Wednesday, July 18, 2018

Mid-week update

The FEHBlog listened to a good chunk of this morning's Senate Homeland Security and Governmental Affairs hearing on the President's government reorganization plan. The witness before the Committee was OMB Deputy Director for Management Margaret Weichert. The FEHBlog learned that OMB's top reorganization priority is to move employee background checks from OPM to the Defense Department. Other top priorities include growing the cybersecurity workforce, implementing a customer service initiative, and creating an advance research institute. Ms. Weichert expects to identify by summer's end ten to twelve initiative that the executive branch can implement without new Congressional action. Sen. Lankford (R Okla.) mentioned that he and Sen. Heitkamp (D N.D.) plan to hold an OPM oversight hearing in the next few weeks. Those Senators are the chair and ranking member of the Committee's Subcommittee on Regulatory Affairs and Federal Management. Sen. Lankford added that the hearing will concern, among other topics, federal retirement issues.

On Sunday, the FEHBlog mentioned that the Senate Health Education Labor and Pension Committee planned to hold a hearing yesterday on controlling health care costs. Here's a link to an interesting Health Data Management article coming out of that hearing on this important topic.

The FEHBlog has been noticing many articles about Medicares "340B Program." The FEHBlog, however, is unfamiliar with the Program's specifics. He read a July 17, 2018, D.C. Circuit decision on the Program which explained

[T]he so-called “340B Program,” which allows certain hospitals to purchase outpatient drugs from manufacturers at or below specified prices. See Public Health Services Act § 340B, 42 U.S.C. § 256b. When hospitals treat Medicare beneficiaries with these drugs, they are reimbursed through [Outpatient Prospective Pricing System] OPPS [which is part of Medicare Part B].
In setting the annual reimbursement rates for drugs obtained through the 340B Program, the Secretary must use either the “average acquisition cost” of the drug, taking into account “hospital acquisition cost survey data,” or, if those data are unavailable, the “average price” of the drug, as established under different provisions of Medicare. 42 U.S.C. § 1395l(t)(14)(A)(iii). The relevant cross-referenced provision fixes payment rates at 106% of the average sales price. See id. § 1395w-3a(b). If the average-price metric is used, this 106% figure may be “adjusted by the Secretary as necessary for
purposes of [OPPS].” Id. § 1395l(t)(14)(A)(iii)(II). The Secretary does not have acquisition cost survey data, so he historically has set the OPPS reimbursement rate for drugs purchased through the 340B Program at 106% of the average sales price, without any adjustments. See Hospital OutpatientProspective Payment and Ambulatory Surgical Center Payment Systems and Quality Reporting Programs, 77 Fed. Reg. 68,210, 68,382–86 (Nov. 15, 2012). 
The current brou-ha-ha stems from the fact that the current HHS Secretary Alex Azar cut the 340B reimbursement rate to 77.5% of the average sales price, "cit[ing] various studies indicating that hospitals participating in the 340B Program are able to buy covered drugs at amounts significantly below the average sales price."  This legal challenge to Secretary Azar's decision was dismissed on the ground that it was not predicated on Medicare Part B claim decision as the Medicare judicial review law requires. The legal battle of course will continue. The FEHBlog appreciated gaining this information on the 340B Program.

Sunday, July 15, 2018

Weekend update

Congress remains at work on Capitol Hill this coming week. The Senate Health Education Labor and Pensions Committee will be holding another hearing on Tuesday morning about reducing health care costs. The Senate Homeland Security and Government Affairs Committee will hold a hearing on the President's government reorganization plan on Wednesday morning.  OMB Deputy Director Margaret Weichert will testify at the reorganization plan hearing.

Healthcare Dive reports that according to a recent Avalere study more insurers are using value based contracts with drug and medical device companies.
“Health plans continue to examine how outcomes-based contracts can be deployed to help patients get needed medicines while containing costs,” said Kathy Hughes, vice president at Avalere. “Health plans will look to build experience on what works and what doesn’t, including how to overcome perceived operational challenges.”
In the FEHBlog's view, a cooperative working relations between the insurers and the vendors is the key to successful contracting.

