Monday Musings

David Ermer

I am an attorney who practices law in Washington DC. My practice has involved the Federal Employees Health Benefits Program since 1983.

Monday Musings

David Ermer–CDC, Congress, Medicare, Uncategorized–

Federal News Network offers a useful report on the President’s Fiscal Year 2021 budget priorities for the federal workforce. Particularly in an election year, the President’s budget proposal is principally a political document. Now let Congress do its job.

Coordinating benefits when group health plan members have coverage under more than one plan is complicated. Nothing is more complicated than coordinating group health plan benefits with Medicare, and FEHB plans have to do a lot of this work due to the large number of Medicare eligible annuitant members, some of whom remain employed while most are retired. The FEHBlog could go on and on. See Section 9 of your plan brochure.

About ten years ago, Congress passed a law colloquially known as Section 111 which requires group health plans, among others, to report demographic information to the Centers for Medicare and Medicaid Services (“CMS”) in order to facilitate coordination of benefits. Now in its infinite wisdom CMS has decided to move forward with a proposed rule to impose civil monetary penalties on Section 111 reporting entities, including FEHB plans, for certain Section 111 errors. More details are available in this CMS fact sheet.

Bear in mind that larger FEHB plans in particular are under OPM Inspector General scrutiny for the accuracy of their Medicare coordination of benefits efforts. Moreover, the carriers, not the federal government, are on the risk for the FEHBP coverage. In short, Medicare coordination of benefits creates enough headaches for FEHBP carriers without the added risk of civil monetary penalties. How about a little comity between CMS and OPM? (E.g. Because OPM does not seek to penalize CMS for its COB goofs, CMS should not penalize FEHBP for their COB goofs.) The public comment deadline on the proposed CMS rule is April 20.

In a bit of hopeful news, Health Payer Intelligence discusses a successful Horizon New Jersey Blue Cross initiative to apply value based pricing to pediatricians. “If value-based care in pediatric healthcare truly is the future of value-based care, payers need to leverage strong provider relationships to establish effective pediatric quality measures in order to improve their pediatric value-based care performance, Horizon’s executive vice president for healthcare management and transformation Allen Karp illuminated.” Yes indeed.

Finally, on the disease front, HHS reports that

U.S. hospitals saw a 40 percent increase in the rate of Medicare beneficiaries hospitalized with sepsis [an extremely dangerous infection] over the past seven years, and in just 2018 had an estimated cost to Medicare of more than $41.5 billion according to an unprecedented study by researchers from the U.S. Department of Health and Human Services.

Researchers determined that the increase in sepsis was not due to the growing number of American seniors enrolling in Medicare. From 2012 through 2018, the U.S. saw a 22 percent increase in the Medicare enrollment rates but a 40 percent increase in the rate of sepsis-related hospital admissions among beneficiaries.

Most patients with sepsis arrived at the hospital with the condition, rather than developing sepsis in the hospital, a possible indicator of success for CMS efforts to reduce hospital-based cases of sepsis. However, two-thirds of these sepsis patients had a medical encounter in the week prior to hospitalization. This finding represents an opportunity for improved education and awareness among patients and healthcare providers, as well as the need for diagnostics to detect sepsis early.

Let’s get going with those efforts.

Also the FEHBlog learned that the Centers for Disease Control has issued interim guidance on COVID-19 for businesses and employers which also is probably good advice for controlling the flu. The FEHBlog appreciates the CDC’s work as should we all.

Mount Rushmore

Presidents’ Day Weekend Update

David Ermer–Uncategorized–

Congress is out of town this coming week following the Presidents’ Day holiday.

Healthcare Dive provides a helpful review of large publicly traded health insurer fourth quarter 2019 financial results. “Every major payer reported an uptick in their medical cost ratios and many boasted of increased enrollment.”

