Weekend update

What an afternoon! My college team, the UConn Huskies, are in the Final Four of the men's basketball tournament for the fifth time in the last fifteen years (three national championships so far).

From the sublime to the ridiculous, Congress is in session again this week as the Hill's Floor Blog reports and the Senate will take up the temporary Medicare Part B fix bill tomorrow. The AMA is upset that Congress decided not to pass the bipartisan permanent fix this go around. The FEHBlog does expect the permanent fix to be enacted in the lame duck session that will follow the Congressional election in November.

As the FEHBlog noted on Friday, the Medicare Part B temporary fix bill will delay ICD-10 code implementation for at least another year. ihealthbeat reports that industry reaction to the delay is mixed. Health insurers and hospitals are frustrated and doctors are relieved. The FEHBlog understands the frustration but the October 1, 2014, ICD-10 compliance date was shaping up to be a train wreck because so many medical practices are unprepared. What's more moving to the ICD-10 code won't improve the speed of claims processing which was HIPAA's goal now almost 20 years ago. In the FEHBlog's view, it is time to repeal the electronic transaction and code set provisions of HIPAA. Let the industry handle it. Technology standards should not be embedded in law.

The large prescription benefit manager, CVS Caremark, announced last week that it received a three year renewal of its contract to manage the Blue Cross Federal Employees Program's retail, specialty, and mail order prescription drug benefits. "The new agreement, which runs through 2017, brings the relationship between CVS Caremark and FEP to more than 20 years."

Finally, following up the FEHBlog's comments on the worthy Million Hearts campaign last Friday, Modern Healthcare reports that "Nearly 6 million Americans diagnosed as needing high blood pressure medication may no longer need to take it, and another 13.5 million previously classified as having uncontrolled blood pressure would now meet healthy blood pressure targets, a new Journal of the American Medical Association analysis finds." The study generally affects people aged 60 and older whose systolic blood pressure reading is between 140 and 150, which is consider a gray area. This could be relevant to NCQA HEDIS standard on blood pressure control.  But from a big picture perspective, the FEHBlog believes that the article illustrates the fact that practice of medicine remains as much an art as it is a science.

TGIF

OPM and AHIP held an interesting FEHBP carrier conference over the past few days. Federal News Radio, Govexec.com, and the Federal Times all covered the OPM Director's keynote speech.  The FEHBlog did learn a few things:

1. OPM willl be implementing the ACA;s employer shared responsibility mandate for 2015 which in the FEHBlog's view is good news. OPM is collecting data necessary to estimate the impact of expanding FEHBP coverage to all federal employees who work on average 30 hours or more as calculated under the IRS's rules. 
2. There are a few specialty drugs (injectables that require special handling, e.g. Gleevec) which are small molecule and therefore can be converted to generic upon patent expiration under the existing FDA approved regulatory pathway. A speaker from CVS/Caremark estimated that when the FDA creates the regulatory pathway for biosimilar drugs (large molecule drugs), the discounts will range from 10% to 40% in line with discounts for multibrand brand name drugs but not small molecule generics (75% discount or more for those).  He pointed out that the costs of developing biosimilar drugs will be much higher than the costs of developing small molecule generics. 
3. There are 700 or so manufacturer sponsored specialty drug copay assistance programs which are disrupting health plan designs. 
4. Blood pressure can be brought under control by prescription drugs alone. The Million Hearts campaign is promoting ABCS -- aspirin for those who need it, blood pressure control, cholesterol management, and smoking cessation.  Other lifestyle changes improve health but aren’t critical to controlling blood pressure. That's why it's so important for people with hypertension -- which affects one out of three adult Americans according to the CDC  -- to see a doctor. The FEHBlog had hypertension a few years ago, but he lost weight and takes hypertension, medication, statins for cholesterol management, and aspirin. His blood pressure is perfect now. The trick, of course, is maintenance. So the FEHBlog understands why OPM is promoting blood pressure control in the call letter. 

The House did pass another temporary / one year Medicare Part B payment fix yesterday that the Senate plans to take up on Monday. The American Medical Association, according to fierce healthcare.com,  is furious about this development which surprises the FEHBlog because the House bill extends the ICD-10 coding compliance date to at least October 1, 2015. We shall see. 

Tuesday's Tidbits

Modern Healthcare confirms that Congress is likely to pass another Medicare Part B doctor payment patch this week rather than allow a rough 20% cut in those payments go into effect next month.