The Wall Street Journal reported yesterday that
A small Colorado drugmaker recently raised the price for a spray form of sleep aid Ambien by as much as 843%, the latest example of how some firms are increasing prices despite mounting pressure. 
So far this year, companies have made 3,653 price increases on 1,045 different drug products, according to Raymond James & Associates, even as President Donald Trump and other members of his administration have criticized such moves. 
The median price increase is 8%, but some specific increases have been far greater. Aytu BioScience Inc. raised the list price of a 7.7 milliliter bottle of its sleep aid Zolpimist to $659 from $69.88, while increasing the price of a 4.5 milliliter bottle by 747% to $329.50, according to RELX PLC’s Elsevier Gold Standard Drug Database. The drug is a spray version of zolpidem, the key ingredient in Ambien, which is widely available as cheap generic pills. 
Chief Executive Josh Disbrow said Aytu raised Zolpimist’s list price to bring it in line with the cost of other brand-name sleep drugs. He said Zolpimist was for the small number of patients willing to pay more, often out of their own pockets, for the oral spray than for lower-priced pills.
As the FEHBlog's late father who owned a small boiler and chimney cleaning business once  jokingly observed, "The proper pricing policy is to stick the knife in the customer's back, twist it until the customer screams and then turn it back a quarter turn. That's a fair price."

Friday, July 13, 2018


Plan Sponsor reports on a package of healthcare related bills that the full House Ways and Means Committee approved at a mark up meeting held yesterday, including:
H.R. 6301, which provides that a plan shall not be fail to be treated as a high deductible health plan (HDHP) by reason of failing to have a deductible for not more than $250 of specified services (twice such amount in the case of family coverage) during a plan year, was ordered favorably reported to the House of Representatives. The term ‘specified services’ means, with respect to a plan, services other than preventive care.
Another bill would let Medicare Part A beneficiaries currently prohibited from contributing to their existing HSAs once they turn 65 to continue to contribute.
Other bills would qualify significantly more health treatments, services and over-the-counter drugs for HSA spending and expand the definition of HDHPs to include Affordable Care Act (ACA) bronze plans and catastrophic plans.
The House also approved H.R. 6317, a bill to amend the Internal Revenue Code of 1986 to provide that direct primary care service arrangements do not disqualify deductible health savings account contributions, and for other purposes.
After a two-day markup session, the committee also moved to the House legislation providing retroactive relief from the ACA’s employer mandate from 2015 through 2018 and delay for one additional year (until 2023) the 40% Cadillac Tax.
In troubling news, Medpage today tells us that "The number of opioid overdose deaths in which fentanyl was detected in 10 states doubled during the first half of 2017 compared with the second half of 2016, according to the CDC's Mortality and Morbidity Weekly Report."  The reports concludes chillingly that "the potency of many fentanyl analogs, especially carfentanil, 'might warrant multiple administrations of the effective opioid overdose reversal medication naloxone.'"

The Health Affairs Blog reports on a recent academic conference on health care cost control. Nothing definitive.

Finally, notwithstanding the FEHBlog's unwillingness to predict whether the Justice Department will approve the CVS / Aetna merger, CNBC reports the stocks for those companies rose yesterday on "market rumors" that the Justice Department approval will happen soon. 

Thursday, July 12, 2018

Thursday Roundup

The FEHBlog discovered that the OPM Inspector General has posted on the internet his semi-annual report to Congress for the period ended March 31, 2018, and the agency has posted its management response to that report.

OPM today issued a final rule terminating effective September 30, 2018, the program offering stepchild coverage under the FEHBP and FEDVIP to the children of/ C domestic partners living overseas with a same sex federal employee.  This temporary program was ended for federal employees living in the U.S. effective January 1, 2016, soon after the Obergefell decision was handed down by the U.S. Supreme Court. "There is no change in coverage for children whose same-sex partners are married."