The FEHBlog admires Kaiser Health News for its sensible approach to reporting on the COVID-19 epidemic in China. The Wall Street Journal’s numbers column yesterday provided interesting insights into calculating the contagion factor of diseases, known as R naught, and in particular COVID-19. Kaiser Health News points out that

It’s not surprising that mortality rates [# of deaths / # of infections] for the coronavirus [COVID-19} vary dramatically, based on where diagnoses were made, Schaffner said. For example, a report Monday from the Imperial College of London found a mortality rate of 18% for cases detected in Hubei, where only patients with unusual pneumonia or severe breathing problems were being tested for the virus. Outside China, health officials test anyone with a cough and fever who has visited Hubei — a much larger number — producing a mortality rate of 1.2% to 5.6%.

In personnel news

  • The Federal Times reports that U.S. Office of Management and Budget Deputy Director Margaret Weichert will return to the private sector [in mid-March] to work as the managing director of commercial practice for Accenture. Deputy Director Weichert contemporaneously served as acting OPM director for around 18 months of her 30 months at OMB.
  • Fierce Healthcare reports on leadership changes at Cigna’s Express Scripts prescription benefit manager unit.
  • Drugstore News reports on leadership changes at CVS Health’s Caremark prescription benefit manager unit.

Good luck to them all.

TGIF

David Ermer–Uncategorized–

The Health Care Cost Institute has released its 2018 healthcare cost and utilization report.

Average employer-sponsored insurance (ESI) spending rose to $5,892 per person in 2018, according to the Health Care Cost Institute’s annual Health Care Cost and Utilization Report, which analyzes 2.5 billion medical claims to inform the public about trends affecting approximately 160 million U.S. individuals with employer-sponsored insurance. This spending growth outpaced 2017’s growth due to continued price growth combined with an uptick in utilization.

“Prices, spending, and out-of-pocket costs continue to rise for the 160 million Americans with employer-sponsored health insurance,” said Niall Brennan, president and CEO of HCCI. “Higher prices for medical services continue to drive most spending increases, but in 2018 we also saw an uptick in utilization for the first time in several years. If these price and utilization trends continue, we expect spending growth to stay on an upward trajectory in the coming years.”

Despite recent increases in utilization, rising prices were the primary driver of spending growth over the 5-year study period. After adjusting for inflation, spending rose by $610 per person between 2014 and 2018. “Higher prices for medical services were responsible for about three-quarters of overall spending increases between 2014 and 2018, after inflation,” said Jean Fuglesten Biniek, report co-author and senior researcher at HCCI.

Shocker. (-;

Becker’s Hospital Review lists the 20 most expensive prescription drugs in our country according to the prescription drug discounter, Good Rx. Topping the list is “Amryt Pharma’s drug, Myalept, used to treat lipodystrophy, with a list price of $71,206 per month.” The Children’s Hospital of Philadephia explains that

Lipodystrophy is a rare disorder that affects how the body stores and uses fat. Children with lipodystrophy may have little or no body fat. Instead, fat builds up in places it shouldn’t, like the blood and internal organs. This can lead to diabetes and other health problems.

Lipodystrophy can be inherited, which means the condition is passed down from the parents and it can develop at any time in life. Lipodystrophy can also be acquired without a known genetic cause.

Three medical directors of major health plans have explained in the Washington Examiner why heath plan prior authorization practices are smart medicine. They don’t have to convince the FEHBlog but their article may be helpful to health plans in rebutting physician complaints.

Thursday Miscellany

David Ermer–CDC, Congress–

The FEHBlog visited a large radiology practice in Washington DC today for a routine test. The desk attendant asked the FEHBlog to fill out a brief novel coronavirus questionnaire, e.g., have you travelled to China recently etc. The FEHBlog wondered why they weren’t asking about the flu. It occurred to the FEHBlog that the practice’s employees are vaccinated against the flu but not the coronavirus. In any event, Stat News, a Boston Globe service offers an interview with the Centers for Disease Control and Prevention about efforts to avoid the novel coronavirus spreading in the U.S.

Healthcare Dive offers a simple side by side analysis of the three bipartisan surprise billing proposals under House of Representatives consideration. Thanks.