The Washington Post and Govexec.com posted articles about OPM's 2015 call letter for FEHB carrier benefit and rate proposals.

Fedsmith.com posted an article about an OPM letter to benefit officers providing details on the scheduled 2016 implementation of a self plus one enrollment option in the FEHBP.

Fierce Health Finance.com reports that

Hospital inpatient prices increased 1.4 percent year-over-year [from February 2013 to February 2014], according to producer price data from the U.S. Bureau of Labor Statistics (BLS). They grew 0.3 percent between January and February {2014]. By contrast, the product price for hospital outpatient care increased 3.5 percent between February 2013 and February 2014, by far the biggest price increase among all the healthcare services studied.

Weekend update

Congress returns to Washington this week to address the Medicare Part B payment fix issue and the Ukraine according to the Hill's Floor Action blog. The Floor Action blog recaps the FEHBlog's expectation:

Earlier this month, House Republicans tried to permanently kill the SGR formula in a bill that would also delay the individual mandate under ObamaCare for five years. The House passed that bill with 12 Democrats, but it's seen as a dead letter in the Senate, and the Obama administration has threatened to veto it.  That means Congress has little choice but to agree on some short-term patch once again this week. The House seems likely to pass it by the middle of the week, and the Senate is likely to follow through soon afterwards.

The FEHBlog being an old guy reads two newspapers everyday. He reads the Wall Street Journal for international and national news and the Washington Post for federal employee news, local news, and local sports. (Also the New York Times on Sunday for old time sake.) The FEHBlog also gets a charge out of reading the Washington Post's massive reports on the front page of the Sunday paper. Today's deep dives concerned GWU's admissions process and OPM's retirement claim processing service located in a limestone mine in Boyers, PA (rented as it turns out by the Iron Mountain document storage company) -- the "Sinkhole of Bureaucracy."  The Post shellaced OPM for continuing to process retirement claims on paper. But as the article as points out, the root problem is a hideously complex retirement systems (two systems actually). The Post notes the the State of Texas can process a state employee retirement claim in two days. Congress should consider modelling the federal system on Texas if it wants to solve this problem instead pushing OPM to pound a square peg into a round hole.

The FEHBlog did his own deeper dive on the AvMed breach of privacy class action settlement that he discussed in the most recent mid-week update. The class action stems from the theft of two AvMed laptops containing unencrypted protected health information. A National Law Review article reviewed the terms of the settlement as follows:

Under the agreement’s terms, AvMed will establish a $3 million fund to pay the following:
1.Class members whose personal information was actually on the stolen laptops, but who have not suffered identity theft, can receive $10 for each year they paid AvMed for health insurance coverage before the December 2009 incident, up to a maximum recovery of $30. This relief is intended to compensate class members for that portion of their premiums that plaintiffs contend AvMed should have devoted to adequate data protection protocols and procedures.  This group comprises the “Premium Overpayment Settlement Class.”
2.Those class members who actually suffered identity theft will be reimbursed for the amount of any proven monetary loss that is shown by that member to have occurred “more likely than not” as a result of the December 2009 breach. Members of this class may also claim under the Premium Overpayment Settlement Class.  The parties have allocated $250,000 to cover identity theft claims by this sub-class.
3.An incentive award of $10,000 to be split evenly among the two class representatives (for their efforts in serving as class representatives).
4.Attorneys' fees and costs for the plaintiffs' class attorneys, in the amount of $750,000.
5.The costs of sending notices to the settlement classes as well as all costs of settlement administration.

Emphasis added. The settlement thus does include a small per capita  payment to everyone affected by the breach to reimburse them for a portion of their premiums that should have been spent on protecting the informaiton. This Premium Overpayment Settlement Class" is eligible to receive tiny slivers of about two thirds of the settlement fund. Clearly the class action plaintiff attorneys were interested in establishing a precedent for this type of relief.  (This aspect of the settlement also allowed those attorneys to beef up the attorneys fee recovery tranche of the settlement fund.) The legal pendulum is swinging in a troubling direction for entities that hold protected health information. Take cover -- e.g, purchase adequate cyber liability insurance, keep your risk assessment up to date, and encrypt protected health information held on a mobile device.

Finally, the FEHBlog also is looking forward to attending the big OPM AHIP FEHBP carrier conference later this week.

