Monday, February 19, 2018

Happy Presidents' Day

Congress is out of town this week. Here's a link to the Week in Congress's report on last week actions on Capitol Hill.

Following up on a couple of last week's posts, the FEHBlog noticed an op-ed today in which the author complained that he had to bring a lawsuit against his insurer in order to correct a prior authorization decision. This isn't the case. Patient Advocate explains that ACA marketplace plan members can appeal prior authorization decisions and obtain an independent review organization decision that is binding on the insurer. Why don't people understand this when insurers are obligated to place members on notice of appeal rights. The fixable problem as the FEHBlog see it is that while member of employer sponsored plans, including the FEHBP where OPM acts as the independent reviewer, must exhaust their administrative remedies unless the insurer screws up procedurally, ACA marketplace members can choose between a lawsuit and independent review. Litigators are likely to choose the lawsuit route for their clients. Congress should align the individual marketplace with the employer sponsored plan marketplace as far as it concerns exhaustion of an available administrative remedy. That would lower costs for everyone.

The Wall Street Journal has a report this afternoon about the number one hospital caused infection. That infection surprisingly to the FEHBlog at least is pneumonia, which my father call the "Old Man's Friend," not sepsis.
Hospital-acquired pneumonia is more pervasive and urgent than most people realize, a new study warns, and hospitals in America aren’t adequately addressing prevention. “Given the mortality, hospitals should be doing a lot more,” says Dian Baker, lead author of the study, which was published in January in the American Journal of Infection Control.
Pneumonia, which typically comes from germs that enter the body through the mouth, is the No. 1 hospital-acquired infection in America, according to the Centers for Disease Control and Prevention. That includes both pneumonia infections that some patients on ventilators catch from bacteria in their breathing tubes as well as the more common non-ventilator variety, the CDC says.
According to the article, NYU Langone Medical Center is requiring that patients who are about to undergo surgery brush their teeth. This has proven to be an effective technique to help stop the spread of pneumonia.

Finally reports that
Healthcare data breaches continued to rise in 2017, but the number of affected patient records declined 80 percent, a new report suggests. According to the Protenus Breach Barometer, 2017 may have simply been an off year for malicious actors, who may be regrouping for more attacks in 2018. [Let's hope not.]
A total of 477 data breaches were reported to the Department of Health and Human Services' Office for Civil Rights during the year, up from the 450 reported in 2016. However, the positive news for healthcare organizations and leaders is that fewer records were implicated in the breaches, specifically, 5.6 million in 2017 versus 27.3 million in 2016.

Friday, February 16, 2018


Ah, it's the beginning of the last federal three day weekend that in turn launches the great federal holiday drought. No more three day weekends until Memorial Day.

The FEHBlog has been reflecting on Sen. Claire McCaskill's opening comments at the Senate Homeland Security and Governmental Affairs Committee's business meeting last Wednesday. Sen. McCaskill (D Missouri) is the ranking minority member on the Committee. She bemoaned the fact that the Committee was about to kill the ACA's multi-state program rather than try to fix it.  The multi-state program was an OPM-administered program intended to cover the state based exchanges with commonly designed plans. One of the many problems with the multi-state program was the fact that the participating plans were subject to both OPM and state regulation. Blue Cross tried to help out OPM, but the Blue Cross multi state plans were competing with the local Blues plans in the exchanges. In other words, like many parts of this law, the multi-state program was overkill, and repeal is the proper outcome.

OPM's administration of the multi-state program has unfortunate effects for the FEHBP. As the FEHBlog has mentioned, the large group market in which the FEHB sits has the loosest ACA restrictions while the multi-state program was in the individual market which has the tightest ACA restrictions. The multi-state program allowed OPM to learn about those tighter restrictions and apply them to the FEHBP. Cost curve up.

The point is that Sen. McCaskill should recognize that in many respects the ACA overreached and the best fix is to trim it back.

