Fedweek reminds us that the Federal Benefits Open Season is winding down.

While FEHB and FEDVIP coverage continue unchanged unless the enrollee makes a change during the open season, a new enrollment is required each year for those who want a health care flexible spending account, a dependent care account, or both in the following year.

The dependent care maximum remains $5,000 while the health care maximum is rising to $2,700 (a figure set by the IRS after materials were prepared reflecting the old $2,650 figure). Also, you must have a health care account in the following year to take advantage of the $500 allowable carry-over in that type of account.

The Open Season ends on Monday December 10.

CVS Health today announced a new pricing policy for employer sponsored health plans known as its guaranteed net price model. Healthcare Finance explains that

The guaranteed net cost is calculated using plan utilization and expected rebate value, and applying projected drug price inflation and expected shift in drug mix, such as from brands to generics.

Moreover,

[CVS Health] would be accountable for the impact of drug price inflation and shifts in drug mix [and,]

Clients will continue to have the option to implement point-of-sale rebates to provide plan members visibility into the net costs of their medication. 

Speaking of CVS Health, Fierce Healthcare tells us that CVS Health’s Aetna subsidiary closed yesterday on the sale of its Medicare Part D business to Wellmark which was the Justice Department’s prerequisite to approving the merger under federal anti-trust laws.

As of Sept. 30, WellCare has 1.1 million Part D members. Aetna’s business adds 2.2 million more, pushing the insurer ahead of Blue Cross Blue Shield and Express Scripts in terms of Part D market share 

Forbes columnist Avik Roy explains why all healthcare consumers will benefit if the Senate joins the House in suspending the ACA’s onerous health insurer tax for 2020 and 2021. The tax was in effect in effect for 2014-16 , suspended for 2017, and resurrected for 2018. Congress suspended the tax for 2019. Roy explains, and the FEHBlog heartily agrees that

[T]he blue ribbon for the Dumbest Tax in Obamacare goes to its tax on health insurance premiums, which the Joint Committee on Taxation estimates as raising $161 billion in revenue between 2019 and 2028. (The number would be higher, but for the fact that Congress passed a one-year premium tax holiday for 2019.) 

The problem is this: Health insurers aren’t in the business of going broke. So they pass along the cost of the tax in the form of higher premiums for consumers. According to estimates developed by consultants at Oliver Wyman, for every dollar Washington raises in taxes, premiums go up by around $1.27.

That translates to an annual premium increase in 2020 of $196 per person for those buying coverage through Obamacare; $458-479 for individuals obtaining coverage through their employers [including the FEHBP]; $241 for enrollees in Medicare Advantage; and $147 for enrollees in Medicaid managed care plans.

Hopefully the Senate will pass this bill before the lame duck session ends later this month.

HHS’s Office for Civil Rights announced a $500,000 plus compliance program settlement with a Florida hospitalist practice which was sharing protected health information with a billing service vendor without first putting a business associate agreement in place.

The Washington Post reports that “Congressional leaders and White House officials agreed Monday to extend a government funding deadline by two weeks, until Dec. 21,” due to the late President Bush’s state funeral this week.

The Wall Street Journal, to the FEHBlog’s surprise reports that

[Senior Federal Judge Richard Leon] in a brief hearing Monday said [to lawyers for the Justice Department, CVS Health, and Aetna] he’s considering requiring that the merged firm hold the CVS and Aetna assets separate until he has more time to consider the settlement. If he does so, it could cause considerable disruptions for the newly merged firm, as CVS began integrating Aetna’s assets immediately after the deal closed last week.

The judge set another hearing date for December 18. If he were to issue such an order, it would be appealable to the U.S. Court of Appeals for the DC Circuit, in the FEHBlog’s opinion.

Also on the competition front, the ACA regulators, the Department of Health and Human Services, the Department of Labor, and the Department of the Treasury, have released a report to President Trump on Reforming America’s Healthcare System Through Choice and Competition as required by Executive Order 13,813. Check it out.

Congress remains in session this week on Capitol Hill. Here’s a link to the Week in Congress’s report on last week’s actions there.

The continuing resolution funding several federal agencies, including Homeland Security and OPM, expires at the end of December 7.  Fedsmith has more details here. Given the fact that President George H.W. Bush’s state funeral occurs on December 5, it’s most likely in the FEHBlog’s view, that Congress will extend the continuing resolution into next week if the parties are close to agreement or to next year / the new Congress. Bear in mind that because OPM’s FEHBP operations are funded by a a premium surcharge, the FEHBP is not subject to full or partial shutdown. Nevertheless the FEHBlog is sensitive to the fact that federal employee compensation, e.g., a 2019 raise, is a topic to be resolved by the appropriations minibus to replace the continuing resolution.

