April 30, 2009

• Key Senate Leaders Unveil Options for Reforming Healthcare
• Congressional Democrats Reach Agreement To Prevent Republican Filibuster of Health Reform
• Medicare Advantage Plans Face Changes in 2010
• Drugmakers, Insurers Agree To Link Prescription Drug Price to Effectiveness
• HHS Report Finds Medicare Fraud Prevalent in South Florida
• Poll Finds 59 Percent Favor Healthcare Reform Now
• Massachusetts Debates Age-Based Pricing for Health Insurance
• Vintage Voices: The New Senior Moment
• Save on Dental, Vision and Prescription Drugs
• Quote of Note
• Web Site of the Week: Tips on Protecting Yourself against Swine Flu

KEY SENATE LEADERS UNVEIL OPTIONS FOR REFORMING HEALTHCARE
Senate Finance Committee chair Max Baucus (D-Mont.) and committee ranking minority member Chuck Grassley (R-Iowa) on April 28 released a 48-page set of policy options for reforming the nation's healthcare delivery system that would make sweeping changes in the way Medicare operates. Proposals include shifting the program from volume-based purchasing (paying providers for services they render) to value-based purchasing (paying providers based on the effectiveness of services offered). The key Senate leaders also would offer bonus payments for primary care physicians, and may base Medicare-managed care payments on a competitive bidding model as proposed by President Obama. The document contains numerous policy options that could be included in a final healthcare reform bill. The process of deciding which options will be included in the legislation began April 29 when Baucus and Grassley are scheduled to brief committee lawmakers on the document and solicit their feedback. Baucus has said he intends to mark up health reform legislation in June with the aim of securing Senate passage by the August congressional recess. The document, the first of three outlining committee options for healthcare reform legislation expected over the next few weeks, is divided into improving quality and promoting primary care, fostering medical care coordination and provider collaboration, improving healthcare infrastructure, making changes to the Medicare Advantage program and combating waste, fraud and abuse. The overall savings that result from these reforms were not included in the document. Baucus and Grassley, however, are exploring ways to cancel a scheduled 21 percent Medicare reimbursement cut for physicians scheduled to take effect in 2010. The proposal did not include elimination of the Medicare Advantage program.

CONGRESSIONAL DEMOCRATS REACH FINAL AGREEMENT TO PREVENT REPUBLICAN FILIBUSTER OF HEALTH REFORM
Budget conference committee negotiators on April 27 reached an agreement on a $3.5 trillion fiscal year 2010 budget resolution that includes budget reconciliation as a means of passing health reform legislation. Under the agreement, Congress would have until Oct. 15 to pass deficit-neutral healthcare reform legislation. If no measure is passed, deficit-neutral healthcare overhaul legislation could be attached to the budget reconciliation bill, which is not subject to a filibuster requiring 60 votes to end but only requires a majority vote. Democrats say that they prefer the traditional voting process. Both key House and Senate party leaders see the use of reconciliation only as a last resort but view the tactic as leverage in negotiating with the Republican minority, which so far has almost unanimously opposed President Obama's major policy initiatives.

MEDICARE ADVANTAGE PLANS FACE CHANGES IN 2010
The Centers for Medicare and Medicaid Services recently established stricter rules for private insurance companies, effectively cutting subsidies to Medicare Advantage (MA) plans by up to 5 percent. Currently, the government overpays MA plans an average 14 percent more per beneficiary than for traditional fee-for-service Medicare. According to The Wall Street Journal, under the new regulations, MA plans cannot charge low-income and sick patients more than traditional Medicare, must explain what is covered in the Part D "doughnut hole" coverage gap, and will face extra scrutiny if patients' annual out-of-pocket costs are not capped at $3,400 or less. The changes are designed to allow consumers to more easily compare options and costs. Medicare officials said they would try to eliminate plans with fewer than 10 enrollees that are similar to other plans and make it hard for seniors to compare. Also changing: charges for hospitalizations, outpatient services and other services often associated with chronic illnesses-services for which MA plans have been particularly likely to charge patients more than traditional Medicare. However, many industry experts say beneficiaries enrolled in MA plans will likely face increased premiums or fewer benefits next year.

