Mid-week update

The Hartford Courant has the latest news on the state of the Anthem-Cigna merger here.

In the weekend update, the FEHBlog noted a report that hospitals like health plans are focused on expanding the use of telemedicine.  The FEHBlog wondered why. The Wall Street Journal provided the answer in this article published on Monday.   The article looks at hospital use of telemedicine from several angles including

In the woods outside St. Louis, shifts of doctors and nurses work around the clock in Mercy health system’s new Virtual Care Center—a “hospital without beds” that provides remote support for intensive-care units, emergency rooms and other programs in 38 smaller hospitals from North Carolina to Oklahoma. Many of them don’t have a physician on-site 24/7.

and

The Cleveland Clinic is working to create a “Cleveland Clinic in the Cloud” that would allow patients across the country to access its physicians without going to Ohio. Dr. [Peter] Rasmussen [from the Cleveland Clinic] also foresees joining with local pharmacy clinics, labs and imaging centers to provide in-person exams as needed. “This will open up a world of relationships across a spectrum of health-care providers that we haven’t seen to date,” he says. 

The Centers for Disease Control released 2016 ICD-10 changes last week according to this ICD-10 Monitor report.  "There are 1,974 additions, 311 deletions, and 425 revisions. The resulting total for diagnosis codes is 71,486."

Health Data Management reports that the federal government is encouraging the use of ethical hacking by healthcare organizations. "Ethical hackers are computer and networking experts who attempt to penetrate information systems on behalf of its owners to find security vulnerabilities that a malicious hacker could potentially exploit." What next?

Finally, Employee Benefit News reports on a survey finds that a majority of employees cannot define common health insurance cost sharing terms.  The FEHBlog finds that hard to believe. In any event, employees should be concerned with those terms because according to this International Foundation of Employee Benefit Plans website, "The International Foundation’s new report, 2016 Employer-Sponsored Health Care: ACA’s Impact, finds that about one-third of organizations have increased out-of-pocket limits, in-network deductibles or employees’ share of premium costs in response to ACA."

Weekend update

The FEHBlog is back inside the Capital Beltway. The House of Representatives has left town but the Senate will remain in residence until Thursday. Here is a link to the Week in Congress's review of last week's action on Capitol Hill.  

It's also worth noting that the U.S. Supreme Court wraps up its October 2015 term tomorrow.  The Hill provides a summary here.

Avik Roy offers his useful insights into the Republican's alternative approach to health care reform that Speaker Paul Ryan released last week.

OPM provided details on the transition of the flexible spending account administrator role from ADP to WageWorks on September 1.

Healthcare IT News reports that according to a recent KMPG survey "nearly half of responding healthcare [system] executives expect that the [government mandated] move from volume to value will adversely impact revenue, which makes investing in technologies  [e.g., telemedicine] even more critical to competing in the market."

Louisville Business First reports that Aetna and Humana have agreed to extend the deadline for completing their merger to December 31, 2016, which is consistent with previous management projections for a second half of 2016 close.

Kaiser Health News reports on the demise of the nasal flu vaccine -- FluMist -- that until recently had been favored for use by young children.

On Wednesday [June 22, 2016], an advisory panel to the Centers for Disease Control and Prevention voted that — though it continues to be important to be vaccinated against the flu — the spray version was so ineffective that it should not be used by anyone during the 2016-2017 flu season.
Just two years ago, that same Advisory Committee on Immunization Practices recommended FluMist as the preferred alternative for most kids ages 2-8, after reviewing several studies from 2006-2007 that suggested the spray was more effective in kids than the injectable forms of the vaccine.
What changed to make the spray so much less effective than studies had shown it to be in the past? The bottom line is that right now “we don’t understand what it is,” said David Kimberlin, a professor of pediatrics at the University of Alabama at Birmingham, who said academic researchers and those at MedImmune, a subsidiary of Astra Zeneca that makes the vaccine, are working to get answers. 

