Budget deal may be sight

The Hill is reporting this afternoon that the White House and Congressional leaders are making progress on a two year budget deal (FY 2016 which began October 1 and FY 2017) that also would lift the debt ceiling and solve the Medicare Part B premium problem.

Weekend update

Congress remains in session this week. Here is a link to the Week in Congress's account of last week's activities on Capitol Hill.  In the coming week, the House of Representatives is expected to elect Paul Ryan (R Wisc) as its new Speaker.  Bloomberg reports that the House is expected to take up the issue of raising the federal debt ceiling this coming week.

The Federal Benefits Open Season starts two weeks from tomorrow on November 9.  Tammy Flanagan writes about the new self plus one enrollment type here. Ms. Flannagan notes that

The big surprise for many people is that there isn’t much difference in the premium between self-and-family and the new self-plus-one enrollment because of the number of older retirees who will be the prime candidates for the new option. You can find the complete list of 2016 premiums on the OPM website [or the FEHBlog]. Even more surprising is that in some cases, it is less expensive to continue enrollment in Self and Family.  

In the FEHBlog's view the fact that there isn't much difference between the premiums of the two enrollment types is due to the fact that the average family size in the FEHBP is roughly 2.3 to 2.4 members. Some plans have somewhat larger family sizes and others have smaller. That's the nature of averages.  A larger family size would tend to produce a larger difference in premiums.  The Government contribution for self plus one is less than the Government contribution for self and family. This fact that can cause the self plus family premium to be less than the self plus one.  Just remember that a federal employee or annuitant with one eligible family member can elect self plus family. Federal employees and annnuitants are not obligated to elect self plus one.

The FEHBlog mentioned last Friday that he had learned that the FDA has a large backlog of generic drug maunfacturing license applications. A Wall Street Journal editorial on Saturday noted that "FDA approval to manufacture any given generic takes 50 months on average and the backlog for permission has climbed in recent years to about 4,000 applications."  The FDA is on top of new drug applications because the prescription drug manufacturers support the FDA's cost of that regulatory process.

The FDA's delay in generic drug licenses permits entrepreneurs to purchase the manufacturing rights to single source generic drugs and then ramp up the price without fear of competition. This Wall Street Journal editorial and this San Diego Union Tribune article discuss how in San Diego compounding pharmacy "Imprimis Pharmaceuticals, plans to compete against other manufacturers who sell generic drugs far above their cost " The Union Tribune article explains that

The formulation is not FDA-approved, and can legally only be sold through a doctor's prescription to a specific individual. The specific ingredients are FDA-approved, Baum said, and its compounding operations are FDA-inspected.

The Washington Post provides an interview with the CEO of 23andme a company that sells DNA testing services directly to consumers.  "After the FDA slapped the company with a warning letter in 2013, it stopped marketing its health tests and began working with regulators to come up with a product that would meet its rigorous standards for consumer testing, validation and analysis." The company released its new product last week. It costs 100% more than the original product ($199 vs. $99).

TGIF

The ACA regulators issued FAQ XXIX this afternoon with more consumer / preventive services goodies / impositions on health plans.  This is a basic problem with the law. The forces plans to cover a broad and ever increasing array relatively low cost items that consumers should be paying for themselves. Those reimbursable items wind costing the economy more and push the premiums ever closer to the high cost plan excise tax threshold.

The FEHBlog attended an excellent federal pharmacy symposium put on by the large pharmacy benefit manager Express Scripts.  It is worth relating that prescription drug manufacturers have a record number of new drugs in the research pipeline and that in 2014 the Food and Drug Administration approved a record number of new drugs for marketing. The FDA, however, is slow to approve generic drug manufacturing licenses which allows predatory companies to make a ton of money on single source generic drugs just by raising prices.

The FEHBlog has criticized the ACA-created and insurer funded Patient Centered Outcomes Research Institute as a white elephant. Here is a link to the PCORI's annual meeting report. Judge for yourself,

Earlier this week, the American Cancer Society issued its updated recommendations on routine mammographies for breast cancer screening. Kaiser Health News reports that these guidelines "are unlikely to" impact insurance coverage for routine mammographies. The FEHBlog agrees.

Health Data Management reports on what's coming in 2016 -- another round of government audits on compliance with the HIPAA privacy and security rules. HIPAA covered entities and business associates be advised!

Mid-week update

The  IRS today published a notice about inflation adjustments to various federal tax provisions for 2016. We learned that there will no change in the maximum annual contribution to health care flexible spending accounts which currently is $2550 (see page 14).  The employer sets the limit which cannot exceed $2550.

