Midweek Update

On Monday May 14, OPM posted an indemnity benefit plan pre-notice solicitation on fbo.gov.  The Federal Employees Health Benefits Act calls for OPM to contract for a government wide service benefit plan, a government wide indemnity benefit plan, employee organization plans and comprehensive medical plans. The indemnity benefit plan slot which Aetna held from the inception of the FEHBP in 1960 until roughly 1990 has been vacant for nearly thirty years. OPM tried to solicit insurer interest in filling the slot in 2008 and it’s trying again this year. In the FEHBlog view, OPM’s efforts are bound to fail until the agency convinces Congress to change the financing mechanism from the antiquated retrospective experience rating method prescribed in the 1959 FEHBA (5 U.S.C. Sec. 8902(i)) to a modern approach based on the ACA’s medical loss ratio.

Following up on the President’s blueprint to lower prescription drug prices, here are links providing reactions from the healthcare industry, courtesy of Health Payer Intelligence, and Drug Channels.  Healthcare Dive reports that HHS Secretary Alex Azar

underscored proposed changes made in President Donald Trump’s “American Patients First” blueprint in a speech to the American Enterprise Institute, where he defended against criticism that Trump dropped support of Medicare directly negotiating drug prices.  Azar argued that the free market is better equipped to drive down costs while preserving consumers’ right to choose what works for them.  Trump’s plan seeks to merge some parts of Medicare Part B into Part D, which the pharmaceutical industry has opposed. The secretary warned that if pharma doesn’t bring the administration “a plan for which drugs make sense to move from Part B to Part D, we’ll decide that for them.” 

The FEHBlog is not a fan of Medicare negotiating for drugs because Medicare engages in legally permissible price fixing which shifts costs onto the FEHBP and private sector plans. The FEHBlog, who has been in the car a lot this week, is enjoying listening to the EconTalk podcasts, one of which delved into this issue (the interviewer and guest don’t share the FEHBlog’s opinion by the way.)
Also on the topic of prescription drug prices, CMS yesterday “released a redesigned version of the Drug Spending Dashboards. For the first time, the dashboards include year-over-year information on drug pricing and highlight which manufactures have been increasing their prices.”  Take a look
Closing tidbits —
  • Govinfo Security reports that HHS’s Office for Civil Rights which is responsible for the HIPAA Privacy and Security Rules plans a re-do for the Privacy Rule’s accounting for disclosures individual right. 
  • Media Post reports “the number of data breaches totaled 685 in the first quarter of 2018 — a four-year low, down from 1,444 in the same quarter last year and 1,153 in 2016, according to the Q1 2018 Data Breach QuickView Report, a study by Risk Based Security. And while it’s still a large number, only 1.4 billion records were exposed, compared with 3.4 billion in the first quarter of 2017. A single incident in India accounted for 81% of those exposures. However, the number far exceeds those of the three years leading up to 2017.  Fraud accounted for 1.27 billion of these exposed records, but it still was only the seventh-most common breach type, accounting for 4.8% of the incidents.”
  • The National Institute for Health Care Management has released the slides from its recent expert panel presentation on the future of healthcare in our country. Check it out. 

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