Happy New Year!

OPM released the 2015 call letter for FEHB carrier benefit and rate proposals today. Here's a link to the document. Just like the NFL's new year begins when free agency starts, the FEHBP contract year begins when OPM issues the call letter. OPM will be discussing the call letter with FEHBP carriers at the OPM AHIP carrier conference in beautiful Arlington, VA next Friday. Carriers are allowed until May 31, 2014, to submit their 2015 benefit and rate proposals. OPM seeks to approve the proposals by mid-August, and then Open Season begins in early November for about six weeks. This is the Program's Super Bowl to carry on the NFL analogy. Now it's back to the NCAA tournament.

Mid-week update

The FEHBlog often comments on the fact that the demographics in the FEHBP are lousy which given the FEHBP's success should give hope to the insurers operating in the exchanges. The FEHBlog's point was driven home today by a Washington Post report that "employees younger than 30 make up only 8.5 percent of the federal workforce, compared to 23.2 percent of the U.S. workforce overall, based on data from the Office of Personnel Management."

The Wall Street Journal has a report on a successful IPO by a San Francisco based cloud software company called Castlight. A related Journal analytical report explains that the IPO was successful because there's money to be made in controlling healthcare costs. Castlight advises self-insured employers on this matter. The Leapfrog Group, which was created by the National Roundtable to assess health care quality, just retained Castlight for a big project. Modern Healthcare explains

Castlight, which sells price transparency products and services to self-insured employers' systems, will take its first look at Leapfrog data on early elective deliveries and infections. It will provide an analysis of the survey data nationwide, by region and by each of 28 survey metrics, according to the release. The Castlight analysis, including graphics, will be part of a Leapfrog report this spring evaluating hospitals on quality and safety.  

Why aren't the actuarial consulting services providing this service?

Speaking of improving quality, Modern Healthcare reports on a survey on physician participation in accountable care organizations or ACOs--

The results, published online in the journal Health Services Research, show that roughly 6 of 10 physician groups have so far avoided accountable care, a proliferating payment model that rewards and penalizes hospitals and doctors based on their ability to meet cost and quality targets. Medicare accountable care efforts, launched in 2012 under the Patient Protection and Affordable Care Act, now include more than 350 organizations. Private insurers have entered into more than 600 accountable care contracts, according to estimates by healthcare consultant Leavitt Partners. When measured against an index of 25 measures of care management, patient engagement and quality, the physician practices with no plans to join an ACO scored lowest, the study said. Medical groups already under accountable care contracts ranked highest. One-quarter of survey respondents were in ACOs. The survey included roughly 1,180 medical groups that researchers adjusted to reflect a nationally representative sample. Another 15% planned to join an ACO soon.

Finally, the FEHBlog as a lawyer urges readers who are covered entities or business associates to read this Computer World article that begins

Courts have generally tended to dismiss consumer class-action lawsuits filed against companies that suffer data breaches if victims can't show that the the breach directly caused a financial hit. A federal court in Florida broke the mold by approving a $3 million settlement for victims of a data breach in which personal health information was exposed when multiple laptops containing the unencrypted data were stolen.

The plaintiffs' lawyers argued for restitution on the group that part of the payments that the victims made to AvMed were to cover the cost of securing the data.  That's what we lawyers call precedential or an attention grabber.  .

Weekend update

Congress is not in session this week. The current Medicare Part B doctor payment fix expires two weeks from tomorrow. As the FEHBlog has noted there is a bipartisan approach to replacing the sustainable rate of growth formula but no agreement on how to pay for that change. According to Modern Healthcare, The House passed the bipartisan approach but decided to pay for it by waiving the ACA's individual mandate until 2019. Of course, that approach is unacceptable to the Administration and the Senate leadership. It increasingly looks the can will be kicked down the road until the lame duck session after the mid-term elections.

On Friday, CMS issued guidance that it's illegal under the ACA for an insurer offering non-grandfathered group or individual health insurance coverage to extend coverage to opposite sex but to not same sex spouses. The guidance, which is based on 45 C.F.R. § 147.104,

does not require a group health plan (or group health insurance coverage provided in connection with such plan) to provide coverage that is inconsistent with the terms of eligibility for coverage under the plan, or otherwise interfere with the ability of a plan sponsor to define dependent spouse for purposes of eligibility for coverage under the plan. Instead, this section prohibits an issuer from choosing to decline to offer to a plan sponsor (or individual in the individual market) the option to cover same-sex spouses under the coverage on the same terms and conditions as opposite sex-spouses. 