Well-deserved congratulations to OPM FEHBP actuary Ron Gresch for being named a meritorious professional recipient of the 2018 Presidential Rank Award. The award ceremony will be held on December 13 in Washington, DC.  

Late last week, the U.S. Centers for Disease Control issued their 2017 reports on life expectancy in the U.S. NPR explains that

For the second time in three years, life expectancy in the U.S. has ticked downward. In three reports issued Thursday, the Centers for Disease Control and Prevention laid out a series of statistics that revealed some troubling trend lines — including rapidly increasing rates of death from drug overdoses and suicide. 

CDC Director Robert Redfield described the data as “troubling.” 

“Life expectancy gives us a snapshot of the Nation’s overall health and these sobering statistics are a wakeup call that we are losing too many Americans, too early and too often, to conditions that are preventable,” he said in a statement released Thursday. 

Redfield tied the drop in overall life expectancy, which averaged 78.6 years in 2017, a decrease of 0.1 from the year before, to the rise in deaths from overdose and suicide.

Here’s a Healthline list of the leading causes of death drawn from these reports. The number one cause is heart disease. A few years ago, the FEHBlog heard the American Medical Association President elect remark that heart disease is the doctor’s fallback diagnosis to fill in the cause of death blank on the death certificate. The FEHBlog considers it is reasonable to draw a conclusion from these reports that the ACA is not a magic bullet.

Let’s wrap it up with a few tidbits

• Interesting Medcity News account of John Doerr’s take on where Amazon is headed in the the healthcare field. Mr Doerr led an investment bank’s investment into Amazon in 1995. “Doerr pointed to how the company’s foundational corporate strategy around ‘price, selection and convenience’ easily translates to healthcare, with the replacement of inefficient physical locations with online or virtual experiences.”

• Medcity News also reports on United Health Group’s rollout of a fully portable individual health record (“IHR”) for its members. 

UnitedHealth plans to offer IHRs at no charge for all of its 50 million comprehensive benefits plan members across North and South America by the end of 2019 as a technology solution meant to improve patient experience, lower costs and improve outcomes. The platform will also be accessible by more than 1 million care providers during that time frame.

The Internal Revenue Service has granted self-funded large employers and insurers including FEHB plans, a 30 day grace period (from January 31, 2019, to March 4, 2019) for distributing Forms 1095-B and 1095-C to employees / plan enrollees. These forms document the enrollees compliance with the ACA’s individual shared responsibility mandate and the large employer’s compliance with the ACA’s employer shared responsibility mandate. The IRS did not extend the reporting entity’s deadline to submit the forms to the IRS.  The IRS will have to revisit these forms for the next reporting year when the individual mandate penalty starts to be zeroed out.

CNBC interviewed Express Scripts’ chief medical officer Steve Miller, MD.

Dr. Miller sees a potential watershed moment in the year ahead when it comes to drug pricing in Washington. He thinks the administration could find allies on both sides of the aisle in the incoming Congress to move even further with reforms which seemed unthinkable just a couple of years ago.

“I never would have thought I’d have a Republican president in Donald Trump who’s advocating for international price controls, that I would have the former head of Lilly, Alex Azar HHS, advocating for low prices and low rebates, and Scott Gottlieb who’s been spectacular at the FDA accelerating approvals of generics, accelerating approvals of the 2nd and 3rd in class per drug. It’s really an incredible moment,” Dr. Miller said.

With respect to the drug pricing issue, Healthcare Dive reports that

After years of delay, HHS finalized a rule Thursday that will impose a ceiling price to limit how much drug manufacturers can charge hospitals participating in the 340B drug discount program for their products, as well as civil monetary penalties for manufacturers charging above the ceiling.

While this is good news for tertiary care hospitals in particular, it probably means that the drug manufacturers will be seeking to make up lost ground with other customers.

Health Payer Intelligence discusses a recent customer satisfaction survey of health plan consumers that Newsweek arranged. Humana, Blue Cross, and Aetna topped the results.

Tailored experiences and a personal touch are in extremely high demand, said Nancy Cooper, Newsweek Global Editor in Chief, especially as automation threatens to fundamentally alter the way consumers interact with large corporate entities. 

