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H.R. 4859, PART II, HEALTHIER FEDS AND FAMILIES: INTRODUCING INFORMATION TECHNOLOGY INTO THE FEDERAL EMPLOYEES

HEALTH BENEFITS PROGRAM

HEARING

BEFORE THE

SUBCOMMITTEE ON THE FEDERAL WORKFORCE

AND AGENCY ORGANIZATION

OF THE

COMMITTEE ON

GOVERNMENT REFORM

HOUSE OF REPRESENTATIVES

ONE HUNDRED NINTH CONGRESS

SECOND SESSION

ON

H.R. 4859

TO AMEND CHAPTER 89 OF TITLE 5, UNITED STATES CODE, TO PROVIDE FOR THE IMPLEMENTATION OF A SYSTEM OF ELECTRONIC

HEALTH RECORDS UNDER THE FEDERAL EMPLOYEES HEALTH BENEFITS PROGRAM

JUNE 13, 2006

Serial No. 109–215

Printed for the use of the Committee on Government Reform

(

Available via the World Wide Web: http://www.gpoaccess.gov/congress/index.html

http://www.house.gov/reform

(II)

COMMITTEE ON GOVERNMENT REFORM

TOM DAVIS, Virginia, Chairman

CHRISTOPHER SHAYS, Connecticut

DAN BURTON, Indiana

ILEANA ROS-LEHTINEN, Florida

JOHN M. MCHUGH, New York

JOHN L. MICA, Florida

GIL GUTKNECHT, Minnesota

MARK E. SOUDER, Indiana

STEVEN C. LATOURETTE, Ohio

TODD RUSSELL PLATTS, Pennsylvania

CHRIS CANNON, Utah

JOHN J. DUNCAN, JR., Tennessee

CANDICE S. MILLER, Michigan

MICHAEL R. TURNER, Ohio

DARRELL E. ISSA, California

JON C. PORTER, Nevada

KENNY MARCHANT, Texas

LYNN A. WESTMORELAND, Georgia

PATRICK T. MCHENRY, North Carolina

CHARLES W. DENT, Pennsylvania

VIRGINIA FOXX, North Carolina

JEAN SCHMIDT, Ohio

——— ———

HENRY A. WAXMAN, California

TOM LANTOS, California

MAJOR R. OWENS, New York

EDOLPHUS TOWNS, New York

PAUL E. KANJORSKI, Pennsylvania

CAROLYN B. MALONEY, New York

ELIJAH E. CUMMINGS, Maryland

DENNIS J. KUCINICH, Ohio

DANNY K. DAVIS, Illinois

WM. LACY CLAY, Missouri

DIANE E. WATSON, California

STEPHEN F. LYNCH, Massachusetts

CHRIS VAN HOLLEN, Maryland

LINDA T. SANCHEZ, California

C.A. DUTCH RUPPERSBERGER, Maryland

BRIAN HIGGINS, New York

ELEANOR HOLMES NORTON, District of

Columbia

———

BERNARD SANDERS, Vermont

(Independent)

DAVID MARIN, Staff Director

LAWRENCE HALLORAN, Deputy Staff Director

TERESA AUSTIN, Chief Clerk

PHIL BARNETT, Minority Chief of Staff/Chief Counsel

SUBCOMMITTEE ON THE FEDERAL WORKFORCE AND AGENCY ORGANIZATION

JON C. PORTER, Nevada, Chairman

JOHN L. MICA, Florida

TOM DAVIS, Virginia

DARRELL E. ISSA, California

KENNY MARCHANT, Texas

PATRICK T. MCHENRY, North Carolina

JEAN SCHMIDT, Ohio

DANNY K. DAVIS, Illinois

MAJOR R. OWENS, New York

ELEANOR HOLMES NORTON, District of

Columbia

ELIJAH E. CUMMINGS, Maryland

CHRIS VAN HOLLEN, Maryland

EX OFFICIO

HENRY A. WAXMAN, CALIFORNIA

RON MARTINSON, Staff Director

SHANNON MEADE, Professional Staff Member

ALEX COOPER, Clerk

ADAM BORDES, Minority Professional Staff Member

(III)

C O N T E N T S

Page

Hearing held on June 13, 2006 ............................................................................... 1

Text of H.R. 4859 ..................................................................................................... 6

Statement of:

Fallis, Charles, president, National Active and Retired Federal Employees Association; Colleen Kelley, national president, National Treasury

Employees Union; Jacqueline Simon, director of public policy, American

Federation of Government Employees; Archelle Georgiou, M.D., executive vice president, strategic relations, specialized care services,

UnitedHealth Group; Stephen W. Gammarino, senior vice president,

national programs, Blue Cross and Blue Shield Association; and Joe

Witkowski, vice president, Government Employees Hospital Association, Inc. ......................................................................................................... 38

Fallis, Charles ........................................................................................... 38

Gammarino, Stephen W. ........................................................................... 80

Georgiou, Archelle ..................................................................................... 69

Kelley, Colleen ........................................................................................... 47

Simon, Jacqueline ..................................................................................... 57

Witkowski, Joe ........................................................................................... 91

Green, Dan, Deputy Associate Director, Center for Employee and Family

Support Policy, Office of Personnel Management ...................................... 21

Letters, statements, etc., submitted for the record by:

Fallis, Charles, president, National Active and Retired Federal Employees Association, prepared statement of ....................................................... 41

Gammarino, Stephen W., senior vice president, national programs, Blue

Cross and Blue Shield Association, prepared statement of ....................... 82

Georgiou, Archelle, M.D., executive vice president, strategic relations,

specialized care services, UnitedHealth Group, prepared statement of ... 72

Green, Dan, Deputy Associate Director, Center for Employee and Family

Support Policy, Office of Personnel Management ...................................... 24

Kelley, Colleen, national president, National Treasury Employees Union,

prepared statement of ................................................................................... 50

Simon, Jacqueline, director of public policy, American Federation of Government Employees, prepared statement of ............................................... 60

Witkowski, Joe, vice president, Government Employees Hospital Association, Inc., prepared statement of ................................................................. 94

(1)

H.R. 4859, PART II, HEALTHIER FEDS AND

FAMILIES: INTRODUCING INFORMATION

TECHNOLOGY INTO THE FEDERAL EMPLOYEES HEALTH BENEFITS PROGRAM

TUESDAY, JUNE 13, 2006

HOUSE OF REPRESENTATIVES,

SUBCOMMITTEE ON FEDERAL WORKFORCE AND AGENCY

ORGANIZATION,

COMMITTEE ON GOVERNMENT REFORM,

Washington, DC.

The subcommittee met, pursuant to notice, at 2 p.m., in room

2154, Rayburn House Office Building, Hon. Jon C. Porter (chairman of the subcommittee) presiding.

Present: Representatives Porter, Marchant, Schmidt, Davis of Illinois, Norton, and Clay.

Staff present: Ronald Martinson, staff director; Chad Bungard,

deputy staff director/chief counsel; Shannon Meade, professional

staff member; Patrick Jennings, OPM detailee/senior counsel; Chad

Christofferson and Alex Cooper, legislative assistants; Adam

Bordes, Tania Shand, and Mark Stephenson, minority professional

staff members; and Neil Shader, minority staff assistant.

Mr. PORTER. I’d like to bring the meeting to order. I appreciate

you all being here today.

This is a hearing on Healthier Feds and Families: Introducing

Information Technology into the Federal Employees Health Benefits Program, a Legislative Hearing on H.R. 4859, Part II.

We will probably be called for votes here momentarily, but I do

know we have a special guest with us, so I’d like to do my opening

and then have Mr. Clay give his opening, and then, by that time,

we should be taking a recess for probably 15, 20 minutes.

So, again, thank you all for being here. This is the third hearing

that I’ve chaired that will examine the need to improve the quality

and delivery of healthcare within the Federal Employee’s Health

Benefits Program and the second hearing that focuses on the bill

that I and Representative Lacy Clay from Missouri have introduced; that’s H.R. 4859, the Federal Family Health Information

Technology Act.

As a primary sponsor of H.R. 4859, I often get asked by Federal

employees and others the following question: How will electronic

health records [EHR], proposed in my bill help the employees?

Well, it’s quite simple and clear. What the last two hearings have

taught us is that the EHR, as proposed under H.R. 4859, will reduce medical errors, lower the cost of healthcare and improve qualVerDate 11-MAY-2000 10:11 Jun 11, 2007 Jkt 000000 PO 00000 Frm 00005 Fmt 6633 Sfmt 6633 C:\DOCS\33251.TXT HGOVREF1 PsN: HGOVREF1
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ity of care while at the same time empowering consumers by giving

them and their providers access to critical information about their

health status and medical needs.

At the last hearing on H.R. 4859, former Speaker of the House

Newt Gingrich stated from his testimony, which was extremely

powerful, that paper kills. He continued: Instead of saving lives,

our current paper-based health system is taking them, with as

many as 98,000 Americans still being killed by medical errors

every year. Ridding the system of paper-based records and quickly

adopting health information technology will save lives and at the

same time save money.

H.R. 4859 will also improve the quality of care. At that same

hearing, IBM testified that the implementation of personal electronic health records for its employees has played a major part in

making IBMers healthier and others in the industry, and lowering

healthcare premiums. Substantially reducing medical errors and

improving the quality and delivery of care within the FEHBP will

be a welcomed improvement in and of itself, but like the old commercials for the ginseng knives used to say, but, wait, there’s more,

the implementation of H.R. 4859 should lower the cost of

healthcare for all the participants in FEHBP over time.

In my home State of Nevada, Health Plan of Nevada’s transition

from paper records to electronic records have saved them nearly

$1.7 million to date, resulting from a more than 50 percent reduction in medical records, staffing and paperwork.

In drafting H.R. 4859, my staff and I have met with over three

dozen different stakeholders, including trade organizations, nonprofit organizations, hospitals, various companies, employee groups

and Federal agencies. I have very much appreciated their advice

and input from all of them and have learned a great deal.

Staff and I have also examined many demonstration projects

using electronic health records, including regional health information organizations, and have gone to physician offices and hospitals

to see the effectiveness of health information technology firsthand.

The reason that we have invested so much time on this legislation is because we want to do it right. I’m pleased to announce

that, in addition to some of the organizations with us today, the

Federal Family Health Insurance Health Information Technology

Act has received a significant amount of public support, including

Mr. Newt Gingrich, the Health Information Management Systems

Society, which has almost 300 corporate members, IBM corporation, the ERISA Industry Committee and U.S. Chamber of Commerce, among many others.

Additionally, in its program carrier letter for fiscal year 2007,

issued a month after the introduction of H.R. 4859, the Office of

Personnel Management for the first time expressed its expectations

that carriers will work toward creating carrier-based and personal

electronic health records.

The Federal Family Health Information Technology Act is designed to provide the voluntary electronic health records to the

FEHBP participants cost free while at the same time maintaining

strict adherence to HIPAA. This means that, during implementation, carriers will be unable to pass costs on to FEHBP participants

because all carriers must contract with OPM annually. I believe

3

this explicit requirement will be a reality, especially with continued

aggressive congressional oversight. Moreover, if history is any indication, the implementation of H.R. 4859 could also lead to lower

premiums.

The Federal Family Health Information Technology Act requires

carriers participating in the Federal Employees Health Benefits

Program to provide their members with two types of electronic

records, a carrier-based electronic health record and a personal

electronic health record. The carrier-based electronic health record

will provide valuable information by leveraging the claims data,

technology and capabilities of health plans to improve healthcare

decisions by patients and providers. This claims information already exists and is maintained by the carrier. In fact, most carriers

use this claims-based information for disease and care management. The bill simply requires a carrier to make it available for a

member. It is a shame that many carriers do not make this information available to their members today.

The trend, however, is looking up as many carriers are moving

in this direction, such as United Health Care and Blue Cross Blue

Shield of Texas, Delaware and Illinois, just to list a few. The bill

will require that carriers that want to do business with and participate in FEHBP make this information available upon request to its

members.

