News in brief - Oct. 22/29, 2007

Medicare to recover billions from drug plans - Many Republicans, most Democrats support SCHIP expansion - Sen. Domenici retiring due to illness - HIT bill criticized by industry

Medicare to recover billions from drug plans

The private insurers that administer the Medicare drug benefit must return roughly $4 billion to federal coffers because government officials determined that total drug costs in 2006 for nearly all of the plans were below initial estimates.

When insurers bid to offer drug benefits to Medicare beneficiaries, they estimate how much total spending they will incur for the year. When the Centers for Medicare & Medicaid Services accepts a bid, it agrees to pay the plan prospectively based on this estimate and to reconcile final cost levels after the year ends.

Because 2006 was Medicare Part D's first year, insurers generally overestimated costs, because they did not have a baseline from which to judge how much beneficiaries actually would spend on medications, the agency said. For the benefit's second year, plan bids were much lower.

Many Republicans, most Democrats support SCHIP expansion

About 42% of Republicans support expanding the State Children's Health Insurance Program by $35 billion to $50 billion over five years, while 20% oppose that idea, according to a Harris Interactive online poll of 2,490 adults conducted Aug. 16-20. That compares with 66% of Democrats who favor such a move, and 8% who oppose it.

The poll also found that 35% of Republicans believe SCHIP is a bad idea because they view it as socialized medicine, while 39% disagree with that opinion. By comparison, only 12% of Democrats view the program in that light, while 62% disagree with that assessment. Earlier this month, President Bush vetoed legislation that would expand SCHIP by $35 billion over five years.

He and congressional Republicans criticized the bill as a move toward socialized medicine.

Sen. Domenici retiring due to illness

Sen. Pete Domenici (R, N.M.), a champion of mental health parity legislation, announced early this month that he would not seek a seventh term because he has been diagnosed with frontotemporal lobar degeneration. Domenici was diagnosed with the progressive, incurable neurological disorder two years ago but only recently have tests documented a progression of the disease.

"It may well be that seven years from now, it will be stable. On the other hand, it may also be that the disease will have incapacitated me. I am not willing to take a chance that the people who have so honored me with their trust for 40 years might not be served as well as they deserve," Domenici said. His sixth term ends in January 2009.

Domenici wrote the Mental Health Parity Act of 1996 and was one of three senators to negotiate a parity bill the Senate adopted last month.

HIT bill criticized by industry

Legislation that would give the National Institute of Standards and Technology the role of setting the technical standards for computers to exchange health information is drawing fire from industry leaders.

Several private and public organizations are working on health IT, but these groups move too slowly, said Rep. Bart Gordon (D, Tenn.), the bill's sponsor and chair of the House Science and Technology Committee, at a recent hearing. But several witnesses called the legislation unnecessary.

The Health Information Technology Standards Panel is effective in setting standards, said Michael Raymer, General Electric Healthcare Integrated IT Solutions vice president and general manager of global product strategy. The federal institute could play a role by coordinating federal agencies working within the HIT Standards Panel, he said, but should take a subordinate role.

A panel staff person said the measure's critics are confusing the role proposed for NIST with that of the HIT Standards Panel. The bill would limit NIST's role to the technical standards necessary for computers to talk to one another, while the panel would address diagnostic terms and medical nomenclature standards.

Vote refines AMA stance on health reform
The AMA House of Delegates rejected attempts to rescind support of a U.S. House health reform bill and any new government-sponsored health insurance plan during the 2009 Interim Meeting.
Story - AMA House - Slideshow