Interesting tidbits outside the FEHBP:

  • Healthcare Dive reports on Mercer Consulting's recent national survey of employer sponsored health coverage.
  • The Centers for Medicare and Medicaid Services today issued a proposed Medicare Part B physician fee schedule rule for the 2019 calendar year. CMS touts the rule as quite deregulatory and note that the rule provide for Medicare Part B coverage of telehealth services. 
  • An Employee Benefit News article offers three ways to help employees understand the value of health savings accounts. 
  • Health Data Management calls attention to a growing number of indictments and criminal complaints based on violations of the HIPAA Privacy and Security Rules. This is noteworthy because the criminal sanctions have been on the books for over 20 years.
  • Finally, the Wall Street Journal reports tonight that the Justice Department has appealed to the U.S. Court of Appeals for the D.C. Circuit from the recent lower court decision permitting the AT&T / Time Warner merger to proceed. The FEHBlog has been tracking the case because it involves a vertical merger similar to the vertical healthcare mergers now under antitrust review, e.g. CVS / Aetna, Cigna / Express Scripts, and Walmart / Humana. No predictions, just keeping track. 

Tuesday, July 10, 2018

Tuesday Tidbits

Following up on a number of recent posts:

  • Federal News Radio reports that 
The Justice Department jumped the gun in June when it claimed  a Maryland woman pleaded guilty for using data stolen from the 2015 breach of the Office of Personnel Management to obtain fraudulent loans. In a letter to Sen. Mark Warner (D-Va.), Justice Assistant Attorney General Stephen Boyd said DoJ reached a “premature conclusion” that the data only came from the OPM breach.
  • Fierce Healthcare reports that yesterday HHS Secretary Alex Azar gave a speech in the course of which he said
"The drug companies who recently increased prices may well be remembered for creating a tipping point in U.S. drug pricing policy.  As you may have recently seen on Twitter, the president has noticed. I have noticed. And more importantly, the American people have noticed. Change is coming to prescription drug pricing whether it's painful or not for pharmaceutical companies." 
The Wall Street Journal reports tonight that "Pfizer Inc.c said Tuesday that it would “defer” some recent drug-price increases, reversing course after President Donald Trump criticized the company."
  • Healthcare Dive reports that Food and Drug Administration Commissioner Scott Gottlieb, MD, "reaffirmed in a statement Monday the agency’s commitment to finding the “right balance” between reducing the U.S. rate of opioid addiction and providing access to legitimate patients, for whom these medications can be lifesaving."  That's an important balance to achieve.
  • On a related note, Fierce Healthcare reports on how hospitals are handling the intravenous opioid drug shortage.  As the FEHBlog learned from reading the outstanding Dreamland book, opioid drugs administered inpatient are closely supervised and don't lead to addiction. It's the outpatient use that poses an addiction concern but even then many people need this effective pain treatment. Supervision can be provided to outpatients too. 
  • Healthcare Dive also reports on a useful study on patient safety here.

Sunday, July 08, 2018

Weekend update

The Senate and House of Representatives return to work on Capitol Hill this week following a week-long state or district work period combined with the Independence Day holiday.

Federal News Radio reports that tomorrow, OPM will publish in the Federal Register a proposed rule
to establish Birmingham/Hoover/Talladega, Alabama; Burlington/South Burlington, Vermont; San Antonio/New Braunfels/Pearsall, Texas; and Virginia Beach/Norfolk, Virginia, as new locality pay areas. 
Once OPM completes the regulatory process, the president must set locality pay rates for the four new areas, which typically occurs at the very end of each calendar year. 
Federal employees in these four new areas would likely see the locality pay changes on or after Jan. 1, 2019 in their first paychecks of the new year.
The change favorably impacts 62,000 federal employees (out of 2 million) and brings the number of locality pay areas to 51. The FEHBlog had no idea that the number of locality pay areas is that high.