Health Payer Intelligence discusses four Social Determinant of Health barriers that health plans are seeking to remove in order to improve access to care. The publications deems those barriers to be

the lack of behavioral and mental healthcare, difficulty in obtaining transportation to healthcare appointments, cost barriers to medication adherence, and access to medical care sites—both physical and virtual.

In a bit of related good news, the CDC reports that

The percentage of all persons who were in families having problems paying medical bills in the past 12 months decreased 4.5 percentage points from 19.7% in 2011 to 15.2% in 2015 and then decreased 1.0 percentage point from 2015 through 2018 (14.2%).

Govexec.com discusses the bipartisan effort underway in Congress to correct some oversights in the new paid family leave law for federal employees. The bill is HR 5885. That program takes effect October 1, 2020.

Midweek update

David Ermer–Congress, Uncategorized–

Today the House Ways and Means Committee passed its surprise billing proposal (H.R. 5826) by voice vote. This bipartisan bill is strongly by hospital and other healthcare provider organizations. Enough said.

The Hill reports on the state of efforts in the Senate to lower prescription drug prices. The efforts currently are up in the air according to the Majority Leader Mitch McConnell.

Speaking of prescription drugs, Bioworld informs us that a

New analysis from Clarivate Analytics’ Cortellis Forecast Team predicts 11 medicines set to enter the market in 2020 will reach more than $1 billion in sales by 2024. Drugs for central nervous system indications and cancer dominate the list, almost universally accelerated in their development by orphan drug status or other designation intended to speed their path to market. Most medicines are for indications in markets already crowded with competitors, meaning they’ll face substantial pressures to differentiate from existing products.

The Office of National Coordinator of Health Information Technology discusses last week’s 10th annual ONC conference in a blog post.

We heard about standards for clinical data and financial transactions, technology for matching you with your (snail) mail, and how leading innovators are using application programming interfaces and the HL7® FHIR® standard to advance access. And yet, these technologies are not always working in sync. Several new and proposed policies from HHS – including ONC’s and CMS’s proposed interoperability rules and the Trusted Exchange Framework and Common Agreement – are set to move the nation one step closer to making these technologies work for the patient.

It can’t happen too soon, in the FEHBlog’s view.

Also this week Healthgrades issued its best U.S. hospitals list. Healthgrades explains that its ratings are “based solely on clinical quality outcomes for 32 conditions and procedures. This premier distinction rewards hospitals that consistently exhibit exceptional, comprehensive quality care.” Although none of the D.C. located hospitals are included on the list, there are several in the D.C. suburbs of Maryland and Virginia.

Tuesday Tidbits

David Ermer–ACA, Congress, Uncategorized–

Earlier today, the House Education and Labor Committee advanced its bipartisan surprise billing proposal (H.R. 5800) today by a 32-13 vote. As the FEHBlog mentioned last Friday, the House Ways and Means Committee has released the legislative text of its bipartisan surprise billing proposal (H.R. 5826). While these proposals seek to protect consumers, which is a good thing, they also will impose new administrative burdens on the health system but won’t encourage out-of-network providers to go in-network. The FEHBlog anticipates that if bipartisanship on this issue continues in the House, then it’s likely that the House bill will wind up in the Senate’s bill to lower healthcare costs (S. 1895) and eventually become law.

The Association of Community Health Plans has proposed

a certification framework for digital health care pricing tools that makes quality and pricing information accessible, understandable and actionable for consumers. Outlined in a new issue brief, ACHP offers a core set of standards for meaningful price transparency and lays out a roadmap for independent certification of these tools.

Smart move given the federal government’s push for price transparency tools.

The Wuhan or novel coronavirus has an official name. Forbes reports that

Today, the World Health Organization (WHO) announced the official new name of nCoV2019 (2019 novel coronavirus), the strain of coronavirus that has infected over 43,000 people worldwide, resulting in 1017 deaths.

COVID-19, as the virus will now be known, was decided on by the WHO, with the organization giving a number of reasons as to why it was chosen.

Evidently the FEHBlog was violating WHO guidelines by referring to this disease as the Wuhan virus. Lo siento.

