Health Information Technology Strategic Framework Report
Attachment 1
Report from the Office of Personnel Management
Letter from Director, Kay Coles James
Interoperable Health
Information Technology
A Report for:
The Honorable George W. Bush
President
United States of America
on
Federal Employees Health Benefits Program
Initiatives to Promote the Use of Health
Information Technology
by
Kay Coles James
Director
U.S. Office of Personnel Management
INTRODUCTION
OVERVIEW
The Federal Employees Health Benefits (FEHB) Program began in 1960. It is the largest
employer-sponsored group health insurance program in the world, covering more than 8
million Federal employees, retirees, former employees, family members, and former
spouses.
Public Law 86-382, enacted September 28, 1959, created the FEHB Program. The law
governing the Program is chapter 89 of title 5, United States Code. The law authorized
the Civil Service Commission (now the Office of Personnel Management OPM) to write
regulations necessary to carry out the Act. These regulations are in part 890 of title 5 and
chapter 16 of title 48, Code of Federal Regulations.
Over 200 health plan choices currently are offered under the FEHB Program. There are
twelve fee-for-service plans, of which seven are open to all enrollees, while the rest are
available only to specific categories of employees. In addition, health maintenance
organizations (managed care plans) are available in many specific local areas throughout
the United States. Premiums and benefits are negotiated annually. Premiums and
benefits vary among the plan offerings allowing Federal employees and retirees a wide
choice to suit their individual circumstances.
This consumer-based choice is a key hallmark of the FEHB Program. The Government
pays on average about 72% of the cost of the health benefits coverage, and enrollees pay
the remainder, based on a formula set by law.
The FEHB law provides OPM wide authority to contract with various private health
insurance plans. Annual contract negotiations are a bilateral process, and both OPM and
the plan must agree on the final terms. Individual policies or contracts are not issued to
FEHB Program enrollees. Each enrollee is given a detailed description of benefits so the
consumer may use the open enrollment period to choose the best protection for his or her
circumstances.
NEGOTIATIONS
The negotiation process in the FEHB Program formally begins in the spring of each year.
OPM sends all current and newly approved qualified health plans the annual Call Letter
to advise them on goals and procedures for negotiation of contracts that will be effective
the following January. In conjunction with the Call Letter, OPM issues instructions for
premium rate negotiation for the upcoming contract year. There are two rating types,
experience rating and community rating. All proposals are due by May 31.
The Office of the Inspector General audits health plans to make sure our costs are
appropriate.
PREMIUM RATE NEGOTIATIONS
Experience Rating
Experience rating bases the FEHB Program premiums on its benefit costs and
administrative expenses. OPM's actuaries also evaluate each plan's rate proposal in
relation to past premiums and anticipated future premium requirements to ensure the
plan's premiums will be reasonably stable, represent good value for the benefits provided,
and remain competitive with other FEHB plans. Fee-for-service plans and some HMOs
are experience rated. The goal of the experience-rate negotiation is to make sure
premiums are set high enough to support the plan's expenses but low enough to be
competitive. Rate negotiations reflect a dynamic between premiums and costs and
covered expenses. OPM rate instructions for experience rated plans are detailed and
feature protection for the Government, enrollees, and plans. Funds in excess of a plan's
current needs are held in the Employees Health Benefits Fund in the U.S. Treasury. The
reserves provide a protective cushion against unanticipated costs and help achieve rate
stability.
Each year specific profit margins are negotiated. This is the only profit allowed for
experience rated plans. If at the end of a contract period there are excess funds over
expenses, the excesses are credited to the reserve, not kept by the plan.
Community Rating
The majority of FEHB plans are health maintenance organizations (HMOs) and use
community rating. This rate-setting methodology is based on what the plan charges its
other groups. OPM analyzes and reviews each plan's rate to ensure the FEHB rates are
fair. Our community rates are based on the best rates the plan offers its two subscriber
groups most similar to the FEHB group. Preferential rates granted to a group similar to
the FEHB group must be granted to the Government.
