOC) finally published on December 26 its final rule exempting employer sponsored health care benefits from the requirements of the Age Discrimination in Employment Act. The EEOC action is intended to override a Third Circuit U.S. Court of Appeals decision issued in 2000, and it permits employers to differentiate health benefits coverage based on whether or not the participant also has Medicare coverage. More information can be found in this Chicago Tribune article.

On December 29, the President signed into law the bill extending funding for the State Childrens Health Insurance Program through March 2009. The extension bill does not include the program expansion advocated by Congressional leadership and creates another issue for the 2008 election.

Midweek Miscellany

• The President signed the Consolidated Appropriations Act of 2008 (HR 2764) into law today. It turns out that there's a fly in the ointment for employer sponsored health plans. This massive law includes a provision that gives the Secretary of Health and Human Services carte blanche to collect Medicare secondary payer data from health plans and employers according to Business Insurance. This provision takes effect in 2009.


• The Healthcare Information Technology Standards Panel (HITSP) has approved another set of healthcare information technology interoperability specifications to the American Health Information Community, which is the next step in the process leading to Secretary of HHS approval. The new specifications relate to the following topics:
  
  -- Consumer Access to Clinical Information will assist patients in making decisions regarding care and healthy lifestyles. Accessible information could include registration information, medication history, lab results, current and previous health conditions,
  allergies, summaries of healthcare encounters, and diagnoses. (see sample:
  http://tinyurl.com/36jt7d).
  
  -- Quality indicators will benefit providers by providing a collection of data for inpatient and ambulatory care, and will benefit clinicians by providing realtime or near-realtime
  feedback regarding quality indicators and contra-indications for specific patients.
  
  -- Emergency Responder-Electronic Health Record will track and provide on-site emergency care professionals, medical examiner/fatality managers, and public health
  practitioners with needed information regarding care, treatment, or investigation of emergency incident victims.
  
  The Chairman of HITSP has his own blog here.


• Another legal battle between a brand name drug manufacturer and a generic drug manufacturer has erupted. Teva Pharmaceuticals has launched a generic version of Wyeth's blockbuster heartburn medicine Protonix according to the New York Times. Wyeth has announced plans to sue Teva for patent infringement. For the time being, however, Teva has stopped distributing its generic verision while the parties discuss settlement. According to the Wall Street Journal, "Some analysts said the launch puts pressure on Wyeth to settle with Teva to allow marketing of a generic pill before the patent expires" in mid -2010. The Journal also reports that another generic manufacturer Sun Pharmaceutical Industries Ltd., of India, is putting pressure on Wyeth over its anti-depressant Effexor patent, which is Wyeth's best seller and also expires in mid-2010. North Jersey.com explains that
  

  Sun Pharmaceutical Industries Ltd., a generics manufacturer in India, has applied for U.S. Food and Drug Administration approval to sell a drug with the same active ingredient as Effexor XR, but with an important difference: It's an extended-release tablet, not a capsule.

  FDA approval of what is likely to be a lower-priced drug from Sun might come when patent protection for Effexor's active ingredient, venlafaxine, runs out in June 2008. Patent protection for the capsule formulation expires later. Sun's different formulation should allow it to sidestep Wyeth's patent rights, and Wyeth already has told Sun it won't sue for patent infringement.

Federal Court blocks implementation of CMS AMP rule

Last summer, the Centers for Medicare and Medicaid Services published a final rule that provides for reimbursing pharmacies for generic drugs dispensed to Medicaid beneficiaries based on average manufacturer price ("AMP") rather than the average wholesale price. The drug store trade associations, the National Association of Chain Drug Stores and the National Community Pharmacist Association, warned that the rule would have a dire impact on pharmacies and lead to thousands of closures. I expect that the rule also would lead to higher generic drug costs for the FEHB Program and other employer sponsored health plans. The pharmacy trade associations have been working for a legislative fix because the rule is derived from the Deficit Reduction Act of 2005.

On December 14, Judge Royce Lamberth of the U.S. District Court for the District of Columbia preliminarily enjoined CMS from enforcing the rule in the case of National Association of Chain Drug Stores v. HHS Civil Action No. 1:07-cv-02017. The judge entered a written order on December 19. CMS can appeal this order to the D.C. Circuit.

According to the NAPS press release on the preliminary injunction,

"NCPA will use this reprieve to convince Congress of the need for structural improvements in the Medicaid reimbursement system that will not handicap community pharmacies by paying them substantially below their acquisition costs.”