Of course, this is not an issue for the FEHBP.  In the FEHBlog's opinion, a plan sponsor is just asking for trouble if it excludes same sex spouses.

Reuters is reporting that

Aetna Inc, the third largest U.S. health insurer, said on Friday it would not proceed with a proposed $120 million settlement with healthcare providers and plan members over out-of-network reimbursements. Aetna, which had agreed to settle in December 2012, said enough claimants had opted out to trigger a provision enabling it to cancel the deal.

The FEHBlog is saddened this insane litigation continues to plague health insurers. For decades, plans based out of network provider payments on "usual, reasonable, and customary" data compiled by a third party -- first a trade association and later an information company affiliated with United Healthcare. The American Medical Association alleged an unholy conflict of interest between United and its affiliate and challenged the integrity of the data . Insurer got caught in the middle in this sort of litigation. Insurers used the data as a common yardstick based on convenience not necessarily accuracy. The phrase "usual reasonable and customary," however, implied accuracy, and plaintiffs' attorneys flogged the United affiliate with alleged data flaws. Since this issue arose over 10 years ago -- it erupted in late 2008 -- plans have dropped the usual, reasonable, and customer phrase in favor of the much more generic plan allowance phrase.  United's affiliate transferred the data base to a new New York non-profit called Fair Health.  Plans also have switched to Medicare's relative value schedule as a yardstick. (The SGR controversy concerns setting the dollar multiplier that is multiplied times the Medicare relative value to obtain the payment value.) he incident does illustrate the importance of clear plan language.

Happy Pi Day

A client reminded the FEHBlog that today is National Pi Day. Best wishes to all.

Following up on the FEHBlog's diatribe about the ACA regulator's decision to consider whether PHCS § 2706(a), the ACA's provider non-discrimation law, creates a federal any willing provider rule, the FEHBlog noticed in the Drug Channels blog that believe it or not the Federal Trade Commission recently sent a detailed letter to CMS expressing its opinion that any willing provider laws push the cost curve up!  This letter was written in response to CMS's now withdrawn proposal to imposed an any willing pharmacy requirement on Medicare Part D.

And while on the topic of diatribes, the FEHBlog has not been happy with the federal Office of Federal Contractor Compliance Program's ("OFCCP") efforts to treat FEHBP participating health care providers as federal subcontractors for purposes of affirmative action program requirements in the face of OPM's long standing rule that health care providers are not FEHB plan subcontractors.  Hospitals and other health care providers already are heavily regulated and an additional burden like this only will discourage hospitals from contracting with FEHB plan carriers in the FEHBlog's view.

OFCCP also has taken enforcement actions against TRICARE (military dependent health program) providers. Congress passed a law to stop those efforts but OFCCP was not deterred. OFCCP has encouraged a crabbed interpretation of the law. Rep. Tim Walberg (R Mich) has introduced a short bill (HR 3633) that is intended to shut down these OFCCP enforcement efforts once and for all..

Yesterday, Rep. Walberg who chairs a House Education and the Workforce subcommittee held a hearing on his bill which is titled the "Protecting Health Care Providers from Increased Administrative Burdens Act." At his hearing Rep Walberg announced that the Secretary of Labor has decided to impose a five year long moratorium on OFCCP enforcement actions against TRICARE, but not FEHBP, providers of cares. During that moratorium, OFCCP plans to acclimate providers to the new enforcement scheme. Rep. Walberg welcomed the OFFCP action but further encouraged Congress to adopt his bill as a long term solution. Here is part of his opening statement:

If the secretary [of labor who is responsible for OFCCP] has accomplished anything, he has signaled to our TRICARE providers the day of reckoning is only delayed. Any sensible provider will use these few years to decide whether it’s in their best interest to continue operating in a TRICARE network. Many may decide the administrative burden looming on the horizon is simply too much to bear. As a result, veterans, service members, and their families will lose access to care. Let me repeat that: As a result of the department’s policy, veterans, service members, and their families will lose access to care. Maybe not now, but soon.