Contracts between OPM and insurance carriers also will require

carriers, upon the request of a member, to provide for the establishment and maintenance of a personal electronic health record for

their members. This record will be controlled by the individual, and

it will contain personal health information the individual chooses

to include, such as personal and family health histories, symptoms,

over-the-counter medication use, diet, exercise or other relevant

health information activities. The creation of a personal electronicbased health record will simply provide program participants with

greater control over their health information.

The bill also requires the carriers to make electronic health

records available in some portable fashion to all requesting FEHBP

members.

With the 109th Congress heading toward a close, I intend to

move forward in short order—I like to say we’re moving toward a

close; we’re being very optimistic—I intend to move forward in the

short order on subcommittee consideration of H.R. 4859. However,

let me reemphasize the commitment to getting this bill right. That

is what these hearings are about and the countless meetings and

discussions on this bill that I’ve had to date.

Based on some of these discussions, I’ve already agreed to work

on some changes. Both the National Association of Active and Retired Federal Employees and the National Treasury Employees

Union have expressed uneasiness about our inclusion of a provision

that would allow the unused portion of FEHBP’s 1 percent administrative fee to be made available to help fund the implementation

of electronic health records. I’ve agreed to eliminate that provision

at this time prior to mark-up. In addition, all employee groups with

us today, NARFE, NTEU and the American Federation of Government Employees have expressed concern about certain older annuitants or employees who are not computer savvy or lack access to

4

a Web-based portal but who should have the same ability to access

and input information into the electronic health records as those

who are computer savvy. This is an important concern and a matter that must be dealt with accordingly, and I look forward to

working with these groups on appropriate language prior to the

mark-up.

It’s also important to clarify that H.R. 4859 does not intend in

any way to get ahead of standards being developed and is intended

to provide both flexibility for appropriate market determinations

and for OPM to administer the program. The Office of National Coordinator for Health Information Technology within the Department of Health and Human Services is fostering certification and

harmonizing standards by creating a cooperative environment

within and outside the Federal Government to ensure that consensus industry standards are developed and adapted in both the private and the public sectors. The certification process will determine

whether the particular products, like electronic health records,

meet minimum requirements as identified by the industry-led cooperative effort.

Another process already underway will identify harmonized

standards to ensure that a full array of nonconflicting standards is

available to the industry. I’ll continue to work with HHS prior to

the mark-up to get technical assistance to ensure that H.R. 4859

does not get ahead of the game with regard to standards and does

not inadvertently lead to conflicting standards which could be a

barrier to interoperability and patient portability of health information.

Privacy remains a major concern for a number of individuals,

and rightly so, especially in light of the recent theft of data from

the Veterans’ Affairs employees. There is nothing more personal

and private than a person’s medical information. The Federal Family Health Information Technology Act intends to ensure that a

participant’s medical information is kept private and secure by requiring compliance with the Health Insurance Portability and Accountability Act.

HHS has committed to provide technical assistance to ensure

that the language in H.R. 4859, which is intended to be wholly consistent with and not modify HIPAA, does not inadvertently alter it

in any way.

In addition, there are some great minds at HHS thinking long

and hard about this important issue, particularly through the work

of the Health Information Security and Privacy Collaboration. HHS

should also at some point consider revising the regulations to ensure HIPAA is adequate and strong enough to protect our privacy.

Technology has been booming in America and in the world over

the past couple of decades. As always, change has been harder for

some to accept than others. Change is always hard, especially technological change because it involves a change of culture as well.

Some doctors see the benefits of electronic health records, and

some are stuck to paper. Some carriers are leading change and providing carrier-based electronic health records and personal electronic health records to their members as the bill proposes, and

some are waiting for the last possible moment before they have to

provide this level of information to their members.

5

The Federal Family Health Information Technology Act is not for

show or some kind of exercise in futility; it’s about improving the

quality and the delivery of healthcare within the Federal Employees Health Benefits Program. The technology is available today.

The technology will save and improve lives. It’s here today, it’s

being used around the country. We cannot in good conscience continue to deny existing information held by carriers to be used for

treatment. To keep ignoring the substantial benefits associated

with the health information technology is to allow senseless deaths

caused by preventable medical errors to continue to prevent the

highest possible quality of healthcare to be delivered. This is akin

to a hospital rushing an individual to a hospital without using an

ambulance. The Federal Employees Health Benefits Program cannot afford to wait any longer; to do so would unnecessarily cost

lives, health and productivity and of course money.

I look forward to the discussions today and to all of our witnesses’ testimony, and I would now like to introduce my colleague,

Mr. Lacy Clay, for some comments.

Thank you for being here.

[The text of H.R. 4859 follows:]

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Mr. CLAY. Thank you very much.

Mr. Chairman, let me begin by expressing my gratitude to you,

Mr. Chairman, for inviting me to formally address the Federal

Workforce Subcommittee this afternoon. It has been both an honor

and privilege working with you on health IT issues.

As I believe, health IT has the potential to benefit our public

health infrastructure for generations to come. In 2003, the Institute

of Medicine estimated our total national expenditures on

healthcare to be approximately $1.7 trillion of our economy. Much

of this is driven by government efforts to make the provision of

healthcare a public good for all to benefit from. Through programs

such as Medicare and Medicaid as well as some insurance programs for Federal employees, we have sought to provide equality

among all individuals needing healthcare, regardless of socioeconomic need or circumstances.

From this perspective, I believe it is time for the Federal Government to lead in the development and adaptation of a nationwide

health information network that can diminish such barriers and

improve upon the quality of care provided to all of our citizens.

The widespread adoption of health information technology will

provide a platform for delivering higher quality care more efficiently and economically than current paper-based record information systems.

No better example of this can be offered than from my home

State of Missouri where Medicaid providers and chronically ill patients are working to develop Web-based collaborative medical

records that will ensure improved case management and treatment

options for our participants. Since the enactment of the Health Insurance Portability and Accountability Act of 1996, the adaptation

of electronic health information among private industry has made

significant progress. A recent report from the Center for Study in

Health System Change validates this assessment, as recent surveys indicate that the number of doctors having access to information technology for key clinical activities such as e-prescribing has

nearly doubled to about 20 percent since 2001.

Nevertheless, this is still only one-fifth of our Nation’s doctors,

and more needs to be done in order to achieve widespread access

across geographic and socioeconomic boundaries.

Furthermore, vendor requirements for information security and

stringent uniform privacy standards that exceed current HIPAA

regulations must be established if patients are to have confidence

in e-health solutions. The only way to achieve these outcomes, I believe, is through the leadership of the Federal Government. This is

why I have partnered with Chairman Porter on legislation that will

strengthen the Federal Government’s role in health information

technology.

I am a proud co-sponsor of H.R. 4859, the Federal Family Health

Information Technology Act of 2006, as authored by Chairman Porter. Simply put, this bill utilizes the market power of the Federal

Government by establishing a process for the development of electronic health records for all Federal employees.

By utilizing our Federal Employees Health Benefits Program as

a model for electronic health record adaptation, we are creating a

19

model for consumers, employers and insurers to build comprehensive electronic health records for all individuals.

I’ve also introduced H.R. 4832, the Electronic Health Information

Technology Act of 2006, along With Chairman Porter. H.R. 4832

seeks to accomplish two major goals: First, it will codify the current

Office of the National Coordinator for Health Information Technology at HHS and preserve its role as the leading health information technology standard setting authority in the Federal Government. Second, the bill seeks to partner with the private sector

through grants in a direct loan program that will provide key economic assistance for institutions seeking to expand their electronic

health record capabilities.

If we continue our pursuit of utilizing IT throughout the

healthcare delivery system, we are sure to experience shorter hospital stays, improved management of chronic disease and the reduction in the number of needles tests and examinations administered over time. While it is not a panacea, I believe the creation

of such a network will prove far more efficient in both economic

and human terms than its financial cost.

Mr. Chairman, this concludes my remarks, and I ask that they

be included in the record.

Mr. PORTER. With no objection.

Thank you, Mr. Clay. I appreciate your hard work and your efforts to improve healthcare. Thank you very much.

We are going to go into recess for a few moments to go have

votes on the floor. But shortly after the recess, I am going to embarrass a couple of friends that are here, so I’m first going to recess.

[Recess.]

Mr. PORTER. I’d like to bring the meeting back to order. Thank

you for your patience. I appreciate everyone still being here.

And as I was rushing out to vote, I did have an opportunity to

recognize my good friend, Ron Martinson, on his 25th wedding anniversary, he and Wanda. And again, it’s an honor for me to do

that, and I’m sorry we had to do that in a hurry, but congratulations.

Also, I would like to formerly acknowledge that Mr. Clay will be

serving as part of the committee.

Lacy, again, thank you for your testimony earlier.

And I’d like to now turn over to Mr. Davis for an opening statement.

Mr. DAVIS OF ILLINOIS. Well, thank you very much, Mr. Chairman. And let me apologize for coming a bit late, but I also want

to congratulate Mr. Martinson on his 25th wedding anniversary.

Anybody who stays married for 25 years in this day and age deserves some commendation. As a matter of fact, that’s what kept

me away; we had a bill promoting responsible fatherhood on the

floor that I was managing, so that’s why I wasn’t here. So he fit

right in with that.

But let me just thank you, Mr. Chairman, for calling this hearing

and for calling this meeting, but also for the leadership that you’ve

provided to this subcommittee. And it has certainly been a pleasure

working with you.

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Chairman Porter, H.R. 4859, the Federal Family Health Information Technology Act, which you sponsored with Representative

Clay, is a very forward-thinking bill with a very worthwhile objective, to improve the quality and delivery of healthcare for Federal

Employees Health Benefits Program, the FEHBP participants.

An integrated system of medical records could be particularly

beneficial to a patient being treated for a complex condition by a

number of different specialists. All of the treating physicians would

be able to access all of the patients’ records, lessening the possibility that one physician would prescribe a treatment that would

interact improperly with the treatment prescribed by another physician.

While the bill pushes us in the direction of using technology to

collect, store, retrieve and transfer health information electronically, many important questions and concerns remain. For example, one, do insurance providers collect the type of data that would

be useful for diagnosis and treatment as the bill requires? The insurance claims data may record the date and cost of a patient’s

blood tests, but do they record the results of the blood tests? Under

the bill, providers would be required to create and make available

a carrier-based—that is, electronic health record—for all covered

individuals and to a healthcare provider treating the individual. As

unwise as it may seem, what if an enrollee simply does not want

an electronic health record and if such a file were created, which

health provider would the file be transmitted to?

In addition to the privacy concerns, there is the question of interoperability. The Office of Personnel Management and America’s

health insurance plans indicate that the bill would create a proliferation of numerous personal health record models and make

standardization and interoperability very difficult to achieve. It has

been suggested that a pilot program testing personal electronic

health records of FEHBP enrollees may be a better way to proceed.

I hope that our witnesses will address this option in their testimony.

Again, Mr. Chairman, I want to thank you. And I was just thinking that when I first worked in the community health centers, the

first task that I had was to help develop something called a problem-oriented medical records program some years ago. So I come

to this with a little bit of not only interest, but also some experience, and it’s delightful to see us move in this direction. And so I

commend you and Mr. Clay for introducing this legislation and look

forward to our witnesses.

Mr. PORTER. Thank you, Mr. Davis. We do need your expertise,

so we’re glad you’re a part of this team.

Mr. Clay, anything you would like to add at this time? You’re

more than welcome to.

Mr. CLAY. No.

Mr. PORTER. I’d like to do some procedural matters. First all of,

I ask unanimous consent that all Members have 5 legislative days

to submit written statements and questions for the hearing record

and any answers to the written questions provided by the witnesses also be included in the record. Without objection, it is so ordered.

21

I ask unanimous consent that all exhibits, documents and other

materials referred to by Members and the witnesses may be included in the hearing record, and that all Members be permitted

to revise and extend their remarks. Without objection, it is so ordered.