Yesterday, the Health and Human Services Department announced that it is suspending the Affordable Care Act's risk adjustment program based on a New Mexico federal court decision. The details, including a timeline, are available on the CMS website.  Many are lashing out at HHS over this decision, but in the FEHBlog's view the root problem is the overreaching and poorly drafted Affordable Care Act. Ironically, the New Mexico case challenging CMS's method of calculating the risk adjustment was brought by the New Mexico health co-op unnecessarily created by the ACA.

The FEHBlog is a fan of Mondays because he enjoys his work and new episodes of the Econtalk podcast are released that day.  The FEHBlog ran across this academic assessment of the ACA, titled A Cure for our Healthcare Ills, via the website.  Also check out this Econ Talk interview with Jerry Muller the author of one of the FEHBlog's favorite books of 2018, The Tyranny of Metrics.

Friday, July 06, 2018


The Society for Human Resource Management calls attention to the fact that the House-passed bill addressing the opioid crisis (H.R. 6) "contains a provision extending the amount of time that employer-sponsored health plans [including FEHB plans] must cover end-stage renal disease under Medicare secondary payer rules from 30 months to 33 months."  That would be a bitter pill for those plans to swallow on top of the high cost of the opioid crisis itself.

The Washington Examiner reports that several prescription drug manufacturer are continuing their unpopular practice of semi-annual pricing changes.

CNBC, via Becker's Hospital Review, tells us that telemedicine faces obstacles on its path to reaching the mainstream of healthcare. AHIP points out in this article how telemedicine can be interwoven current focus on social determinants of health. The FEHBlog believes that eventually telemedicine will reach the mainstream.

Meanwhile the International Foundation reports
Onsite [health] clinics are not a new concept, but they are gaining increasing popularity with employers of all sizes. Because these clinics provide primary care and preventative care, onsite clinics are a multifaceted solution used by employers to decrease costs, increase access to care, improve health outcomes for their employees, and create a more productive and satisfied workforce. 
In fact, more than 40 companies on Fortune's list of the "100 Best Companies to Work For" offer an onsite health clinic for their employees. Additionally, according to the National Survey of Onsite Clinic Operations and Policies Report published in December of 2014, 66% of onsite health center programs demonstrated its ROI in all or some areas.
Federal agencies offer on-site medical clinics but they don't coordinate care with FEHB plans.

Monday, July 02, 2018

Holiday week update

Congress is out of town this week for the Fourth of July holiday. The Supreme Court wrapped up its October 2017 term last week. Of course, the Supreme Court remains in the news because Justice Kennedy announced his retirement from the bench. 

Fierce Healthcare offers a report on healthcare provider views on lowering costs in the healthcare system. The panel consensus is to lower regulatory burdens on providers while forcing private sector payers to increase their benefit payments due to the public payer cost shift.  In this regard, reports that "A new study from the Healthcare Financial Management Association, Leavitt Partners, and McManis Consulting found that the penetration of value-based payment (VBP) models is not yet enough to generate cost savings and is also not affecting clinical quality outcomes at the market level."  But's it still early in the process. 

HHS's Office for Civil Rights issued its June 2017 healthcare security report which focuses on the importance of vulnerability scanning and the remedial task of patching.  

Friday, June 29, 2018


Greeting from Madison Wisconsin whether the FEHBlog and his wife are helping their daughter celebrate her wedding on Friday.  A lot has been happening in the healthcare world so duty calls.

Here are links to Bloomberg Government and articles on last Wednesday's House Oversight and Government reform committee hearing on the President's federal government reorganization plan. Also here's a link to the FEDWeek Issues brief on the proposed OPM reorganization.

Amazon is paying "roughly" $1 billion for a company called Pillpack. Pillpack provides chronically ill people with a thirty day supply of various prescribed medicines in daily blister packs. The service is available in the continental U.S and Alaska. The FEHBlog heard about this innovative company a few years ago at an Express Scripts conference. The Wall Street Journal reports that PillPack “has never achieved much retail share,” Raymond James & Associates said in a note to investors. Nevertheless the acquisition shows that Amazon is serious about breaking into the mail order drug business.

