President Obama has canceled a planned address at the National Association of Insurance Commissioners' annual meeting in Seattle, an NAIC official tells The Hill.

The White House had announced Thursday that Obama would address the group on Tuesday and discuss the implementation of the healthcare reform law. The state insurance commissioners' group is playing a key role in that regard as it helps define key insurance regulations.

The reason for the cancellation is unclear at this point.

Update: The NAIC at 2:49 p.m. released a press statement saying Obama cancelled his appearance because of a scheduling change.

BP has agreed to pay a $50.6 million federal fine for ongoing worker-safety violations at the site of a 2005 explosion at its Texas City, Texas, refinery that killed 15 workers, The New York Times reports.

The penalty from the Occupational Safety and Health Administration reflects BP's failure to correct problems at the plant since the explosion. BP paid a $21 million fine in 2005 and agreed to a number of improvements. In the settlement announced Thursday, BP accepted 270 citations for failing to fix problems it had promised to address, the Times reports.

Under the new settlement, BP must also take immediate steps to protect workers at the refinery and spend at least $500 million on safety efforts there.

Consumer groups this week are asking the White House to take a closer look at the pay policies of private insurance companies, which in recent months have cut medical spending even as premiums have skyrocketed.

"In recent quarterly financial reports, all of the seven largest for-profit health insurers have reported healthy profits and reductions in the proportion of premium dollars spent on medical care," Consumer Watchdog and the Center for Media and Democracy wrote Wednesday to Health and Human Services (HHS) Secretary Kathleen Sebelius.

The companies, the groups say, "appear to be cutting the proportion of premium dollars spent on medical care … in advance of regulations intended to make them spend a higher proportion on care, and less on administrative bloat."

The behavior, the groups added, "looks suspiciously like that of credit card companies, which spiked annual interest rates in advance of consumer protection laws intended to restrict the conditions under which rates could go up."

The Democrats' new health reform law includes a provision forcing private insurers to spend between 80 and 85 percent of premium payments directly on medical care (in lieu of advertising, salaries, dividends and other corporate costs). The figure is known as the medical loss ratio (MLR) — "a telling description," the groups write, "of how providing healthcare is regarded by Wall Street."

Indeed, private insurers are fighting tooth and nail to have HHS broaden what expenses qualify as medical services for the purpose of determining MLRs. Insurers, for instance, are lobbying to have all state and federal taxes deducted from premium revenue — a trend leading top Democrats this week to clarify that only "federal taxes and fees that relate specifically to revenue derived from [healthcare reform]" should qualify as deductible.

Consumer Watchdog and the Center for Media and Democracy are urging HHS to tighten its definition of MLR to ensure that only true medical services are included in the calculation.

House GOP Reps. Jeff Flake, Trent Franks and John Shadegg joined as plaintiffs Thursday in an Arizona lawsuit that aims to overturn portions of March's healthcare overhaul.

Filed in U.S. District Court in Phoenix, the suit is the latest in a series of similar challenges brought by conservative organizations and attorneys general in approximately 20 states.

At least 40 states have also put forward legislation to limit or block the implementation of the program, and some — Arizona among them — are expected to see ballot measures challenging its requirement that everyone have health insurance. Seventy-one percent of Missouri voters backed such a measure on Aug. 3. 

The Arizona suit was filed by the state's conservative Goldwater Institute, and takes issue with the creation of the Independent Payment Advisory Board and proposed handling of patients' medical records. 

"The Democratic healthcare law infringes on our constitutional protections,” Flake said in a statement Thursday. "The Goldwater Institute’s lawsuit will reinstate some of the personal freedoms and privacy we’re guaranteed under the Constitution."

Arizona Democrats have begun to criticize the challenge. 

State Rep. Kyrsten Sinema (D), a member of President Obama's task force on healthcare, says it's an unnecessary move.

"It's quite stupid. If Congress wants to review it [the Independent Payment Advisory Board], all they have to do is pass an amendment. It's that simple," she said.

Other observers note that while the suit illustrates conservative frustration with the federal government, the courts rarely strike down advisory boards created by Congress. 

"It's important to note that Congress does this all the time — sets up individual bodies," says James Hodge, a health policy expert at Arizona State University.

"There are very few examples historically in which courts have ever struck down Congress's ability to set conditions for the receipt of federal funds," he added. 

MEDICAL LOSS RATIO: Despite a recent letter from Democratic lawmakers outlining congressional intent, the National Association of Insurance Commissioners says state regulators have yet to decide how they'll define which taxes healthcare plans will be able to subtract from premiums when calculating their medical loss ratios.

"It's something we will look at — basically we see this as a comment from the Hill as to what they see as the intent of that, but we will have to work through that," Brian Webb, manager of health policy and legislation for the NAIC, told reporters Thursday evening. NAIC is also "interested in what [the Department of Health and Human Services's] read of the legislation is," Webb added. The final word, though, "will be a decision of the commissioners."