And it’s also the practice of this committee to administer the

oath to all witnesses. If all the witnesses would please stand, I will

administer the oath at one time.

[Witnesses sworn.]

Mr. PORTER. Let the record reflect all witnesses have answered

in the affirmative. And please be seated at this time.

I’d like to invite our first witness to the table, I believe he is already with us. The witness will be recognized for an opening statement. I would ask you to summarize your testimony in about 5

minutes if at all possible. Any further statements you may wish

will be included in the record.

Of course we have heard from Mr. Clay at this point, so we will

now move into Mr. Dan Green. We appreciate you being here. Deputy Associate Director with the Center for Employee and Family

Support Policy at the Office of Personnel Management, and I thank

you for being here.

STATEMENT OF DAN GREEN, DEPUTY ASSOCIATE DIRECTOR,

CENTER FOR EMPLOYEE AND FAMILY SUPPORT POLICY, OFFICE OF PERSONNEL MANAGEMENT

Mr. GREEN. Thank you, Mr. Chairman.

Mr. Chairman and members of the subcommittee, thank you for

your invitation to discuss H.R. 4859. I am here to speak about

OPM’s role in administering the Federal Employees Health Benefits Program. The FEHBP program covers approximately 800 employees and their families. The program offers competitive health

benefits products for Federal workers like large private sector employers by contracting with private sector health plans. OPM has

consistently encouraged FEHBP plans to be responsive to consumer

interests by emphasizing flexibility and consumer choice as key features of the program. In our call letter last year, we encouraged

carriers to take steps to expand and improve on their health information technology efforts. While there are wide variations in the

scope and extent of information technology currently being used by

FEHBP carriers, most are focusing their efforts on providing

claims-based information through their Web sites linking disease

management problems to HIT initiatives and prescribing e-prescribing incentives.

This year, we encouraged FEHBP plans to make personal claims

data available to enrollees, to continue working with their pharmacy benefit managers to provide incentives for e-prescribing, to

link their disease management programs to HIT and to ensure

compliance with Federal requirements that protect the privacy of

individually identifiable health information.

In our call letter, we also ask FEHBP carriers to develop business plans with action items and milestones for accelerating HIT

for the remainder of 2006 and for 2007. We also plan to expand our

Web site information to highlight the HIT capabilities and plans so

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that prospective enrollees can view this information in reviewing

their health plan choices for 2007.

We are committed to confronting the rising cost of healthcare, to

help members of the Federal family afford the insurance coverage

they need. We believe transparency in healthcare costs and quality

can help patients better control their medical expenses. Therefore,

we are taking steps in the FEHBP program to raise the level of

transparency.

This year’s call letter asks carriers to make pricing information

available to enrollees. Director Linda Springer and senior staff personally met with a number of carriers to urge them to provide specific information on their Web sites to help consumers make better

informed choices during this year’s open season. We are encouraging carriers to administer online decision tools with cost estimators

related to both diagnosis and drugs to group costs for common illnesses and conditions by geographic area, and to ensure that they

describe the sources, limitations and currency of the data clearly

and prominently on their Web sites.

Our commitment to transparency aligns with our efforts to promote wider use of HIT. IT will provide for standardized interoperable medical, pharmaceutical and laboratory costs and utilization

information. Making this information more transparent to consumers will help them to understand the value of personal health information in managing their own health needs and their healthcare

expenses.

There is much HIT research and development activity underway.

Under an HHS contract, the Health Information Technology Standards Panel is developing a process for a set of health IT standards

that will support interoperability among healthcare software applications. The HITSP standards, the first of which are expected to

be delivered this September, will form the basis for implementation

of new HIT initiatives. OPM intends to join other Federal health

programs in ensuring that these standards are adopted as soon as

possible.

OPM appreciates your interest in health information technology

as shown by your introduction of legislation H.R. 4859. And while

we agree with the legislation in principle, we do have some concerns with some of its provisions. We believe that rather than

stressing the need for a carrier-based personal health record, the

bill should focus more on the implementation of interoperability

standards covering carrier information. Health information, whether it originates from the carrier or the provider, can be most useful

to consumers when the information is available in a standardized

format.

The bill provides for an incentive plan that will allow OPM to

provide funds to carriers to help their contract and medical providers adopt interoperable technology systems. This is an innovative

concept. The FEHBP program, though, has no experience in operating a charitable trust fund as envisioned in the bill for administering the grant process.

Finally, I would like to express our support for your attention to

the very important issue of privacy and security of personal health

information.

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H.R. 4859 recognizes that consumers have a right to privacy. We

believe privacy is an important consumer concern, and that no compromise will be acceptable.

We appreciate this opportunity to testify before the subcommittee

and look forward to working with you on furthering the Health Information Technology Initiative. I’ll be glad to answer any questions you may have.

[The prepared statement of Mr. Green follows:]

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Mr. PORTER. Thank you, Mr. Green. We appreciate you.

And certainly all of your colleagues at OPM have been very responsive to all of our needs, and I appreciate that.

For the audience, and for the record, could you explain how a call

letter works and what it means, what it does?

Mr. GREEN. Certainly, yes, sir. We contract with some 270 plan

choices in the Federal Employees Health Benefits Program. In late

March, early April, of each year, we issue a call letter which calls

for carriers to provide to us their proposed benefit and rate changes

for the next plan year. For instance, this year, on April 4th, we

issued the call letter for the 2007 contract year. In that call

letter——

Mr. PORTER. Excuse me, Mr. Green. So what would be a contract

year? Is it October to July? Is it January——

Mr. GREEN. A contract year is a calendar year, yes, sir.

We have an open season in November, and enrollees are allowed

to change plans effective the first pay period of the next year. So

working backward from that, we like to, by September of the previous year, we need to have ready for all the members information

about how their plans will change in the upcoming year, what the

rates will be, what the benefit changes will be. And then we share

that information and market that information to enrollees during

the fall. So we’re working backward. We need the summer to negotiate rates and benefits.

So the call letter in April asks the carriers what changes they

propose for the upcoming year, and we give our guidance, the

things that we expect from carriers in both rates and benefits as

well as in the administration of the program and the types of

things that we want them to work toward. And health information

technology was one of those things. We receive their rate and benefit proposals May 31st by regulation.

Mr. PORTER. Plus it’s purely optional for a company even to submit a bid or a—what is it called when they submit? Is it called a

bid? Is it called a proposal?

Mr. GREEN. Well, they apply to join the FEHBP program. But all

carriers that are currently in the program the previous year are

sent the call letter under the assumption that they will continue.

But, yes, that is correct——

Mr. PORTER. So if they choose not to follow your guidelines, or

Congress, they don’t have to submit a proposal.

Mr. GREEN. No, absolutely not. They can withdraw from the program at the end of any contract year.

Mr. PORTER. Thank you. So if they actuarially determine it’s not

profitable for them to submit their proposal again, it is purely optional.

Mr. GREEN. Precisely.

Mr. PORTER. As I said, the bill does not intend in any way to get

ahead of standards, provides flexibility for appropriate market determinations and for OPM to administer the program. Will you and

HHS continue to work with my staff in providing technical assistance before the subcommittee mark-up on H.R. 4859 so we can get

it right and do it right the first time?

Mr. GREEN. Absolutely, sir.

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Mr. PORTER. Well, I knew the answer to that, but I still needed

to ask that question.

Mr. GREEN. Absolutely, we will.

Mr. PORTER. Your call letter that you sent out to the businesses

did mention the accelerating HIT. Have any plans been submitted

yet to address this?

Mr. GREEN. Yes, sir. We have received the rate and benefit proposals from all of our carriers as regulations proscribe by May 31st.

That information is now being sifted through. We will analyze it,

and we will work with carriers where we see they were incomplete

in their answers or where they have innovative ideas. And during

the negotiation season, during the summer, we will be analyzing

that and consolidating that information and finding out where they

propose to go and if that fits in with our plans as well.

Now, this is proprietary information and is not releasable until

rates and benefits are announced.

Mr. PORTER. Absolutely. And I understand that.

The companies, when they receive the call letter, do you use a

scoring system? What if they choose on your call letter—because it

addresses other issues, not just HIT, what if they choose not to address an issue that is not in the call letter? Is there a matrix or

anything else that you use to determine responsiveness?

Mr. GREEN. Yes, sir, we do have a matrix. There’s a number of

points. If they aren’t responsive to our call letter’s information, do

not provide information, we go back to them and work with them

until we do get the information. If they are still not responsive, we

have a system that provides penalties. We negotiate profit with the

plans as well, and if plans are not cooperating with our program

initiatives, then they could receive a reduction in profit.

However, I hasten to add that rarely happens. Our plans, as you

point out, voluntarily participate in the FEHBP program, and

we’ve found them all to be very supportive of our initiatives, and

we try to work with them to make sure that the ways we are going

are the ways that benefit our common customer, our Federal employees and retirees. We have that in common with all of our

health plans.

Mr. PORTER. Do you think that we’ll be able to address some of

the concerns that have been brought up regarding privacy and

those issues? Do you think we’ll be able to address that appropriately and provide the proper privacy for our participants?

Mr. GREEN. Yes, sir, I do. And we share those concerns with you

and with the others that have brought them up. We have that,

along with the health and welfare of our enrollees, uppermost in

our minds; their right to privacy is extremely important to us. But

I do believe that those issues can be addressed effectively.

Mr. PORTER. And there are a lot of success stories in the industry, and I will point out Blue Cross and Blue Shield, right after

Katrina, in preparation for Rita, successfully transitioned an additional form of HIT for their company and I think to protect their

participants. There are, as I said in my opening comments, I’ve met

with dozens of folks, including insurance carriers, and there are

some carriers that openly embrace this concept, and there are some

that don’t. And having been in the insurance industry 20 years, I

understand the language; sometimes, I may not agree, but I underVerDate 11-MAY-2000 10:11 Jun 11, 2007 Jkt 000000 PO 00000 Frm 00038 Fmt 6633 Sfmt 6633 C:\DOCS\33251.TXT HGOVREF1 PsN: HGOVREF1
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stand the culture of the insurance industry, not that I always agree

with it.

But it seems to me that there are a lot of carriers that are implementing this quite successfully across the country. Are you hearing

of problems with some of the carriers? And you don’t have to mention names. What are you hearing?

Mr. GREEN. Well, what we’re hearing from the carriers, they generally are very interested in this. I mean, after all, our FEHBP carriers are like any other companies; they will adopt changes that

will make them more efficient and will allow them to better compete in the marketplace.

As you point out, the initiatives that have already been underway have proven the value of using technology, health information

technology and personal health records, to not only improve operations and to save both benefit and administrative costs, but

they’ve also attracted enrollees because they’ve demonstrated the

company’s interest in the health and well-being and the involvement of their members and their own healthcare. So I think you’re

going to see more and more of that adoption.

And yes, there are issues that need to be overcome. I think that

the positive movement will carry forward with correct support from

the government and having interoperable standards in place so

that those investments—they’re not buying a Beta; they’re buying

a VHS.

Mr. PORTER. Well said. My last comment, in having met with a

lot of companies, there are those that are now using as a marketing tool to attract customers HIT, some of the hospitals and some

of the insurance companies, and I see 1 day when that’s going to

be a TV commercial: We offer HIT because it will save lives, and

it will reduce premiums.

I just appreciate all of your efforts and trust your opinion, and

know that all these areas that have been addressed, it’s healthy to

have the debate and a discussion, and I look forward to working

with you more in the future.

And with that, Mr. Davis.

Mr. DAVIS OF ILLINOIS. Thank you very much, Mr. Chairman.

I was just thinking, Mr. Green, what are your thoughts about the

possibility of creating a pilot health information technology program for the FEHBP participants?

Mr. GREEN. We believe that a pilot can provide a good approach

to evaluate how the adoption of HIT initiatives affects the

healthcare system in a particular geographic area. And we are particularly interested in how FEHBP consumers deal with the availability of health information technology. So pilots can be very productive.