In a bit of good news, yesterday the Food and Drug Administration approved a blood test for concussions. The results are available in three to four hours. The New York Times reports that
The test, called the Banyan Brain Trauma Indicator, is also expected to reduce the number of people exposed to radiation through CT scans, or computed tomography scans, that detect brain tissue damage or intracranial lesions. If the blood test is adopted widely, it could eliminate the need for CT scans in at least a third of those with suspected brain injuries, the agency predicted.
Well done.

Wednesday, February 14, 2018

Mid-week update

Earlier today, the Senate Homeland Security and Governmental Affairs Committee cleared for full Senate approval the President's nominations of Dr. Jeff T.H. Pon to be OPM Director and Michael Rigas to be OPM Deputy Director and Chairman Ron Johnson's bill (S. 2221) to repeal the Affordable Care Act's multi-state program.  That program already is dying on the vine. Federal News Radio provides background on the story.

The Centers for Medicare and Medicaid actuary issued a projection of health care spending from 2017 to 2026. Cost curve up.  Here's the Healthcare Dive story on the report.

There's a lot of press reports on an Aetna case in California where the Aetna medical director, who since has left Aetna's employ, admitted in a deposition that he had relied on the Aetna nurse's review of the medical records when he requested additional testing before granting necessary pre-authorization for a medical service. Here's Healthcare Dive report

The medical profession is expressing outrage because it hates the practice insurer pre-authorization. The press accounts are equally overheated. The Affordable Care Act was supposed to avoid these disputes by requiring that all insurer decisions on medical necessity, etc., be referred to an independent medical review organization. This case arose in 2011 when that part of the law was in effect. In other words, the medical director did not have the final say. Yet, the FEHBlog does not see any mention of IRO review in the articles. IRO review is much more cost effective than litigation.

On the bright side, the Wall Street Journal reported yesterday that
In a bag of backyard dirt, scientists have discovered a powerful new group of antibiotics they say can wipe out many infections in lab and animal tests, including some microbes that are resistant to most traditional antibiotics.
Researchers at Rockefeller University in New York reported the discovery of the new antibiotics, called malacidins, on Monday in the journal Nature Microbiology.
It is the latest in a series of promising antibiotics found through innovative genetic sequencing techniques that allow researchers to screen thousands of soil bacteria that previously could not be grown or studied in the laboratory. To identify the new compounds, the Rockefeller researchers sifted through genetic material culled from 1,500 soil samples.
“We extract DNA directly out of soil samples,” said biochemist Sean Brady at Rockefeller’s Laboratory for Genetically Encoded Small Molecules, a senior author on the new study. “We put it into a bug we can grow easily in the laboratory and see if it can make new molecules—the basis of new antibiotics.”

Tuesday, February 13, 2018

OPM Budget Proposal and New Strategic Plan

Yesterday, the Trump Administration issued its Fiscal Year 2019 budget proposal.  The Washington Post this morning discusses the impact of the budget on federal employees and annuitants. The budget includes a proposed statutory change to the government contribution for FEHBP coverage which is detailed in this budget document at page 182:
This proposal would revise the government contribution rate to base it on a plan's score from the Federal Employees Health Benefits (FEHB) Program Plan Performance Assessment. Currently all FEHB carriers participate in the assessment, which includes 19 measures of health outcomes, quality, and efficiency. Under this proposal, the Government contribution would range between 65-75 percent depending on a plan's performance.
As it stands the government contribution ranges from approximately 65% - 75% of the selected plan's premium due to the impact of the statutory cap on the government contribution. The current government contribution formula is 72% of the enrollment weighted average capped at 75% of the selected plan's premium. The FEHBlog is not suggesting that this is nothing burger but it also is not going to attract new plans. Too much emphasis on metrics for the FEHBlog's taste.

OPM also released its new strategic plan. The plan is much shorter than it's immediate predecessor. The predecessor plan had a chapter on the FEHBP. The new plan has a section (1.4) that fits in under one page. Brevity is a virtue.

