GroupHealth Group Health Cooperative
Public Policy / Government Relations
GHQ-E4N
Group Health Headquarters

320 Westlake Avenue N, Suite 100
Seattle, WA 98109

www.ghc.org

August 12, 2010

Department of Health and Human Services
Attention: OCIIO-9991-IFC

P.O. Box 8016

Baltimore, MD 21244-1850

Re: Grandfathered Health Plan Status Interim Final Rule
File Code OCIIO-9991-IFC

Submitted via eRulemaking Portal: www.regulations.gov
Dear Sir or Madam:

Group Health Cooperative (“Group Health”) appreciates the opportunity to
provide comments on the Interim Final Rules on Grandfathered Health Plans
under the Patient Protection and Affordable Care Act. We agree with many of
the comments offered by both Alliance of Community Health Plans (ACHP) and
America’s Health Insurance Plans (AHIP) on grandfathering, and will not repeat
those comments here. We wish to provide additional comment on several
aspects of the proposed rule that particularly affect organized, integrated group
practice plans; in particular, the impact of plan network changes and prescription
drug formulary changes on grandfathered status. Reasonable modifications in
both these areas should be allowed to assure organizations can deliver quality
and value to consumers while allowing them to keep the health plans they
currently have.

Group Health is one of America’s oldest and largest non profit health care
systems. Founded in Seattle in 1947, the organization is governed by
consumers. It is a leader in integrated care, and an important voice for health
care reform. We provide coverage and care to more than 628,000 residents in
Washington State and Northern Idaho through two owned and operated primary
and specialty health centers as well as over than 9,000 contracted community
providers.

1. Changes in Provider Network that Would Cause a Group or Individual
Health Plan to Cease to be a Grandfathered Health Plan

Assuring that our members are served by physicians, hospitals and other
providers that consistently deliver high quality, coordinated and cost effective


care is central to our mission. Flexibility surrounding the routine maintenance of
a provider network plays a key role in assuring we can deliver on that mission.
We work diligently to assure we have strong and ongoing community
partnerships. High quality caregiver retention is a priority within our owned and
operated delivery system, because this helps assure continuous healing
relationships.

Quality provider networks, however, are not static nor should they be.
Expansions of networks, along with other provider changes, are often made to
health plan networks as a method of not only improving quality of the health plan,
but promoting patient safety as well. At Group Health, we selectively contract
with community providers that align with our integrated and team based
approach to care delivery. We occasionally discover a lack of “fit”, or an inability
to meet Group Health quality standards. We also must retain the ability to shape
our network based on overall value to our members. Providers also retire, move,
or otherwise voluntarily leave our network. A grandfathering rule that would
“lock” us in to an overly rigid and unchanging network configuration would mean
we could not meet the dual promises of reform; enabling members to keep what
they have, and to experience ongoing high quality and value.

Furthermore, in Washington, as in many other states, health plans must comply
with network adequacy requirements contained in state laws and regulations.
Such requirements function as consumer protections to ensure health plan
members have an adequate network of providers to choose from under their
health plan. Logically, any changes made to provider networks in furtherance of
compliance with such state requirements should not have an impact on the plan’s
grandfathered status. In addition, state requirements such as these do not allow
for significant changes to a health plan’s provider network. Therefore, any
changes made to a provider network for health plans within states that have
network adequacy requirements should not have an affect on the plan's
grandfathered status.

While we support the overarching goals and objectives of grandfathered health
plan status, we have concerns about the final rules being too restrictive in
allowance of changes to provider networks. Group Health strongly supports the
continued changes in provider networks that health plans routinely make in
conformance with state and federal requirements or for the other important
reasons discussed above without interference to grandfathered status.

2. Changes to a Prescription Drug Formulary that Would Cause a Group or
Individual Health Plan to Cease to be a Grandfathered Health Plan

The American Society of Health-System Pharmacists defines a “Drug Formulary”
as “a continually updated list of medications and related information, representing
the clinical judgment of physicians, pharmacists, and other experts in the

diagnosis and/or treatment of disease and promotion of health.” This definition is


commonly used throughout the medical industry, as a key component of a quality
prescription drug formulary is its flexibility to change over time.

As an integrated delivery system, Group Health has extensive experience
designing, delivering and financing pharmacy benefit plans. We believe that an
evidence-based formulary, providing an optimal mix of available medications is
essential to offering affordable, quality prescription drugs to our members. In
order to achieve affordable choices and provide quality prescription drugs in our
formulary, it is necessary to make routine changes to the formulary, in-line with
current medical research and development.

It is imperative for grandfathered health plans to be allowed to make routine
formulary changes without inadvertently triggering the loss of grandfathered plan
status. Formulary changes are essential to the maintenance of any health plan
as new prescription drugs become available, and other prescription drugs
become obsolete for patient safety concerns. Furthermore, advances in medical
knowledge and research result in changes to prescription drug formularies of
health plans. The availability of generic versions of current formulary brand
name products, as well as newly available generics of drugs in the same
therapeutic class as formulary brand name products, also result in change made
to the formulary. For example, when the generic anti-seizure medication
lamotrigine was introduced, the cost savings for Group Health was approximately
$3.2 million a year. In addition, when the brand osteoporosis medication
alendronate-D converted to a generic, cost savings totaled $1 million. Without
the flexibility to alter prescription drug formularies and not impact to a plan’s
grandfathered status, such cost savings would not be available. The
maintenance of prescription drug formularies is essential to the benefit of
consumers, as it not only promotes the offering of cutting edge treatments for
certain illnesses, but also offers the consumer cost-saving alternatives as generic
versions are released into the market.

For the reasons above, the Status as a Grandfathered Health Plan final
regulations should provide for significant latitude in adjustment to current health
plan prescription drug formularies, while retaining the health plan's current
grandfathered status.

We appreciate the opportunity to provide these comments for your consideration,
and your willingness to consider these comments as you develop the objectives
and measures for determining grandfathered status.

Sincerely,

M

Medan Grover
Director, Regulatory Affairs
Group Health Cooperative