Mr. DAVIS OF ILLINOIS. And so you have no problem—I mean, no

disposition toward not——

Mr. GREEN. No, no disposition toward not working with pilots.

Again, while we do need standards in place that apply to all pilots, we need privacy protections as would apply to all initiatives,

so some things need to be across the board.

Mr. DAVIS OF ILLINOIS. H.R. 4859 makes a distinction between

carrier electronic health record and a personal electronic health

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record; could you share with us the difference between the two?

And which one, if either, in your estimation would be most useful?

Mr. GREEN. Yes, sir. There’s a lot of nomenclature issues out

there in the industry about defining EHRs and PHRs and EMRs

and that sort of thing, so it can be quite confusing. But the way

it works for me, sir, is I think of it in terms of where the information is generated. Some information the carrier holds. And that’s

claims-based information; how much was paid? There is identification information about the enrollees. There are claims information.

There is identification information about providers. There is laboratory cost or tests done. There is prescription drugs that are used.

That’s the sort of information that’s carrier-based information.

There is personal health information that the individual provides

that may be in other systems of records but definitely is provided

by the individual, obviously identifiable information; the vaccines

or the immunizations that their children have had that might not

be in every provider’s record. There’s family history information.

There’s over-the-counter drugs that an individual is taking, and

aches and illnesses, symptoms that the individual provides.

And then there is provider-based information, which are the diagnoses, the results of tests, the test scores as opposed to which

test is performed, the actual results of the tests, some background

information on why a particular test was provided, x-ray information.

So it works for me best to think about in terms of where the information came from rather than what particular title is put on

any particular bit of information.

Mr. DAVIS OF ILLINOIS. Aside from the call letter, do you see any

other role for OPM?

Mr. GREEN. Yes, sir. We work with our carriers 365 days a year,

and 1 more day on leap years. We are there to—and we hear from

our enrollees as well every day of the year. So we think we are in

a very good position to help them understand the needs of our enrollees and the needs of the government that is funding the insurance plan.

So, yes, we work with them regularly, not just during the negotiation season but on individual cases and around the clock doing

oversight and administrative review.

Mr. DAVIS OF ILLINOIS. Do you feel that privacy and interoperability concerns are adequately addressed in the legislation?

Mr. GREEN. I think that, while they are addressed, we can work

with the staff to improve on them and address other additional concerns. But I think they’re there. I think the intent is there, and we

want to make sure that they comply with the law and the HITSP

standards that I addressed.

Mr. DAVIS OF ILLINOIS. I have no further questions. Mr. Chairman, thank you very much.

Mr. PORTER. Mr. Clay, any questions?

Mr. CLAY. I will be very brief, Mr. Chairman.

OK, Mr. Green, please identify the deficiencies that you see in

the interoperability standard setting process at HHS right now.

Would OPM require its carriers to adopt the technical standards

for employee records that have been developed through the Consolidated Health Initiative and the AHIC activities?

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Mr. GREEN. Our Director, Linda Springer, is a member of the

community, the AA community, and we are working very closely

with HHS, and we intend to support the initiatives coming out of

the—both by the administration and by the HITSP standards that

are in place and the other initiatives as well. How we do that is—

we are still working out, but we are committed to being as supportive as we can be in this process.

Mr. CLAY. Would you insist that all carriers utilize the same set

of standards that are available now and as they are implemented

in the future?

Mr. GREEN. The standards aren’t available as of yet. The first set

of standards are due in September. But we will be working to, ultimately, as the whole program—the whole 10-year initiative is designed to do, having a set of standards that are used universally.

How we go about that, we have to work with the carriers and we

have to work with HHS to make that happen.

Mr. CLAY. Thank you very much for your response. I have no further questions, Mr. Chairman. Thank you.

Mr. PORTER. I have an additional question, Mr. Green; and then

we are going to go vote. But there is only two, so it shouldn’t take

very long.

I know a real concern, and rightfully so, for this committee and

for the employees is the cost of insurance. Also of equal importance

is saving lives and saving injuries, and if not even greater concern.

Because literally, as we have said earlier, paper kills—and we already know it—80,000 or 90,000 people a year. But I know one of

the concerns is that by trying so—and, by the way, I don’t think

this science is new. But, to some, this is new in the culture. I hear

from sectors, from employees and from insurance carriers that this

could drive up the cost of insurance.

Have you heard any of that yet or any indication of your call letter of any of your carriers saying we are going to have to charge

more for your premiums because of what you have requested?

Mr. GREEN. No, sir, I have not heard that.

Mr. PORTER. I am really surprised. Because I heard that from a

number of insurance carriers, that this may well cost more money,

which has also frightened some Federal employees, that the costs

could be passed on to them. So you haven’t heard from any company that, by implementing this, this could save funds or cost

more?

Mr. GREEN. Sir, I have not. But I can understand that might,

that is out there, that it would cost. The fact is that capital improvements and expenses do cost money in the short term; and you

have to spend some money to make some money. That is part—we

fund administrative expenses and capital expenses, our fair share

of those expenses, regularly. And it is our job—it is OPM’s job to

make sure that we get our return on our dollar both in benefit

costs and in administrative costs. That is our job to do, and we will

do that. So we are not likely to spend money wantonly. But investments cost some money. It is the return on investment that we look

for.

Mr. PORTER. Including saving lives, and I know that is——

Mr. GREEN. That is important, too.

Mr. PORTER. I know that is a priority.

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Back to the cost issue and possible increases in premium, 9 million participants has to be one of the largest group programs in the

country; and I assume it is highly competitive. If—you say we have

270 some different plans.

Mr. GREEN. Different choices, yes.

Mr. PORTER. Different choices. Must be highly competitive. There

must be insurance carriers that would like to have this business.

We are not having a shortage of companies asking for our business,

correct?

Mr. GREEN. No, sir. That’s correct.

Mr. PORTER. Any additional questions?

What we will do is take a recess again; and we will be back with

the next panel, should be about 20 minutes. Thank you. We are

going to combine the panels to help all of your schedules, help expedite it once we come back. Thank you.

[Recess.]

Mr. PORTER. I would like to bring the meeting back to order.

Again, thank you for your patience. Legislative time is one of

those very unpredictable items. So, again, thank you very much;

and I appreciate being able to combine the panels.

I would like to begin with Mr. Charles Fallis, president of the

National Active and Retired Federal Employees Association. You

have approximately 5 minutes. Thank you. Welcome.

STATEMENTS OF CHARLES FALLIS, PRESIDENT, NATIONAL

ACTIVE AND RETIRED FEDERAL EMPLOYEES ASSOCIATION;

COLLEEN KELLEY, NATIONAL PRESIDENT, NATIONAL

TREASURY EMPLOYEES UNION; JACQUELINE SIMON, DIRECTOR OF PUBLIC POLICY, AMERICAN FEDERATION OF GOVERNMENT EMPLOYEES; ARCHELLE GEORGIOU, M.D., EXECUTIVE VICE PRESIDENT, STRATEGIC RELATIONS, SPECIALIZED CARE SERVICES, UNITEDHEALTH GROUP; STEPHEN W.

GAMMARINO, SENIOR VICE PRESIDENT, NATIONAL PROGRAMS, BLUE CROSS AND BLUE SHIELD ASSOCIATION; AND

JOE WITKOWSKI, VICE PRESIDENT, GOVERNMENT EMPLOYEES HOSPITAL ASSOCIATION, INC.

STATEMENT OF CHARLES FALLIS

Mr. FALLIS. Thank you Mr. Chairman. I appreciate the opportunity to be here today and to testify on the H.R. 4859 legislation

that would implement electronic health records within the Federal

Employees Health Benefits Program.

NARFE appreciates your commitment to involve us in the development of H.R. 4859, and we thank you for your willingness to

meet with us in an open exchange of ideas looking toward improvement of the legislation.

NARFE recognizes that there are medical benefits stemming

from the adoption of HIT; and we believe greater coordination of

individual medical records for use by providers could save lives, improve efficiency, and help control health care costs.

NARFE is also supportive of the legislation’s commitment to protect individual privacy. Protection of personal medical information

is an extremely critical issue for our members, so we are pleased

that the bill assures full compliance with HIPPA.

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NARFE also supports this bill’s provision for voluntary participation. We are confident that many Federal workers and their annuitants will want to build their own electronic records in order to

maximize their health care. We are pleased that the creation of

such records will be initiated only at the enrollee’s request.

While savings may well result from this change, the up-front

costs will be significant. The fund’s startup of phases I and II of

the record system, H.R. 4859, directs OPM to utilize the unused

portion of the 1 percent fee the agency receives from FEHBP contributions to cover their administrative cost of managing the plan.

Heretofore, this administrative fee has always been used for its

intended purpose, and any remaining or unused balances have

been allocated to contingency reserves established for the health insurance plans. Tapping into those contingency reserves to satisfy

additional program spending on HIT would represent a significant

and unwelcome departure from OPM’s past practice in the administration of the plan.

The precedent of using the fee for other than FEHBP administration, including spending for HIT, could create pressure to increase

the fee and thus increase enrollee premiums to cover any number

of nonadministrative costs. NARFE believes that, to the extent possible, it is essential to maintain the current framework to ensure

adequate contingency reserves which help to ensure that premiums

are predictable and affordable.

This is especially important at a time of escalating health care

costs, coupled with a graying work force and with almost half of

the health plan composed of annuitants who have not yet been

given the privilege of paying their health care premiums with

pretax dollars.

Chairman Porter, we understand and appreciate your willingness

to remove from the bill provisions accessing the OPM administrative fee.

While statutory language included in the bill prohibits HIT costs

from being taken into account in future FEHB contract negotiations, HIT spending, as currently described in the bill, could nonetheless directly result in higher premiums, which would be opposed

strongly by our members.

NARFE is also grateful for your active consideration of adding a

provision to the bill that would enable all plan participants, including those who aren’t computer savvy, to establish electronic health

records. NARFE is concerned that those who don’t have access to

an Internet portal might not be able to input the necessary data

to establish their electronic health records. NARFE suggests incorporating a new language—or incorporating new language into H.R.

4859 to clarify that such individuals could access their electronic

health records through a call center where information could be

added or checked for accuracy.

Finally, Mr. Chairman, I pledge to you that NARFE will work

with you to successfully implement electronic health records within

FEHBP and that together I hope that we can work together to address the outstanding issues that I have identified and others have

identified today.

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I want to thank you for the invitation to share our views and to

thank you for your able leadership of the subcommittee. Thank

you, sir.

Mr. PORTER. Thank you very much for your testimony. I appreciate your comments and appreciate working with you on the bill.

Your comments have made a substantial difference. So thank you

very much.

[The prepared statement of Mr. Fallis follows:]

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Mr. PORTER. Is there anyone here that has a time constraint or

who has the worst time constraint? Is there planes to catch or anything that we can help you with at this point?

We have one at 6:30.

We are going to be here until probably midnight so—no problem.

Next, Colleen Kelley. She is the national president, National

Treasury Employees Union. It is always a pleasure to see you.

Thank you for being here.

STATEMENT OF COLLEEN KELLEY

Ms. KELLEY. Thank you, Chairman Porter, Congressman

Cummings. It is truly a pleasure for me to have the opportunity

to testify on behalf of the 150,000 employees represented by NTEU.

Federal employees and retirees are very concerned about the

quality and the cost of the health insurance that they received

through the FEHBP. National Treasury Employees Union has been

involved in several initiatives to improve the program, including

legislation to hold down the cost for enrollees.

At a time when Federal pay rates lag behind the private sector

and attempts are being made to reduce employee rates in several

departments and workers are being subjected to determined efforts

to contract out their work, health insurance becomes one of the

most attractive features to both recruit and retain the best and the

brightest to the Federal service. A decline in the quality or an increase in the cost of health insurance may be the last straw for a

productive employee or applicant.

