Sunday, March 26, 2017

Weekend update

Congress remains at work on Capitol Hill this week. Here is a link to the Week in Congress's report on last week's activities on Capitol Hill. The FEHBlog did notice that the U.S. Senate has freshenened up its website.

Here are a few tidbits from last week's OPM AHIP FEHBP carrier conference:

  • OPM's medical director, Dr. Christine Hunter, received a prestigious Presidential Rank award from President Obama last December. What's more, OPM's FEHBP tribal coverage desk received a Presidential customer service award.  Mazaal tov! 21,000 Indian tribal employees who work for 100 tribes are covered under the FEHBP. 
  • A National Business Group on Health speaker called attention to his group's issue brief on specialty pharmacy costs. In that regard, a CVS medical director predicted that the biosimilar market will "take off" in three to four year. The FEHBlog certainly hopes so. 
  • OPM's is a data visualization tool that’s available to the public.  The tool includes Federal Employee Viewpoint Survey and the Enterprise Human Resources Integration database.  To see the publicly available information, you need to scroll down the home page.  There's a United States map that shows where federal employees live, for example. Federal employees can register for a deeper dive. 
Modern Healthcare reported last week that two large prescription benefit managers, CVS and Express Scripts, are offering direct to consumer products for folks with high deductible plans, among others. 

A colleague pointed out to me that Govinfo Security reports that

The Trump administration has named Roger Severino as the new director of the Department of Health and Human Services' Office for Civil Rights, which enforces HIPAA['s Privacy and Security rules] and protects patients rights.
An OCR spokesperson confirmed on March 24 that Severino had been named to the position, and his bio has been posted on the office's website.
Meanwhile, former Rep. John Fleming, R-La., has reportedly been selected for the newly created position of deputy assistant secretary for health technology. It's not yet clear whether Fleming would lead HHS' Office of the National Coordinator for Health IT. ONC oversees standards and policies for the HITECH Act electronic health records "meaningful use" financial incentive program, and also carries out various health IT-related provisions in the 21st Century Cures Act, which was signed into law last year.
Finally, Fierce Healthcare reports that last week, the Centers for Medicare and Medicaid Services announced that the agency is delaying at least until October 1, 2017, the mandatory Medicare bundled payment programs that the Obama Administration rolled out last year.  "The latest delay came as welcome news to the Federation of American Hospitals and the American Hospital Association, which expressed concern last year that the accelerated pace of the program."

Friday, March 24, 2017


The House never voted on the American Health Care Act. The House leadership with the President's consent pulled the bill from the floor because the Republicans were not able to assemble the necessary votes.  The Wall Street Journal reports this afternoon that the House Speaker Paul Ryan (R WI) conceded that 
We're going to be living with Obamacare for the foreseeable future," though he argues that replacing it would actually have done a favor to Democrats.  He says that tax reform will move forward, even though the plan has been complicated by the Obamacare taxes remaining in place.
The Journal further reports that
Going forward, [President] Trump said he would seek bipartisan support for a bill to overhaul the health-care system, saying that would be “the ultimate” and drawing a contrast with the Affordable Care Act, which he said was “rammed down everyone’s throat” with only Democratic support.
Also today, a three judge panel of the U.S. Court of Appeals for the D.C. Circuit heard oral argument in the Anthem / Cigna appeal of the district court decision blocking their merger agreement from closing. The Wall Street Journal reports
A federal appeals court panel on Friday asked tough questions of health insurer Anthem Inc., which is attempting to salvage its proposed $48 billion acquisition of Cigna Corp. after a trial judge blocked the combination as anticompetitive.
The Anthem appeal, which took place in front of a large crowd at the U.S. Court of Appeals for the District of Columbia Circuit, was surprisingly lively—and lengthy—as three judges said the case presented novel and difficult issues.
“We haven’t had a case like this,” Judge Brett Kavanaugh said.
The session was supposed to last for 40 minutes; the judges instead asked questions for about two hours.
That's an engaged panel. This case was expedited so that the panel could issue its decision before the Anthem - Cigna merger agreement's termination date - April 30, 2017.

Over the weekend, the FEHBlog will share some bon mots from the FEHBP carrier conference. Nothing earthshaking occurred but some useful tidbits were shared by the speakers.