Healthcare Dive updates us on where we stand with the Medicare Part B premium issue now percolating on Capitol Hill.  Nothing definitive yet.

The Harvard Business Review offers hospitals advice on how to reduce the number of never events / preventable errors.  The Mayo Clinic takes a full look at the quality of care in addition to investigating identified problems

To look for opportunities to improve care, we examine all aspects of care rendered for every patient who dies in our facility — even those whose death was anticipated due to grave illness. We look for trends in opportunities in order to prioritize improvement work across our hospitals. * * * When we started this mortality-review process, we found care issues or opportunities for improvement approximately 23% of the time. More recently, that figure has declined to around 13% of the time. This is a reliable sign of progress in patient safety.

This Health Day article discusses the "time honored" tradition of the annual physical.

Some [doctors] want the once-a-year physical abandoned, based on a growing body of research that these exams don't reduce your overall risk of disease or death.  But yearly checkups help build the relationship between doctor and patient, leaving both better prepared when illness does strike, other doctors respond.

The FEHBlog thinks that the "aye" side of the argument has the better side of the argument as the patient ages.  The article notes that the nay sides prefers seeing the patient every two to three years and relying on the electronic medical record to nudge the patient toward necessary preventive care in the outyears.

Tuesday Tidbits

Following up on Sunday's post knocking the ICD-10 as a waste of money, the FEHBlog wishes to clarify that some aspects of the ICD-10 make sense, such as identifying whether the affected body part is on the left or the right side.  However, the ICD-10 is the complete public health statisticians' wish list and as a result it is way too complicated.  Coders never will use all of the codes. As AMA President Steven Stack said last year at a WEDI conference that the FEHBlog attended, the coding community missed an opportunity to work with the medical profession to create an improved code set that works. Instead we are likely to wind up with more confusion, rather than more clarity.

The FEHBlog and OPM independently have advocated the medical profession's Choosing Wisely campaign which relies on specialists to identify relatively common procedures which are past their sell date. Fierce Health Payer reports on a study published in JAMA Internal Medicine suggesting additional steps that need to be taken in order to make the campaign effective.

The FEHBlog also has advocated health plan use of reference pricing to control benefit costs. The New York Times Upshot column lauds Europe for its prevalent use of reference pricing with prescription drug benefits.  For your ease of reference (get it?) here's the Times' explanation of this technique:

Drugs are grouped into classes in which all drugs have identical or similar therapeutic effects. For example, all brands of ibuprofen would be in the same class because they contain the same active agent. The class could include other nonsteroidal anti-inflammatory agents like aspirin and naproxen because they are therapeutically similar. The insurer pays only one amount, called the reference price, for any drug in a class. A drug company can set the price of its drug higher, and if a consumer wants that one, he or she pays the difference.

Of course, our friendly ACA regulators weighed in on the technique last year.

Yesterday, according to this Fierce Health Payer article, Aetna and Humana stockholders "overwhelmingly" approved the merger agreement reached earlier this year. The regulators continue to evaluate the deal, which is expected to close next year.

Weekend Update

Congress is back in town this week.  The Hill reports that "hopes are dimming" for an expansion of the law that holds Medicare beneficiaries harmless against Medicare Part B premium and deductible increases when as will be the case next year there is no Social Security COLA.  NARFE, among other organizations, is advocating for an expansion of the hold harmless protection because federal annuitants whose Medicare premiums are withheld from the CSRS benefit checks fall outside of it. The protection only applies to Medicare beneficiaries whose premiums are withheld from Social Security checks. Goofy, but it's the law.

Healthcare Data Management is taking a "so far so good" approach to ICD-10 implementation.  The ICD-10 coding set went into effect on October 1. Given billing cycles, it may be premature for ICD-10 advocates to take a victory lap yet. The FEHBlog thinks that the ICD-10 effort has been a waste of money but fortunately at this point no train wreck has occurred.  The FEHBlog is attending a WEDI conference next week in lovely Reston Virginia. He will keep an ear open on this issue.

Health Care Dive identifies the top 13 healthcare CEOs drawn from a Harvard Business School study.  Number 5 on the list is the CEO of Gilead Sciences, the piratical company that holds the patent on the miraculous Hepatitis C drug Harvoni.  The Washington Post reports today that Medicare spending on Harvoni continues to skyrocket.