Like experience-rated plans, the FEHB maintains reserves to mitigate rate instability, rate
increases, and benefit changes.
SUPPORT FOR INTEROPERABLE HEALTH INFORMATION IS GROWING
Below are brief summaries of typical initiatives related to interoperable health
information technology that are currently emerging.
WellPoint, a Blue Cross and Blue Shield local plan, recently began a program called
Prescription Improvement Package. The program offers physicians, at no charge, a
wireless, handheld electronic prescribing unit, a wireless access point, and a one-year
subscription to an e-prescribing service. Initially, WellPoint will target 2,000 physicians
who can support the technology. The WellPoint effort is aimed at reducing medication
errors and saving costs by decreasing duplication of services. This allows physicians to
discard their prescription pads in favor of electronic transmissions to any pharmacy.
Well Point, with Microsoft's Healthcare and Life Sciences Group acting as technology
consultant, provides Microsoft e-prescribing software to the 19,000 physicians in
WellPoint's network in California, Georgia, Missouri, and Wisconsin.
Empire Blue Cross and Blue Shield is in the last stages of a program that awards bonus
payments to hospitals that meet certain Leapfrog standards. Payments are paid by
participating employers and equal a percentage of the hospital claims for employees of
the participating employers. The self-funded employers are IBM, Verizon
Communications, PepsiCo, and the Xerox Corporation. The goal of this program is to
reduce errors and improve health care quality through the increased use of Computer
Physician Order Entry (CPOE) and other Leapfrog Group standards; reward technical
innovation; and raise the standards for all hospitals in health information technology HIT
adoption and health outcomes. A formal evaluation to assess the impact on
improvements in quality of care and error avoidance is planned when the program
concludes.
Blue Cross & Blue Shield of Massachusetts will start paying primary care physicians at
Beth Israel Deaconess Medical Center, Caritas Christi Health Care, and Baystate Health
System for "Web visits" with their patients beginning August, 2004. Harvard Vanguard
Medical Associates, the large Eastern Massachusetts doctors' group, and the insurer
Harvard Pilgrim Health Care, also are experimenting with doctor-patient e-mail
programs. At Beth Israel Deaconess, patients can enroll in "PatientSite," an online system
that allows them to schedule appointments, look up test results, and e-mail their doctors.
Blue Cross only is paying doctors who use a standardized Web visit form developed to
provide secure online communication.
Anthem Blue Cross and Blue Shield provides a member Website that provides
members with an individually tailored online experience that offers quicker, easier, and
more efficient access to self-service tools and member-specific health information.
Members use the Website for four reasons: to view their membership information, to
choose or change health care providers, to learn about health and wellness, and to shop
for health-related products and services at discounted prices. Members log in and then
have one-click access to MyServices, MyProviders, MyHealth, and MySpecialOffers - all
efficiently organized by tabs and links - for easy navigation.
MyAnthem offers members the opportunity to become more involved in their health care
through online capabilities that allow greater clarity, simplicity, and management over
their health care benefits. MyAnthem provides an easy way to help members gain more
control over their health care benefits through secure access that's available at any time
and from any place. The new Website satisfies many member needs in that it offers a
personalized experience, customized content, simplified user interface and improved
communication, and enhanced relationships that can translate into more information and
tools at the member level allowing the member to make informed decisions about his or
her health care.
Integrated Healthcare Association (IHA) has convened six large California health plans
in a pay-for-performance program. The health plans award bonuses to physician groups
based on an aggregate score that includes clinical measures, patient satisfaction, and IT
investment. While each health plan sets its own dollar award, IHA suggests a bonus
amount of 5-10% of the per-member capitation payment. The IT portion of the bonus is
based on the physician groups' ability to match multiple clinical data sets at the patient
level and to deliver electronic data at the point of care (electronic health records,
electronic lab results, patient registries, etc.).