FEHBP must be modern, efficient and well-functioning. It must

embrace what is best in emerging technology to better serve its

beneficiaries. The Federal Family Health Information Technology

Act, properly implemented, can serve that goal. Requiring FEHBP

carriers to create electronic health records available to individual

enrollees, these records have the potential to provide important

benefits to the enrollees, including better coordination of medical

records, easier access to those records and, as you have noted,

could save lives.

National Treasury Employees Union agrees with the important

and worthy goals of this legislation.

Having said that, I would like to outline a few concerns and propose some improvements that we feel would be beneficial to this

legislation; and they fall into four categories: privacy, oversight, access and funding.

On the privacy issue, from my discussions with NTEU members,

privacy is a significant concern. Most important is the need to protect Federal employees from any inappropriate access to their personal medical records. In particular, their employer should not

have that access. Further, this information needs to be kept from

disclosure to sales and marketing entities, such as pharmaceutical

vendors and others, not just written prohibitions of such disclosures but systems that really protect the privacy with rigorous enforcement. FEHBP enrollees must have recourse to remedies when

their privacy rights are violated.

The opt-in provision in the legislation helps to make sure that

those in FEHBP who have privacy concerns are not forced into participating in a program they are not comfortable with.

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I agree with former House Speaker Newt Gingrich who testified

before the subcommittee recently when he said it can be expected

that substantial numbers of FEHBP enrollees would elect to opt in.

I agree with that. But enrollees must have that choice, and NTEU

strongly supports the opt-in provision of this legislation.

On oversight, NTEU believes that, to ensure proper privacy

standards, OPM and HHS must, in a formal way, engage Federal

employee and retiree representatives. This legislation should require HHS’s Office of the National Coordinator for Health IT to

meet periodically with Federal employee and retiree organizations

to consult with them, to provide them with all information needed

to make a thoughtful review of these matters, including the number and nature of all privacy complaints made by FEHBP participants, and to give great weight to any recommendations made by

these organizations.

The chief privacy officers at both OPM and HHS will play key

roles in protecting privacy. These positions need to be made fulltime positions. They also need their authority enhanced by having

the power to undertake investigations and to issue reports as they

deem necessary, as well as having subpoena power. In order to ensure the independence and the integrity of the privacy officer, any

removal or transfer should require a notification to both Houses of

Congress.

I believe it is also important that HHS and OPM both report

back on a regular basis to this subcommittee as well and that the

subcommittee perform proper oversight of FEHBP privacy issues.

That way, there will be ongoing congressional review; and any laxness or shortcomings either in enforcement or legislative authority

can be resolved.

On the access issue, improved access by enrollees to personal

medical information is obviously an important feature of this legislation. As already noted, electronic Web-based access is the means

most enrollees will utilize. However, as you, Chairman Porter, also

already recognized, some of enrollees need access other than

through the Web portal. Provisions need to be made so that they

have the opportunity to access their medical records as well.

On the funding issue, the passage of this legislation will put the

Nation’s largest employee health benefits program behind the development of medical IT. In the long run, both Federal and private

sector employees will benefit. Therefore, it would be unfair for

FEHBP participants to bear even a short-term premium increase

for what is a social benefit.

I note that the bill prohibits increase in FEHBP premiums. In

this provision, strict enforcement will be a key issue. Given the legislation’s potential benefit to the private sector as well as the Federal sector, it would seem proper and reasonable that costs associated with short-term development be provided for by an appropriation from general revenue.

On the funding issue language, NTEU very much appreciates

your decision and your commitment to remove the language prior

to markup that would have allowed the unused portion of the 1

percent administrative fee to be made available to fund this system.

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You and this subcommittee and your staff have been very open

to listening to NTEU’s concerns on this issue, and we very much

appreciate it and look forward to working with you on the development of an electronic health record system that does protect the

privacy and promote the health care efficiency for Federal employees.

I would be happy to answer any questions you have. Thank you.

Mr. PORTER. Thank you, Ms. Kelley.

I said it to Mr. Fallis. Your comments have played a big role,

both of you; and I appreciate working with you. These adjustments

have come about after we have had our numerous meetings and

discussions. So thank you for your input, and I certainly agree with

your insights as to those areas. Plus, this could well be a landmark

piece of legislation in changing health care not only for Federal employees but for the country. I am very pleased to have your help,

and I really appreciate it. Thank you.

[The prepared statement of Ms. Kelley follows:]

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Mr. PORTER. Next, we have Jacqueline Simon, Director of Public

Policy, American Federation of Public Employees. Thank you.

STATEMENT OF JACQUELINE SIMON

Ms. SIMON. Mr. Chairman, I want to thank you for your personal

attention to this legislation and the access that you provided AFGE

during your deliberations. We know that the plan is extremely well

intentioned.

My testimony, however, will focus on the many questions Federal

employees have regarding privacy, costs, accuracy, access and the

potential difficulties that may emerge from the implementation and

maintenance of electronic health records in the context of FEHBP’s

current structure and regulatory framework.

The No. 1 concern is privacy and security, which I address at

length in my written testimony. There is enormous concern among

Federal employees that EHRs will not be secure from either loss

or unauthorized access, as the recent theft of data from an employee from the Department of Veterans Affairs attests.

Although the privacy rule acquired under HIPPA requires medical professionals to limit disclosure of medical information to the

minimum necessary and this rule will be applicable to Federal

EHRs and FEHBP, the rule is not absolute. In fact, the regulatory

regime for protecting privacy of health information is quite complex

and fragmented throughout the country. And even if HIPPA and its

regulations were adequate, the current reluctance to enforce Federal regulations makes the bill’s conformance with HIPPA almost

an irrelevancy.

The Washington Post reported last week that in the 3 years since

HIPPA’s enactment no fines have been imposed, even though more

than 19,000 grievances have been filed. The grievances included allegations that, ‘‘personal medical details were wrongly revealed, information was poorly protected, more details were disclosed than

necessary, proper authorization was not obtained and patients

were frustrated getting their own records.’’

Although the insurance companies, hospitals, health plans and

doctors interviewed for the article were reported to be quite satisfied with the lax enforcement, patients and patient advocates were

not. Especially troubling for Federal employees, the representative

from HHS whose office is responsible for enforcing the law was

quoted saying that, ‘‘challenges with our resources,’’ was part of the

explanation for why more has not been done to enforce the law.

Federal employees are more intimately aware than anyone that

inadequate funding for agency staffing and political bias have made

regulatory enforcement a low priority. They will not find credible

promises that OPM will enforce HIPPA-like privacy protections,

and they will not find credible assurances that the data or the program will be implemented in ways that serve their interests.

Privacy is such an enormous concern because a health record reveals some of the most intimate and personal aspects of one’s life.

Medical records include the details of family history, genetics, diseases and treatments, illegal drug use and sexual orientations and

practices. Subjective remarks about a patient’s demeanor and character and mental states are also sometimes part of a record. The

bill does not address how variations in business policies, State laws

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that affect privacy and security practices, including those related to

HIPPA, and other challenges to health information exchange could

result in the mishandling or misinterpretation of patient health

records, even assuming that HIPPA protections were enforced.

If the government cannot guarantee generally impregnable firewalls to protect privacy and control access, then no Federal employee’s health information should be placed in an electronic record

without his or her affirmative permission, permission that must be

able to be withdrawn and given entirely at will.

Another troubling aspect of the bill is the assumption that its

adoption will result in significant savings, the EHRs will pay for

themselves. While there may be some clinical savings and gains

from greater physician productivity as a result of using EHRs,

there is every reason to believe that most or all of these savings

will be offset by administrative costs. The added administrative

costs will be real and the savings are only hoped-for projections.

Even if the money is saved by better coordination of care or use

of preventive services, forcing every practice that participates in an

FEHBP plan to submit yet another set of medical data will be extremely costly.

The startup costs to fund EHRs in the Federal Government will

be considerable. AFGE strongly opposes the use of the FEHBP reserves for this purpose, and we are glad to hear that you have

agreed to delete this provision from the bill.

We believe this program should be started as a pilot or a demonstration project within FEHBP and be open to a small population

of volunteers. If the projections of savings are realistic, insurance

companies should be eager to participate and should be willing to

subject themselves to the government cost accounting standards in

order to prove that the savings are real.

Once the pilot has had a sufficient period of time to allow objective evaluation of its costs and benefits, the decision can be made

whether to expand it. If it is as successful as the bill’s advocates

believe it will be, it is likely that both insurance companies and

Federal employees will be comfortable participating.

This concludes my statement. I will be happy to answer any

questions you may have.

Mr. PORTER. Thank you very much for your testimony, Ms.

Simon. I appreciate you telling us what you think.

Ms. SIMON. Thank you for the opportunity, sir.

Mr. PORTER. No problem. We appreciate it.

I, too share, the majority of your concerns; and that is why we

have spent a lot of time and will continue to do so making sure we

get it right.

You know, I have met with—and if this subcommittee would

allow—I met with a veteran the other day who is in the Veterans

Administration under its health care plan. He was about 80 years

old, sitting in my office. He was a disabled American vet, had a

substantial handicap and a friend for many years. He spent a lot

of time talking about the advantages of the veterans’ health care

system and access to his health care records and being able to communicate with his doctor and being able to communicate via technology.

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Just know that there are areas of concern, and I share with you.

But there is also great successes, and we want to make sure we

can emulate those. So, again, your points are well taken; and we

appreciate your testimony.

Ms. SIMON. Thank you, sir.

As you probably know, AFGE represents most of the employees

of the Veterans Administration; and they take great pride in the

health care they provide our veterans. I am really glad to heard

that. Thank you.

Mr. PORTER. Thank you very much.

[The prepared statement of Ms. Simon follows:]

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Mr. PORTER. Next, we have Archelle Georgiou, Doctor, executive

VP, strategic relations, specialized care services, UnitedHealth

Group. Thank you for being here.

STATEMENT OF ARCHELLE GEORGIOU, M.D.

Dr. GEORGIOU. Thank you, Chairman Porter and distinguished

members of the committee, for the opportunity to testify before you

at today’s hearing on how the use of health information technology

can improve the health of Federal employees and annuitants and

their families.

I am Archelle Georgiou, physician and executive vice president of

strategic relations with specialized care services, a specialty health

and well-being division of the UnitedHealth Group. Headquartered

in Minneapolis, MN, UnitedHealth Group offers a broad spectrum

of products and services through six operating businesses:

UnitedHealth Care, Ovations, AmeriChoice, Uniprise, Specialized

Care Services and Ingenix. Through its family of businesses,

UnitedHealth Group serves approximately 65 million individuals

nationwide.

UnitedHealth Group has extensive experience providing health

care services to the Federal Government, State governments and

private payers in many types of competitive environments. Currently, we offer health benefits to Federal employees under the

Federal Employees Health Benefits Program in 14 States. We have

more than 322,000 members enrolled in our various FEHBP plans

and have been a carrier in our FEHBP for over 20 years.

As Jeannine Rivet testified before this subcommittee in March,

UnitedHealth Group is a strong supporter of using health information technology to advance the quality of care provided to individuals and to improve the efficiency of our health care system. Over

the past 5 years, we have invested $2.5 on technology in an effort

to bring simplicity and enhanced administrative efficiencies to the

U.S. health care system.

In 2000, UnitedHealthcare introduced its consumer service Web

site, myuhc.com, to provide members with easy access to health information and services so they can manage their health care effectively. Members logging on to UnitedHealthcare’s Web site can find

physicians and other providers, find information on hospital quality

and order prescription refills online and compare the cost of drug

alternatives.

In March 2005, UnitedHealthcare expanded the functionality of

our consumer Web site, myuhc.com, by integrating personal health

record capability. Easy access offers a secure Web site which protects the privacy and security of members’ data with user name

and passwords, in keeping with industry authentication and validation standards.

Members can use their personal health records to access a comprehensive record of their medical, surgical, radiology, pharmacy

and laboratory health care claim history. This easy-to-read format

includes a summary of medical conditions, doctor visits, visit dates,

medication history including prescription names, dosages and refill

dates, as well as laboratory and radiology tests, including the date

and location of these services.