Healthcare Dive reports on Change Healthcare survey of healthcare provider and payer executives. The article describes differences of opinion between payer and provider executives. Here’s one —

Their positions on social determinants of health seem to reflect one of the widest splits. Providers appear to have the edge in terms of gathering information on substance abuse among patients (71.4% of provider executives versus 52.5% of payers). However, payers are much more effective at pinning down the income data of their enrollees (45.9% versus 26.5%). They also had a 10-point advantage in focusing on health literacy (39.3% vs. 29.6%), although the numbers suggest both factions did not consider it a major issue.

Big Monday

David Ermer–Congress, Federal employment benefits, Uncategorized–

The U.S. Office of Personnel Management (“OPM”) released its call letter for 2021 FEHBP benefit and rate proposals today. The carrier proposals are due on Sunday May 31, 2020. To prepare the proposals carriers also need OPM’s technical guidance, which is a separate Carrier letter, and to submit their proposals, carriers also must complete OPM’s extensive “ADC” information request. OPM expects a lot from its FEHBP carriers.

The President did transmit his FY 2021 budget proposal to Congress today. The Administration intends to propose to statutory change to the FEHBP government contribution formula (5 USC Sec. 8906):

to base it on a plan’s score from the FEHB Plan Performance Assessment would improve healthcare quality and affordability within the program. The enactment of the proposals in 2021 will not begin to impact program financials until 2023. [Page 1168]✦

This appears to be a retread from the last budget cycle. However, the FEHBlog does not recall reviewing the proposed legislative language for the 2019 proposal. This proposal assuming its the same one didn’t get very far then, and it’s unlikely to get further this year in the FEHBlog’s view. Federal News Network discusses other federal employee compensation found issues in the budget proposal.

Russ Roberts the host of the Econtalk podcast held a fascinating conversation with “physician and author Marty Makary of Johns Hopkins University talks about his book The Price We Pay.” The book concerns fixing our healthcare system. Dr. Makary made a lot of sense to the FEHBlog. He encourages readers to listen to this podcast or read the transcript.

Weekend update

David Ermer–CDC, Congress, Medicare, Rx coverage–

Congress remains in session this coming week on Capitol Hill. Tomorrow the President will deliver his proposed FY 2021 budget to Congress. The Wall Street Journal reports that the

$4.8 trillion budget [proposal] charts a path for the start of a potential second term, proposing steep reductions in social-safety-net programs and foreign aid and higher outlays for defense and veterans.

[The safety net program savings include] $130 billion from changes to Medicare prescription-drug pricing.

Federal News Network advises that

Signs indicate the Trump administration is still pursuing the merger of the Office of Personnel Management with the General Services Administration, despite recent congressional language prohibiting the transfer of OPM statutory functions to other agencies.

The administration will, for example, issue a joint budget request for OPM and GSA for 2021 [just like the FY 2020 budget], Federal News Network has learned

Of course, rather than prohibiting the transfer, Congress more accurately put the merger on hold pending an independent study of the transfer by the National Academy for Public Administration. The report on the study is expected to be submitted in June 2020.

OPM released additional guidance on the Wuhan or novel coronavirus to Chief Human Capitol Officers on Friday February 7. Here’s a link to the Centers for Disease Control’s website about reports of the disease in our country.

Healthcare Dive reports that

Telehealth and remote monitoring are becoming significant forces in healthcare delivery, according to a new survey of 1,300 primary care and specialty physicians released Thursday by the American Medical Association.

The number of physicians who use telehealth for visiting with patients has doubled between 2016 and 2019, although the overall number remains relatively low with 28% of surveyed physicians reporting they have adopted telehealth technology. Remote patient monitoring has also grown, from just 13% of physicians using it in 2016 to 22% in 2019.

That’s encouraging news.