Bridges to Excellence (BTE), a Robert Wood Johnson-sponsored initiative, is focused on creating system-wide improvements in care delivery by linking physician payment and performance. This initiative, which includes a consortium of quality partners, health
plans, and providers has two current projects underway - Physician Office Link (POL)
and Diabetes Care Link (DCL). POL stresses the necessity and value of an HIT
infrastructure in a physician's office to promote error reduction and quality
improvements. Rewards are based on a physician's use of clinical information systems
and evidence-based medicine; patient education and support; and care management. The
intent is to establish a HIT infrastructure and link it to improvements in the providing of
more efficient and higher quality care. The DCL's intent is to test the effectiveness and
impact of the HIT infrastructure by using HEDIS measures for patients undergoing
treatment of diabetes. These proven measures will help the program assess the success of
the POL.
MVP and Taconic IPA (TIPA) have developed a partnership, MedAllies, to provide
technical assistance, IT support, and other related services. The objective is to develop a
community-oriented model through progressive improvements in the continuity of care
and connectivity across all providers in the TIPA. Through a phased implementation of
an electronic health record EHR, the ultimate goal is to have a highly integrated
community data exchange to include physicians, labs, and hospitals. There is no planned,
formal, quantitative evaluation, with success being measured by the level of participation.
Participation is high and growing to include local community hospitals. MedAllies has
discontinued payment for most of the technology upgrades in physician offices because
TIPA and MVP expect financial incentive bonuses to offset the costs for
hardware/software upgrades.
Health and Human Services, Centers for Medicare and Medicaid Services (CMS), is
in the process of implementing a three-year demonstration project, the Doctor Office
Quality-Information Technology (DOQ-IT) project. Medicare Advantage plans will be
providing financial incentives to physician offices to adopt HIT and meet certain
performance measures. Physicians must treat a certain number of Medicare beneficiaries
and meet specific systems and process requirements that include adoption of IT and care
management. The physicians also must agree to phase in, over the three-year timeframe,
the use of HIT to manage clinical care and electronic reporting of clinical quality and
outcomes measures data. Several goals of this project are to adopt HIT in small- to
medium-sized physician offices to promote continuity of care and stabilization of medical
conditions, and to reduce adverse health outcomes of those beneficiaries with chronic
illnesses.
CMS currently is conducting a Medicare demonstration project that uses financial
incentives to encourage hospitals to provide high quality inpatient care. Hospitals that
deliver the best quality of care will be rewarded with higher Medicare payments.
Bonuses will be awarded based on a hospital's performance on evidence-based quality
measures for a variety of medical conditions. Only top performing hospitals will receive
monetary bonuses. While there is not a specific HIT component, information on each
hospital's performance will be made available to health care providers and consumers
that will contribute to a wider availability of information and informed choice.
WHAT OPM IS DOING NOW
OPM recognizes that in order to achieve shared goals and broaden the health care
spectrum, there must be a collaborative effort from all organizations involved in the
process. As the largest purchaser of employee health care benefits, OPM has undertaken
and affiliated itself with a variety of organizations working toward common goals such as
quality and affordable health care, positive medical outcomes, reduction of medical
errors, wider availability of health information, and the creation of a competitive
marketplace that provides choice to the consumer.
OPM's COLLABORATIVE EFFORTS TO SUPPORT HIT
National Quality Forum (NQF)
NQF is a membership organization that is developing and implementing a national
strategy for health care quality measurement and reporting. OPM currently serves as the
Quality Interagency Coordination Task Force (QuIC) representative to NQF's Board of
Directors.
Quality Interagency Coordination Task Force (QuIC)
The QuIC is an interagency task force charged with ensuring all Federal agencies
involved in purchasing, providing, studying, or regulating health care services are
coordinating their work on improving health care quality. OPM chairs the Patient and
Consumer Information Workgroup, one of five workgroups carrying out the QuIC's
mission.