Wednesday, March 22, 2017

Mid-week update

Tomorrow, the seventh anniversary of President Obama signing the Affordable Care Act into law, the House of Representatives is expected to vote on the American Health Care Act.  The legislative process is quite engaged this evening according to the press.

Today the House of Representatives passed two healthcare related bills -- a Small Business Healthcare Fairness Act (HR 1101) and a Competitive Health Insurance Act (HR 372).  The first bill would permit small businesses to purchase health insurance coverage through association health plans.  The second would subject all health insurers to the full application of federal anti-trust laws.  Whether the first bill passes the Senate is anyone's guess, but the second bill is a slam dunk to become law in view of the 416-8 vote for House passage. More details on the first bill can be found in Kaiser Health News, and more detail on the second bill can be found in Bloomberg BNA.

Let's tie up a couple loose ends
  • As the OPM IG was walking out the door just about a year ago, he tossed a grenade into the acting Director’s office by asserting that Ms. Cobert should have stepped down when President Obama nominated her to serve as permanent OPM director. The OPM IG relied on a DC Circuit decision called NLRB v. SW General, 796 F.3d 67. As the FEHBlog noted at the time, the D.C. Circuit opened the Director’s actions to legal challenge but did not render all of her actions illegal per se.  In any event, on Monday, in a 6-2 decision written by the Chief Justice, the Supreme Court affirmed the D.C. Circuit decision. 
  • Five years ago, a major health care crisis erupted when the New England Compounding Center was accused of causing 2012 fungal meningitis outbreak that killed 64 people and hurt more than 700.  The crisis was attributed to 14,000 contaminated vials of drugs that NCCC had prepared and distributed nationwide. Following the crisis, Congress passed a law cracking down on compounding pharmacies.  NPR reports that today a federal district court jury in Boston found one of the NECC owners guilty of racketeering but not murder.
Tomorrow also is the beginning of the annual AHIP-OPM FEHBP carrier conference.  The FEHBlog will be there.

Tuesday, March 21, 2017

House leadership releases AHCA amendments

Yesterday, the House of Representatives leadership released a set of AHCA amendments.  The House Speaker Paul Ryan explained that
The first amendment makes technical revisions to the original bill to ensure compliance with the Senate rules governing reconciliation bills. It is purely technical and achieves the same policy goals as previously drafted.
The second amendment includes improvements drafted by both of the authorizing committees.
Under jurisdiction of the Ways and Means Committee: Moves up repeal of Obamacare taxes from 2018 to 2017, strikes a provision allowing excess tax credits to be deposited into Health Savings Accounts, and provides budgetary space for the Senate to increase tax credits for older Americans.
Under jurisdiction of the Energy and Commerce Committee: Immediately prohibits any additional states from expanding the current broken Medicaid program, allows states to opt-in to a traditional Medicaid block grant as well as implement work-requirements for Medicaid, protects the equitable state-federal partnership, and enhances the growth rate for the aged and disabled population on Medicaid. 

Sunday, March 19, 2017

Weekend update

It will be a busy week on Capitol Hill with four days of confirmation hearing for Supreme Court justice nominee Neil Gorsuch before the Senate Judiciary Committee beginning tomorrow and a House of Representatives vote on the American Health Care Act scheduled for Thursday.   Here is a link to the Week in Congress's one pager on last week's activities on the Hill.

The American Enterprise Institute features an article on the economic lessons that can be drawn from pricing trends in cosmetic surgery over the past 20 years.  Of course, as we all know, the cost curve for health care services has been up over the period. According to the article health care inflation rivals college education inflation.  Cosmetic or plastic surgery is paid out of pocket by the patient with no health benefits coverage and no income tax deduction, except in limited circumstances.  The author compared average cost increases in general health care to cost increases in cosmetic surgery.
The average price increase between 1998 and 2016 for the [top] 20 cosmetic procedures displayed above was 32%, which is less than the 47.2% increase in consumer prices in general. Of the 20 procedures above, 14 increased in price by less than overall inflation (and therefore decreased in real terms) and only six increased in price by more than inflation. And most importantly, none of the 20 cosmetic procedures in the table above have increased in price by anywhere close to the 100.5% increase in the price of medical care services or the 176.7% increase in hospital services since 1998. 
The Affordable Care Act exacerbated this trend by mandating the coverage of a multitude of low priced services and items.  Hopefully, the American Health Care Act and HHS will allow health insurers and consumers more flexibility going forward.

