The Hill uses a recent Food and Drug Commissioner speech among other resources to read the tea leaves about the President’s upcoming speech on drug prices.  The FDA Commissioner suggests that the Administration wants to plow manufacturer rebates into lower prices for consumers.

The Wall Street Journal reports that

The opioid epidemic has unfairly increased health insurance costs across the board, not just for those suffering from addiction, plaintiffs allege in five proposed class-action lawsuits filed Wednesday. 

The suits, brought on behalf of people and businesses who have paid for health insurance in California, Illinois, Massachusetts, New Jersey and New York since 1996, represent a new front in litigation seeking to hold corporations accountable for the opioid crisis. 

Already, drug makers and distributors collectively face more than 600 civil lawsuits brought by local and state municipalities trying to recoup costs borne from opioid abuse.

When will the federal government join these lawsuits?

Recent surveys —

•  Becker’s Hospital Review lists 100 “great” U.S. hospitals. 
• The Commonwealth Fund has issued its annual state health scorecard, and the results aren’t pretty. 
• Health Payer Intelligence reports on an interesting employer health care survey. “Sixty-four percent of employees that participated in a new survey said financial incentives helped connect them to necessary healthcare resources and equip them for improved member engagement.” What’s more, “Eighty-two percent of employees said that participating in a high-deductible health plan helped enforce better healthcare decision making.”

Healthcare Informatics reports on Health and Human Services Secretary Alex Azar’s speech to the World Health Congress. The Secretary is keen on making health care pricing transparent to consumers. Why not require doctors to provide a summary of services and prices similar to the summary of benefits and coverage that the ACA requires health plans to produce, e.g., my practice participates in the following networks, if I perform this type of service out of network it would cost $X.

Azar also referenced issues around pharmaceutical pricing. “We also want to lower the high prices of drugs,” he said. “HHS is working with the president to focus on a number of issues, including high-list prices, seniors in government programs overpaying for drugs, and foreign governments getting a free ride on American innovation. We’re working on this. I can assure you the President wants to go further, much further. Action is desperately needed. I believe we can help lower the cost of medicine while still stimulating innovation. We have to do so going forward.” 

Concluding his speech, Secretary Azar said that the potential for change, and the initiatives he had just referenced, are among the reasons “why I’m so optimistic.” Fundamentally, he said, “The time has simply come for this [transformational change] to happen. The status quo just cannot hold. The way we do business in American healthcare, from insurance, to IT, to drug pricing, to patient billing, has got to change.” He said he believes that “The power of informed individuals will deliver high-quality healthcare. Getting to that system won’t be the most comfortable process for some entrenched players,” he warned, but he said the opportunities are many, and exciting, and he added, “I exhort all of you to engage with us on the initiatives we’ve presented today, because the opportunities are [so great]. Change is necessary, change is coming,” he said, and asked the leaders gathered at the conference to be a part of that change.

Healthcare Dive discusses a wide-ranging PwC report on merger and acquisition activities in healthcare.  In the course of discussing tech company involvement with healthcare, the publication observes based on the PwC report that

More than half of consumers surveyed said they believe technology companies can improve the patient experience, reduce costs, simplify healthcare and increase their access to personal health information. But they also expressed concerns about the quality of products and services offered by tech companies and privacy of their information. For example, 36% said they would not be very comfortable getting diagnostic tests through a tech company and 36% were uncomfortable with the idea of a virtual doctor visit.

Consumers are, however, embracing health retailers like CVS Health, Walgreens Boots Alliance and Walmart. Slightly more than half said they would be very or somewhat likely to get a wound treated or get staples or stitches at a retail clinic, and 61% said they would use an at-home strep test purchased at a retail store. Payers like CVS are banking on these loyal retail customers to drive increased use of basic healthcare services at clinics.

Health IT Security offers a very informative report on HHS Office for Civil Rights advice on development of legally mandated electronic protected health information security risk assessments. Definitely worth a gander.

Federal News Radio reports that

In a wide-ranging conversation with reporters Monday morning [April 30],  [OPM Director Dr. Jeff] Pon outlined his vision for OPM and its role in modernizing 40-year-old statutes that govern how agencies recruit, retain, compensate and manage federal employees. 

“We’ve been nibbling around the edges of civil service reform in the [19]90s and also in the 2000s,” Pon said. “We’ve looked at pay systems, but I’m really looking at wholesale change. We’re looking to make sure that the fabric of the civil service is ready for the next 40 years.” 