TGIF

The House of Representatives has quit town until July 6, while the Senate continues in session through June 30. Everyone gets a break for the 4th of July weekend.  

The Social Security program trustees issued a report earlier this week projecting that Social Security beneficiaries will receive a 0.2% cost of living increase in their benefits next year. according to a USA Today report.

There was no cost of living adjustment for 2016. The upshot was that under a modified federal hold harmless law federal and postal annuitants under the FERS program, who elect Part B, saw no Medicare Part B premium increase while federal and postal annuitants under the CERS program, who elect Part B, saw a 16% increase in that premium.

A Wall Street Journal analysis of the new Social Security trustees report states that

Those who are paying the standard $121.80 a month for Medicare Part B this year [the CSRS annuitants and people who recently joined Medicare] would be charged $149 a month in 2017 if the trustees’ predictions come to pass. [The article does not explain how the FERS annuitants would be affected, but there would be a Medicare Part B premium increase.]

Higher earners would pay more. The trustees project individuals earning between $85,001 and $107,000 and couples earning between $170,001 and $214,000 would have their 2016 monthly premiums rise from $170.50 a person this year to about $204.40 in 2017. For those earning more than $214,000, or $428,000 for couples, the projected increase is to about $467.20 a month, from $389.00 in 2016.

Medicare Part B deductibles and Part D premiums also would be affected.

If the trustees’ predictions come to pass, all Medicare beneficiaries will see their annual Part B deductibles rise from $166 in 2016 to $204 in 2017. “Everyone on Part B will be liable for the full increase,” says [Tricia Neuman, senior vice president and an expert on Medicare at the Kaiser Family Foundation]. 

The report projects that monthly Medicare Part D premiums—which cover prescription drug costs—will rise from $34.10 to $40.59, while the annual Part D deductible will jump from $360 to $400. Those increases will apply to all Medicare Part D beneficiaries.

These changes are important to the FEHBP because the Program covers a large cadre of Medicare Part B eligible annuitants.

CMS has created a new HIPAA administrative simplication website -- no doubt in celebration (?) of the law's upcoming 20th anniversary of enactment in September. My how time flies.

Midweek update

Greetings from Corolla NC.  Yesterday, the ACA regulators issued FAQ 32 which concerns the relationship between COBRA continuation coverage (TCC is the FEHBP analog to COBRA) and the ACA marketplaces.  FAQ 32 begs the question why didn't Congress simply repeal COBRA and TCC when it implemented the marketplace. That would have simplified the system and added more people to the marketplace.

On Monday, the U.S. Supreme Court decided to review the D.C. Circuit's decision on which the now retired OPM Inspector General relied to challenge Beth Cobert's authority to serve as acting OPM Director while the Senate considered her permanent nomination.  We won't see a Supreme Court decision for several months and the Obama Administration which asked the Supreme Court to take this action disagreed with the retired OPM Inspector General. The FEHBlog sides with the Obama Administration here (at least with respect to the Director's authority).

PriceWaterhouseCoopers ("PwC") released its 2017 healthcare cost projection.  "PwC’s Health Research Institute projects the 2017 medical cost trend to be the same as the current year – a 6.5% growth rate." That's quite a bit above inflation.

The Health Care Cost Institute released a report on diabetes spending.

The report, 2014 Diabetes Health Care Cost and Utilization Report, examines how much is spent on health care for adults and children with diabetes, where those dollars are spent, and how that compares to people without diabetes. It is based on the health care claims of more than 40 million Americans younger than 65 covered by ESI from 2012 to 2014. People diagnosed with type 1 or type 2 diabetes accounted for five percent of the ESI population in 2014. 

Similarly, Fierce Healthcare reports on an AHIP Insitute panel last week which discussed approaches to covering health plan members with chronic illnesses like diabetes.

A couple months ago, the Washington Post reported the health care problems afflicting rural America.  Stat offers an interesting article on a public health worker who is trying to tackle these problems.

