The FEHBlog was visiting a client for most of the day today, and he returned to his office near 14th and K St around 3 pm.  It was pandemonium with pro-Trump and anti-Trump agitators. (A small anti-Trum rally marched down the middle of K Street during rush hour.)  The FEHBlog is glad that he is staying home in Bethesda on Friday.

The FEHBlog has been reflecting over the press-created uproar over impending changes to the Affordable Care Act. Let me share some thinking.

The FEHB Program is part of the large group market.  In 2010 when the ACA was enacted there were no serious problems with that market.  The small group market in which the FEHBlog participates was a little messy and the individual market was a mess.

Note of course that health insurance premiums in the large group market are 100% exempt to the managers and employees; those premiums are 50% taxable to owners in the small group market and are 100% taxable to people in the individal market (if they fall outside the ACA’s income limits (four times the poverty line).  This fundamental problem, which dates back to the World War II price control regime, never has been fixed.  Congress should level the tax playing field for all Americans.

But rather than playing small ball with the small group and individual markets, the Democratic Congress with the support of President Obama supported an unnecessary and massive across the board fix. As a result, the large group market, including the FEHBP, is overburdened with regulation, subjected to price regulation, and  forced, with OPM’s support in the case of the FEHBP, to provide one size fits all coverage including 100% reimbursement of many otherwise low priced items (which in turn significantly raises the cost of those items.  Health insurance should not be treated as a price support for health care services and products.).

The ACA’s changes such as the creation of the marketplace did not lower premiums in the small group and individual markets.  Consequently, in the FEHBlog’s view, give the Republican Congress, hopefully in consultation with the Democrat minority in Congress and of course the new President, a chance to fix the small group and individual markets. But leave the FEHBP and other large group plans out of that legal fix.

With respect to the individual and small group markets, the FEHBlog supports the idea of the subsidized marketplace but with more consumer choice in benefit design, much less price regulation, and as much frill removal as possible (e.g, kill the patient centered outcomes research institute).  He also supports expansion of government supported community health centers which can provide direct primary care in lower and even middle income communities.

It’s worth adding that the FEHBP is a group insurance market which in its over 55 year history has never imposed pre-existing conditions or late enrollment penalties like Medicare Part B.  Perhaps the newly designed individual marketplace should use a late enrollment penalty instead of the individual mandate. The bottom line though is that the marketplace needs more time to mature.

Happy King Day Weekend!

It’s the last week of the Obama administration.  President-elect Trump will be sworn in at noon on Friday January 20. Congress will be in session briefly this week. Here is a link to The Week in Congress’s report on last week’s activities on Capitol Hill.

No news yet on the President-elect’s choice for OPM Director in his administration.  President Obama nominated his first OPM director,  John Berry on March 23, 2009. So if precedent is any guide, it may be a few weeks yet before we learn who will be the next OPM leader.  Govexec.com reports on OPM guidance issued last week to allow the Trump administration “to place nominees into agency positions while they await [Senate] confirmation.”

Yesterday’s Wall Street Journal (the “FEHBlog’s favorite newspaper) published an essay on a structured approach to treating the Nation’s opioid epidemic, which is worth reading.

Ah, the second week of the NFL playoffs. Hopefully this week’s games will be better than last week’s. Of course, the stakes are higher.

Govexec.com published an article on OPM’s 2018 call letter.  It would be interesting if OPM just issued a one paragraph call letter telling plans to submit proposals by May 31 and then see how creative the carriers can be thanks to a pretty vibrant market.

Yesterday the ACA regulators proved me wrong by issuing ACA FAQ 37 which principally concerns arcane aspects of health reimbursement accounts.  Perhaps they can reach FAQ 40 by next Thursday.

In that regard, the Wall Street Journal reports that this afternoon the House of Representatives

took its first procedural step toward repealing the Affordable Care Act, passing a budget that directs lawmakers to start drafting legislation to dismantle much of the 2010 health care law.  Already approved by the Senate, the budget resolution passed the House on a 227-198 vote. Nine Republicans voted with 189 Democrats to oppose the budget. No Democrats voted for it.  The measure will start the substantive work on measures to repeal portions of the health law, instructing two House and two Senate committees to come up with proposals by Jan. 27.