Sunday, February 11, 2018

Weekend update -- the hold has been lifted!

Congress continues to be in session this coming week. Here is a link to the Week in Congress's report on last week's actions on Capitol Hill.

The Senate Homeland Security and Governmental Affairs Committee is holding a business meeting on Wednesday morning. The first orders of business are to consider the President's nominee's for OPM's Director, Dr. Jeff T.H. Pon, and Deputy Director, Michael Rigas. The Chairman, Sen. Ron Johnson (R Wisc) has lifted the hold on their nominations which he had placed as leverage to obtain OPM's cooperation in his investigation of OPM's 2013 decision to provide an FEHBP level government contribution toward coverage of members of Congress and their staffs in the DC small business exchange. This makes the FEHBlog quite happy.

The Committee also will consider Chairman Johnson's bill (S. 2221) to repeal the ACA's multi-state program which OPM administers and has only one participating plan operating in one state, Arkansas Blue Cross, for 2018.

The President will release his FY 2019 budget tomorrow. Of course, Congress has already passed and the President has signed an FY 2019 budget agreement but the devil is in the details.

Federal News Radio reports that OPM has released its Quadrennial Federal Workforce Priorities Report, the first of its kind, details the steps agencies should consider when reshaping the government workforce and improving employee engagement. The report does not discuss the FEHBP.

The Washington Post reports that
OxyContin maker Purdue Pharma said on Saturday that it has cut its sales force in half and will stop promoting opioids to physicians, following widespread criticism of the ways drugmakers market addictive painkillers.
The drugmaker said it will inform doctors Monday [February 12] that its sales representatives will no longer visit physicians’ offices to discuss the company’s opioid products. It will now have about 200 sales representatives, Purdue said.
“We have restructured and significantly reduced our commercial operation and will no longer be promoting opioids to prescribers,” the company, based in Stamford, Conn., said in a statement.
Sometimes better late than never is not good enough.

The deadly flu no one saw coming

That's the headline of a weekend Wall Street Journal article that disturbed the FEHBlog. The article discusses two women who caught the flu last month and died. Both women were in the late 30s, were married with young children, and had health insurance. One of the women was a teacher and the other was an administrator. Their deaths shouldn't have happened but they did.

Bloomberg reports that the flu and its big brother pneumonia currently are the cause of 1 in 10 deaths in America.
The death toll in future weeks is expected to grow even higher because flu activity is still rising—and the number of deaths follow the flu activity. Hospitalization rates are already approaching total numbers seen at the end of the flu season, which may not be for months.
“Unfortunately, more deaths are likely to happen,” [Centers for Disease Control acting director Anne] Schuchat said. “Over the next few weeks, we do expect and it would make sense to see more pneumonia and influenza-related deaths. The people who are likely to die are already in the hospital.”
In a sidebar, the Wall Street Journal discusses why this disease can be so deadly.
People over age 65, young children [particular those five and under], pregnant women and adults with chronic medical conditions such as heart disease or chronic lung disease are at high risk of serious complications. It is uncommon, but otherwise healthy people can develop them too.
Complications occur when the body’s immune system overreacts, triggering an exaggerated inflammatory response. Or flu infection can make it easier for bacteria to invade the bloodstream, causing a secondary infection. 
The article encourages people or caregivers in those categories to contact their doctor right away. Tamiflu, according to the article (and the FDA), can reduce flu symptoms particularly if taken within the first two days of getting sick.  The article also discusses when you need to head to the emergency room.

The bottom line is that people need to have a primary care provider in place before they get sick. Similarly, it's important if you have a telemedicine service to register for that service before you need it. Even if you prepared as the two unfortunate women in the article mentioned at the outset were, tragic things can happen.