DRUGMAKERS, INSURERS AGREE TO LINK PRESCRIPTION DRUG PRICE TO EFFECTIVENESS
Some drugmakers—encouraged by health insurers—have begun linking the prices of their medications to the drugs' efficacy. According to some experts, the strategy could be a positive shift toward pay-for-performance care rather than fee-for-service treatment. In the past few years, nationalized health systems in other countries began using pay-for-performance contracts as a method of reducing costs and promoting cost-effective treatments. Now private insurers in the U.S. are beginning to follow suit. For example, Procter & Gamble and Sanofi-Aventis—which jointly market the osteoporosis drug Actonel—recently agreed to reimburse Health Alliance for costs related to beneficiaries' broken bones while taking Actonel. Health Alliance will charge patients a lower co-payment for Actonel than for Boniva, a competing brand-name drug. Under the deal, if a Health Alliance policyholder who is correctly taking Actonel experiences a nonspinal fracture, the drugmakers will pay for the policyholder's medical care related to the break. The deal also could reduce the pressure on Health Alliance to switch patients from Actonel, which costs about $100 monthly, to a less-costly generic version of the drug. In another deal, Merck is expected to announce shortly an agreement with CIGNA to align what the insurer pays for its diabetes treatments Januvia and Janumet with how well type 2 diabetes patients can control their blood sugar. Under the agreement, Merck will give CIGNA larger discounts on the two drugs. Some of the discounts are linked to whether patients take the drugs as prescribed. The agreement could reduce the number of complications and increase sales because patients would no longer be skipping or reducing dosages. In addition, CIGNA will charge a lower co-payment for Januvia and Janumet than for some other brand-name drugs.

HHS REPORT FINDS MEDICARE FRAUD PREVALENT IN SOUTH FLORIDA
Just 2 percent of Medicare beneficiaries in the U.S. live in South Florida, but the area accounted for 17 percent of Medicare's total spending on inhalation drugs in 2007 because of potential fraud, according to a report released April 21 by the U.S. Department of Health and Human Services' Office of Inspector General. The report found that Medicare in 2007 spent $143 million on drug claims to treat respiratory ailments in Miami-Dade County, which is 20 times more than the amount Medicare spent in the Chicago area, which has twice as many beneficiaries. Medicare spent $4,400 per beneficiary on inhalation drugs in South Florida compared with $815 per beneficiary in the rest of the country. According to the report, two-thirds of all Medicare beneficiaries in South Florida who have submitted claims for inhalation drugs did not have an office visit with the prescribing physicians in the previous three years. As a result, beneficiaries' conditions are not being re-evaluated, but the providers are continuing to submit claims in their name. Providers also billed above Medicare guidelines for the inhalation drugs for thousands of patients. Many of the patients do not require inhalation drugs but are paid kickbacks by the provider in exchange for the use of their Medicare numbers. In addition, the report found that medical equipment suppliers and pharmacies have re-used physicians' names for ongoing patient billing.

POLL FINDS 59 PERCENT FAVOR HEALTHCARE REFORM NOW
According to the latest Kaiser Health Tracking Poll, a majority of U.S. residents say that they or a member of their household has delayed or gone without healthcare services in the past year. In addition, 59 percent of U.S. residents believe healthcare reform is now more important than ever, while 37 percent say reform would be too costly to attempt during the current economic climate. About two-thirds (67 percent) of U.S. residents strongly or somewhat favor establishing a public health insurance option similar to Medicare, with about 80 percent of Democrats, 60 percent of Independents and 49 percent of Republicans in favor of such a plan. This support drops drastically, however, when those who support a public plan are told that it could give the government an unfair advantage over private insurers. When supporters are told that public plans would be the first step toward a single-payer system, overall support for a public plan is 41 percent in favor and 50 percent opposed. The poll also found that when asked if they support requiring employers to offer health insurance to their workers or pay money into a government fund, 71 percent support the concept.