OPM can push change with four main mechanisms: legislation, executive order, agency-specific authority and OPM authorities. “I’m going to be pushing on all four,” Pon said. “We are going to ask our legislators on ambitious things. We are going to ask for greater authorities for the OPM director to make sure that this position can manage agency-wide HR policies.” 

The ACA regulators, the Health and Human Services Department, the Labor Department, and the Treasury Department, have issued a new Affordable Care Act rule.  Last year, a federal judge here in the District of Columbia ordered the ACA regulators to reconsider an aspect rule that has been standing since 2010. The American College of Emergency Physicians had challenged the way in which the ACA regulators had created a basis for paying out of network emergency care. The ACA regulators stuck with their original and relatively practical approach. The regulators rejected further complications proposed by ACEP which is fine with the FEHBlog. The matter now goes back to federal court.

Health IT Analytics is telling us that

The Blue Cross Blue Shield Association’s network of value-based care programs, including accountable care organizations (ACOs) and patient-centered medical homes (PCMHs), is outperforming other initiatives in 96 percent of care and cost quality metrics.

The Blue Distinction Total Care Program is the healthcare industry’s largest national network of value-based care programs. Overall, Total Care doctors, hospitals, and clinical care teams are outperforming other healthcare providers in 22 of 23 nationally-recognized industry quality measures.

Members of the program have produced a 10 percent reduction in emergency room visits and a 15 percent decrease in hospitalizations year-over-year.

Impressive.  The FEHBlog appreciates provider-payer cooperation.

Speaking of healthcare metrics, Healthcare Dive reports that “Hospital re-admissions that occur in the first week after a patient is discharged are more likely to be preventable than those occurring later, according to a new study in the Annals of Internal Medicine that suggests it may be time to rethink the association between hospital quality and 30-day readmission rates.” Amen to that. NCQA take note.

The large telehealth provider American Well announced this week that it is acquiring another telehealth company Avizia which focus on providing telehealth services to hospitals and health systems. “Today, Avizia powers over 1,300 hospital deployments and is a leader in comprehensive acute care telemedicine implementation for large health systems. The company has a significant global presence in over 38 countries, with strong clinical use cases across behavioral health, chronic care, stroke, pediatrics and urgent care at over 70 health systems.”

The Wall Street Journal reports that “CareMore, a California-based subsidiary of Anthem that provides health care to 150,000 Medicare and Medicaid patients across the country, is screening its elderly patients for loneliness.”  Evidently, loneliness can adversely affect health, particularly in the elderly. Another social determinant of health. Good luck with that.

Good luck also to the National Institutes of Health which according to Fierce Healthcare “has set [May 6 as the] start date for the full launch of its All of Us precision medicine research project.}

NIH announced that nationwide enrollment in All of Us will begin on May 6 with launch events to be hosted in seven cities: New York City, Chicago, Birmingham, Alabama, Detroit, Kansas City, Kansas, Nashville and Pasco, Washington.  

All of Us seeks to enroll more than 1 million volunteers over the next 5 to 6 years as one of the “most ambitious” research efforts in the country, said Francis Collins, M.D., director of NIH, at a press briefing Tuesday. “Imagine the research we could enable,” he said, with access to “one of the largest and most diverse cohorts” ever made available. 

People who are interested in participating in the study can visit this website.  The FEHBlog enrolled.

The House of Representatives and the Senate are holding district / state work periods this week.

Most employee organization plans participating in the FEHBP hold accreditation from the Accredition Association for Ambulatory Health Care which is based in Skokie, Illinois. Becker’s Hospital Review reports that changed its governance structure after nearly 40 years, from an association structure to a 13-member board of directors. “Arnaldo Valedon, MD, was appointed the first-ever board chair. Ira Cheifetz, DMD, is chair-elect, Timothy Peterson, MD, is secretary and treasurer and Kenneth Sadler, DDS, will serve as immediate past board chair.”

The Wall Street Journal reports that this week closing arguments will occur before federal district judge Richard Leon in the federal government’s lawsuit to block the proposed merger between AT&T and Time Warner.  Why is this relevant to healthcare?

The trial marked one of the biggest antitrust cases in decades and the stakes are high. Should the Justice Department lose, it could embolden companies, including in the media industry, to pursue more transformative deals. A government loss also could prompt it to shy away from future lawsuits against vertical mergers, which combine companies that operate at different rungs of the same industry ladder.

All of the big pending healthcare mergers, e.g., CVS Health / Aetna, Cigna / Express Scripts, and Walmart / Humana also are vertical mergers.