The Wall Street Journal also reports this morning that
As Americans suffer through the worst influenza outbreak in almost a decade, a Japanese drugmaker says it has developed a pill that can kill the virus within a day. But even if the experimental drug lives up to the claim, it likely won’t be available in the U.S. until next year at the earliest.
A late-stage trial on Japanese and American flu patients found that for the people who took the Shionogi 4507 -3.04% & Co. compound, the median time taken to wipe out the virus was 24 hours. That is much quicker than any other flu drug on the market, including Roche AG’s RHHBY -0.07% Tamiflu, which the trial showed took three times longer to achieve the same result. Quickly killing the virus could reduce its contagious effects, Shionogi said.
Also, Shionogi’s experimental drug requires only a single dose, while patients need to take two doses of Tamiflu a day, for five days.
Both Shionogi’s compound and Tamiflu take roughly the same amount of time to entirely contain flu symptoms, but Shionogi says its compound provides immediate relief faster.


Friday, February 09, 2018

Two fiscal year long Budget deal reached

Over night, as the Wall Street Journal reports, Congress approved a two year budget deal (October 1, 2017, to September 30, 2019) and extended the continuing resolution funding the federal government though March 23.   The Senate leadership struck the bipartisan deal in which the House Republican leadership and the President joined.

This means no more government shutdown nonsense at least through the mid-term elections. Of course, there will be other issues for legislative combat.

Becker's Hospital Review lists the five takeaways from the budget deal for healthcare leaders here.

Thursday, February 08, 2018

Thursday Tidbits

While we wait to see whether Congress can reach a budget agreement overnight, here are two AHIP PowerPoints and two earning reports to ponder:

  • AHIP's uplifting presentation on the value of employer sponsored health care
  • AHIP's helpful presentation on its initiative to address the opioid crisis.
  • Healthcare Dive's report on CVS Health's 4th Quarter 2017 earnings. "CEO Larry Merlo said on the company's Q4 earnings call that 'nothing that has surfaced' has come as a surprise, adding that he still expects the deal to close in the second half of 2018," and
  • CNBC's report on Gilead's 4th Quarter 2017 earnings. Gilead is the company that first brought the Hepatitis C cures to market at an astoundingly high price. Those glory days are over due to competition and the success of the drug. 

Tuesday, February 06, 2018

Inspector General Report

The acting OPM Inspector General has posted on the internet his semi-annual report to Congress for the period ended September 30, 2017. The report, which has a flashy cover, leads with a lousy recommendation in the FEHBlog's view.

The acting Inspector General wants Congress to apply a horribly complicated Medicare, Medicaid and TRICARE law, known as the federal healthcare programs anti-kickback act, to the FEHBP.  This law places restrictions on discount arrangements between healthcare providers and health plans. This law makes some sense with Medicare, Medicaid and TRICARE where the government dictates the pricing for the most part. The law makes no sense with the FEHBP where the discount arrangements are contractually negotiated. If the OIG's recommendation is accepted, FEHB plans would be required to re-negotiate thousands of contracts and providers may be unwilling to play ball under the new rules. This type of chaos will not lead to better, more affordable healthcare.

The FEHBlog had hoped that OPM management would push back on this request but the management response does not oppose the recommendation, notwithstanding the President's call for de-regulation.  This is a big bowl of wrong.

Sunday, February 04, 2018

Happy Super Bowl Sunday

And it's time to get in a post before the big game begins.

Congress is in session this week. Here's a link to the Week in Congress's account of last week's actions on Capitol Hill.  Congress is expected to approve a further continuing resolution funding the federal government past February 8. Meanwhile, on Tuesday, the Senate Homeland Security and Governmental Affairs Committee will hold a hearing on the obvious problems with governing through continuing resolutions. Healer, heal thyself because the House of Representatives did pass a spending bill before September 30. The hold up has been in the Senate.