“As we examined the larger, impersonal forces that are transforming retail, it seemed like a good time to recognize a more personal factor in business success: the ways in which many companies nurture their relationships with consumers,” she said. 

“The automated future is already upon us, and the hope is that we—as a nation and as individuals—can shape it to our advantage.” 

Healthcare payers are certainly trying to balance the efficiencies of automation with the individualized customer service their beneficiaries expect. 

By combining advanced data analytics and artificial intelligence with personalized outreach and tailored communications, payers are creating innovative new opportunities to increase satisfaction and adherence to recommended treatment pathways.

Just short of one year following the merger announcement, CNBC reports CVS Health has closed on its deal to acquire major health insurer Aetna. The deal is valued at $70 billion. CVS Health’s CEO Larry Merlo predicts “the combined company will create a new data-driven health-care model that’s more personal, convenient and tailored to individual patients than ever before.”Good luck with that effort.

According to Hartford Business, Cigna and Express Scripts extended the December 8, 2019 deadline for closing on their merger deal by six months as they still have some state regulatory hurdles to clear. The parties nevertheless expect the deal to close before the end of this year.

The Centers for Medicare and Medicaid Services announced a proposed rule that would give Medicare Part D and Medicare Advantage plans more bargaining power to lower prescription drug costs. The proposed changes include:

• Providing Part D plans with greater flexibility to negotiate discounts for drugs in “protected” therapeutic classes, so beneficiaries who need these drugs will see lower costs;
• Requiring Part D plans to increase transparency and provide enrollees and their doctors with a patient’s out-of-pocket cost obligations for prescription drugs when a prescription is written;
• Codifying a policy similar to the one implemented for 2019 to allow “step therapy” in Medicare Advantage for Part B drugs, encouraging access to high-value products including biosimilars; and
• Implementing a statutory requirement, recently signed by President Trump, that prohibits pharmacy gag clauses in Part D.

CMS is also considering for a future plan year, which may be as early as 2020, a policy that would ensure that enrollees pay the lowest cost for the prescription drugs they pick up at a pharmacy, after taking into account back-end payments from pharmacies to plans.

Healthcare Dive offers an interesting analysis of the proposed rule here.

In a hopeful step, America’s Essential Hospitals, a trade association of tertiary care hospitals, now offers providers an online toolkit to help them hold cost of care discussions with patients. The toolkit should prove helpful to health plans too. Bravo.

Yesterday, HHS’s Office for Civil Rights, which enforces the HIPAA Privacy and Security Rules, announced a HIPAA privacy rule breach settlement with a small Hartford, CT, medical practice.

In February 2015, a patient of Allergy Associates contacted a local television station to speak about a dispute that had occurred between the patient and an Allergy Associates’ doctor. The reporter subsequently contacted the doctor for comment and the doctor impermissibly disclosed the patient’s protected health information to the reporter.  

The practice agreed to pay OCR $125,000 and commit to a corrective action plan.

Business Insider reports that having obtained all required government approvals, CVS Health’s acquisition of Aetna, valued at $69 billion, will close by Wednesday November 28, 2018. Both Aetna and CVS Health participate in the FEHBP in various roles.

Congress returns to Capitol Hill this week following the Thanksgiving holiday. The most pressing issue is completion of FY 2019 appropriations.  (FY 2019 began on October 1, 2018.) The bulk of FY 2019 appropriations (in terms of dollars) were resolved in September.  The following appropriations measures are funded with a continuing resolution through December 7, 2018: Agriculture; Commerce, Justice, Science; Financial Services & General Government (which includes OPM/FEHBP); Homeland Security; Interior, Environment; State, Foreign Operations; and Transportation, Housing and Urban Development. For more details check out the Committee for a Responsible Federal Budget’s Appropriations Watch.

Healthcare Dive discusses a Health Care Cost Institute report on primary care visits covered by employer sponsored plans like the FEHBP.  The highlights of the report are as follows:

Office visits to primary care physicians (PCPs) declined 18 percent from 2012 to 2016 for adults under 65 years old with employer-sponsored health insurance, while office visits to nurse practitioners (NPs) and physician assistants (PAs) increased 129 percent. 

Comparing 2012 to 2016, there were 273 fewer office visits per 1,000 insured individuals to primary care physicians over that span, while visits to nurse practitioners and physician assistants rose from 88 visits per 1,000 insured members to 201. The rate of office visits to specialists and other non-physician providers remained relatively unchanged over the period. 