Leapfrog Group (LFG)
Sponsored by the Business Roundtable, the LFG's goal is to mobilize employer
purchasing power to initiate breakthrough improvements in the safety and overall value
of health care to American consumers. OPM participates as an LFG liaison member of
the Board.
National Committee on Quality Assurance (NCQA)
NCQA's mission is to improve the quality of health care delivered to people everywhere.
NCQA is active in quality oversight and improvement initiatives at all levels of the health
care system. NCQA is best known for its activity of assessing and reporting on the
quality of the nation's managed care plans through its accreditation and performance
measures program. NCQA currently is supporting HIT by its new standards that
support the Bridges to Excellence. OPM has a long standing association with NCQA.
National Business Group on Health
Formerly the Washington Business Group on Health, representing over 200 large
employers, health care companies, benefits' consultants, and vendors, it is the nation's
only nonprofit organization devoted exclusively to finding innovative and forward thinking
solutions to the nation's most important health care and related benefits issues.
Joint Commission Business Advisory Group
Created by the Joint Commission on Accreditation of Healthcare Organizations
(JCAHO), the Business Advisory Group provides counsel on employer priorities in the
evaluation of health care quality and assists the Joint Commission in identifying quality
and safety issues important to employers. OPM is a member of the Board. The group
meets several times each year and includes a cross section of individuals and coalitions
representing businesses of varying sizes and different types of purchasing arrangements
across the country. The Joint Commission relies on a variety of advisory groups in its
continuous effort to improve the safety and quality of care provided to the public. These
groups provide feedback to help JCAHO develop and revise standards, policies, and
procedures that support performance improvement in health care organizations.
Center for Health Transformation
OPM has become actively engaged with the Center for Health Transformation through
discussion and attendance at conferences sponsored by the Center. The Center for Health
Transformation's vision is to accelerate the transformation of health and health care into a
dynamic 21st century intelligent health system that results in better health, more choices,
and lower costs to all. We share the Center's idea that the key drivers to health
transformation are:
- patient safety and patient outcomes;
- information and communication technology;
- a system and culture of quality; and,
- individual knowledge, responsibility and power to choose.
eHealth Initiative
OPM has just been invited to join the Employer and Purchaser Advisory Board of the
eHealth Initiative. The eHealth Initiative is moving forward aggressively to create
national and local collaborative efforts with employers to support a common goal of
higher quality, safer and more efficient healthcare enabled by information technology.
The eHealth Initiative supports the improvement of measurement ability, data integrity and efficiency of collection and transmission of data.
The Employer and Purchaser Advisory Board of the eHealth Initiative and its Foundation
is a vehicle for high-level discussions of issues important to the employer community and
members of the eHealth Initiative. The group was formed to support the further
development of the eHealth Initiative's strategy and the successful execution of its
mission, which is to improve the quality, safety and efficiency of healthcare through
information and information technology.
Below are summaries of OPM's initiatives already underway that can help
leverage its purchasing power to support HIT.
Pharmacy Benefit Management Arrangements
Many FEHB plans have had contractual arrangements with pharmacy benefit managers
(PBMs). Prescription drug costs represent a high percentage of total FEHB costs. PBMs
provide real time online access to member enrollment records to facilitate point-of-sale
transactions. This technology can be leveraged to promote patient safety and
connectivity. The interconnectivity that PBMs have with retail pharmacies can serve a
vital role to link providers and pharmacies.
Care Management
FEHB plans generally provide care management services for members with chronic
conditions, including flexible benefit options and diagnosis-based programs. Care
management programs help educate affected members about their chronic conditions
and help ensure they are getting appropriate services. It is generally accepted that a
relatively small percentage of members, primarily those with chronic conditions, use
the greatest percentage of benefits. By addressing the needs of this chronically ill
population, health plans help improve the quality of care and promote the effective use
of benefit dollars. Online decision support tools available to members help facilitate
their access to information and educational materials.