MASSACHUSETTS DEBATES AGE-BASED PRICING FOR HEALTH INSURANCE
Patient advocates in Massachusetts are making a serious effort to prohibit insurers from pricing their insurance plans based on age. State law requires that everyone obtain health insurance, unless purchasing coverage would exceed 12 percent of their income. Self-employed individuals and retirees ages 50 to 64 who do not qualify for an exemption are left to choose between expensive monthly premiums that rise with age and cheaper plans with skimpier coverage and high out-of-pocket costs for doctors and prescriptions. Advocates say that in order to help these residents obtain affordable insurance that meets their needs, the state must outlaw age-based pricing of insurance plans, which under state law allows some elderly people to be charged as much as two times what younger people pay for the same coverage. AARP Massachusetts said it has seen an increase in complaints about age-based pricing by insurers. Opponents of these changes say that banning age-based pricing would have several adverse effects, such as increasing insurance rates for other age groups. Marylou Buyse, president of the Massachusetts Association of Health Plans, said, "Individuals, as they get older, use more healthcare services. It is a fair distribution now, considering use of the system." Advocates are calling on the state to include out-of-pocket costs, including deductibles and co-payments, in calculating the cost of coverage.

VINTAGE VOICES: THE NEW SENIOR MOMENT
In the Winter 2008 issue of Aging Well, Gene Cohen illuminates the common misinformed concept of a "senior moment"—what in most of the 20th century explained away momentary lapses in memory. But, we now know that we have the capacity to continue to grow new brain cells right until the end of life. Instead, aging might bring with it a new psychological development in older age, where we can feel liberated and more creative. It's as if an inner voice begins to say, "If not now, when? Why not?" Cohen explains. Read the full article to learn more.

SAVE ON DENTAL, VISION AND PRESCRIPTION DRUGS
The AFT + health savings plan combines dental, prescription and vision discounts into savings for AFT members and their families. Save:

• 20 percent to 60 percent on most dental procedures from a network of more than 30,000 dentists;
• 20 percent to 45 percent on eyeglass frames and lenses;
• Up to 55 percent on generic prescription drugs and up to 15 percent on name-brand prescription drugs from more than 57,000 participating pharmacies; and
• 15 percent off conventional contact lenses.

The cost is $119.99 a year for you and your family with a 45-day free trial period. Call 888/949-8184 and tell the operator you are an AFT member.

QUOTE OF NOTE

"Everyone agrees that America's healthcare system is broken. Over the past year, I've been talking to members of the healthcare community and listening to innovative ideas about how to improve quality in the way healthcare is delivered to patients. The policy options Sen. Grassley and I are releasing today put some meat on the bones of those ideas to strengthen our discussion moving forward. But nothing is set in stone."

Sen. Max Baucus (D-Mont.)
April 28, 2009

WEB SITE OF THE WEEK:
http://www.aft.org/psrp/download/Swine_Influenza_Fact_Sheet.pdf.

The recent attention to the spread of swine flu, now officially dubbed H1N1 flu, has drawn both government and media attention. The AFT health and safety program is offering a helpful fact sheet with information about the disease and a few simple precautions that will reduce your exposure:

• Wash your hands frequently; use an alcohol gel when soap and water aren't available.
• Reduce normal social customs such as handshakes. Like other types, swine flu is spread by droplets and aerosols caused by coughing or sneezing. It can also survive on objects like moist tissues for up to eight hours.
• Avoid touching your face, especially nose, eyes and mouth.
• Avoid crowded areas or airplane travel, especially to outbreak areas.

Contributors and sources: Bill Cunningham, Lauren Luchi, Darryl Alexander, New York Times, Los Angeles Times, Wall Street Journal, CQ Today, Washington Times, Boston Globe, Miami Herald, Aging Well, BNA Healthcare Daily Report, Alliance for Retired Americans Friday Alert, Kaiser Health Policy Report. Frank Stella, editor; Mary Boyd, copy editor; Janelle Bowe, design.