The Post also reports that two more health insurance co-ops bit the dust on Friday.  "Nearly a third of the innovative health insurance plans created under the Affordable Care Act will be out of business at the end of 2015, following announcements Friday that plans in Oregon and Colorado are folding." You cannot solve a problem by throwing money at it. In this case, money was being thrown a problem that did not exist.

No COLA

Govexec and the Senior Journal report as expected that the federal government confirmed today that federal and postal annuitants and Social Security recipients will not receive a cost of living adjustment ("COLA") in their retirement benefits for 2016.

Today also is the beginning of the Medicare open season. For the second year in a row, CMS has failed to specify the Medicare Part B premiums and deductibles in advance of the open season.  Absent Congressional action, many CSRS annuitants will see a spike in the Medicare Part B premiums and deductibles as detailed in this Forbes article.

The absence of the COLA for 2016 is attributable to non-existent inflation.  As someone who lived through the raging inflation of the 1970s, the FEHBlog does not see the absence of inflation as a bad thing. Nevertheless, the FEHBlog recognizes that no annuity bump for 2016 is a problem for folks on a fixed income. Perhaps Congress should consider changing the COLA measuring stick.

On the bright side, the addition of a self plus one enrollment type to the FEHBP should help married annuitants.  Today, OPM issued a benefits administration letter about significant plan changes to the FEHBP and FEDVIP. There are no significant plan changes to FEDVIP for 2016. The significant plan changes in the FEHBP for 2016 are described in this OPM attachment and Fast Facts that accompanied the BAL.  Take a look at these documents if you are an FEHBP enrollee.

Tuesday Tidbits

Following up on Sunday's post, here's a link to an ehrintelligence.com article about a recent American Hospital Association report on the importance of electronic medical (or health) record interoperability.  Specifically,

EHR use also provides the opportunity for enhanced public health reporting. Because patient data is aggregated on one, electronic system, healthcare professionals can track healthcare trends and analyze information about population health. But without adequately interoperable systems, that process is significantly hampered.

No kidding.

Before the exchanges launched in October 2013, the FEHBlog predicted and he was not going out on a limb that the ACA's health insurance co-operatives would wind up being the ACA's Solyndras. This Washington Post article proves that FEHBlog's point.

Speaking of waste created by the ACA, the IRS this week announced that for plan years beginning on or after October 1, 2015 (e.g., FEHB plans) but before October 1, 2016, the Patient Centered Outcomes Research Institute ("PCORI") Fee that the ACA imposed on health plans will be $2.17 per member.  The PCORI is flinging around millions of health plan dollars but where are the results?

Additional tidbits --

• Business Insurance reports that cyberinsurance premiums are rising but in the FEHBlog's view the coverage is worth the cost.
• Medpage Today discusses the evolution of urgent care centers here. 
• Health Data Management reports on the problems that the ICD-10 is creating for one small family practice, and
• Drug Channels discusses the prescription drug benefit aspects of a Kaiser report on employer sponsored health plan coverage. 

Weekend update

Congress is out of town this week of Columbus Day. Here's a link to The Week in Congress's account of last week's actions. Federal News Radio reports  that a Republican member and a Democratic member of the House Oversight and Government Reform Committee sent a joint letter to the Office of Management and Budget recommending changes to the federal employee and contractor security clearance process, including a switch in responsibility for clearance record holding from OPM to an agency that is focused on national defense or intelligence.

Govexec reports that on Thursday October 15 the Bureau of Labor Statistics will release a report which will give us the final word on whether federal and postal annuitants will receive a cost of living adjustment for 2016.  "The annual COLAs are based on the percentage increase (if any) in the average CPI-W for the third quarter of the current year over the average for the third quarter of the last year in which a COLA became effective."  Govexec expects that the decision will be no COLA for 2016. Federal employees will be receiving a 1.3% raise for 2016 plus increases in locality adjustments.

Last week, HHS issued its final roadmap of electronic medical record ("EMR") interoperability. To recap, in return for "free" EMR software, health care providers must comply with meaningful use standards developed by HHS. The EMR developers relied on those standards which did not include interoperability among different systems. After issuing $32 billion in EMR payments, HHS has issued a final roadmap to EMR interoperability which it outlined as follows:

•  2015-2017: Send, receive, find and use priority data domains to improve health care quality and outcomes
• 2018-2020: Expand data sources and users in the interoperable health IT ecosystem to improve health and lower cost.
• 2021-2024: Achieve nationwide interoperability to enable a learning health system, with the person at the center of a system that can continuously improve care, public health, and science through real-time data access.

For those keeping track, 2024 is fifteen years after Congress authorized the free EMRs. 