Further, OPM has asked plans to begin the process of establishing a link between their
care management programs and Long Term Care Partners, the administrators of the
Federal Long Term Care insurance Program (FLTCIP), so enrollees with FLTCIP
coverage can experience a smooth transition to long term care when necessary.
HealthierFeds
OPM's HealthierFeds campaign places emphasis on educating Federal employees and
retirees on healthy living and best-treatment strategies to reduce demand on the health
care system. This OPM initiative is featured at www.healthierfeds.gov on OPM's Web
site. It supports the President's HealthierUS initiative which follows a simple formula:
every little bit of effort counts. The Administration's initiative has identified four keys
for a healthier America: be physically active every day, follow a nutritious diet, get
preventive screenings, and make healthy choices. OPM has reinforced with FEHB plans
that educating their members may lead to more patient involvement in health care
decision making and, subsequently, more consumer responsibility.
Quality Initiatives
Quality is a very important aspect of managing health care programs. Quality is how well
health plans keep their members healthy, or treat them when they are sick. Good quality
doesn't always mean receiving more care. Good quality health care means doing the right
thing at the right time, in the right way, for the right person, to achieve the best possible
results.
OPM is continuing to provide FEHB members with resources that will help them choose
high-quality health plans. OPM provides FEHB members with the accreditation status of
participating health plans in our annual Guide to FEHB Plans. Accreditation
demonstrates an organization's commitment to providing quality, cost-effective health
care. Providing FEHB members with accreditation information allows consumers to
choose a high quality health plan.
OPM also provides Federal employees and retirees with individual health plan ratings
based on the results of our annual Consumers' Assessment of Health Plans Survey. This
consumer survey allows current plan members to rate their health plans and providers in
several key areas, including overall satisfaction, satisfaction with their providers, access
to care, customer service, and claims processing. Providing FEHB members with this
consumer survey information allows them to consider the feedback of other consumers
when choosing a health plan.
E- Initiatives
OPM is continuing to expand the use of the Internet as a valuable communications and
resource tool. During the annual open season events, OPM provides in various ways,
comprehensive program information, including health plan brochures, FEHB guides,
premiums and other useful information our customers need to choose a quality health
plan. The FEHB Website, linked from the OPM website, www.opm.gov links to a report
card designed by the National Committee for Quality Assurance (NCQA). This report
card helps users learn more about the quality of care and service provided by HMOs.
FEHB consumers also have access to an OPM health plan comparison tool. Most plan
consumer information can be linked through OPM's portal.
Patient Safety
During the past few years, the health care community has stressed the importance of a
culture of patient safety. We are continuing our work with FEHB plans adding
information on their patient safety initiatives and programs to the FEHB Website.
Health Insurance Portability and Accountability Act of 1996 (HIPAA)
The Health Insurance Portability and Accountability Act of 1996 (HIPAA), subtitle,
Administrative Simplification, requires the Secretary of Health and Human Services
(HHS) to adopt standards for: ten electronic administrative and financial health care
transactions; unique identifiers for individuals, employers, health plans, and health care
providers; protecting the privacy of individually identifiable health information; and
providing security for individually identifiable health information and electronic
signatures. HHS has now published several final HIPAA regulations. The compliance
deadline for electronic transactions was October 2003. OPM successfully migrated from
its proprietary enrollment transaction format to the HIPAA standard format. The final
HIPAA privacy regulations were effective April 2003. The security regulations will
become effective April 2005 for most plans and April 2006 for small plans. The
national provider identifier regulations will become effective May 2007 for most plans
and May 2008 for small plans. All OPM contracts require HIPAA compliance. OPM is
working closely with FEHB plans to ensure a smooth transition in meeting these
important requirements.
PROVISIONS AVAILABLE TO OPM TO PROVIDE INCENTIVES
OPM purchases health benefits coverage for over 8 million employees, annuitants, and
dependents. OPM's significant purchasing power is powerful leverage to contract for a
comprehensive set of health benefits at affordable prices. Through this leverage, OPM
continues to capitalize on the great efficiencies and economies that can be achieved.
