Tuesday's Tidbits

U.S. District Judge Henry Hudson ruled yesterday in Virginia v. Sebelius that Congress has no Constitutional authority to impose a mandate on individuals to purchase health insurance as the Affordable Care Act requires beginning in 2014.  This is the first court (of three) to rule against the legislation's constitutionality. Other lower federal court decisions are expected. Business Insurance reports on Judge Hudson's opinion and on the Government's unsurprising decision to take an appeal to the U.S. Court of Appeals for the Fourth Circuit. Thus the wheels are set in motion for the Supreme Court to consider this issue. A Supreme Court decision might arrive in the 2012 Presidential election year.

The AMA News reflects on one of the goofier provisions of the Affordable Care Act -- beginning next year group health plans, flexible spending accounts, health reimbursement accounts, and health savings account can only reimburse members for over the counter drugs (excluding insulin) that have been prescribed by a doctor. However, by definition, an over the counter drug is safe enough that a consumer can use it without physician oversight. Doctors and pharmacists understandably are freaking out over the additional time burden that the law creates. FEHB plan members, for example, will need a prescription next year to purchase over the counter smoking cessation drugs at a pharmacy. The article reports that an effort is underway to repeal this provision.

OPM is announcing in the Federal Register tomorrow that it will be issuing a revised Privacy Act system of records notice for the FEHBP claims data warehouse that it plans to create for Program management purposes. "The revised notice will provide more detailed information regarding OPM authorities for maintaining the system, systems security measures that will be taken to protect the records, and the circumstances under which records will be released from the system." OPM will permit another public comment period on the revised notice before that notice takes effect.

OPM is requiring fee for service plans to adopt transparent or pass through contracting methods with prescription benefit managers. The Society for Human Resource Management discusses a report,The Value of Alternative Pharmacy Networks and Pass-Through Pricing, researched and written by the actuarial and consulting firm of Milliman Inc.

Milliman’s findings show that, depending on the benefit design, an employer’s overall costs could be reduced by up to 13 percent by using a limited, preferred pharmacy benefit design and pass-through pricing model rather than a traditional model that includes most retail pharmacies. For example, the study showed that by adopting a closed network, where coverage is only through network pharmacies, an employer with approximately 10,000 members could save up to $845,000 annually. Additional savings could be earned with plan changes that encourage member use of generic drugs over branded drugs.

An American Bar Association committee annually asks various government agencies questions about employee benefit issues. EBIA reports back on the Qs and As with HHS's Office for Civil Rights, the agency responsible for enforcing the HIPAA Privacy and Security Rules. For example, "the officials indicated that OCR expects to issue updated sample language for business associate agreements when final HITECH regulations are issued."

HHS issued yesterday a "new Strategic Framework on Multiple Chronic Conditions ― an innovative private-public sector collaboration to coordinate responses to a growing challenge. More than a quarter of all Americans ― and two out of three older Americans ― have multiple chronic conditions, and treatment for these individuals accounts for 66 percent of the country’s health care budget. These numbers are expected to rise as the number of older Americans increases."