The FEHBlog agrees with this Wall Street Journal observation:
[T]he health-care market may be challenging for Amazon to disrupt. It is highly regulated, and depends on a complex web of contracts, interconnected data systems and other relationships with health plans, drug-benefit managers and other health-care players that Amazon may not want to alienate if it wants its pharmacy business to prosper.
For more details on this transaction, check out this Drug Channels blog post.

Health IT Security breaks down the healthcare breach data found in the FBI's 2017 Internet Crimes report.

Finally here are Fortune and RevCycleIntelligence articles on creating uses to applying social determinants of health. Check them out.  

Tuesday, June 26, 2018

Tuesday Tidbits

Here's a link to the testimony from today's Senate Finance Committee hearing on prescription drug prices at which HHS Secretary Alex Azar testified.

Tomorrow morning at 10 am, the House Oversight and Government Reform Committee will hold a hearing at which OMB Deputy Director for Management Margaret Weichert will testify about the President's reorganization plan. Last week, the FEHBlog linked to a commentary from Federal News Radio about how that plan handles OPM. The author of that piece had a follow up article which you can read at this link.

The Wall Street Journal yesterday offered an interview with the new Director of the U.S. Centers for Disease Control Dr. Robert Redfield. Dr. Redfield plans to "address two of the most common ways people take their lives: substance abuse and firearms," in addition to his agency's other public health responsibilities.
Noting that the most common means of suicide is firearms, he said the CDC recently expanded the number of states in which it tracks violent deaths, and would conduct research into gun violence if Congress funds it. “We’re authorized to do it,” he said. “We just need a funding mechanism.” 
Dr. Redfield said the CDC is also stepping up its efforts to combat opioid abuse, another common factor behind suicide and one of his top priorities for the agency. “We’re going to continue to expand our efforts,” he said, including developing guidelines for prescribing opioids for acute pain and using a new system that can track opioid overdoses in a timely way using emergency-department data. 
The freshest opioid data used to be months old, Dr. Redfield said. Now, “we’re going to be able to track this epidemic in real time, which I think is really important to be able to respond.”
In another interesting development, Fortune Magazine reports on a venture capital fund called the Dementia Discovery Fund which "makes early stage venture capital investments to develop novel disease-modifying therapeutics for all forms of dementia."  The DDF completed its initial investor fund raising  of $350 million this week.  AARP, United Healthcare, Quest Diagnostics invested $75 million and Bill Gates invested $50 million. Other initial investors included the NFL Players Association and many prescription drug manufacturers. Hopes springs eternal.

Sunday, June 24, 2018

Weekend update

Congress is in session for one more week until it takes time off for the Independence Day holiday. The U.S. Supreme Court ends its October 2017 term this week.

The Senate Finance Committee will hold a hearing on prescription drug costs on Tuesday morning June 26. The scheduled witness is the HHS Secretary Alex Azar.

A few weeks ago, the FEHBlog called readers attention to a PriceWaterhouseCoopers analysis of medical cost trends. The FEHBlog noticed an interesting Health Payer Intelligence article that pulled a couple of nuggets out of that report.  To wit,
Health plans with narrower, high performance networks (HPNs) can help generate cost savings by focusing on improvements in care quality and member satisfaction. HPNs allow payers to invest greater financial resources in a limited number of providers in order to maximize the effectiveness and efficiency of provider care. HPNs also hold providers accountable by measuring their performance with quality measures.
Payers and employers are also using health advocates to assist high deductible health plan (HDHP) members with accessing effective and affordable healthcare services.\ 
HDHPs are a popular employer-sponsored plan offering that can contain costs by shifting greater financial responsibility to health plan members. However, that greater financial responsibility sometimes discourages HDHP members from seeking needed services in order to cut back on personal costs. 
Health advocates are gaining popularity within the employer-sponsored market because they can effectively help HDHP beneficiaries to use affordable healthcare services. 
The New York Times reported today on the journey of a  young primary care provider in her efforts to understand her patients suffering from opioid addiction.  
Opioid overdoses are killing so many Americans that demographers say they are likely behind a striking drop in life expectancy. Yet most of the more than two million people addicted to opioid painkillers, heroin and synthetic fentanyl get no treatment. Dr. Gastala, 33, is trying to help by folding addiction treatment into her everyday family medicine practice. She is one of a small cadre of primary care doctors who regularly prescribe buprenorphine, a medication that helps suppress the cravings and withdrawal symptoms that plague people addicted to opioids. If the country is really going to curb the opioid epidemic, many public health experts say, it will need a lot more Dr. Gastalas.
Amen to that sentiment.

