Weekend Update

Happy New Year to the FEHBlog’s Jewish readers. Congress will be in session this week. Here is a link to the The Week in Congress’s report on last week’s activities on the Hill.

The lead story in Saturday’s Washington Post was a story about the need for older Americans to lower their blood pressure.  “The new [federal government] research advises people with high blood pressure to keep their “systolic” pressure — the top number in the reading that health-care providers routinely tell patients — at 120 or below. Clinical guidelines have commonly called for systolic blood pressure of 140 for healthy adults and 130 for adults with kidney disease or diabetes.”

Recently, the FEHBlog noted a new Medicare mandate that hospitals accept bundled payments for hip and knee replacements.  Modern Healthcare reports that the medical community is not amused by this initiative.

Reuters reports that CALPers is finding that reference pricing is helping to control the cost of colonoscopies.  Reference pricing directs plan members to facilities that will accept the reference price. Members who use other facilities pay the difference between the other facility’s price and the reference price.

“In the short term, the major beneficiary of reference pricing is the employer and insurer, as they are paying most of the cost and hence reap most of the savings,” [Prof.] Robinson  [the study’s author] said. “In the long term, the consumer is the beneficiary, since their premiums don’t rise as fast as they would otherwise and, perhaps more importantly, providers begin to moderate prices in hopes of retaining their customers.” A number of leading insurers and employers now use reference payment for services like knee replacement surgery, arthroscopy, cataract removal, laboratory tests and drugs, he said.

Employee Benefit News indicates that employers are clutching on whether or not to continue offering on-site clinics in view of the impending application of the 40% excise tax.  This illustrates another inequity of the excise tax.  A health plan premiums may be below the excise tax threshold but if the employer decides to offer additional benefits subject to the tax, those benefit costs could drive the total cost above the threshold. In that case, the health plan even though the law mandates the coverage will bear the brunt of the excise tax because the tax is allocated pro rata among the various coverages and health insurance is the most costly.    

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