As policymakers, we shouldn’t accept political half-measures that merely kick the can down the road. The American people expect better. I am disappointed my friend and colleague, Representative Courtney [a Connecticut Democrat on the Committee], is no longer a cosponsor of this important legislation. However, it is my hope we continue working together to provide a lasting solution to this problem, not just for our active and retired military service personnel, but also for our seniors, and the men and women who serve in the federal workforce. H.R. 3633 provides the long-term solution they and their families deserve. 

Amen to that.

Provider Non-Discrimination

The FEHBlog nearly fell out of his chair when he read that the ACA regulators are seeking public comment on the scope of the law's provider non-discrimination rule (Public Health Service Act § 2706(a)). This law essentially expands the FEHBA's medically underserved area rule nationwide. OPM explained the medically underserved area rule (5 U.S.C. § 8902(m)(2) as follows:

If you live in a medically underserved area and are enrolled in a fee-for-service plan, your plan must pay benefits up to its contractual limits, for covered health services provided by any medical practitioner properly licensed under applicable State law.

On April 29, 2013, the ACA regulators in FAQ XV explained that Section 2706(a) is self-implementing and does not require a regulation. This was a political move in the FEHBlog's opinion because the American Medical Association detests this provision. In any event, the ACA regulators explained that

Until any further guidance is issued, group health plans and health insurance issuers offering group or individual coverage are expected to implement the requirements of PHS Act section 2706(a) using a good faith, reasonable interpretation of the law. For this purpose, to the extent an item or service is a covered benefit under the plan or coverage, and consistent with reasonable medical management techniques specified under the plan with respect to the frequency, method, treatment or setting for an item or service, a plan or issuer shall not discriminate based on a provider's license or certification, to the extent the provider is acting within the scope of the provider's license or certification under applicable state law. This provision does not require plans or issuers to accept all types of providers into a network. This provision also does not govern provider reimbursement rates, which may be subject to quality, performance, or market standards and considerations.

The chiropractors danced for joy. But evidently it was not enough for Senate Democrats according to a notice that the ACA regulators posted in the Federal Register today.

The Senate Committee on Appropriations Report dated July 11, 2013 (to accompany S. 1284) 3 states that section 2706 of the PHS Act ‘‘prohibits certain types of health plans and issuers from discriminating against any healthcare provider who is acting within the scope of that provider’s license or certification under applicable State law, when determining networks of care eligible for reimbursement. The goal of this provision is to ensure that patients have the right to access covered health services from the full range of providers licensed and certified in their State. The Committee is therefore concerned that the FAQ document issued by HHS, DOL and the Department of Treasury on April 29,  2013, advises insurers that this nondiscrimination provision allows them to exclude from participation whole categories of providers operating under a State license or certification. In addition, the FAQ advises insurers that section 2706 allows discrimination in the reimbursement rates based on broad ‘market considerations’ rather than the more limited exception cited in the lawfor performance and quality measures. Section 2706 was intended to prohibit exactly these types of discrimination. The Committee believes that insurers should be made aware of their obligation under section 2706 before their health plans begin operating in 2014. The Committee directs HHS to work DOL and the Department of Treasury to correct the FAQ to reflect the law and congressional intent within 30 days of enactment of this act.’’ 

Note to the ACA regulators -- this Appropriations bill did not become law. As far as the FEHBlog can tell, this provision is not found in the omnibus appropriations bill that Congress enacted. Hasn't this law pushed up the cost curve enough. Is it necessary to disrupt up insurers' provider networks? Do market conditions really not have a role in health care? The comment deadline is June 4, 2014.  This action is unsettling.

Mid week update

Here are some Tuesday tidbits which are a little late because the FEHBlog was focused on the NFL draft and the FL 13 election last night.

• The OPM director issued a strategic information technology plan yesterday.  The Federal Times provides an overview of the plan. The FEHBlog notes that OPM explains in the report  (p. 35) that the agency plans to roll out a new BenefitsPlus platform this year. The FEHBlog notes that many OPM information technology programs stem from unduly complicated retirement program laws. Simplify the laws first. 
• The FEHBlog at long last noticed yesterday that over a month ago OPM issued a 2015 call letter for the multistate program operating in the exchanges. This call letter provides some clues about what FEHB carriers may learn when OPM issues the FEHBP's 2015 call letter on March 28. 
• Heads up! Under the final employer shared responsibility rule, employers who cover at least 70% of their full time employees next year will not be liable for the $2000 per uncovered FTE penalty. Nevertheless they can be held liable for the $3,000 penalty imposed for failing to cover a full time employee who receives subsidized coverage in the exchange. See Question 39 the IRS FAQs. The IRS will be able to identify these employees because the IRC 6055 and 6056 reporting requirements will be in effect for 2015. 