Finally the Speaker of the House Paul Ryan offered his party's health care reform task force report.

Weekend update

Happy Fathers' Day.  Congress is in session on Capitol Hill again this coming week.  Business Insurance reports that the House leadership will unveil their proposal to replace the ACA later this week. 

Last week, a Senate appropriations subcommittee on June 15 and the full committee the following day approved the FY 2016 financial services and general government appropriations bill which funds OPM and the FEHBP. The bill now heads to the Senate floor.  Here's a link to the Week in Congress's report on other Capitol Hill activities from last week.

The Street offers a pessimistic report on the prospects for the Anthem-Cigna merger, which is now under regulatory review.

As confidence wanes that Anthem's (ANTM) $54.2 billion acquisition of Cigna  (CI) will survive regulatory scrutiny, analysts are already considering what the target will do if the deal falls apart.
Ana Gupte of Leerink Partners LLC believes that Cigna could look to acquire a smaller managed-health care company, such as Long Beach, Calif.-based Molina Healthcare (MOH) or Tampa, Fla.-based Wellcare Health Plans (WCG) if the deal doesn't push through.
Thanks to the $1.85 billion break-up fee Anthem would pay to Cigna, the Bloomfield, Conn.-based company would have extra cash on hand to make an acquisition.

The FEHBlog looks for the tea leaves, but he certainly can't read them.

Fierce Healthcare offers a report which confirms the FEHBlog's thinking on hospital readmissions, which is of course gratifying:

Many 30-day readmissions may not be linked to poor care, but instead to mental health issues, homelessness or substance abuse, according to a new study published in JAMA Surgery.
The research team analyzed data for 2,100 patient discharges at one Level 1 trauma center and safety-net hospital and found 173 of those patients were readmitted.
In close to one-third of the cases, patients fell into two groups, according to the study: injectable drug users who had new infections (about 17 percent of the readmissions) or people who did not have access to social support services, which led to issues with discharge and follow-ups (about 15 percent of the readmissions).

Health plan case managers are sure to be on the lookout for such high risk candidates for readmission.

Becker's Hospital review tells us about the latest IBM-Ponemon report on data breaches, which not suprisingly is uglier than last year's report.  Verizon's data breach report is another useful resources.

 

TGIF

Fedsmith reports on NARFE's reaction to the House Oversight and Government Reform Committee's bipartisan postal service reform bill.  NARFE is opposed to the idea of auto-enrolling Postal annuitants in Medicare.  That train, however, has left the station because auto-enrollment is the surest path to lowering the Postal Service's liability for post-retirement health benefits.  The article notes that

To help offset these new mandatory cost, the House legislation provides a transition fund with the Postal Service paying 75 percent of the enrollee’s share of their premium for the first year of Medicare enrollment, 50 percent the second year, and 25 percent the third year. In the fourth year and thereafter, postal retirees would have to pay the full amount of their share of Medicare premiums like most other Part B participants.

NARFE's legislative director believes that the House bill could be marked up by the Committee within the next 30 days.  "It is possible that the House version could receive a floor vote after Congress returns from its August recess, setting up a final vote in the House and Senate during their final session of the year after the November elections."  Of course, the FEHBP-related provisions are only one aspect of this over-arching bill.

John D. Rockefeller, the oil baron from the 19th Century, built his fortune in the first fifty years of his life.  He devoted the second half of his long life (he lived to age 97) to philanthropy.  Much of his philanthropy focused on public health issues.  Bill Gates, the softward baron, has ripped a page out of the John D. Rockefeller playbook. Stat has an interesting interview with him here.  

The annual AHIP Institute has taken place in Las Vegas this week. Here are articles from Fierce Heathcare and Healthcare Finance about that conference.

