Last Friday was the deadline for public comments on IRS Notice No. 2015-16 which was the first wave of guidance on the high cost coverage excise tax. Beginning in 2018, the ACA imposes on 40% excise tax on the cost of employer sponsored coverage that exceeds $10,200 for self only coverage and $27,500 for self and family coverage. The law includes permits an adjustment to those thresholds to the extent the cost of Blue Cross FEP Standard Option coverage over the period 2010-2018 exceeds 55%. That adjustment will wind being a big goose egg because according to the FEHBlog's calculations, Blue Cross FEP Standard Option coverage has increased only 18% over the period 2010 through 2015. In any event, the FEHBlog suggest that readers take a gander at the American Health Insurance Plans' comments to the IRS. AHIP makes many good points. In short this is a very disruptive tax which merits repeal.
Modern Healthcare offers an interesting story about the coverage conflicts between insurers on one side and doctors and patients on the other caused by the price of the very expensive Hepatitis C drugs. The most sensible solution is for Gilead Sciences to lower the absurdly high price (even after discounts), but that's unlikely to occur.
Healthcare Dive reports on the indictment of a Texas anestheisologist who allegedly defrauded our beloved FEHB Program to the tune of $5 million.
The New York Times reports on CVS's acquisition of Omnicare this week and its writer predicts that this acquisition signals the end of pharmacy mergers due to market concentration. Omnicare's principal business is distributing medications to nursing homes and other institutions, which is an obvious fit with CVS's business. The article adds, however, that
One of Omnicare’s main moneymakers is expensive niche medicines, which it helps manufacturers distribute and get reimbursed for by insurers and the United States government. Those drugs account for about a quarter of company sales, and those sales are growing at an annual rate of more than 20 percent. But the lucrative business may end up conflicting with Caremark’s focus on extracting discounts from pharmaceutical firms.It will be interesting to see how the Justice Department and the Federal Trade Commission react.