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They can enter there and manage self-reporting data, including

tracking and charting of wellness indicators. They can also enter

and track self-reported data such as glucose levels and blood pressure, as well as information on lifestyle issues such as weight and

sleep habits.

Finally, they can print their personal health summary for their

personal records and/or use with their practitioner.

While the personal health record is available to all of our members, as of March 2006, 41⁄2 million consumers have accessed their

personal health record through our Web portal, myuhc.com.

Of course, the privacy and security of personally identifiable information is of great concern to us all. UnitedHealth Group currently protects members’ privacy through the use of standard industry security measures. We are planning to add additional layers

of protection to provide our members with even greater assurance

that their personal health records are completely secure.

In addition, we automatically suppress data on sensitive health

issues to help gain member trust and acceptance of the personal

health record feature.

The overall response to our consumer portal and personal health

record capabilities has been extremely positive, and we feel it reflects a strong level of comfort on the part of the members regarding the level of privacy and security offered.

Specific to H.R. 4859, we do support your efforts with this bill

and look forward to continuing to work with you and your staff as

it moves through the legislative process. UnitedHealth Group believes that the use of appropriately designed electronic personal

health records will make a significant difference in improving

health outcomes for Federal Employees Health Benefits Program

participants and will make it easier for them to manage their

health care effectively.

Since the FEHBP covers such a large member population, we believe requiring the use of electronic personal health records by program carriers and providers could have a significant impact on

driving the entire industry forward on this very important matter.

Moreover, the use of electronic personal health records could help

reduce disparities in health care.

As Speaker Gingrich stated in previous testimony before this

committee, participants for whom English is a second language

would be better served by being able to provide their physicians

with access to their complete health record, rather than having to

try to explain complex medical issues in a second language. They

could also provide access to their records to family members with

greater proficiency in English to assist in their medical encounters.

In conclusion, our experience in offering consumers a personal

health record as well as our research to determine the key needs

of consumers as related to a personal health record have enabled

us to identify a number of requirements for facilitating widespread

adoption. These requirements for success include a strong and consistent information and education campaign that clearly shows the

value of using a personal health record to consumers; a tailored

consumer experience, organizing data and features in a manner

that makes it easier to navigate and access information of choice,

with health information displayed and described in ways that are

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easy to understand; secure and private infrastructures and processes; accurate and timely information to build trust and credibility; flexibility to address consumer needs, preferences and desires;

health records integrated so that individuals have easy access to

the PHR from the carrier’s consumer portal and easy access back;

and interoperability with provider office technology.

Chairman Porter, we appreciate your continued leadership in

this matter and commend you and the members of the subcommittee for your appreciation of the benefits and value that health information technology can bring to the quality, efficiency and effectiveness of health care.

Thank you.

Mr. PORTER. Thank you, Doctor. I appreciate your testimony and

the fact that you are a Nevadan. We appreciate that.

And I tell you, having talked to some of your participants from

across the country, they like the fact that they now know what information you have on them, which they didn’t know before; and

they are happy to have that access. So thank you very much.

Dr. GEORGIOU. Thank you. And it is helpful because at times we

can get misinformation when claims are submitted from physicians, and they can help us correct that information as well.

Mr. PORTER. Thank you.

[The prepared statement of Dr. Georgiou follows:]

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Mr. PORTER. Next, we have Stephen Gammarino, senior vice

president, national programs, Blue Cross and Blue Shield Association. Welcome.

STATEMENT OF STEPHEN W. GAMMARINO

Mr. GAMMARINO. Thank you, Chairman Porter and members of

the subcommittee, for giving the Blue Cross and Blue Shield Association an opportunity to present our views on H.R. 4859.

I will cover three main areas in my testimony today: First, a

strong support of Blue Cross Blue Shield plans in advancing health

information technology; second, an overview of OPM’s market-oriented approach to health information technology; and, third, our

concerns and recommendations related to this important issue.

First, we commend, Mr. Chairman, you and the subcommittee for

your support for health information technology.

Now, for my first point, Blue Cross Blue Shield plans and the Association are committed to advancing health information technology. We are committed to a health care system that delivers

safe, efficient and high-quality care. We recognize that the goal requires nationwide standards for interoperability, and we have a

record of support and commitment. For example, we serve on Secretary Leavitt’s American Health Information Community. We are

collaborating with America’s health insurance plans to develop industry standards related to health information records, and we

supported legislation that would require and spur development of

industrywide interoperability.

My written statement provides several examples of plan leaderships and lessons learned. For example, we have learned that nonproprietary interoperability standards are critical to facilitate data

exchanges; second, we know that providers must see value in

records and they must be integrated into the providers’ workflow;

and, three, perhaps most important, we learned that members

must see value in using the personal health records.

The second point is an overview of the OPM’s market-oriented

approach.

As most of us know, the FEHBP has a long history of being cited

as a model for employer-sponsored health benefit programs. A lot

of that strength is reliance on market forces of competition and

consumer choice.

Historically, Congress has exercised a light touch in imposing

statutory mandates, and we believe this market-oriented approach

has resulted in innovation in the program over the last 40 years.

As you know, most recently, OPM, in their 2007 call letter, provided for short-term information technology objectives which focus

on enhanced member education, payer-based personal health

records, incentives for e-prescribing, linking disease management

programs to health information technology, having requirements to

protect individual health information, and providing financial incentives for carriers.

The market-oriented approach has already led to health information advances in the Blue Cross Blue Shield Service Benefit Plan.

Over the last couple of years, we worked with the agency in a

program called Care Coordination.

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We are currently applying health information technology to an

integrated data base to ensure that, among our sickest members,

that they receive the right treatment at the right time.

We think a market approach is superior to any legislative mandate. It relies on marketing incentives, rather than one-size-fits-all.

Carriers that are slow to offer personal health records, for example,

risk punishment in the marketplace as consumers who value them

gravitate to other carriers. It also allows each carrier to meet a

member’s needs.

In responding to one of the questions that Congressman Davis

has put before the panel earlier today, we think pilot projects are

critical. Without members use and provider acceptance, the health

records will not have the impact we all hoped for.

My third point focuses on our concerns about this bill and our

recommendations for establishing health records in this program.

First concern, we think the bill is premature until the necessary

standards have been developed and fully tested; second, OPM’s current market-based approach, as exhibited in a recent call letter,

makes this legislation we think unnecessary at this time; third, the

bill does not recognize cost being allowed to be charged to the program and being reflected in a carrier’s premiums; and, fourth, the

bill imposes unprecedented mandates on a carrier’s resource and

therefore we think sets a bad precedent.

In closing, Blue Cross Blue Shield has two recommendations:

first, that OPM and carriers follow a market-based approach on

health implementation technology as outlined in OPM’s most recent call letter; and, second, strong congressional oversight to hold

both the agency and the carrier accountable for introducing the introduction of appropriate health records. We are confident you will

find Blue Cross Blue Shield a leader in effective introduction of

those health records.

Mr. Chairman, that concludes my oral statement. I will be happy

to address any questions you may have.

Mr. PORTER. Thank you very much.

I know I mentioned earlier but I would like to reiterate it again,

I applaud Blue Cross Blue Shield because literally in 78 hours or

42 hours or 20 hours—I can’t remember what it was—you transferred your participants after Katrina in preparation for Rita so

they wouldn’t lose their files.

Mr. GAMMARINO. It was probably within 700,000 and 800,000.

Mr. PORTER. How many days?

Mr. GAMMARINO. It was a matter of days.

Mr. PORTER. Well, I applaud you for those efforts. So thank you

very much for taking care of those folks.

[The prepared statement of Mr. Gammarino follows:]

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Mr. PORTER. Next, we have Joe Witkowski, vice president, Government Employees Hospital Association. Welcome.

STATEMENT OF JOE WITKOWSKI

Mr. WITKOWSKI. Thank you, Mr. Chairman.

My name is Joe Witkowski, and I am vice president of Government Employees Hospital Association.

GEHA is a not-for-profit association of Federal employees,

headquartered in Lee’s Summit, MO. We are the third largest national health plan within FEHBP and have participated in the program since its inception in 1960. We serve more than 425,000 Federal employees, retirees and their dependents nationwide.

We at GEHA agree with the conclusion that H.R. 4859 has the

potential to improve health care quality and reduce medical errors.

We also believe it can be used to increase the efficiency of the delivery of medical care, which will result in decreased health care

costs.

Easy access to health records is an important goal. Today, I can

be in any city in the country; and should my car completely break

down I can purchase a new automobile that same day. This can

happen because the dealership can electronically access my personal financial health history in a matter of minutes.

We believe that individuals and health care providers should also

have that same ease of access to a health record. In fact, we have

implemented several initiatives, with significant investment in

time and technology, to meet those very goals. We are participating

in several pilot projects and have begun implementation of other

relevant initiatives. Please allow me to highlight some of our efforts.

GEHA’s participating in an employer-based initiative to create a

community health record. The organization is called HealthE MidAmerica and is a joint effort between major employers in the Kansas City metropolitan area and Cerner Corp. Cerner is a world

leader in developing software for hospitals and physician practices.

The goal is to build a patient health record that includes claims

data, prescription medication information and clinical data such as

diagnosis, procedures and lab results. The patient’s health record

will also include detail provided and maintained by patients, including information on allergies and any other personal medical

history. We believe that our participation in this joint venture will

help us develop and grow our health information technology capabilities.

That organization met this morning and formed their board of directors and is starting to move forward in this venture.

We are also participating in a number of HIT initiatives in conjunction with our pharmacy benefit manager [PBM]. Those programs have a special impact on senior citizens. While only comprising 13 percent of the U.S. population, older Americans use 35 percent of all medications dispensed. Twenty-five percent of these seniors fill prescriptions for at least 10 different medications annually.

Often, these multiple therapies are prescribed by multiple physicians. Adverse drug events can result from this high medication

utilization. Studies show that nearly one in five hospitalizations of

older adults each year is due to problems with dosage or interVerDate 11-MAY-2000 10:11 Jun 11, 2007 Jkt 000000 PO 00000 Frm 00095 Fmt 6633 Sfmt 6633 C:\DOCS\33251.TXT HGOVREF1 PsN: HGOVREF1
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action with prescription drugs. The estimated economic impact of

these preventable hospital stays is $177 billion annually.

Our programs are working to counteract this problem. We at

GEHA send medical claim data to our PBM on a bi-weekly basis.

Our claims data is integrated into the PBM’s proprietary software

and data base engine which then analyzes patient medical and

pharmacy and lab data. Comprised of thousands of clinical rules,

the engine uses a predictive model to identify members with an increased near-term risk for hospitalization. We then send alerts to

physicians to inform them of our findings.

Using the same integrated data from pharmacy, medical and laboratory sources, our PBM stratifies GEHA members into four patient populations: well, acute, chronic and complex. The pharmacists use this real-time integrated data to effectively manage,

prioritize and optimize specific drug therapies on an ongoing basis.

This technology links patients to pharmacists and customer service

representatives who act as patient advocates.

In addition, we are participating in a pilot program with our

PBM to accelerate the development and adoption of real-time and

electronic prescription writing tools for physicians. The goal is to

develop a secure, HIPPA-compliant tool that allows patient prescription and medical data to be checked for potential errors as a

medication is prescribed.

A new project in development is prescription drug pricing transparency, which we expect to have in place by the end of the year.

Members will be able to review and analyze the drug utilization

and spend for themselves and their family through the GEHA mail

order pharmacy. Using an online tool, members can review their

annual drugs and see what generic and brand alternatives are

available. The members annual savings for the new therapy will

also be shown. If a member opts for a less expensive drug therapy,

they can use the same tool to initiate that change online.

Mr. Chairman, I hope that I have made it clear that GEHA embraces information technology as a tool that will help us improve

health care quality and reduce medical errors. GEHA has taken

several steps toward meeting the spirit of this legislation and will

continue to do so.