On Friday, the Centers for Medicare and Medicaid Service announced new proposed payment rules to “update [for fiscal year 2019 beginning October 1, 2018] “policies and rates under the Skilled Nursing Facilities Prospective Payment System (SNF PPS), Inpatient Rehabilitation Facilities Prospective Payment System (IRF PPS), Hospice Wage Index and Payment Rate Update, and Inpatient Psychiatric Facility Prospective Payment System (IPF PPS).” CMS also released “a Request for Information (RFI) to obtain feedback on positive solutions to better achieve interoperability or the sharing of healthcare data between providers. Specifically, CMS is requesting stakeholder feedback through an RFI on the possibility of revising [Medicare] Conditions of Participation related to interoperability as a way to increase electronic sharing of data by providers.”

Earlier this week according to reports from the Hill and the Washington Examiner, the Senate Health Education Labor and Pensions Committee and the House Energy and Commerce Health Subcommittee each voted out over fifty opioid crisis bills. Health IT Security notes unfortunately that neither package includes a desired provision aligning the privacy laws that protect people with substance use disorders. “Harmonization of [42 CFR] Part 2 with [the] HIPAA [privacy rule] would * * * increase care coordination and integration among treating providers and other entities in communities across the nation.”

Fierce Healthcare tells us that HHS and the American Society for Nephrology are “launch[ing] an accelerator for kidney care innovation. The Kidney Innovation Accelerator, or KidneyX, will begin accepting applications for its first round of funding this summer, HHS announced. In addition to providing funding to back new approaches to kidney care, KidneyX will coordinate with federal agencies to bring the innovations to market more quickly.”

EHR Intelligence reports a positive stakeholder response to the HHS inpatient prospective payment system rule released earlier this week. That rule is chock a block full of policy changes as discussed in the article.

Finally, a couple of items of interest to payers:

• AHRQ released  a “Guide to Improving Patient Safety in Primary Care Settings by Engaging Patients and Families.” [The publication]  is a resource to help primary care practices partner with patients and their families to improve patient safety. The Guide is composed of materials and resources to help primary care practices implement patient and family engagement to improve patient safety.” The guide may help payers convince their members about the importance of selecting and using a primary care provider in the payer’s network.
• Employee Benefit News offers guidance on how to help plan members / employees avoid wasting their health savings account dollars. The FEHBlog expects this guidance will be well received by high deductible plan members. 

While the FEHBlog is a fan of personalized medicine, the Wall Street Journal reports today that

The emergence of genetics-based medicines is pushing the cost of treating certain diseases to new levels, forcing hospitals and health insurers to reckon with how to cover total costs per patient approaching a million dollars. 

The therapies deliver new genes or genetically altered cells to tackle some of the hardest-to-treat diseases, including in children. They come at a high price: Novartis AG listed its newly approved cell therapy for cancer at $475,000, while Gilead Sciences Inc. priced its rival drug at $373,000. 

But the price of the drugs is just the beginning, hospitals and insurers say. Administering these therapies can add hundreds of thousands of dollars to the tab, including lengthy hospital stays and use of other services and medicines.

OPM finalized a rule today that released the Blue Cross Blue Shield Federal Employees Program from its current limit of offering two options and a high deductible plan with a health savings account. Beginning next year, Blue Cross can offer any type of third option that OPM is willing to approve.

The Internal Revenue Service (“IRS”) reversed itself today when it announced that the 2018 maximum health savings account contribution for family coverage will be $6,900. In May 2017 the IRS announced that the family maximum would be $6,900 for 2018. Then earlier this year, the IRS announced that due to the adoption of the chained CPI-U in the new tax law, the family maximum would be lowered to $6,850. We fortuitously have come full circle.

The Federal Times reports that OPM Director Dr. Jeff Pon

has called on agency heads to ensure that anyone appointed to the Chief Human Capital Officers Council from their agency should be a “very senior-level” person that “serves as an integral part of the leadership team.”

With major civil service reforms, information technology modernization efforts and changes to various federal benefit programs under consideration, I need the advice and assistance of the most senior management officials in planning and implementing human capital initiatives,” Pon wrote in a April 23, 2018, memo.

Today, the Department of Health and Human Services announced new steps in implementing HHS Secretary Alex Azar’s value driven agenda. In that regards, yesterday, the Centers for Medicare and Medicaid Services (“HHS”) disclosed public suggestions to reshape the Medicare Innovation Center which the Affordable Care Act funded with $10 billion.