Why does the FEHBlog care?  OPM and other federal healthcare agencies are putting enormous weight on NCQA's HEDIS scores.  A staff model HMO like Kaiser which has its own interoperable EMR can have the HEDIS surveyor plug into the EMR and voila good HEDIS scores pop out.  (Because doctors are subject to these standards under the PQRS system, my base assumption is that the doctors are doing the work expected of them.)  Other / most health plans which rely on provider networks that lack interoperability are forced to gather HEDIS data in a cumbersome, inefficient way.  Their scores are lower.  These health plans are being punished for the lack of interoperability which the government created. No bueno.

Kaiser Health News reports on a  Health Affairs study that reached the obvious conclusion that "[p]rices for many common medical procedures are higher in areas where physicians are concentrated into larger practice groups."  The ACA encouraged such provider concentration. 

Drug Channels has an interesting perspective on Express Scripts' decision to include both expensive PSCK9 inhibitors in its national preferred formulary.  "This formulary approach contrasts sharply with the approach used for the Hepatitis C products. As Drug Channels explains [in the article], perhaps Express Scripts has learned an important lesson about the business risks of formulary exclusion. AmerisourceBergen [a drug wholesaler], however, may find that it was dealt a losing hand."

OPM comments on the high cost plan excise tax

A colleague called the FEHBlog's attention to this BNA article about the public comments that were submitted on the latest IRS notice (2015-52) on the 40% excise tax on high cost, employer sponsored coverage.  The comment deadline passed last week.  The FEHBlog nearly fell off his chair when he read in the article that OPM commented on the IRS notice.  The FEHBlog's colleague kindly share a copy of the OPM comments with the FEHBlog. Here's a link for your edification.  The FEHBlog found the OPM comments to be thoughtful.

He was delighted to read that OPM is considering converting the healthcare flexible spending account ("FSA")  to a limit scope dental and vision FSA. The former is subject to the excise tax, while the latter according to the IRS's first excise tax notice no. 2015-16, will be exempt from that tax. Because the cost of a full blown healthcare FSA will be added on top of the health insurance premium, a full blown healthcare FSA can push the cost employer sponsored coverage over the excise tax threshold. Employers also are considering making after tax contributions to health savings accounts beginning in 2018 because pre-tax contributions count toward the excise tax threshold. It's a hideously complex provision that will burden all employers unnecessarily.

According to Notice 2015-52, the IRS will consider public comment on these two notices as part of the process of drafting a proposed rule implementing the tax.  Congress continues to consider repealing the tax.

Tuesday Tidbits

On June 28th, the FEHBlog wrote -- "As the FEHBlog and many others expected, the Supreme Court did legalize same sex marriage nationwide last Friday. This decision affects OPM's rule allowing federal employees residing in the states that were not licensing those marriages to enroll the children of same sex domestic partners in the FEHBP. Children enrolled under this rule will lose their coverage at the end of this year unless their parents marry before then." Yesterday OPM caught up with the FEHBlog by announcing (as reported in the Washington Post) that effective immediately

agencies and/or retirement systems should no longer add children of same-sex domestic partners to FEHB enrollments as no new children are eligible. Stepchildren that are already covered under an enrollment for plan year 2015, based on a domestic partner certification, remain eligible family members only until the end of the plan year. For plan year 2016 and beyond, couples must be married in order to cover (or continue to cover) stepchildren under their FEHB and FEDVIP enrollment.

So you could have or did read it here first. The Washington Post tries to read more into the announcement but OPM is just enforcing its own rule.

The New York Times reports today that Congressional leaders on both sides of the aisle are trying to fix the Medicare Part B premium mess. To recap, because inflation has been low, most CSRS annuitants will be socked with a big Medicare Part B premium and deductible increase next year simply because their Medicare Part B premiums are withheld from CSRS annuity checks not Social Security checks. (FERS annuitants have their Medicare Part B premiums withheld from their Social Security checks.)  The Times reports that

Medicare actuaries predicted in July that the standard premium for them would rise to $159 a month. The standard premium is now just under $105 a month, the same as in 2013 and 2014.
The actuaries also predicted an increase in the annual deductible — the amount that beneficiaries pay for health care before Medicare begins to pay. They estimated that the deductible would rise to $223 next year, from $147 in 2015.
Seventy national organizations, including AARP, labor unions and trade associations for health insurance companies, sent a letter to congressional leaders last week calling for swift action to “mitigate projected increases in Medicare premiums.”

