Midweek update

At the top of FEHB news today is the release of the Congressional Budget Office’s report on the Postal Service Health Benefit (“PSHB”) Program provisions of the Postal Reform bill.

CBO expects that PSHB premiums would be lower than those for FEHB plans because Medicare would cover most of the health care costs for Medicare-eligible enrollees in PSHB plans. CBO estimates that USPS spending on health insurance premiums for active workers and their dependents would decrease by roughly $2.5 billion over the 2021-2031 period; those amounts are recorded as off-budget. CBO also estimates that federal spending for health insurance premiums for USPS annuitants and their dependents would decrease by $2.5 billion over that same period; those amounts are recorded as on-budget. * * *

FEHB premiums would rise slightly after those enrollees moved to the PSHB program, CBO expects. Over time, as USPS workers and annuitants enroll in a PSHB plan rather than in an FEHB plan, CBO expects that FEHB premiums would decrease because non-USPS enrollees in FEHB would have lower expected health care costs, on average, than enrollees joining the PSHB program. The federal government’s share of payments for health insurance premiums for non-USPS annuitants is recorded as on-budget direct spending. CBO estimates that spending for such annuitants would decrease by $61 million over the 2021-2031 period.

CBO also explains that the PSHB savings results from a cost shift to Medicare. Because FEHB and PSHB premiums are calculated for a combined risk pool of plan members, the Medicare savings will redound to the benefit of the Postal Service and all of the PSHB members. The lower premiums will encourage enrollment in the PSHB.

If OPM simply allowed all FEHB plans to integrate their prescription drug benefits with Medicare Part D (known as Part D EGWPs), then FEHB plan members and federal and postal employers, all of whom pay Medicare taxes, will receive lower premiums, thereby avoiding the unnecessary balkanization of the FEHB. The decision is OPM’s to make as Congress in 2003 expressly permitted FEHB plans to adopt Part D EGWPs.

In related new, CalPERS Board of Administration, which manages the the California state employees health benefit program, “approved health plan premiums for calendar year 2022, at an overall premium increase of 4.86%.” This suggests that we are in store for a sizable FEHB premium increase for 2022.

As the FEHBlog mentioned yesterday, he has been attending the NCQA’s virtual Digital Quality Summit which has been focusing on health equity, a worthy goal. During last year’s virtual DQS, the FEHBlog came up with the idea of adding the Census Bureau’s racial and ethnic identifiers to the ICD-10 code set which would allow health care providers to readily share that important data with health plans. Today the FEHBlog pushed the idea forward with the patient centered track. Time will tell.

Similarly, Govexec informs us that “Top diversity officials at four major agencies said on Tuesday that obtaining and using better data will be crucial to advancing diversity, equity, inclusion and accessibility in the federal workforce.”

In sad news, the Washington Post reports that

Deaths from drug overdoses soared to more than 93,000 last year, a staggering record that reflects the coronavirus pandemic’s toll on efforts to quell the crisis and the continued spread of the synthetic opioid fentanyl in the illegal narcotic supply, the government reported Wednesday. The death toll jumped by more than 21,000, or nearly 30 percent, from 2019, according to provisional data released by the National Center for Health Statistics, eclipsing the record set that year.

The Post adds

There are some signs that the Biden administration and Congress are preparing to renew efforts to address what was the nation’s most serious public health crisis before the pandemic. President Biden on Tuesday nominated former West Virginia public health official Rahul Gupta to be his drug czar. Gupta has cited the shift from in-person care during the pandemic as one of the contributors to increased addiction-related public health problems.

In prescription drug news

  • The Drug Channels blog discusses 2020 PBM drug trend reports. Top line: “[D]rug spending continues to grow more slowly than every other part of the U.S. healthcare system. Spending growth at CVS and Express Scripts was somewhat higher in 2020 compared to the 2019 figures, due primarily to faster utilization growth.”
  • The Boston Globe reports that “At least half-a-dozen private health insurers in some of the nation’s largest states are balking at covering Biogen’s controversial drug for Alzheimer’s disease, saying it is an experimental and unproven treatment despite being approved by the federal government one month ago. Six affiliates of Blue Cross and Blue Shield in Florida, New York, Michigan, North Carolina, and Pennsylvania indicated in policies posted online they will not cover the Cambridge biotech’s drug, Aduhelm, because they consider it ‘investigational’ or ‘experimental’ or because “a clinical benefit has not been established.” Aduhelm, which is priced at $56,000 a year, is intended to slow cognitive decline in patients with early Alzheimer’s symptoms, regardless of their age. * * * James Chambers, an associate professor of medicine at the Tufts Medical Center Institute for Clinical Research and Health Policy Studies, said that insurers have occasionally opted not to cover expensive specialty medicines for rare diseases, but that he’s never seen firms refuse to pay for an approved drug that could be prescribed to millions of people. ‘This is unprecedented,’ said Chambers, who has spent seven years studying how private insurers decide which drugs to cover. ‘Maybe it’s not entirely surprising given the controversy surrounding the drug’s approval, but it’s not something I’ve seen before.’” The FEHBlog expects that this is a prudent shot across the manufacturer’s bow. The FEHBlog is amazed that Biogen has not yet backed off on the $56,000 price annually per patient. In a STAT News interview, the acting FDA Commissioner Janet Woodcock remarked “The accelerated approval was based on very solid grounds,” she said. “I do believe that will play out over time, as people see that was a very appropriate use of that authority and the right thing to do for patients.”
  • Bloomberg reports on a recent Senate hearing on drug prices. Topics included patent reform and pay for delay deals.

In other news

  • The federal government’s principal healthcare fraud and abuse report for the last federal fiscal year was released. “During Fiscal Year (FY) 2020, the Federal Government won or negotiated more than $1.8 billion in health care fraud judgments and settlements,2 in addition to other health care administrative impositions. Because of these efforts, as well as those of preceding years, almost $3.1 billion was returned to the Federal Government or paid to private persons in FY 2020. * * * In FY 2020, the Department of Justice (DOJ) opened 1,148 new criminal health care fraud investigations. Federal prosecutors filed criminal charges in 412 cases involving 679 defendants. A total of 440 defendants were convicted of health care fraud related crimes during the year. Also, in FY 2020, DOJ opened 1,079 new civil health care fraud investigations and had 1,498 civil health care fraud matters pending at the end of the fiscal year. Federal Bureau of Investigation (FBI) investigative efforts resulted in over 407 operational disruptions of criminal fraud organizations and the dismantlement of the criminal hierarchy of more than 101 health care fraud criminal enterprises.”
  • Becker’s Hospital Review tells us about the telehealth provisions of the CMS proposed 2022 Medicare Part B physician payment rule which would preserve the status quo through 2023.

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