TGIF

David Ermer–Congress–

The American Hospital Association reports today that

House Ways and Means Committee Chairman Richard Neal, D-Mass., and Ranking Member Kevin Brady, R-Texas, this morning released legislative text of the Consumer Protections Against Surprise Medical Bills Act of 2020, the committee’s proposal to address surprise medical bills. The legislation prohibits providers from balance billing patients for emergency services or medical care the patient reasonably could have expected to be in-network, and does not allow patients to be charged more than the in-network cost-sharing amount. The proposal does not rely on a benchmark payment rate to determine out-of-network reimbursement, but instead includes a period for health plans and providers to negotiate reimbursement, to be followed by a mediated dispute resolution process should it be necessary. The proposal also includes several other consumer protection and transparency provisions. The committee is expected to mark up the legislation on Wednesday, Feb. 12. 

In addition, House Committee on Education and Labor Chairman Robert “Bobby” Scott, D-Va., and Ranking Member Virginia Foxx, R-N.C., this morning unveiled the Ban Surprise Billing Act. The legislation is similar to the bills passed last year by the House Energy and Commerce Committee and Senate Health, Education, Labor and Pensions Committee in that it relies on a median in-network rate to resolve out-of-network payments. For amounts paid above $750 (or $25,000 for air ambulance services), the legislation allows for an independent dispute resolution process to determine the final payment. A summary of the legislation is here, and legislative text was released late this afternoon. The committee is scheduled to mark up the legislation on Tuesday, Feb. 11.

If the arbitration approach becomes law, you can be sure that health plans will restrict out of network coverage as far as they can unless Congress repeals that option. In other words, it appears that the out-of-network providers are looking to squeeze the last golden egg out of the strangled goose. The FEHBlog appreciates in-network providers for helping to control health care spending.

Bloomberg News reports that

AHIP President and CEO Matt Eyles said health insurers should be allowed to classify efforts to address social determinants of health as quality improvements or patient care instead of as administrative costs. Health insurers are uniquely positioned to tackle SDOH, according to Eyles, who said changing how the initiatives are classified “would allow for greater measurement over time to understand how we might we might be impacting cost trends.”

Good recommendation. OPM should take this approach with all FEHB plans.

Modern Healthcare informs us

The novel [or Wuhan] coronavirus that threatens to hobble the global economy, causing travel restrictions and the closure of some U.S. retail stores in China, is expected to stabilize in April, according to a projection from S&P Global Ratings. 

S&P’s analysts said a worst-case scenario would involve the virus spreading into late May, with an optimistic prediction calling for an end to transmissions in March. The firm said the impact on economic activity in Asia could peak around the middle of the year before an economic rebound in 2021.

Hope springs eternal.

Thursday Miscellany

David Ermer–ACA, Uncategorized–

The Wall Street Journal reports that a Wuhan physician Dr. Li who had issued public warnings about the Wuhan or novel coronavirus has died from the disease. Not the first nor the last physician to sacrifice his or her life in the interest of public health and patient care. RIP

Last March, the FEHBlog heard Dr. Amy Tuter, a retired obstetrician, speak on Econtalk about the need for maternal ICUs. Consequently, the FEHBlog was pleased to read this American Hospital Association news article about

Titus Regional Medical Center, Mount Pleasant, Texas

Since implementing best practices related to maternal hemorrhaging, Titus Regional Medical Center’s maternal morbidity rate related to blood loss has been reduced significantly. The hospital employs a stage-based approach to maternal hemorrhage, simulates for staff emergent hemorrhage situations and provides intense education regarding the physiology of a hemorrhage.

Bravo!

Finally Healthcare Dive reports that

  • With the release of their fourth quarter earnings, Cigna executives touted the company’s ability to contain medical cost growth at 4% over 2019, continuing a streak.
  • The payer’s medical loss ratio of 82.3% for the fourth quarter of 2019 beat Wall Street expectations even though it increased from the prior-year period. It’s still “an encouraging sign” given several misses from other payers, David Windley of Jefferies said in a recent note.

Cigna did pay a significant amount in Affordable Care Act driven rebates for 2018 according to an HHS report. (When looking at the chart remember that insurers pay rebates based on state level MLRs over a rolling three year period. Consequently there are several CIGNA entries.)