[House Hearing, 109 Congress]
[From the U.S. Government Publishing Office]




 
     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


                                 ______

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                     COMMITTEE ON GOVERNMENT REFORM

                     TOM DAVIS, Virginia, Chairman
CHRISTOPHER SHAYS, Connecticut       HENRY A. WAXMAN, California
DAN BURTON, Indiana                  TOM LANTOS, California
ILEANA ROS-LEHTINEN, Florida         MAJOR R. OWENS, New York
JOHN M. McHUGH, New York             EDOLPHUS TOWNS, New York
JOHN L. MICA, Florida                PAUL E. KANJORSKI, Pennsylvania
GIL GUTKNECHT, Minnesota             CAROLYN B. MALONEY, New York
MARK E. SOUDER, Indiana              ELIJAH E. CUMMINGS, Maryland
STEVEN C. LaTOURETTE, Ohio           DENNIS J. KUCINICH, Ohio
TODD RUSSELL PLATTS, Pennsylvania    DANNY K. DAVIS, Illinois
CHRIS CANNON, Utah                   WM. LACY CLAY, Missouri
JOHN J. DUNCAN, Jr., Tennessee       DIANE E. WATSON, California
CANDICE S. MILLER, Michigan          STEPHEN F. LYNCH, Massachusetts
MICHAEL R. TURNER, Ohio              CHRIS VAN HOLLEN, Maryland
DARRELL E. ISSA, California          LINDA T. SANCHEZ, California
JON C. PORTER, Nevada                C.A. DUTCH RUPPERSBERGER, Maryland
KENNY MARCHANT, Texas                BRIAN HIGGINS, New York
LYNN A. WESTMORELAND, Georgia        ELEANOR HOLMES NORTON, District of 
PATRICK T. McHENRY, North Carolina       Columbia
CHARLES W. DENT, Pennsylvania                    ------
VIRGINIA FOXX, North Carolina        BERNARD SANDERS, Vermont 
JEAN SCHMIDT, Ohio                       (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                DANNY K. DAVIS, Illinois
TOM DAVIS, Virginia                  MAJOR R. OWENS, New York
DARRELL E. ISSA, California          ELEANOR HOLMES NORTON, District of 
KENNY MARCHANT, Texas                    Columbia
PATRICK T. McHENRY, North Carolina   ELIJAH E. CUMMINGS, Maryland
JEAN SCHMIDT, Ohio                   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


                            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


     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 quality 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 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 electronic-
based 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 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.
    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 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.
    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.
    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 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.
    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.
    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 understand 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 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?
    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.
    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.
    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.
    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.
    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 full-time 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.
    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 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.
    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.
    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, 4\1/2\ 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 
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.
    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 Mid-America 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 interaction 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 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.
    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 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.
    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, 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 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 
jerry-built 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 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-
by-case 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.
    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 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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