The FEHBlog is anxiously awaiting the annual FEHBP carrier conference sponsored by OPM and AHIP. The conference will be held on Thursday and Friday of this week in beautiful Crystal City, Virginia.

Friday, March 17, 2017

Happy St. Patrick's Day

Yesterday, the House Oversight and Government Reform Committee approved the bipartisan 2017 Postal Reform Act (H.R. 756) by a voice vote. The bill would create a separate Postal Service Health Benefits Program within the FEHBP effective January 1, 2019. The bill remains pending before the Ways and Means and Energy and Commerce Committees, but this was a big boost toward final House and Senate passage.

Also yesterday, the President released a budget "blueprint" for discretionary federal government expenses. A complete budget with income and mandatory spending, e.g, Medicare, Medicaid, Social Security, will be issued in May. In that regard, earlier this week the President issued an executive order seeking a federal government reorganization according to Federal News Radio.

Continuing federal appropriations funding requires Congressional action next month. The current continuing resolution expires on April 28. Furthermore, the Hill reports that "Lawmakers will have until sometime this autumn to raise the debt ceiling before the Treasury runs out of ways to make essential payments, putting the nation at risk of its first-ever debt default."

Finally Federal News Radio also reports that President Trump withdrew President Obama's nomination of Elizabeth Field to serve as OPM Inspector General.

Erin go bragh.

American Health Care Act advances

The American Health Care Act cleared the House Budget Committee on a 19-17 vote today. (The FEHBlog wrote this on March 16 but it wasn't posted until March 17.)  The Wall Street Journal reports that "The bill will now proceed to the House Rules Committee, which will vote and determine the rules governing the process to alter it on the House floor."

Wednesday, March 15, 2017

Midweek update

As expected and as Medscape reports, the Senate on Monday confirmed Seema Verma's nomination to serve as administrator of the Centers for Medicare and Medicaid. "Verma has specialized in working with state Medicaid programs to improve care while lowering costs."  Meanwhile the Drug Channel blog muses on the President's nomination of Scott Gottlieb to serve as Food and Drug Commissioner. 

Lest it pass us by, let's not forget that it's National Patient Safety Awareness Week. ECRI Institute has created a list of the top ten patient safety concerns:
Information Management in EHRs
Unrecognized Patient Deterioration
Implementation and Use of Clinical Decision Support
Test Result Reporting and Follow-Up
Antimicrobial Stewardship
Patient Identification
Opioid Administration and Monitoring in Acute Care
Behavioral Health Issues in Non-Behavioral-Health Settings
Management of New Oral Anticoagulants
Inadequate Organization Systems or Processes to Improve Safety and Quality
Speaking of which, the FEHBlog's attention was drawn to this EHR Intelligence article about a "new study published in the Journal of the American Board of Family Medicine found patient-reported self-assessments and provider-reported assessments of patient health rarely align."  The article explains that
“A closer look at the reasons given by patients and physicians helps explain that discordance,” the researchers wrote. “We found that physicians tended to focus on disease in their reasoning for all patients, whereas those patients with excellent and very good self-reported assessments focused on feeling well. In medicine, wellness is often considered the absence or prevention of disease, but other concepts within wellness, such as happiness and contentment, may be equally or more important to patients.”
While self-reported assessments are considered an important complement to provider-reported information in EHRs, small biases like emotional wellbeing potentially impacts patient opinion of personal physical health.
Because providers and patients appear to occasionally consider different factors when assessing a patient’s health, researchers believe more face-to-face discussion is imperative to closing gaps in knowledge of patient information and forming a more accurate overall assessment of health.
The FEHBlog guesses this ties back to the first patient safety concern that the ECRI Institute named.

Finally, here's a link to an interesting on the effective use of carrots and sticks in employee wellness programs.