With Congress now in adjournment, time has run out this year for
AMP fix legislation endorsed by NCPA: H.R.3140, H.R.3700, and S.1951. NCPA
intends to keep working through the holidays to gain further support for their
enactment when Congress returns in mid-January.

The AMP rule also provided for CMS to post the AMPs on a public web site. Implementation of that provision also has been blocked by the court order.

Peaceful Season for the FEHB Program

Open Season is over. Congress is off on its holiday break after passing an omnibus Fiscal Year 2009 appropriations bill that includes FEHB Program appropriations and the now standard FEHB Program appropriations provisions, e.g., Cost Accounting Standards exclusion, abortion coverage restriction, contraceptive coverage mandate. Congress also passed a law avoiding at least for six months the scheduled 10.1% reduction in Medicare reimbursement to physicians. Congress did not pass a mental health parity bill or a health information technology bill, but those bills along with the genetic non-discrimination bill, will be taken up again next year. But for now, there is a peaceful respite from change in the FEHB Program.

Merry Christmas, Congress!

Congress completed its work for 2007 today by approving an omnibus appropriations bill, additional war funding, and a health extenders bill. The health extenders bill provides State Children's Health Insurance Program with sufficient funding for the current program through March 2009 and it provides doctors with a half of one percent increase in Medicare reimbursement through June 2008. That's a lot better than the scheduled 10.1% cut in Medicare reimbursement to physicians, and it's good news for the FEHB Program which pays benefits secondary to Medicare on thousands of annuitant members.

The Members of Congress and Senators can now leave our fair city for their home districts. Mental health parity, genetic non-discrimination, and other health care issues will await their return in January 2008.

Congress picks up steam in the home stretch

• The Wall Street Journal reports that Senate negotiators are crafting a Medicare fix bill that would be acceptable to the minority and the President because it would avoid the 10.1% Medicare cut in payments to physicians scheduled for January 1 without socking it to the Medicare Advantage plans. "The package being worked out in the Senate would cut more than $1 billion from a "stabilization fund" created in a 2003 bill to help faltering Medicare Advantage insurers, congressional aides said. The package also would cut an incentive fund passed by Congress last year to encourage physicians to report quality data to the government." However, the fix would only last for six months. The bill may adopted this week, which would be a nice Christmas gift for FEHB plans that pay secondary to Medicare for thousand of members.
• Congress also has passed a Freedom of Information Act reform bill. According to the AP,

  The bill restores a presumption of disclosure standard committing government agencies to releasing requested information unless there is a finding that such disclosure could do harm

  Agencies would be required to meet a 20-day deadline for responding to FOIA requests. Their FOIA offices would have to forward requests for information to the appropriate agency office within 10 days of receiving them.

  It they fail to meet the 20-day deadline, agencies would have to refund search and duplication fees for noncommercial requesters. They also would have to explain any redaction by citing the specific exemption under which the blacked-out information qualifies. Nonproprietary information held by government contractors also would be subject to the law.

  The legislation also creates a system for the media and public to track the status of their FOIA requests. It establishes a hotline service for all federal agencies to deal with problems and an ombudsman to provide an alternative to litigation in disclosure disputes.

The Administration has not yet announced whether the President will sign the bill into law.

• Health Affairs published a web exclusive study on the FEHB Program's mental health parity program. Under the FEHB Program's well received approach, a plan must provide parity in network but not out of network. The study, funded by American Psychiatric Foundation, the National Association of Social Workers Foundation, and the American Psychological Association, concludes that "Parity proposals that do not require any coverage for out-of-network MH benefits may paradoxically have the unintended adverse consequence of decreasing access to mental health treatment." It's a foregone conclusion that the mental health parity bill coming out of Congress next year will require out-of-network parity, thereby increasing FEHB Program expenses.

Omnibus Appropriations Bill Progresses, etc.

• The House of Representatives is now considering an omnibus appropriations bill that includes funding for the FEHB Program (under Division D Financial Services). According to the Washington Post, the President is signaling that he will sign the bill if Congress also approves additional funding for the war effort. The omnibus bill would increase federal employee compensation by 3.5% rather than the 3.0% proposed by the President. Next step will be the Senate.
  