Read earlier story with link to letter: http://bit.ly/cwlHJB

Phase-in? UBS Investment Research analysts think it's "highly probable" a phased-in medical loss ratio — perhaps starting at 65 percent in 2011 — will end up being allowed in the individual market to avoid market disruptions. Health Insurance and Managed Care Committee Chair Sandy Praeger tells reporters NAIC has had internal discussions about a phase-in but no communication with HHS so far.

FOOD SAFETY: Bipartisan group of six unveils compromise manager's package in the Senate. Read the substitute: http://bit.ly/bwdpXP

CBO weighs in: http://bit.ly/cSxLUW

An amendment by Sen. Jon Tester (D-Mont.) exempting small farmers with adjusted gross income under $500,000 a year was left out, but Tester vows to press on.

Tester spokesman Aaron Murphy's statement: "Sen. Tester is continuing to work with members of the Committee to make sure small-scale, local producers are not burdened by expensive new regulations aimed at large-scale corporate producers. He is optimistic about reaching an agreement on his amendment when the bill reaches the floor."


NEW LAWSUIT: Rep. Jeff Flake (R-Ariz.) joins Goldwater Institute lawsuit challenging healthcare reform's Independent Payment Advisory Board, which recommends payment adjustments in the Medicare program.

Read the press release: http://bit.ly/baXf82


HEALTHCARE REFORM COST CONTROLS: Three new briefs funded by the Robert Wood Johnson Foundation look at how healthcare reform will affect healthcare costs.

Cost-containment provisions could help slow rising costs, improve quality: http://bit.ly/d5cadF

Interstate insurance sales provision provides greater consumer protections than past proposals: http://bit.ly/duJMza

Malpractice reform could significantly cut healthcare costs: http://bit.ly/cANe9S

A provision banning the toxic chemical Bisphenol A (BPA) was left out of a bipartisan food safety compromise unveiled Thursday by the Senate health panel.

Sen. Dianne Feinstein (D-Calif.), the provision's champion, said she would offer an amendment banning BPA from baby bottles, sippy cups, baby food and infant formula when the food safety bill comes to the Senate floor.

"I believe that we need legislation to protect consumers, especially babies and toddlers, from harmful chemicals," Feinstein said. "Because of their smaller size and stage of development, babies and children are particularly at risk from the harmful health effects of BPA."

The food safety bill would give the Food and Drug Administration the power to recall tainted food, quarantine geographical areas and access food producers’ records. 

The House passed its version of food safety legislation in July 2009.

State regulators who for weeks had been seeking clarification on the healthcare reform law's medical loss ratio got some needed input this week.

Health insurers had assumed that the healthcare reform law allowed them to write off most federal taxes when calculating how much they have to spend on care for their customers. But in a letter sent Tuesday to the Secretary of Health and Human Services (HHS), the Democratic chairmen of the five panels of jurisdiction over healthcare reform and the Senate Banking Committee argued that only "federal taxes and fees that relate specifically to revenue derived from the provisions" of the healthcare reform law should be excluded.

Rep. Mike Castle (R-Del.) this week defended his recent vote to provide billions of dollars to state Medicaid programs, arguing that the money is needed to protect vulnerable Americans amid tough economic times.

"In normal circumstances, individual states have the primary responsibility of maintaining a budget to meet the challenging economic times, and I don't believe that the federal government should be in the habit of closing these gaps," Castle said in an e-mail. 

"However, I supported this aid package to states at a time of economic hardship in order to preserve vital medical services to the neediest of Americans and prevent layoffs within our education community."

Castle — who's vying to fill the Senate seat vacated by Vice President Joe Biden (D) — was one of just two Republicans to support the Democrats' $26.1 billion state-aid package, which included $16.1 billion for Medicaid and an additional $10 billion for state education programs. 

The House passed the bill in a special session Tuesday, and President Obama signed it into law later in the day. 

Castle's vote drew criticisms from his primary opponent, GOP activist Christine O'Donnell, that the nine-term congressman caved to "special interest groups living high on the hog on the taxpayers' dime."

"Previous stimulus bills have failed," O'Donnell wrote in a fundraising e-mail blast, "yet career politicians like Castle don't seem to grasp that we can't spend our way to recovery."

Castle pointed out that the entire cost of the spending package was offset by tweaking the budget elsewhere.

A new study funded by the drug industry suggests congressional budget scorekeepers "significantly overstated" the savings from a proposed ban on "reverse payment" patent dispute settlements.

The preliminary economic analysis of the so-called "pay-for-delay" legislation limiting generic drugmakers' ability to accept money to settle patent disputes criticizes the CBO's methodology as well as a previous study by the Federal Trade Commission. In particular, the new study says both the CBO and the FTC were wrong to assume that banning reverse payments would speed up generic entry into the marketplace by 17 months.

"Under many circumstances, reverse payment patent settlements between branded and generic manufacturers can benefit competition and consumers," the study says, "particularly by averting continued litigation that may well delay generic entry substantially." Read more...