We respectfully would like to provide some commentary, and first

is the issue of liability protection. Providers may be making treatment decisions based on information which is contained within the

health record. Data within the record may be incomplete or incorrect. We are concerned we would be included in litigation where

medical errors may be made because of the incomplete or incorrect

patient health data and need protection from this real possibility.

Chairman Porter, you have publicly stated that you do not want

to get ahead of the standards; and your legislation reflects that desire. However, there is a possibility that standards may not be developed in 4 years; and we would be required to move forward during that time. That would cause GEHA and other carriers within

the FEHBP program several problems.

GEHA has committed time, money and human capital toward

meeting several of the goals contained within the legislation. We

are prepared to move forward with plans to offer our Federal members greater information about their claim history and provide

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them with tools to build personal health records. We eagerly await

the creation and implementation of standards that will move us in

this direction. With these in place and further direction from OPM,

we will continue to work toward improving the quality of care our

members receive and make delivery of health care more efficient.

Mr. Chairman, we look forward to providing additional commentary on this legislation as it moves forward. Thank you for

bringing this important discussion to the table and for allowing the

GEHA to offer our comments.

Mr. PORTER. Thank you very much for your testimony.

[The prepared statement of Mr. Witkowski follows:]

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Mr. PORTER. I would like to begin. I guess—one comment. Being

from the insurance industry, I don’t have a lot of sympathy for

some of the insurance industry’s comments regarding cost and

passing them on to participants, especially the insurance companies that are doing business with a group the size of 9 million people; and I know that has come up a couple of times.

The impact on the bottom lines of some of our carriers, I don’t

think that is a problem for any of our carriers. I would like to let

that be known for our employee base that the last sympathy I have

is for the bottom line of some of our carriers, seeing that they are

all very substantial and very solvent.

Regarding comments on unprecedented mandates, and I guess

this is for Blue Cross Blue Shield. As I made it pretty clear in my

questioning earlier today and in my comments, it is purely voluntary to apply to be a part of this system of health care. Whether

it be the purchase of a xerox copy machine or whether it be other

standards, the Federal Government does expect that we provide

the best services available for our employees; and I guess we disagree on mandates.

You have a choice whether Blue Cross Blue Shield would like to

participate in our plan or not. We are not requiring that you be one

of our carriers. That is purely your option.

I think, from our discussions, Blue Cross has done quite well

with probably 60 some percent of our participants and have been

very profitable; and it would be your choice whether you choose to

apply again in the future.

Also—I guess this would come in for Blue Cross, Mr.

Gammarino—the last time we spoke, your objections were almost

identical and you hadn’t read the bill. And today I assume you

have read the bill, but the objections haven’t changed, and I appreciate your feelings and your expertise in the field.

But, currently, Blue Cross Blue Shield represents customers all

over the country; and I would assume you probably have millions

of participants currently in HIT, correct?

Mr. GAMMARINO. Each of our local Blue Cross Blue Shield plans,

depending upon where they are in health information technology,

would be providing that to their local members.

So, for example, you mentioned I believe the post-Katrina and

the Texas plan who put together those records which is on short

notice. They did that for their population in that particular area

based upon whatever standards that they were going to employ for

that local community.

The same thing could be said for each of our plans, meaning

whatever local community needs that they have relative to the

standards that they have felt were appropriate for that market.

Relative to the Federal Employee Benefits Program and specifically the Blue Cross Blue Shield service benefit plan, what we are

engaged in is taking those individual plans, customized approaches

and working with the agency to develop something that is consistent nationwide.

Mr. PORTER. So how many participants do you have nationwide

currently?

Mr. GAMMARINO. We have 38 Blue Cross Blue Shield plans that

participate.

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Mr. PORTER. So how many of your customers would currently be

able to use an HIT system?

Mr. GAMMARINO. Well, none of them are available to use the HIT

system right now of the local plan. What they do, Mr. Chairman,

is that we have a separate system that we have for this particular

line of business because it is so large and it demands, really,

customization relative to what is required to meet the needs of this

customer, which is actually not just nationwide but it is worldwide.

Mr. PORTER. Again, this is why I appreciate the insurance speak.

Let me ask it a different way. Blue Cross transferred how many

files after Katrina?

Mr. GAMMARINO. If you are talking about the Texas Blue Cross

Blue Shield, I think it was something in the order of over 700,000.

Mr. PORTER. So we know at least 700,000. Would we assume that

is all that Blue Cross has in its system, is 700,000 participants?

Mr. GAMMARINO. Well, it is—in that particular area, that is what

they decided to do. Nationwide, Blue Cross Blue Shield enrolls over

90 million Americans.

Mr. PORTER. How many of those will have something similar to

the Texas participants?

Mr. GAMMARINO. I wouldn’t know, Mr. Chairman. Each plan has

their own approach to dealing with this. Some of them are probably

further along than others. That is why, historically, what we have

done as we roll out a program of this magnitude for this population

is we work with the agency to put together a consistent uniform

application for them. Otherwise, Mr. Chairman, they may be picking up the cost of each individual plan’s initiative; and that is

something that, at least particularly for efficiency reasons, we

would want to do it in one time.

Mr. PORTER. OK. Let me ask it a different way. How many participants; 90 million in the Blue Cross and Blue Shield family are

customers?

Mr. GAMMARINO. That’s correct.

Mr. PORTER. Would you guess in a percentage that have this information available to them?

Mr. GAMMARINO. No. I would not want to guess. The definition

of information probably reflects what they’re doing for each particular plan. For example, the example you mentioned was put together for one isolated potential event, and as we know, they didn’t

really have to access that because the subsequent event didn’t really occur at the level that they thought they needed to. So this is

what—in the Texas Blue Cross and Blue Shield plan was dealing

with an emergency situation. It wasn’t fully integrated, for example, in the plan’s local infrastructure.

Mr. PORTER. I would think that it would be good business practice for an association to know how many are participating, especially before you object. It’s obvious that you don’t know, or you

would have answered my question; but I wonder how you can object when you don’t know this information. I’m confused.

Mr. GAMMARINO. In objecting to the legislation?

Mr. PORTER. Yes.

Mr. GAMMARINO. Well, Congressman Porter, as I think I’ve said

it in my statement, the objection is to a mandate relative to this

program versus an endorsement of the approach in allowing us to

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work with OPM, the agency, to develop and implement something

that we think is useful and effective for this enrolled population.

It hasn’t shown to be beneficial, for example, for us to independently use each plan’s local system because they’re meeting the

needs based upon what they have locally. And it may or may not

be consistent with what would be applicable, Mr. Chairman, for a

program of this size and the scope relative to it being nationwide.

Mr. PORTER. You talk about communities and different markets

and the needs of those communities. Do you feel that if the need

of the Texas community was fulfilled, that was a mandate?

Mr. GAMMARINO. No, as a matter of fact, it was just the opposite

of a mandate, Mr. Chairman. They’ve actually took a specific instance and, based upon what they felt was appropriate, developed

records that they felt would be appropriate at that time for their

particular population.

Mr. PORTER. Do you think, then, that the civilian population

should have different tools available to them than Federal employees?

Mr. GAMMARINO. No. No. I think, as a matter of fact, I would endorse the approach the Texas plan took relative to this FEHBP, allowing the carriers to develop records that they think are meaningful for their membership under the oversight of this body and the

specific direction of the agency.

Mr. PORTER. The Federal program is really a huge associated

health plan, I guess if we put it in perspective. Whether if you’re

in Nevada or California, you’re still a Federal employee. So what

you’re saying is that if Nevada—one of the Blues in Nevada chooses not to do this, and California does, a Federal employee in Nevada may not have the same tools available to them to check their

own records as someone living in California; is that what you’re

saying?

Mr. GAMMARINO. Well, right now it might be true.

Mr. PORTER. Are you suggesting it should stay that way?

Mr. GAMMARINO. No. As a matter of fact, I’m suggesting just the

opposite, that working with the agency with your oversight, that

we develop appropriate health records for this particular program

to meet the nationwide and actually the worldwide needs of the

Federal enrollees and retirees.

Mr. PORTER. Thank you. I appreciate it.

Mr. Davis.

Mr. DAVIS OF ILLINOIS. Thank you, Mr. Chairman.

Dr. Georgiou, Mr. Gammarino and Mr. Witkowski, interoperability seems to be critical if electronic health records are to be useful and work as intended. How would you ensure that the electronic records you create would be interoperable?

Mr. WITKOWSKI. Thank you, sir. What we’re doing is we’re starting the initiative in the Kansas City area with a group of employers, and we hope that some of the initiatives that take place may

end up being a model, or it may not, but if it does not become a

model on a national level, then what we’ve got to do is wait and

see what standards do get developed and move in that direction.

So our position right now is going to be wait and see what sort

of standards are there and then start complying with what gets put

in place.

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Dr. GEORGIOU. Yes. United Health Group certainly supports the

development and application of standards as well. We also think

that it’s important to remain flexible as we learn about how to effectively produce personal health records, that we remain flexible

in the design so that we can continue to meet marketplace and,

most importantly, consumer needs to make these effective in improving health care quality and decreasing cost.

Mr. GAMMARINO. Congressman Davis, this is a big challenge,

interoperability, and that’s one of the reasons why we think the

standards are so important before we go forward.

A number of our Blue plans are gaining experience in some areas

of the country, like Arkansas, for example. They actually are employing interoperability between both the providers and the health

plans, in some cases the members themselves. So we are learning.

It’s one reason why I value Congressman Davis, I think, your question about piloting. I really think that we have a lot to learn before

we employ significant resources on this to make sure we do it right.

Mr. DAVIS OF ILLINOIS. Thank you very much.

And let me ask Mr. Fallis, Ms. Kelley and Ms. Simon, what is

your response to the question of developing a pilot perhaps as a

way to really move into the implementation of this activity?

Ms. KELLEY. NTU would support a pilot. I think no matter what

the issue is, there are always things to be learned. I think it’s clear

from the work that has been done by the subcommittee and the

changes that Chairman Porter has already agreed to make that

we’ve learned things just from the beginning of this conversation.

So when you actually put this in place, I’m sure there are many

things to learn that would help avoid problems, many of which we

have identified that we have concerns about, whether it’s in the

privacy arena or enforcement or all those areas. So NTU would be

pleased to work with the subcommittee on a pilot.

Mr. PORTER. Ms. Simon.

Ms. SIMON. Yes, thank you. We recommend a pilot in our testimony. The last hearing when the Christiana medical system in

Delaware was cited as an example of success, we thought immediately that it was quite unrepresentative of many of the large

plans in FEHBP. You’ve got a small, relatively homogeneous community covered by one plan. In fact, for example, in Blue Cross and

Blue Shield, there are hundreds of thousands of providers.

And just anecdotally, we’ve heard from small providers whose response to the idea of one more administrative responsibility under

FEHBP would be to drop any coverage, any insurers that required

that additional reporting requirement.

And we’ve been very, very concerned that participation in this

plan on the part of the consumer be entirely voluntary, and that

participation be able to be withdrawn at any time at will on the

part of the participant.

Mr. PORTER. Mr. Fallis.

Mr. FALLIS. NARFEA would support a pilot program. I think inherent in all this is the necessity that we have a means to educate

people about the electronic system and the fact that it can be kept

private. You know, privacy is a very, very critical issue, as I mentioned earlier, with our people. We have an organization whose average age is 74. And I was at a meeting fairly recently in Florida,

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and this business of HIT was mentioned, electronic records. And of

course they think it’s on the Internet and would be available to everybody, and quite frankly, they raised the roof, no, no, no, no, we

don’t want that.

So there is a barrier and a hurdle that has to be crossed with

members in my organization, and that’s to assure them that privacy would really be there. And that’s the main issue, as far as I’m

concerned.

Mr. DAVIS OF ILLINOIS. Thank you very much, Mr. Chairman.

Mr. PORTER. Thank you, Mr. Davis.

I’d like to once again address—before we go to another question—the purpose of this legislation.