This is a big bowl of wrong, and the FEHBlog is willing to predict that it will be fixed.  Higher income annuitants will be subjected to higher premiums under a separate federal law that will not be affected by this whirlwind action on Capitol Hill. The Medicare Open Season starts on October 15.

The Wall Street Journal has a fascinating article today on the pricing power of prescription drug manufacturers.

Attention has focused lately on new drugs with eye-popping prices and on a few whose price a new owner abruptly raised several-fold. But what many drug companies rely on for sales growth is a pattern of steady [price] increases, year in and year out, on older medicines [that remain under patent or otherwise lack competition]. Wholesale-price increases for the 30 drugs analyzed by the Journal averaged 76% over the five-year stretch from 2010 through 2014. That was more than eight times general inflation.
For 20 leading global drug companies last year, 80% of growth in net profits stemmed from price increases in the U.S., according to a May report by Credit Suisse.

As the article notes, health benefits coverage helps mask the increases from consumers.

Weekend update

Congress is back at it on Capitol Hill this week, and the Supreme Court joins them as tomorrow is the first Monday in October. 

The FEHBlog forgot to mention on Friday that GEHA has joined Blue Cross FEP in posting its 2016 benefit information.  The FEHBlog expects that other plans will soon be taking the same step.  

The Washington Post reports that a group of 101 economists has written to Congress supporting the 40% excise tax on high cost, employer sponsored coverage.  

The tax on employers isn't economists' first choice when thinking about solutions. Many would prefer an individual tax cap on the health insurance exclusion, where the value of health insurance over a certain amount would be taxed as income at the person's marginal tax rate. But Aaron pointed out how tricky an individual cap would be to design, since health care costs go up as people get older and what people spend on health care can vary by geography. But even though many economists think the Cadillac tax may be a "second-best" solution, they see it as a critical step toward bringing down health care spending.

The excise tax is hideously complicated, and the FEHBlog does not understand how it will control costs. Yes, the excise tax should incent employers to end frill coverage like flexible spending accounts and other benefits not mandated by the ACA, but this is nickel and dime stuff. Although health insurance is mandated by the ACA, health insurance will bear the brunt of the excise tax. The ACA regulators cannot stop themselves from adding new mandates to employer sponsored coverage, like embedding a self only out of pocket limit in other than self and family coverage, which drives up the cost of health insurance closer to the excise tax thresholds.  Congress has to step up to the plate on this one.  The FEHBlog's suggestion is to tax 1/2 of the premiums on high wage earners - the same rule applicable to small business owners.

The Washington Post included today an interesting interview with the CEO of big pharma manufacturer Novartis.  Take a gander.

TGIF

According to this Wall Street Journal report, the Administration announced this week that the Treasury Department is expected to reach the bottom of its bag of tricks on November 5.  Congress needs to raise the debt limit by that date. Consequently, we have now have two panic dates -- November 5 and December 11, which is the date that the current continuing resolution expires. Congress will be back in session next week. Here is a link to The Week in Congress report on this week's activities on Capitol Hill.

The Wall Street Journal also reports today that momentum is building to repeal the 40% excise tax on high cost, employer sponsored health coverage. In a pleasant surprise, the Hill reports that Congress has passed, and the President will sign, an amendment to the ACA that will limit the small group health insurance pricing rules to groups with no more than 50 employees. Absent that this agreement, the ACA would have boosted the upper threshold to 100 employees. This is a big savings for employers in the 51 to 100 employee group. So there is hope that this crazy excise tax will be repealed.

Following up on yesterday's post, take a look at this Healthcare Dive article on the disruption that the ICD-10 is likely to cause over time.

Finally and because the FEHBlog is not a Luddite, the FEHBlog was impressed that Walgreens, according to Medcity News, is partnering with MDLive to add a telemedicine feature to its popular app.

Happy New Federal Fiscal Year!

Today is the beginning of the new federal fiscal year 2016. Today also marks the implementation of both the ICD-10 coding set for electronic health plan claims and the latest Medicare reimbursement scheme for hospitals and other facilities.

Modern Healthcare reports all quiet on the ICD-10 front. The FEHBlog expects the crash to occur in a few weeks, but he would be happy if it didn't. He does not expect any sizable bang for the buck from this sea change.

Also here's a heads up to the FEHBlog's readers who are FEHB Program enrollees. OPM is readying a family member eligibility audit for launch. HMS Employer Solutions will be conducting the audit on OPM's behalf. Here are links to a recent benefit administration letter and Fast Facts on the new program.