Midweek update

House Oversight and Government Reform Committee leadership released for public comment a bipartisan postal reform bill today according to Govexec.  Like the Senate bill championed by Sen. Tom Carper (D Del.),

The House bill would require postal retirees electing to receive federal health insurance to enroll in Medicare parts A and B as their primary care provider. The bill would phase out the Postal Service’s share of retirees’ Medicare premiums over four years. Most postal employees enrolled in the Federal Employees Health Benefits Program would have to select a plan specific to USPS workers. 

The Medicare integration would largely solve the issue of prefunding future retirees’ health care, as required by a 2006 law. The issue has been a sticking point in previous attempts at postal reform, as the cash-strapped agency has struggled to make the payments and defaulted on them in recent years. USPS would make actuarial payments toward the remaining liabilities over the next 40 years.

The draft House bill is available on the Committee's website.

Also today, the House Energy and Commerce Committee unanimously cleared for floor consideration a significant mental health care reform bill (HR 2646).  Morning Consult reports that

[Rep. Joe] Kennedy [(D. Mass.)]withdrew an amendment aimed at strengthening parity in mental health coverage after [Committee Chair Fred] Upton committed to further look into the issue. “No matter what improvements we make to our mental health system, no matter how many resources we commit, if we do not ensure that those suffering from mental illness are treated fairly by their insurance companies then we leave treatment and care out of reach for far too many patients in need,” he said in a statement. “I appreciate Chairman Upton’s promise to hold a hearing dedicated specifically to parity this fall and look forward to working across the aisle to address this significant gap in our efforts to date.”

The American Medical Association is holding its annual convention this week. Dr. Andrew Gurman is succeeding Dr. Steven Stack as the AMA's president.  Modern Healthcare reports that the AMA at its conference called for a relaxation of pressure placed on doctors to prescribe opioids.  Health Data Management and Healthcare IT News report on the AMA's conference's embrace of telemedicine, which the FEHBlog finds interesting.

And last but not least,  Healthcare Dive tells us that "Aetna and Humana are experiencing smooth sailing as they work to incorporate Humana into buyer Aetna in anticipation of approval for their pending merger." The parties expect to close the deal in the second half of this year.

Weekend update

Congress remains in session this coming week on Capitol Hill.  On Wednesday, at 9:30 am, a Senate appropriations subcommittee will mark up the Senate financial services and general government appropriations bill that funds OPM and the FEHBP.  

Kaiser Health News, which supports the Affordable Care Act, had an interesting headline for a summary of ACA-related news article -- "Even with the Health Law in Plan, Costs Keep Going Up. " This FEHBlog has documented the fact that costs keep going up because of that law.  It's worth noting that a House energy and commerce subcommittee held a hearing last Friday on several bills to fix the ACA's marketplaces, a sensible idea.

As the FEHBlog was taking a low dose aspirin last night, he thought of a Wall Street Journal opinion piece discussing the use of a polypill that would treat several chronic health conditions that affect older people, e.g, cholesterol, blood sugar, etc.

I tend to favor this sort of blunt, comprehensive approach to public health. Much as I like menacing cigarette-package warnings, urging personal responsibility, I like cigarette taxes more (despite their regressive impact). I love “Drive Carefully” signs, but I like seat belts better. And I like air bags best: No judgment, no decision, no defiant will. As for driving under the influence, breathalyzer tests and taking keys away beat the heck out of admonitions to be sober and find a designated driver. 

Human nature is not our ally in maintaining health. With heart disease and stroke, many millions of lives are at stake, and for me it comes down to this: Will popping a polypill work better than willpower? I suspect that the answer may turn out to be yes.

Assuming this makes sense, people would have to take the pill.  In the end, you can't avoid the importance of personal responsibility.

TGIF

Here's a link to the Week in Congress's report on this week's activities on Capitol Hill.  Also here's a link to Prof. Tim Jost Health Affairs blog entry on the major ACA rule released earlier this week and noted in Wednesday's post.

In an interesting development, the Charlotte Observer reports that the Justice Department has sued a large North Carolina hospital system Carolinas Healthcare for anti-trust law violations. Carolinas Healthcare controls about 50% of the hospital service market in the Charlotte NC region.