Budget committee markup of the American Health Care Act

The important markup is scheduled for tomorrow at 10 am, not today. In the meantime, the FEHBlog recommends reading Avik Roy's Forbes article on the CBO report.

Monday, March 13, 2017

CBO report on the AHCA

This afternoon, the Congressional Budget Office issued its report on the American Health Care Act. Here's a link to the report. The House Budget Committee meets on Wednesday as noted in yesterday's post.

Sunday, March 12, 2017

Weekend Update

Congress remains at work on Capitol Hill this week. The Senate is expected to confirm Seema Verma to be Administrator of the Centers for Medicare and Medicaid Services.  The Senate Health Education Labor and Pensions Committee will hold a confirmation hearing for the President's latest nominee for Secretary of Labor, R. Alexander Acosta, on Wednesday afternoon. These are both significant positions in terms of ACA administration.

Modern Healthcare features an interesting article on the state of the burgeoning telehealth market. The large vendors are turning their attention to serving hospitals and health systems. It's always seemed like a no brainer to the FEHBlog that telehealth services could help avoid unnecessary readmissions. But it appears that hospitals are using telehealth services to replace staff for inpatient services. Time marches on. We get closer to the Jetsons.

The FEHBlog et ux (look it up) have been listening to an audiobook of Malcolm Gladwell New Yorker articles. Today we heard Mr. Gladwell who narrates his own work describe the difference between puzzles and mysteries.
The national-security expert Gregory Treverton has famously made a distinction between puzzles and mysteries. Osama bin Laden’s whereabouts are a puzzle. We can’t find him because we don’t have enough information. The key to the puzzle will probably come from someone close to bin Laden, and until we can find that source bin Laden will remain at large.
The problem of what would happen in Iraq after the toppling of Saddam Hussein was, by contrast, a mystery. It wasn’t a question that had a simple, factual answer. Mysteries require judgments and the assessment of uncertainty, and the hard part is not that we have too little information but that we have too much. The C.I.A. had a position on what a post-invasion Iraq would look like, and so did the Pentagon and the State Department and Colin Powell and Dick Cheney and any number of political scientists and journalists and think-tank fellows. For that matter, so did every cabdriver in Baghdad.
The distinction is not trivial. If you consider the motivation and methods behind the attacks of September 11th to be mainly a puzzle, for instance, then the logical response is to increase the collection of intelligence, recruit more spies, add to the volume of information we have about Al Qaeda. If you consider September 11th a mystery, though, you’d have to wonder whether adding to the volume of information will only make things worse. You’d want to improve the analysis within the intelligence community; you’d want more thoughtful and skeptical people with the skills to look more closely at what we already know about Al Qaeda. You’d want to send the counterterrorism team from the C.I.A. on a golfing trip twice a month with the counterterrorism teams from the F.B.I. and the N.S.A. and the Defense Department, so they could get to know one another and compare notes.
If things go wrong with a puzzle, identifying the culprit is easy: it’s the person who withheld information. Mysteries, though, are a lot murkier: sometimes the information we’ve been given is inadequate, and sometimes we aren’t very smart about making sense of what we’ve been given, and sometimes the question itself cannot be answered. Puzzles come to satisfying conclusions. Mysteries often don’t.
Drug pricing falls into the mystery category. Indeed all health care pricing falls into the mystery category. But drug pricing is a peculiar mystery.  That's why the FEHBlog appreciate the Drug Channels blog which lately dicusses a Johnson & Johnson subsidiary pricing transparency report. He gives it two thumbs up.  Check it out.

Friday, March 10, 2017


Here's a link to the Week in Congress's one page report about what happened on Capitol Hill this week.  The Wall Street Journal reports that after two lengthy mark up sessions the House Ways and Means and Energy and Commerce Committees cleared the American Health Care Act for Budget Committee consideration next Wednesday. We should have a Congressional Budget Office score before then. The House leadership's objective is to bring the bill to the House floor for a vote during the week of March 19. The bill would then head to the Senate for consideration under the reconciliation act rules which allow for Senate passage with 51 votes.  It's not clear at this point what will happen in the Senate.