• The Office of Management and Budget has unveiled the website on federal contracts and grants required by the 2006 Federal Funding Accountability and Transparency Act. Click here.
• CMS and the National Institute of Standards and Technology will be hosting a very reasonably priced conference "to discuss challenges, tips, techniques and issues surrounding implementing, adhering to and auditing HIPAA Security Rule requirements." The conference will be held on January 16, 2008, at the NIST's Gaithersburg, MD, campus.
  

Weekend Wrap-Up / Miscellany

• The President and Congress did extend the current continuing resolution funding the federal government to December 21 ( H. J. Res. 69). Congress did pass a fiscal year 2008 defense authorization bill that should avoid the threatened Pentagon layoff of civilian employees. It should be an interesting week.
• OPM issued its semi-annual regulatory agenda on December 10, which only contained one item -- a veteran's preference regulation.
• The Congressional Budget Office issued a report on the long term outlook for health care spending in the United States.
  

Shocker!

"The National Alliance for Health Information Technology is pushing for a voluntary, patient-controlled system of unique identifiers, calling it the 'only way to ensure safety and accuracy when exchanging medical information' through an electronic national network." according to Healthcare IT News.com. HIPAA requires HHS to publish a rule creating a national patient identifier, but Congress has refused to fund the issuance of this rule.

This publication also featured an interesting article observing that "70 percent of [a recent World Health Organization] forum audience agreed that the [U.S.] government should impose a national mandate for health information interoperability standards – the health equivalent of lowering interest rates – in order to lift the industry out its current doldrums. “The most important step is the development of standards and it’s the government’s role to do that,” said Keith Batchelder, chief executive officer of Genomic Healthcare Strategies, a consulting firm focused on personalized medicine. But in the case of the national patient identifier, Congress did mandate the creation of a standard but then backed off. That's one of the problems with statutory mandates. The other is that it's very difficult to change a law, and technology moves a lot faster than Congress. Why is it that banks could create technology standards on their own, but health care can't?

A Health Affairs blogger contends that consumer demand will fuel the growth of health information technology nicknamed Health 2.o. Why not? Consumer demand has sparked the growth of many technologies.

Continuing Resolution extended one week

• According to the Washington Post and the Hill, the House and the Senate voted today to extend the term of the current continuing resolution funding the federal government from December 14 until December 21.
  
• The House yesterday agreed to schedule a vote on overriding the President's second veto of the SCHIP reauthorization act for January 23, 2008, according to a Modern Healthcare.com report.
• House Speaker Pelosi announced this afternoon that it's the Senate Finance Committee's responsibility to craft a Medicare physician reimbursement fix according to a Modern Healthcare.com report.
  
• Bloomberg News reports about an Agency for Healthcare Quality and Research study that finds that "U.S. hospital bills almost doubled over a decade [1997 - 2005] and might reach $1 trillion next year as the aging population seeks care for stroke and heart disease." The AHCR website offers links to oodles of interesting health care expense studies here and here.
  

Peace at last?

• The Washington Post and the Hill are reporting that the Congressional leadership is bowing to the Bush administration's pressure on the FY 2008 appropriations measures. Consequently, the likelihood of a government shutdown has dramatically decreased.
  
• The President has vetoed the SCHIP reauthorization bill for a second time according to Modern Healthcare.com and the Washington Post. A temporary extension of the SCHIP Program funding is now likely in order to punt the issue into the 2008 election campaign.
• An effort to add the Medicare reimbursement fix to the alternative minimum tax patch bill has been unsuccessful according to the Kaiser Daily Health Care Report. It grows increasingly likely that legislation to reverse the 10.1% reduction in Medicare Part B payments to physicians scheduled for January 1, 2008, will not occur this month, although Congress is not likely to adjourn until next week.
  
• HHS has been holding the fourth National Health Information Network forum this week. Healthcare IT News reports on the meetings. The NHIN is intended to be great big patient registry that will connect regional health information organizations Publish Postor RHIOs. However, a Harvard study published this week finds that few RHIOs actually are operating and many more are failing. Meanwhile, the National Committee on Vital and Health Statistics, an HHS agency which has been a haven for privacy zealots, is working on a report that will recommend revamping the allegedly "inadequate" HIPAA Privacy Rule according to the AIS Privacy Report written by Theresa Defino.
  

Appropriations Showdown Brewing?

News reports this evening from the Washington Post and The Hill indicate that negotiations between the White House and Congress over FY 2008 have broken down four days before the current continuing resolution funding the Government expires on December 14. Christmas is only two weeks from tomorrow. It will be interesting to see whether Congress can address any health plan related bills, such as mental health parity, this month.