The lawsuit alleges that Carolinas HealthCare uses its market power to negotiate “unlawful contract restrictions,” which prevent consumers from taking advantage of lower prices at other hospitals.  The lawsuit also contends that CHS encourages insurers to steer patients its way and uses its influence to prevent insurers from giving the same deal to competing hospitals.

Federal agencies are seeking to help consumers understand the complicated federal laws on health information privacy and mental health and substance abuse parity.  HHS's Office for Civil Rights which enforces the privacy law has created three consumer education video's on HIPAA's consumer / patient / enrollee rights.  The Labor Department has created an information flyer on the mental health parity law.

HHS also created a website for the Obama Administration's new Mental Health and Substance Abuse Disorder Parity Task Force.  OPM is one of the members of this Task Force, which is obligated to report back to the White House by October 31, 2016.

Midweek update

Another week, another massive government regulation concerning the Affordable Care Act. Today, according to Kaiser Health News, HHS proposed a rule aimed at forcing healthier people into the marketplace plans. "Simultaneously, the government announced refinements to the methods by which it gauges financial risk of insurance populations. It plans to begin factoring in people who held plans for part of the year and also include prescription drug use. The government will take those costs into account when the government redistributes money from insurers with people who tend to be sicker to plans filled with healthier people."  The law simply is too complicated.

Stat reports on Vermont's passage of a law requiring pharmaceutical manufacturers to support price hikes.  The FEHBlog is not a believer in government price controls. He has more confidence in the efforts of the private sector Campaign for Sustainable Rx Pricing to promote market based reforms. "The Campaign recommends promoting more competition in the prescription drug market and advises providing the U.S. Food and Drug Administration (FDA) with additional resources so it can approve generic drugs more quickly – especially in cases where an expensive drug has no alternative on the market.CSRxP also believes it should be easier to bring a drug to market and exclusivity protections should only be used for new, innovative products. Additionally, the group recommends that patients have access to more information about how different medications compare in efficacy to help bring prices down and empower patients to pay for what works." Makes sense to the FEHBlog.

Closing tidbits --

• Joe Davidson of the Washington Post interviews OPM's acting Director Beth Cobert about the one year anniversary of the OPM data breach announcement. 
• AMA President Steven Stack makes reasonable suggestions on how to better measure electronic health record interoperability per Healthcare IT News. "Instead of using data exchange as the metric for measuring interoperability, Stack urges CMS to focus on usefulness, timeliness, correctness and completeness of data, as well as the ease and cost of information access." Of course, as Health Data Management points out, the lack of interoperability, which can be laid at HHS's feet in the FEHBlog's opinion, "continues to bedevil" the healthcare industry. 
• Ambulatory healthcare providers give good marks to Medicare, Tricare, and major commercial carriers according to Fierce Health Payer. 

Weekend Update

Congress is back in session on Capitol Hill this coming week.  The Hill updates the status of FY 2017 appropriations.

Recently, the Centers for Medicare and Medicaid Services implemented a rule requiring providers to accept bundled prices for joint replacements.  Medicare only covers joint replacements performed inpatient. Modern Healthcare reports on a new trend toward performing joint replacements in outpatient facilities at a lower cost.

The Ambulatory Surgery Center Association says close to 40 centers around the country are performing outpatient joint replacements, and outpatient surgery companies such as Surgical Care Affiliates are aiming to increase them.
Moving these procedures to outpatient settings poses a major threat to hospital finances, since total joint replacements are one of the largest and most profitable service lines at many hospitals. In 2014, more than 400,000 Medicare beneficiaries received a hip or knee replacement, costing the government more than $7 billion for the hospitalizations alone—over $50,000 per case. The financial threat will be even greater if the CMS changes its rules and allows Medicare and Medicaid payment for these outpatient procedures, which observers expect will happen in the next few years.