While on the topic of complaints,

  • Health Data Management discusses why healthcare interoperability moves at a snail's pace. 
  • Medpage Today documents the mediocre progress in implementing value based medicine (but don't give up hope yet), and 
  • Modern Healthcare reports that doctors are concerned that new Medicare quality measures ding them for cost out their control.  "'Physicians are questioning what the patient's part in all these is going to be," [surgeon Brad] Johnson [M.D.] said. "Are they going to sign a contract that requires them to do follow ups or to quit smoking?" 

This brings us back to the announcement that Amazon, J.P. Morgan Chase, and Berkshire Hathaway plan to team up to bring health care to their employees. This consortium, which this helpful Fortune Magazine article discusses, is not ground breaking. More importantly, the consortium is not writing on a blank slate. It's unfortunate that the companies (and doctors) were not more involved when the Obama Administration designed the electronic medical record giveaway. The Obama Administration's disregard for electronic medical record interoperability gave birth to the current mess. The Affordable Care Act multitude of consumer protections also restricts independent development although the law allows the most flexibility to the large group market. Nevertheless, even the large group market is subject to ACA requirements, like the prohibition of annual dollar limits, that have caused the number of million dollar health plan claims to escalate. Furthermore, the consortium will have to deal with the significant cost shifting from Medicare and Medicare to private sector plans. These headwinds caused the FEHBlog to quip that the consortium leaders exhibited hubris. But good luck to them.

The FEHBlog always seeks to make readers aware of innovations. For example, MedPage Today explains why Americans need to learn more about genetic sequencing. Good luck to all innovators.

Friday, February 02, 2018

Happy Groundhog Day

Six more weeks of winter and continuing resolutions! Roll Call reports that the Republican Congressional leadership is confident that Congress will timely extend the current continuing resolution funding the federal government beyond next Thursday, February 8. The FEHBlog have seen other articles suggesting an extension through March 22.

Forbes reports that the Justice Department's anti-trust review of the CVS / Aetna merger is proceeding smoothly. "The companies * * * said they have shareholder meetings scheduled for March 20 for their respective stockholders to approve the merger agreement. “CVS Health continues to expect that the transaction will be completed in the second half of 2018,” CVS said in its SEC filing." 

Health Payer Intelligence has an interesting story about a New Hampshire health plan that saved claims dollars by using a service called Vitals Smartshopper ,  "a tool that allows members to identify and accrue financial incentives for choosing cost-effective care sites for common services."

Healthcare Dive tells us about a recent study finding greater prescription refill adherence by Medicare beneficiaries who receive text reminders.  
“The program results far exceeded our expectations,” the study said. “Throughout the 3-month program, the response rate was around 37%, and the 3-month average refill request rate was 18%. We had also expected that since this was an older patient population the response time span might be stretched out a little longer, but this was not the case with over 80% of refill requests received within 8 hours of the initial reminder.”
HHS's Office for Civil Rights took another HIPAA covered entity scalp yesterday. The FEHBlog found it interesting that the data breaches occurred in 2012 and were reported five years ago. The long arm of the law at work.

Tuesday, January 30, 2018

Tuesday Tidbits

Yesterday, as the Chicago Tribune reports, Alex Azar was sworn in as Health and Human Services Secretary.

Modern Healthcare tells us that the 3700 physicians out of Medicare in 2017 as compared to 7400 in 2016 and 3500 in 2015. Very little FEHBP coverage is available if you are an annuitant over 65 whose doctor has opted out of Medicare. See Section 9 of your FEHBP brochure.  The Modern Healthcare article lead me to this useful CMS website which tells you whether your doctor has opted out of Medicare.  Opt out doctors are required to have to their Medicare Part B patients sign an opt out agreement.

The New York Times Upshot column has an interesting column with the following lede --
The idea that spending more on preventive care will reduce overall health care spending is widely believed and often promoted as a reason to support reform. It’s thought that too many people with chronic illnesses wait until they are truly ill before seeking care, often in emergency rooms, where it costs more. It should follow then that treating diseases earlier, or screening for them before they become more serious, would wind up saving money in the long run.  Unfortunately, almost none of this is true.
No kidding.