OPM fully supports initiatives to further an effective and competitive marketplace as it
explores ways to adopt HIT in the FEHB Program that will bring knowledge-based tools
to the hands that deliver health care.
The end result of any such program is to raise the bar so that everyone is performing at a
higher level. It should be a program that fosters an environment of winners, not winners
and losers. In this era of budget consciousness, investment and return on investment are
pivotal to purchasers and providers. Therefore, to use purchasing leverage to gain a
meaningful and lasting move toward the adoption and full implementation of HIT, OPM
needs to move forward in a way that is shared by all stakeholder groups. Incentives
should be properly aligned and meaningful to ensure that both costs and returns are
shared by all.
As OPM exerts its purchasing power, it will support the adoption of common standards of performance, outcome, and incentives. The use of accepted standards developed by
recognized quality and accreditation organizations lends itself to greater leverage and
earlier adoption. OPM will leverage its purchasing power to move forward, not to
reinvent the wheel.
OPM's goals in the marketplace will be to:
- Reduce health care costs by increasing efficiency and reducing medical errors, inappropriate care and incomplete care;
- Improve health care quality;
- Ensure appropriate information is available to guide medical decisions
at the and place of care;
- Improve care coordination; and
- Partner with ONCHIT and collaborate with Federal partners and other
public and private stakeholders.
Incentives may be provided several ways in the FEHB Program. OPM can explore
regulatory changes to help encourage profit incentives for plans to foster HIT adoption
and implementation. Experience-rated plans can be rewarded for progress toward
adopting or adapting incentives for HIT. Using plans' profit motive should help OPM
leverage its market position to help HIT adoption.
Community rated plans incorporate both their administrative expenses and any profit
amount into their rates. Community rated plans are subject to performance goals and
incentives. OM can explore regulatory changes to align current plan performance
elements to include HIT adoption.
OPTIONS
OPM will explore adoption of a variety of options, such as those below, to speed the
nationwide phase-in adoption of HIT as soon as practicable.
Strongly encourage FEHB Program participating health plans to adopt systems
that are based on the Federal Health Architecture standards.
Strongly encourage health plans to highlight their provider directories to indicate
individual provider HIT capabilities.
Strongly encourage health plans to link disease management and quality
initiatives to HIT systems for measurable improvements.
Strongly encourage health plans to provide incentives for the adoption of
interoperable health information technology systems by key providers under
FEHB contracts.
Base part of the service charge, or profit, for fee-for-service and other experience-
rated plans on their developing incentives for:
- Doctors and pharmacies to use paperless systems to fill prescriptions (ePrescribing);
- Contracting with hospitals that use electronic registries, electronic
records, and/or ePrescribing; and
- Increasing the number of enrollees whose providers use electronic
registries, electronic records, and/or ePrescribing.
Introduce performance goals for HMOs (community rated plans) that are linked to
their developing incentives for:
- Doctors and pharmacies to use paperless systems to fill prescriptions (ePrescribing);
- Contracting with hospitals that use electronic registries, electronic
records and/or ePrescribing;
- Increasing the number of enrollees whose providers use electronic
registries, electronic records and/or ePrescribing.
Introduce incentives and performance goals for plans that contract with networks
of providers to make records accessible through secure and HIPAA compliant
interoperable HIT systems.
Introduce incentives and performance goals for plans that integrate their provider
networks with local and national health information infrastructure initiatives.
Encourage and reward pharmacy benefit managers for providing incentives for
ePrescribing and health information technology linkage.
OPM has great respect for the power and creativity of the private sector to
determine solutions. We will continue to collaborate with our private sector
partners as well as our public sector partners to achieve the goals set by President
George W. Bush in his Executive Order. We believe these goals can be achieved
without violating the key principle that desired outcomes can be achieved through
negotiation rather than imposed through mandates.
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