Weekend Update

The House and Senate remain in session this week as the House and Senate leadership, together with the President, focus on raising debt ceiling. While scanning the internet to prepare this FEHBlog entry, I noticed articles in Govexec.com and the Federal Times reporting that the Federal Aviation Administration has furloughed 4,000 employees because the House and Senate cannot agree on a funding law for the agency.

Business Insurance reported on consumer advocacy groups' negative reactions to the Express Scrips - Medco merger discussed in Friday's FEHBlog entry.

Antitrust regulators could well take a hard look at how many options big companies have when they look for a pharmacy benefits contractor, said this expert [who asked not to be named].
“The question is how many alternatives do large companies have?” this person asked. “When a large company goes out to bid its (drug) plan, how many options do they have?”

The expert is overlooking the fact that many major health insurers, including U.S. Healthcare, Aetna, and CIGNA, have their own prescription benefit manager units.  Although these companies do not insure the health plans of large companies, they do administer those plans and certainly would be willing to provide PBM services too. As noted in the FEHBlog there is another rapidly growing PBM, Catalyst Health Solutions, which recently purchased Walgreen's PBM unit. Plus as noted in Friday's FEHBlog entry, the Express Scripts - Medco acquisition agreement includes divestment provisions intended to address anti-trust regulators concerns. Anti-trust regulator approval of this transaction is not a slam dunk but changes are reasonably good, in the FEHBlog's gut reaction view.

Last week, Standard and Poors released its updated healthcare economic indices. U.S. healthcare costs rose 5.58% over the 12 months ended May 31, 2011.

Over the year ending May 2011, healthcare costs covered by commercial insurance increased by 7.35%, as measured by the S&P Healthcare Economic Commercial Index. Medicare claim costs rose at an annual rate of 2.64%, as measured by the S&P Healthcare Economic Medicare Index. The Commercial and Medicare Indices are respectively 0.25 and 0.16 percentage points above their April 2011 annual rates.

Kaiser Health News featured a roundtable of expert opinions who identified trends that have the potential to lower the healthcare cost curve.

The AMA News reported that beginning August 1, FAIR Health, the New York non-profit that now managed Ingenix's usual reasonable and customary databases for pricing out-of-network provider claims, will unveil its online tool to help consumers project health care bills for out-of-network services by geographic region. According to the AMA news article,

The goal is to give patients an idea of what they will be billed if they choose to see an out-of-network physician, so they can better prepare to meet out-of-pocket expenses or select a physician who charges a lower-than-average fee. The information is free and based on independent data. 

August 1 is also the deadline for public comment on the Health and Human Services Department's May 31 proposed rule broadly expanding the HIPAA accounting for disclosures rule to include so-called access reports. 87 comments already have been filed on this proposed rule at regulations.gov. The FEHBlog was impressed by the comments submitted by the College of Healthcare Information Management Executives, strongly opposing the access report requirement.