The Journal further reports that the House leadership will introduce a broader ACA replacement bill this month which the Senate would consider under regular order. Regular order allows for a filibuster which can be broken with sixty votes. The FEHBlog has read that there are other approaches which would allow for the Senate to get past a filibuster by the passage of time. Of course there is a Congressional Research Service report which discusses the two speech limitation which is an alternative to the sixty vote cloture rule.

Finally according to the Journal report, there are administrative "actions that the Trump administration can take on its own [under the terms of the ACA] . The administration has already issued rules intended to shore up the individual insurance market until the GOP vision of a new health system is enacted. Other changes may include giving states more flexibility in running Medicaid programs and allowing insurers to sell policies without maternity care or other benefits now required under law."  The FEHBlog views this as loosening the choke chain that the ACA placed on insurers. He looks forward to this stage because it could simplify life for FEHB carriers.

The FEHBlog ran across this farewell address from the CEO of the Robert Wood Johnson Foundation  and because it's upbeat here's the link. Have a good weekend.

Thursday, March 09, 2017

Midweek update

Yesterday, the House of Representatives began consideration of the American Health Care Act. House Speaker Paul Ryan explains that House consideration of the bill will be a multi step process leading to consideration on the House floor.
This week, the Energy and Commerce Committee and Ways and Means Committee are holding markups to consider their portions of the bill.  Next [after the Congressional Budget Office score is released], the work of these two committees will go to the Budget Committee to be considered as one bill. After that, the legislation will go to the Rules Committee [before reaching the House floor]. 
The Speaker emphasizes that the bill has been under development for over a year. Prof. Timothy Jost dissects the bill in Health Affairs.  The FEHBlog who appreciates the Goldilocks story takes heart in the Washington Post's subheadline this morning that the bill is under attack from the left and the right.

OPM in its 2017 and 2018 call letter for benefit and rate proposals encouraged FEHBP carriers to adopt telehealth and value based insurance design. For that reason the FEHBlog calls readers attention to recent studies on those topics:

  • A Health Affairs study "on the impact of a value-based pharmacy benefit on medication adherence found that offering free chronic disease medications maintained patients’ levels of adherence even after switching to a health plan with a deductible."
  • Another Health Affairs study on telehealth services finds that the services at this stage at least are a convenience and do not bend the cost curve down.  This comes as no surprise to the FEHBlog. Nevertheless Healthcare Finance identifies some useful conclusions from the study

Since telehealth services save patients costs on travel time, payers may be able to raise patient costs to reduce the impact of increased utilization.
For some patient populations, greater utilization may provide more of a cost benefit than it does to the population in the study, particularly for undertreated conditions. “An increase in utilization for patients with diabetes or mental illness might be perceived as a net positive,” the authors note. 
As telehealth becomes a more widespread, payers may need to look at ways to limit the potential for unnecessary use of the service.

Monday, March 06, 2017

It's out

The House of Representatives leadership released the American Health Care Act which is intended to repeal large parts of and replace the Affordable Care Act.

The bill does not include a provision that would tax employer sponsored premiums in excess of a dollar threshold as the FEHBlog discussed yesterday. For that reason, the bill retains the ACA's Cadillac tax but pushed the effective date back from 2020 to 2025.

With respect to the FEHBP, the bill principally would preserve the ACA's age 26 coverage provision, lift the statutory cap on flexible spending accounts (OPM would have to agree to increase the cap), lift the exclusion on HSA, HRA, and FSA reimbursement of over the counter medicines and increase maximum annual contributions to health savings accounts. The changes generally would take effect next year.

The bill would zero out the individual and employer mandates. The bill also would eliminate virtually all of the ACA imposed business and personal taxes beginning next year except for the Cadillac tax and the PCORI fee unfortunately.

The bill would provide an age rated, and income restricted advanceable tax credit to purchase individual health insurance. It would create a role for health insurance agents. The bill would permit the credit to be use to purchase health coverage which is not ACA compliant, e.g., catastrophic coverage. The bill's provisions must pass muster from the Senate parliamentarian in order to be treated as a budget reconciliation act which can't be filibustered in the Senate.

The Ways and Means Committee will mark up the bill on Wednesday morning.  At the same time on Wednesday, the Energy and Commerce Committee will consider the budget reconciliation aspects of this legislative action.