Weekend Update

Congress is in session this coming week as the Hill's Floor Watch blog reports. The Medicare Part B fix expires at the end of this month unless Congress takes action before then. Upon expiration, Medicare Part B payments to doctors will drop by around 20%.  There is a bipartisan fix on the table but how to pay for the fix remains an open question. The Congress always can kick the can down the road so the issue can be taken up in a lame duck session following the mid-term elections in early November. The Medicare Part B fix has a big FEHBP impact for two reasons. One, there is a large cadre of FEHBP annuitants with primary Medicare Part B coverage, and two, fee for service plans under the FEHB Act pay doctors for services rendered to annuitants over age 65 who have declined Medicare Part B using the Medicare schedule.

Drug Channels.net has an interesting report on the specialty pharmacy business. Specialty pharmacy are biologic or large molecule drugs that require special pharmacy handling because, for example, they often are injectables.  Biologic drugs are more expensive than small molecule / traditional drugs because the FDA still has not created a regulatory pathway for the approval of bio-similar drugs akin to small molecule generics. Drug Channels research

research shows a booming market:

• In 2013, retail, mail, and specialty pharmacies dispensed about $63 billion in specialty pharmaceuticals.
• Specialty drugs accounted for 22% of total pharmacy industry revenues.
• Three companies—Express Scripts, CVS Caremark, and Walgreens—accounted for 63% of revenues from pharmacy-dispensed specialty drugs. The next three largest players had a combined share of about 5%.

Specialty drugs also are dispensed in doctors' offices and clinics.

Here are a couple of tid bits that caught the FEHBlog's attention:

• Two major drug manufacturers -- Ranbaxy in India and Pfizer here in the good old USA -- have recalled drugs due to distribution mix-ups. How often does that happen?
• Healthday is reporting that  "A blood test has been developed that can predict with 90 percent certainty whether a senior will suffer from dementia within the next few years, researchers report." Fingers crossed that the blood test could help researchers determine the cause of this disease. The Washington Post reported last week that "Alzheimer’s disease likely plays a much larger role in the deaths of older Americans than is reported, according to a new study that says the disease may be the third-leading cause of death in the United States."

TGIF

Following up on the CMS's administrator's ICD-10 or bust comments at the HIMSS conference last week, the American Medical Association is begging CMS for an ICD-10 contingency plan. Medical Economics reports that 

The American Medical Association (AMA) says it’s “deeply concerned” that a contingency plan has not been put in place if issues occur during ICD-10 testing this month. “The slightest glitch in the ICD-10 rollout could potentially cause a billion dollar back-log of medical claims that jeopardizes physician practices and disrupts patients’ access to care,” Ardis Dee Hoven, MD, president of the AMA, said in a written statement. “The AMA is deeply concerned that Medicare does not have a back-up plan if last minute testing demonstrates anticipated problems with this massive coding transition. At the end of the day sticking hard and fast to the ICD-10 deadline without a back-up plan to address disruptions in medical claims processing will hurt doctors and their patients.”

Understood and agreed.

The Affordable Care Act regulators issued a veritable flood of regulations late on Wednesday afternoon. HHS issued the 335 page long final 2015 benefit and payment parameters notice. This behemoth prescribes the 2015 out-of-pocket maximum for group health plans, including FEHB plans -- $6,600 for self-only coverage and $13,200 for other than self-only coverage and it expands on the rules for the transitional reinsurance fee. That fee will generate $25 billion from health plans over three years (2014-2016) to fund a transitional reinsurance fee for the qualified health plans in the exchanges and to reimburse the U.S. Treasury $5 billion dollars for the ACA's Early Retiree Reinsurance Fund.  While HHS barred FEHB plans from participating in this program, it is happy to accept this reimbursement from them. Benefit cost curve up. 

IRS issued rules implementing the IRC Section 6055 and 6056 reporting requirements. Both of these requirements take effect next year (following a one year administrative delay) and pose herculean tasks for health plans. The 6056 requirement is imposed on employers to support compliance with the ACA's employer shared responsibility mandate, and the 6055 reporting requirement is imposed on health plans outside the exchanges, including FEHB plans, to support compliance with the ACA's individual shared responsibility mandate. In order to meet the 6055 reporting requirement health plans will have to solicit Social Security Numbers for all plan members. Plans typically have employee Social Security Numbers but not dependents.  Administrative cost curve up.