The [public] responses focused on a number of areas that are critical to enhancing quality of care for beneficiaries and decreasing unnecessary cost, such as increased physician accountability for patient outcomes, improved patient choice and transparency, realigned incentives for the benefit of the patient, and a focus on chronically ill patients. In addition to the themes that emerged around the RFI’s guiding principles and eight model focus areas, the comments received in response to the RFI also reflected broad support for reducing burdensome requirements and unnecessary regulations.

The FEHBlog, of course, is on board with those objectives across the health care industry. Today, CMS released a proposed rule on the Medicare acute care and long term care hospital inpatient prospective payment systems for the next federal fiscal year which begins October 1, 2018.  Here’s a link to the fact sheet on the proposed changes. CMS leads with the policy changes but here’s the dollar impact:

The proposed increase in operating payment rates for general acute care hospitals paid under the IPPS that successfully participate in the Hospital Inpatient Quality Reporting (IQR) Program and are meaningful electronic health record (EHR) users is approximately 1.75 percent. This reflects the projected hospital market basket update of 2.8 percent reduced by a 0.8 percentage point productivity adjustment. This also reflects a proposed +0.5 percentage point adjustment required by legislation, and the -0.75 percentage point adjustment to the update required by the Affordable Care Act. 

CMS projects that the rate increase, together with other proposed changes to IPPS payment policies, will increase IPPS operating payments by approximately 2.1 percent, and that proposed changes in uncompensated care payments, capital payments, and the changes to the low-volume hospital payments will increase IPPS payments by an additional 1.3 percent for a total increase in IPPS payments of 3.4 percent.

Health Affair’s new issue focuses on how health care providers can consider social determinants of health when caring for their patients.

A host of new payment arrangements—from accountable care organizations to value-based purchasing to pay-for-performance initiatives—are encouraging health care providers to broaden their traditional focus on health care services and consider the social determinants of health that are impacting their patients. A recent Deloitte survey found that 80 percent of hospitals are committed to addressing patients’ social needs as part of their clinical care.  The potential rewards from a more balanced, integrated approach are vast. 

Good luck with that effort.

The FEHBlog noticed that Congress has been complaining that the Labor Department had not issued guidance on how the 21st Century Cures Act, passed in December 2016, interacts with the 2008 Mental Health Parity Act. The Labor Department’s Employee Benefit Security Administration released a boatload of guidance today, including a proposed ACA FAQ #39 (see Mental Health Parity heading) . The proposed FAQ, in particular, goes on for 12 pages and is worth reading.

Reason Magazine has an interesting, favorable article on Food and Drug Commissioner Scott Gottlieb.

The Wall Street Journal reports today that

The median hospital operating cash flow margin—monitored by Moody’s Investors Service as a signal of financial strength—fell to 8.1% last year from 9.5% a year earlier, in a preliminary analysis of 160 nonprofit and public hospitals and hospital systems with credit ratings from the agency, a Moody’s report said.  * * * 

[T]he metric’s decline points to new challenges for U.S. hospitals as more patients seek medical care in nonhospital settings, and as enrollment surges in Medicare, which typically pays hospitals less than commercial insurers do. Those trends are squeezing hospital revenue, while a tight labor market is driving expenses higher, Moody’s said.

Ruh roh. More hospital cost shifting is on the way.

Congress remains in session on Capitol Hill this week. The Week in Congress has not updated its page for last week yet. Lo siento.

Bloomberg reported last week that Cigna has confirmed that the U.S. Justice Department is reviewing its proposed merger with Express Scripts for anti-trust law compliance. This comes as no surprise to the FEHBlog because of the size of the deal, among other factors.  Here’s the interesting angle which affects all of the healthcare mergers now pending, e.g., CVS Health / Aetna, Walmart / Humana:

[These] deals are so-called vertical transactions that combine companies operating in different parts of the same industry: health insurance and pharmacy benefit management. For years, such mergers have been approved by antitrust enforcers with conditions on how the firms conduct business in order to remedy any harm to competition from the tie-ups. 

But the Justice Department’s antitrust chief, Makan Delrahim, has taken a tough stand against those kind of settlements, arguing they force antitrust officials to become regulators who need to monitor the effectiveness of the agreements. That position led to his lawsuit last year against AT&T Inc.’s proposed acquisition of Time Warner Inc.

U.S. District Judge Richard Leon is now holding a bench trial in the federal government’s lawsuit to block the AT&T acquisition here in the U.S. District Court for the District of Columbia. The government has rested its case, and the defendants now are presenting their case.  Here is a link to the Wall Street Journal’s page on this important trial.

Health Payer Intelligence offers an interesting take on how Blue Cross of Michigan is approaching the task of bundling payments to providers. Have a look at your convenience.