The new Medicare pricing law, MACRA, is pushing Medicare providers to use population based and episode based payment methods. Modern Healthcare is reporting that the accountable care organization ("ACO") industry is complaining over the fact that HHS's proposed MACRA rules does not consider a "low risk" ACO to be one of these acceptable alternative payment method.  MACRA is pushing Medicare providers to use population based and episode based payment methods.

ACOs are extremely concerned about the direction the CMS is going not only in the proposed MACRA rules but also with the conflicts created by its other value-based payment programs such as bundled payment," NAACOS [ACO trade association] President and CEO Clif Gaus said in a statement. "And when you add that to how much it costs to run an ACO, there's a significant number of ACOs ready to leave the [Medicare Shared Savings Program].

According to Healthcare Dive, population health experts are concerned over a report that the U.S. death rate rose in 2015 for the first time in a decade.   "The increase came largely from higher rates of drug overdoses, suicide and Alzheimer’s disease, with a slight increase in heart disease, The New York Times reported."  The FEHBlog recalls the AMA President Steven Stack saying during a speech that heart diseases is a default cause of death in America.

TGIF

The Wall Street Journal reported earlier this week on the development of a

predictive tool, which pops up on the screen of electronic medical records, prompts the doctor to answer a short series of questions about the patient’s condition. Based on that information, a calculator predicts the probability that the person has the suspected ailment. It may also recommend a course of action.

The idea behind the tool which a physician developed is reduce the amount of unnecessary care. The FEHBlog recalls hear the AMA President Steven Stack complain that doctors did not have any significant input in the development of electronic medical record systems. Better late than never? But

As would be expected, many doctors balk at the idea of a computer program telling them how to do their job. The calculator makes diagnosis and treatment decisions seem simple when they really aren’t, says John Beasley, a family doctor for more than 40 years whose Verona, Wis., clinic is participating in one of the trials. He says he ignores the tool when it pops up on his screen.

It seems to the FEHBlog that just like information received from a computerized mapping tool like Google Maps, you would be making a mistake to rely exclusively on the tool. But it helps to consider the information.  The FEHBlog expects that most doctors take that approach.

Drugs Channels offers an analysis of specialty drug pricing here.  Employee Benefits News discusses the ACA's impact on employee benefit enrollment here. Both articles are worth a gander.

Midweek update

The New York Times reports that the Internal Revenue Service denied an income tax exemption to an accountable care organization ("ACO") -- owned by a non-profit health system -- because the ACO provides care to commercially insured patients - yet Medicare patients would be OK.  ACO's are blooming in the commercial insurance market because commercial insurers offer more contracting flexibility than the Centers for Medicare and Medicaid Services.  HHS is promoting ACO's as a favored alternative payment method.  The ACO cost curve is bound to go up if the ACO is a taxable entity.

The IRS also released a general counsel opinion throwing cold water on wellness rewards paid to employees in cash -- the great incentor. Taxable wages says the Service.  That's a proper outcome under the current tax law in the FEHBlog's opinion. It begs the question why doesn't Congress change the tax law to exclude low dollar cash wellness rewards from taxation?  What's wrong with saying it in green?  An alternative is to position the wellness rewards as premium or deductible reductions. The latter approach is available to FEHB plans, but the former is not according to OPM.

The Delaware Business Times tells us the Blue Cross licensee Highmark is offering their members the opportunity to use internet-based tricks to "nudge" family members and friends to undergo cancer screening tests.  (No doubt due to HEDIS quality measure requirements.)  "The nudges, available at www.allforhealth.com, include notes, coupons, bribes, social nudges and nudge-o-grams that can be customized with personal video, photos and special effects." Tax consequences of nudging are unknown.

The Labor Department is offering a cheat sheet to help health plan members (and their lawyers) sniff out health plan violations of the complex rule implementing the federal mental health parity law.  Simplifying the rule would be preferable in the FEHBlog's view.