Close to 100,000 people a year are dying. I support test projects,

I support pilot projects, but the reason this legislation came forward is one of the downsides of Federal Government is we study

things to death, and I say that 90,000 to 100,000 people a year are

dying, 700,000 people are being hurt every year. And to help Blue

Cross, there is 10 or 11 million of your participants in Illinois,

Texas, Oklahoma, Mexico right now in the health information technology system today.

The reason I brought this forward—and I appreciate the caution,

and I’m with you, and we’re trying to make sure we cover all these

problem areas, whether it be in the financial institutions. It’s not

perfect, but all this information is out there today, but the participant can’t get it. I can’t get my own information, and I don’t think

that’s right.

So I appreciate the pilots. And I know we have to move forward,

but if we study this for another 5 years, a half million people are

going to die. How many of those are participants in the Federal

system? There are so many tests happening out there, we’re testing

this to death. My goal was to look at the best—and you guys in the

insurance industry in this room are the best in the country, if not

in the world. You have the best accountants, you have the best

technology, you have the best resources. You’re able to make it

work, if anybody can make it work, because you’re already doing

it. And the purpose of this legislation is if we study this for another

5 years—there’s going to be another 100 million in the system, but

our Federal employees aren’t going to benefit from it, and I don’t

think that’s right. I think our Federal employees deserve the best.

And currently the civilian force out there, the private sector, has

this available to them.

So again, I appreciate the concerns, and I struggle with, of

course, trying to get answers to questions. That frustrates me. But

there is 40, 50 million people today in America that are in this system. Why can’t we make this work by following all the proper tests

and balances with HHS and with OPM? And we have some of the

best minds in the world, and certainly there is room for improvement, and, as you know, I’m open for suggestions. But my goal is

to save a life. 500,000 Federal employees now in the Blue system

in those States I mentioned are going to have this. Why can’t folks

in Nevada or Virginia have it?

So my frustration is I want to save some lives. And insurance

carriers that we’re working with are not insolvent, and this is not

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going to be a problem for them financially. It should not be carried

on to our participants because it’s already being done.

So again, thank you. And to my Congresswoman that represents

me in my home here, Ms. Holmes, thank you for being here. And

do you have any questions?

Ms. NORTON. Thank you very much, Mr. Chairman. And I really

do the best I can for you while you’re in Washington.

I’m trying to get us both on the same page here. And I don’t

know, I think I hear from the carriers and the representatives of

the employees a way to do that.

First of all, Mr. Chairman, I think what you just said in your

most recent remarks is why the majority of the American people,

and I think Members of Congress, yes, and Federal employees

would be interested in the bill; that if we can, by providing a little

information, save people’s lives and improve their health care, and

they’re already in some kind of IT system, how come we can’t

somehow use it? It’s pretty hard to say anything but amen to that.

And as with all hard problems, it gets down to the nuts and bolts

that you really get to the questions we have to ask, and that’s what

I want to raise here today.

I have really two concerns. These were raised previously when

we have had hearings on this bill. One, of course, were the upfront

costs. If you say to anybody—and we’re talking about Federal employees—and there is one dime to be added to—costs keep going up

or anything, except what you tell me is for health care costs, you

will get the book, eggs and anything else they can find thrown at.

And this whole notion about the reserves and pharmaceuticals and

some nonprofits, very bothersome. We’re talking about 3.1 million

retirees and Federal employees, and frankly, that’s what makes

this idea a good one. This is your, you know, optimal control group,

the Federal employees. And if somebody has to go first, why not

a group like this, where we have more control than we would have

in the ordinary population?

But if we have learned anything about IT, it is that the jerrybuilt systems will kill you. So you think you’re being killed because

somebody can’t get your records? One of the things you don’t want

to do is let loose a weapon like IT that you’re not absolutely sure

of.

Now, Mr. Chairman, I think I heard—and I would like everybody

to correct me if I’m wrong, if anyone disagrees with this—does anybody on the panel believe that the best way available for us to proceed is through some form of pilot program where we would—whatever group we may all perhaps in a hearing like this choose as the

appropriate group, but would take some of these 3.1 million as opposed to all of them to begin to implement this in phases? Is there

anyone who disagrees that a pilot program would be the most responsible way to begin? I just want to establish that for the record.

Let me tell you why I raise it. How short are our memories? Who

remembers the prescription drugs fiasco, where the program literally fell apart on the first day? Why? Because it really had many

component parts, and because IT was central to making it work.

That would otherwise be known as an unintended consequence. It

was not perceived in advance. In my judgment it could have been

avoided if we had phased in seniors, saying everybody will be in

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by X date. But we threw them all in there, and a terrible price was

paid. Half the States of the United States, including the District

of Columbia, ended up rescuing the Federal program.

So you will find me believing in very large part because I ran an

agency—when I came to the agency it was very troubled, and what

you really wanted to do, since I thought I knew what to do, was

to take the whole agency and begin. And I started with 3 of the

offices, and there must have been 15 in the country, and tested it

out. So I really don’t believe in the infallibility of government bureaucrats. I think we are like everyone else and should try everything out.

I am totally confused, Mr. Chairman, because in your case-bycase analysis you say—and I want to from the carriers particularly—certainly from the employee representatives—what is going

to be made available is what is available, like carrier information

is available now, and so no one knows from carrier information, for

example, what the blood test is for, what the results were. That’s

still private information. But when I looked at this analysis—Mr.

Chairman, this is in your memo to us—under carrier-based electronic health record, then I get lost, because it says that each carrier-based electronic health record must contain the carrier’s health

information for the particular FEHBP member enrolled to the extent that the information is necessary.

Now, then, it—and this is the part that I don’t understand, and

maybe the panel can help me understand. The primary purpose of

section B is to, ‘‘convert claims data into a format that is useful for

diagnosis and treatment,’’ like a patient summary. But I thought

the claims information was not like individual information that we

would make available to your doctor, for example. See, that’s who

we want to save lives with; we want your doctor and all your doctors to have it. But we begin with the carrier information. But in

this hand—help me out, please—useful for diagnosis and treatment. But I thought it couldn’t be used for diagnosis and treatment, and that’s why it’s all right we can make it available because

it’s only claims data.

Would somebody—this just may be me, but I’m confused by this

analysis of what the bill will do and what we are told that the

claims information stops it doing.

Mr. PORTER. If you would yield for just a moment. I know you

have a flight to catch, so if you need to go——

Mr. WITKOWSKI. I don’t think I’m going to make it, sir.

Mr. PORTER. If you decide to stay——

Ms. NORTON. Are you opting out?

Mr. PORTER. He’s opting in.

Dr. GEORGIOU. If I could offer maybe some clarity in an answer

to your question. Carrier-based health information includes the

claim submissions from all of the providers, hospitals, facilities,

physicians that care for an individual patient. Each of the claims

that are submitted, however, is a single event in time, and so I believe—correct me if I’m wrong, Chairman Porter, but I believe that

what you would like to suggest in the bill is that all of those separate events that exist for an individual be consolidated in a way

that provides a holistic picture of the individual and the conditions

that are part of their history.

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I don’t think that any claim-based personal electronic health

record should be used to practice medicine or make a diagnosis, but

it could assist and support the practice of medicine and prevent errors, accelerate diagnoses and improve the quality of care.

Ms. NORTON. Do you think that the claims-based information

should go first? That would be what nobody could opt in or out of,

right, because we already provide that kind of information?

Dr. GEORGIOU. That information is currently available, I would

expect, in all of the data bases that exist.

Ms. NORRIS. But do you really think that one could construct

from that claims information a, ‘‘patient clinical summary?’’ And if

so, why is it mandatory, why is that an invasion of privacy?

Dr. GEORGIOU. I absolutely believe that can be constructed. We

actually have already constructed that for over 15 million members, and it’s available today.

Ms. NORRIS. So you have already opted in because whoever has

your claims information already can do a patient clinical summary

from it. So what’s the difference between opting in and opting out

if it’s mandatory, and if, in fact, the primary purpose is to use this

claims data in a format useful for diagnosis and treatment, like a

patient clinical summary, then why haven’t you essentially opted

in, because whoever has this information can, in fact, reconstruct,

as it were, a clinical—a patient clinical summary?

Dr. GEORGIOU. I’m not sure I completely understand your question, but let me make a few points. No. 1 is that United Health

Group would support an opt-out provision to this in this bill.

Ms. NORRIS. For the carrier——

Dr. GEORGIOU. For the carriers, yes.

And No. 2 is that an individual always has the personal choice

to access it or not access that information through the portal. Did

that answer your question?

Ms. NORRIS. Well, yeah, it’s opting out and not opting in, of

course. Yes—no, it does—what I am saying is that this says you

can, in fact, use this information to, in fact, get the information I

thought was not available through the claims data because you can

use this information like a patient clinical summary. And the last

time I looked, when you said patient clinical summary, it means

that somehow you can find this private information about what, in

fact, transpired. On the surface it may look like I took a blood test,

but if it says that it will be used for—useful for diagnosis and

treatment like a patient clinical summary, it must mean that somebody did, in fact, reconstruct what the uses are. And I just don’t

understand—I still don’t understand if that’s the case, what the

difference is here between the carrier-based electronic information

is and what the so-called individual information is where you have

to somehow say whether you want that information released. So I

am—no, you have not answered that, except by saying you could

opt out of it.

Could I just ask this? You know, here we are—this opting in, opting out, and whether or not people understand what they can do

and what it really means, and what can be constructed or reconstructed from the carrier information, all of these nuts-and-bolts

questions I’m getting into, I think, Mr. Chairman, could be easily

cleared up by just taking a portion of the work force that voluntary

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agrees—perhaps even given some incentives, I don’t know what

they would be—but perhaps voluntarily agrees to test this out so

that some of these questions simply answer themselves. Because

we have real-time, real-life people, we see where the mistakes are

made, but on such a level—with such a group sufficiently small

that we don’t do harm to as many as 3 million employees just

through the carrier-based data alone, for example.

So I don’t know see yet the answers to the questions I’ve raised,

others have raised, and what looks to be the consensus of employees and carriers alike is not try to focus in on a target group to

test this new and very wonderful idea, but not to subject every

Federal employee at one time to it, prescription-drug style that is

so recently in our minds. Thank you, Mr. Chairman.

Mr. PORTER. Thank you very much. I have another 20 or 30

questions to ask, but let me say thank you very, very much for

your time. And many of you have spent literally hours on this

project, and I appreciate that.

This program—and possibly I’m not always making myself as

clear as I would like. I would just like 8 or 9 million Federal employees to have available to them what 15 million have currently

at United HealthCare, or the 10 or 20 million—maybe it’s 50 at

Blue Cross and Blue Shield, I’m not sure, a million and a half. I

would like Federal employees to have those same benefits.

And I agree with my colleagues and every one of you that privacy

is critical. I believe that keeping the premiums where they are, if

not less, is a priority. But I think I said it probably earlier that our

Federal employees deserve what the private sector can have and

our retirees deserve, and that I would hope that this voluntary program that I’m proposing could move forward and change health

care for millions of Federal employees and health care across the

country. And I appreciate all of you, GEHA, United HealthCare, for

expressing support and willingness to work and move forward.

You know, of course, I pick on you, Mr. Gammarino. It’s difficult

for me to hear no on our first meeting and still hear no today even

before you read the legislation. So I see other health carriers stepping up to the plate because they think they want the business because it’s profitable business, but we still have some time, and I’m

still open for ideas as we fine-tune this.

And to our employees, Ms. Simon, I understand the concern of

families. I mean, they don’t want to be a test, they want the best,

and they don’t want to pay more. I understand that. I certainly understand—I understand the employees more than I understand the

insurance industry’s objections, but we’re going to try to do everything we can to address those concerns, and I appreciate your comments.

So I want to thank you all. This is very historic, and I think that

collectively we can do some great things. And to my committee, I

know that they’ve had other meetings to go to but it’s been a very

thoughtful process, and I appreciate all of you being here and being

here late in the evening.

So the meeting is adjourned. So thank you very much.

[Whereupon, at 6:01 p.m., the subcommittee was adjourned.]

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