Healthcare Dive reports that Amazon, Berkshire Hathaway, and JP Morgan Chase are forming a not-for-profit company to reduce healthcare costs for their employees and presumably employees from other large employers. Here's a link to their announcement.  The FEHBlog sees this as a quite a display of hubris but yesterday's post illustrates the fact that the FEHBlog can make mistakes.

Monday, January 29, 2018

A mistook

The FEHBlog made a mistake in several posts about the current continuing resolution. He thought that the additional health insurer tax moratorium applies to this year. In fact, this moratorium applies to 2019. So the government will be collecting $14.3 billion from insurers this year which Congress evidently assumes was already baked in the premiums. Here's a link to the IRS guidance on the 2019 moratorium.

Sunday, January 28, 2018

Weekend update

Congress is in session this week on Capitol Hill.  The FEHBlog's attention was drawn to a Hill newspaper article headlined "Congress takes the sting out of Obamacare."  In the FEHBlog's view, Congress started to take the sting out of the law by repealing the individual mandate but it has a long way to go still. Way too much stick and not enough carrot in that law.

For example, the FEHBlog pointed out a few weeks ago a December 2017 HHS report on 2016 medical loss ratio ("MLR) results.  The HHS report notes that "In 2016, the average MLR was 92.9 percent in the individual market, 86.1 percent in the small group market, and 90.3 percent in the large group market."  The statutory MLR is 80% for the individual and small group markets and 85% for the large group market which includes the FEHBP. So you would think that the MLR rebates would have been small in 2016, but they totalled hundreds of millions of dollars because those refunds are determined using state-level MLRs for each insurer.

FEHBP insurers are in double jeopardy because they are subject to this state-level MLR and OPM's contract level MLR. It's no wonder that you don't see new carriers joining the FEHBP.  In any event, all MLR penalties / rebates should be based on the insurer's aggregate MLR per market with no state or contract breakdown.

Health Payer Intelligence points out a recent AMA report finding that the ACA reduced consumer out of pocket spending by 11.9% but increased consumer spending on health insurance premiums by 12.1% over the period 2012-2015. There has to be a better, less complex, way. The FEHBlog continues to like his idea of giving all high earners, not just small business owners, a 50% tax exclusion on health insurance premiums. Give all middle income people, not just employees, a full exclusion and repeal the ACA taxes on providers and health plans. The low income people would continue to have ACA subsidies. That would be a good, equitable start.

In prescription drug news, Wired has an interesting report on the state of CRISPR gene editing research.
[Last] week the National Institutes of Health announced it will be awarding $190 million in research grants over the next six years, in part to push gene editing technologies into the mainstream. “The focus of the Somatic Cell Genome Editing program is to dramatically accelerate the translation of these technologies to the clinic for treatment of as many genetic diseases as possible,” NIH Director Francis Collins said in a statement Tuesday. Which could encourage some of the more exotic, experimental delivery systems out in the research world—strategies like Crispr-covered gold beads, yarn-like ball structures called DNA nanoclews, and shape-shifting polymers to get the editor where it needs to go.
Let's go.  Also, the Wall Street Journal yesterday offered a fascinating interview with  economist David Ridley.  Prof. Ridley came up with idea of having the Food and Drug Administrative give drugs that treat rare diseases an express lane pass for a future new drug application. What's more the express lane pass can be sold to another drug manufacturer for "between $67.5 million and $350 million, though the price last year settled in the range of $125 million to $150 million." The applicant must pay a $2.7 million fee to use the express lane. Congress enacted the idea in 2007. At the first the express lane pass was awarded for infectious tropical disease treatments, and in 2012 the initiative was extended to rare pediatric diseases. Last year, the FDA issued "five [passes or more formally expedited review vouchers] for drugs to treat rare pediatric diseases and one for the tropical Chagas parasite, which afflicts more than six million people world-wide." Cool.