Finally, the Wall Street Journal reported last week that
Some current and former federal government employees are taking a look at their credit activity after the Justice Department said this week that data stolen by suspected Chinese hackers in 2014 cyberattacks at the Office of Personnel Management may have been used to commit identity fraud.
Federal prosecutors on Monday said a Maryland couple had pleaded guilty to using information stolen in the OPM breach to set up fraudulent car-loan applications with a Langley, Va., credit union.
Here's a link to the U.S. Attorney's office press release. It's clear that two days later U.S. Attorney's office walked back from the statement that the information had beens stolen in the OPM breach. Here's the qualification:
As stated in the Statement of Facts for defendants Cross and McKnight, numerous victims of the LFCU identity theft fraud also identified themselves to DOJ as victims of the OPM Data Breach. The Government continues to investigate the ultimate source of the PII used by the defendants and how this PII was obtained.
Time will tell.

Friday, June 22, 2018


Following up on the Whither OPM? posts, the FEHBlog now sees that the OPM HR policy shop would wind up alongside the Office of Management and Budget as part of the Executive Office of the President.  OPM Director Pon has voiced his support for the President's reorganization plan.  Federal News Radio offers an expert opinion on the proposal to "abolish OPM."

Yesterday the Senate Appropriations Committee unanimously approved its Financial Services and General Government appropriations bill.  This is the bill that funds OPM and the FEHBP. It allows for a 1.9% civil service raise next year.

Today, according to the Hill, the House of Representatives approved its massive bill to address the opioid crisis by a 396 to 14 vote.
The legislation, passed Friday, includes a range of measures to fight the epidemic, including lifting some limits on prescribing Buprenorphine, a drug used to treat opioid addiction. The bill also requires health-care professionals to write prescriptions for Medicare beneficiaries electronically in order to better track prescriptions and to allow Medicare to cover treatment at addiction treatment clinics.
AHIP held its annual conference in San Diego this week. Healthcare Dive provides three takeaways from that conference.

Oh joy! The World Health Organization released Version 11 of the International Classification of Diseases (ICD-11) earlier this week. 55,000 Version 11 codes vs. 14,400 Version 10 (ICD-10) codes. "ICD-11 will be presented at the World Health Assembly in May 2019 for adoption by Member States, and will come into effect on 1 January 2022. This release is an advance preview that will allow countries to plan how to use the new version, prepare translations, and train health professionals all over the country." Of course the January 1, 2022, effective date does not mean that U.S. health plans and healthcare providers will not begin using the ICD-11 on that date. The FEHBlog expects a five to ten year lag from for U.S. implementation based on the ICD-10 process.

Thursday, June 21, 2018

Whither OPM? Reorg plan released

Earlier today, the Trump Administration released its federal government reorganization plan,  As Federal News Radio accurately reported yesterday, the reorganization plan proposes (at page 51) to move OPM's human resources, healthcare and insurance, and retirement services to the General Services Administration. OPM's background search service would move to the Defense Department and the remaining employment policy functions would move to the Office of Management and Budget.

The reorganization plan requires Congressional approval. The House Oversight and Government Reform Committee will hold a hearing on the reorganization plan next Wednesday June 27 at 10 am ET.

Here's the Federal Times article providing its overview of the reorganization plan.

Wednesday, June 20, 2018

Whither OPM?

Federal News Radio is reporting as its current lead article that the President’s government reorganization plan scheduled to be announced tomorrow will do away with OPM as we know it. “Multiple sources said the reorganization may also include a move of OPM’s health care and retirement services to GSA.”