In an effort to reduce administrative costs, CAQH, which is a coalition of health plans and providers, has created a coordination of benefits databank known as COB Smart which just launched last month. 

COB Smart is being rolled out on a market-by-market basis. The solution is currently live in 15 states; the remainder of the country is scheduled to go live later in 2014. The impact of this solution will amplify throughout the U.S. as more organizations adopt COB Smart.
"COB Smart is addressing the frustrations that patients, providers, and health plans sometimes experience with benefit coordination," said Robin Thomashauer, Executive Director of CAQH. "Efficient COB processes are integral to ensuring providers receive the right payment and health plans process the correct claims the first time."
CAQH and its member health plans worked together to design COB Smart. Participating health plans include Aetna; AultCare; Blue Cross and Blue Shield of North Carolina; BlueCross BlueShield of Tennessee; CareFirst BlueCross BlueShield; Cigna; Health Net, Inc.; Horizon Healthcare Services, Inc.; Kaiser Permanente; UnitedHealthcare; and WellPoint, Inc., on behalf of its affiliated health plans. Each of these health plans has committed to adopt the solution.

Bravo.

President's FY 2015 Budget Proposal

The President issued his FY 2015 budget proposal today. The Office of Personnel Management's proposed budget include the following legislative initiatives that the agency also suggested last year:

The health insurance marketplace has changed significantly since the FEHBP was enacted in 1959 and the current governing statute leaves little flexibility for the program to evolve with the changing market. The 2015 budget proposes that beginning in 2016: domestic partners of Federal employees and new retirees would be eligible for health benefits; OPM would be authorized to contract with modern types of health plans rather than being limited to the current four statutorily-defined plans reflective of the 1950s insurance market; OPM would be authorized to contract separately for pharmacy benefit management services; and OPM would be given authority to make adjustments to premiums based on an enrollee's tobacco use and/or participation in a wellness program.

Last year's wish list included adding a self plus one option to the FEHBP. Congress enacted that suggestion because CBO scored that change as creating budget savings. OPM has decided to delay implementing that change until 2016 as the FEHBlog noted last week.  

Weekend Update Supplement

Well, the FEHBlog was out of town this weekend, and his schedule was discombobulated this morning by winter storm Titan. So the FEHBlog posted the key weekend update this morning and now wants to add a few more points.

The FEHBlog received a tip from his friend and colleague Theresa Defino that on February 18, 2014, the Congressional Research Service issued not one but two FEHBP related reports.  The first is a report on the transition of members of Congress and their official staffs from FEHBP coverage to DC gold level SHOP exchange coverage.  The second is an updated report on law affecting the FEHBP or as the FEHBlog calls it "Thanks for the memories."

Today, the consulting firm Truven Health Analytics released the results of its annual survey of top 100 hospitals. Check your PPO lists! One local hospital made the list, the Virginia Hospital Center in Arlington, VA. The Truven press release explains that

“Employers and payers are increasingly seeking network hospitals that consistently provide demonstrated value — hospitals that deliver higher quality, higher satisfaction and lower cost. The 100 Top Hospitals have been objectively proven to provide high value, and the majority of them have demonstrated year-over-year increased value, as well,” said Jean Chenoweth, Truven Health Analytics senior vice president, 100 Top Hospitals Programs. “The results show 100 Top Hospitals to be strong, well-managed hospitals with consistently high performance. This year, 59 percent of the 2014 100 Top Hospitals were winners last year. In 2013, 51 percent were repeat winners; in 2012, 42 percent were repeat winners.”

The FEHBlog also was reminded today that the Choosing Wisely campaign which OPM has endorsed is continually updating its member medical association lists of medically unnecessary procedures. The most recent posts were from the American Geriatrics Society and the American Academy of Allergy, Asthma, and Immunology.

Weekend update

The Obama Administration is expected to release its FY 2015 budget proposal tomorrow. Federal New Radio reports that OPM's Director hinted on Friday about OPM initiatives in that proposal which focus on employee training. Congress is in session this week, and the Hill's Floor Blog reports that major Congressional committees will be questioning Administration officials about their budget proposals.