Weekend Wrap-Up / Miscellany

• The federal benefits Open Season officially ends tomorrow December 10. Commentators have offered last minute advice to federal employees and annuitants here and here.
• There has been little evident forward motion on the federal appropriations and SCHIP reauthorization fronts over the past week. It turns out that Congress did not send its second SCHIP reauthorization bill to the White House last week, and the current continuing resolution (HR 3222) funding the federal government, including the SCHIP and FEHB Programs, expires this Friday, December 14. We'll just wait and see what the backrooms on Capitol Hill produce.
  
• We also are anxiously anticipating the emergence of a consolidated House mental health parity bill and Medicare reimbursement fix bill that would avoid the 10.1% cut in Medicare Part B compensation to physicians scheduled for January 1.
• Health Affairs features an interesting conversation between HHS Secretary Michael Leavitt and Leonard Schaeffer, the retired CEO of Wellpoint. I particularly enjoyed this exchange on healthcare information technology (IT) which can be categorized under the no good deed goes unpunished heading:
  

  Schaeffer:There's no magic in IT. The benefits of health IT come from changing workflow and practice patterns based on better information.

  Leavitt: So, we've got to experiment a little. We've got to say, "Let's prove up the business model here." Everybody is optimistic about health IT, and we've seen it work in closed systems. But we've never seen it work on a large networked basis. We really do need to demonstrate this. And you'll see that in the fairly near future.

  Schaeffer: I've got the scars to prove your point. WellPoint received awards for attempting to accelerate health IT adoption, but the truth was, we tried and failed. WellPoint gave away $42 million worth of hardware and software to doctors, many of whom happily took their laptops home to their kids. All we got from that effort was a letter from the California Medical Association accusing us of unfairly imposing a gift tax on recipients of the free IT supplies.

• Modern Healthcare featured an update on AHIC's efforts to mandate electronic prescribing in the Medicare program. The article notes that "Wednesday [December 5], U.S. Sens. John Kerry (D-Mass.), Debbie Stabenow (D-Mich.) and John Ensign (R-Nev.) held a news conference to ballyhoo a separate piece of legislation, the Medicare Electronic Medication and Safety Protection (E-MEDS) Act of 2007, a bill they've sponsored to support e-prescribing. The Senate Judiciary Committee also scheduled hearings Wednesday on the Drug Enforcement Agency policies toward e-prescribing."
• WEDI and the North Carolina Healthcare Information and Communications Alliance, Inc. released this week a projected HIPAA standard transactions and code sets regulatory timeline. According to their press release, "[t]he timeline estimates that, based on current assumptions, implementation of the 5010 version of HIPAA transactions will be complete in 2014. This date is important because the ICD-10 clinical coding system cannot be used until 5010 transactions are implemented and can be processed using the ICD-10 codes."
• AHIP, the Blue Cross Blue Shield Association, and Health Level 7 signed a memorandum of understanding on maintaining the electronic transaction standard to transfer subscriber information between gaining and losing health plans that they developed for public use.
• EBRI released a report on the future of employment based health benefits that concludes that the current system is stable.
  

Medicare News

• Modern Healthcare reports that HHS Secretary Michael Leavitt "said that a Medicare bill expected to emerge from the Senate later this week should tie the use of health information technology to higher Medicare physician reimbursement." This is the Senate Finance Committee's bill to avoid the 10.1% cut in Medicare Part B reimbursement to physicians that will be effective on January 1, 2008, unless Congress acts.
• The AMA News reports that the AMA House of Delegates recently voted to call for national legislation to allow physicians to bill patients for fees that Medicare does not cover. Currently, physicians may choose whether or not to participate in Part B. Participating physicians generally receive 5% more money from Medicare than non-participating physicians but participating physicians may only balance bill patients for the Medicare deductible and co-insurance. A non-participating physician may balance bill for these items plus no more than 15% above the Medicare reimbursement amount. Several states, including Massachusetts, prohibit physicians for balance billing this 15% surcharge. The AMA wants Medicare to preempt those state laws.
  
• HHS has appealed a U.S. District Court for the District of Columbia order that would have required HHS to provide the Center for the Study of Services HHS claims data that the Center planned to use for the purpose of evaluating provider quality of care. The lower court order has been stayed pending this appeal to the U.S. Court of Appeals for the District of Columbia Circuit. The Center's press release is available here.