While the utilization of office visits to NPs and PAs increased dramatically over the study period, the substitution did not result in cost savings. Since 2012, the average cost of an office visit to a primary care physician remained closely aligned with the cost of a NP and PA visit. In 2016, the average cost per visit to a primary care physician was $106 compared to $103 for an office visit to a NP or PA. 

Every state saw declines in office visits to PCPs and an increase in office visits to NPs and PAs between 2012 and 2016.

Modern Healthcare tells us about an innovative company called 98point6.

Ever since house calls fell out of favor, most medical care has been delivered in hospitals and doctor’s offices. But apply smartphones and AI to the situation, and that need not be the case, at least not for primary care. The company 98point6, for one, wants to take primary care virtual, through text conversations.

For patients, the experience begins with 98point6’s automated assistant, which asks what’s wrong. Behind the scenes, natural language processing and machine learning analyze the chat to narrow in on the relevant topic, allowing the assistant to ask questions that will give human physicians the information they need to diagnose and treat the problem.

The software itself isn’t handling treatment—a physician is. After the initial narrowing, the software presents the case to 98point6’s board-certified physicians, all of whom are permanent employees of the company. In anywhere from a few seconds to a couple of minutes, the physician connects with the patient, messaging to ask any additional questions—using video and photos, if necessary—and then will submit an electronic prescription, order labs, or recommend the patient see someone in person. But that last option is rare: More than 95% of cases are resolved virtually.

98point6 is currently focused on the self-insured employer market. Employers pay a single fee for unlimited access for their employees. “That’s key,” Cape said, since a single fee doesn’t limit patients’ use of the service. 98point6 also has a direct-to-consumer offering, which costs $20 for the first year and $120 per year after that.

Perhaps this approach will be more appealing to consumers than telehealth.

Federal News Network columnist Mike Causey promoted Consumers Checkbook FEHB Open Season Guide in last Friday’s column captioned Easy on the Brain Health Plan Tips. (The FEHBlog subscribes to this guide.)  Mr. Causey writes

[Th]e health insurance open enrollment season . . . runs through close-of-business Dec. 10 . . . . Here are three quick tips for health plan hunters from Walton Francis. He’s the guy who literally wrote the book, “Checkbook’s Guide to Health Plans For Federal Employees.” The book is available at many stores in the D.C. area while the online version is available courtesy of their agency to most employees at work.

• Catastrophic coverage is the most important feature of a health plan. How much will you be out of pocket if you suffer a major illness or accident next year?
• Would you like to be covered by a health plan that will give you a savings account that is more than the premiums you’ll pay?
• And finally, will shifting to the standard or basic option of your plan give you the same coverage at a much lower premium?

If you don’t have a primary care doctor, use the health plan open season as an opportunity to find an in-network primary care doctor. Blue Cross offers five tips on finding a primary care doctor here.

Also with regard to the Consumer Checkbook’s second tip. the FEHBlog has a high deductible plan with a health savings account (outside the FEHBP).  He thinks it’s a great choice for people who are starting to think about retirement because health savings accounts are triple tax free — deposits are made tax free; the account grows tax free, and the payments out of the account for tax deductible medical expenses are tax free. The best. Build up your health savings account in preparation for retirement. The right to contribute to Medicare ends once you become eligible for Medicare.

In today’s healthcare merger and acquisitions news —

• Reuters reports that CVS Health advised that closing on its acquisition of health insurer Aetna will occur after Thanksgiving as the parties await approval from New York and another state, and 

• The Wall Street Journal reports that 

Drugstore owner Walgreens Boots Alliance Inc.  and health insurer Humana Inc. are in preliminary discussions to take equity stakes in each other, according to people familiar with the matter, as health-industry players scramble for tie-ups that will help them compete in a rapidly evolving environment.

For all the talk of wondrous European health-care systems, the American generics system is the envy of the world. Nine in 10 prescriptions in the U.S. are cheaper generics, which saved $265 billion last year. Compare that with 70% in Canada and less than half in many European countries. The U.S. pays big for breakthroughs but eventually prices fall as competition arrives. Europe enjoys less price discipline.

That’s is what is happening with Truvada as the Food and Drug Administration this summer approved a generic version of that drug. The FEHBlog is happy to learn about this drug. Happy Thanksgiving.