The Senate committees named in the resolution are Finance and Health, Education, Labor and Pensions, and the named House committees are Ways and Means and Energy and Commerce. The full resolution text is available here if you are interested.

Govexec.com interviewed House Oversight and Government Reform Committee Chairman Jason Chaffetz in Monday’s edition.  Mr. Chaffetz explained that his focus of attention will shift from oversight to reform in this session of Congress as he has an opportunity to enact some legislation with  both the Executive and Legislative Branches in the hands of his party for at least the next two years. The FEHBlog was interested to read that “Chaffetz will meet with the cosponsors of his bill to reform the U.S. Postal Service, including [Rep.] Connolly, this week and expects to reintroduce a bill very similar to the one that cleared the committee last year.” The FEHBlog was surprised to read that “The main point of contention is a provision to require all postal retirees to enroll in Medicare as their primary health insurance provider.”

The Postal Service has been pushing for full Medicare integration for at least five years in order to significantly reduce the burden of pre-funding post-retirement coverage for its retirees. The FEHBlog looks forward to reading the new version of the bill which was HR 5714 in the last Congress.

Also on Monday, the OPM Inspector General made public a December 2016 management report on the Multi-State Plan Program.  This program, which OPM administers, was intended to add more plans to the ACA marketplace.  The Inspector General explains why that effort has run into roadblocks. He overlooks perhaps the key roadblock — the difficulty of making a profit in the ACA marketplaces.

Yesterday, the Obama Administration’s ACA regulators issued perhaps their final ACA FAQ which is no. 35 — well less than the number of Super Bowls.  This FAQ responds to a U.S. Supreme Court for a regulatory compromise that would resolve religious institution objections to the Administration’s birth control coverage mandate. The ACA regulators kicked the can down the road to the new Administration by refusing to compromise.

The Labor Department’s Employee Benefits Security Administration which enforces ERISA issued an FY 2016 Fact Sheet on enforcement of the mental health parity law.  Also the ACA regulators posted public comments on a series of related mental health parity questions raised by ACA FAQ 34 last year. Those questions concerned how to educate consumers and health plans about the mental health parity rule’s complex non-quantitative treatment limitation requirements.  Title XIII of the recent 21st Century Cures Act addresses the same issue with a requirement that the regulators issue guidance on NQTL requirements.

Modern Healthcare reported earlier this week that

In an effort to fulfill its mission to expand its provider footprint to serve about two-thirds of the U.S. population, OptumCare has agreed to acquire Surgical Care Affiliates for about $2.3 billion in a cash and stock deal.  Deerfield, Ill.-based SCA owns or operates 190 ambulatory surgery centers and surgical hospitals, most as joint ventures with physicians and health systems. The company says SCA and its affiliates serve approximately 1 million patients per year in more than 30 states. In 2015, it had operating revenue of around $1.1 billion.

OptumCare is an arm of the largest health insurer in the U.S., United Health. The article explains

UnitedHealth has said Optum aims to provide primary care and ambulatory services in 75 markets, representing about two-thirds of the U.S. population. Over the past year, Optum has purchased physician practices around the country. It also acquired urgent-care provider, MedExpress. In 2014, Optum agreed to acquire MedSynergies, a physician practice consulting firm, and care-monitoring company Alere Health for $600 million.

Interesting.

On the HIPAA privacy and security front, the HHS Office for Civil Rights announced another scalp resulting from a health plan’s failure to give prompt notice of a protected health information data breach. $475,000 was required to settle the matter.  OCR also created a new FAQ which clarifies the circumstances under which doctors, hospitals, and health plans can share information with a person who is not married to the patient or is not one of the patient’s relatives.

Finally, an op-ed in the Wall Street Journal this week provided some background on the continuing problem of lack of interoperable electronic medical records, which of course the FEHBlog’s major pet peeve. The Obama Administration missed the boat by failing to include interoperability requirements in the EMR standards that were created as part of the government’s $30 billion investment.  The op-ed writer explains that the largest EMR vendor is refusing to ally with the smaller vendors to resolve the problem. The op-ed writer suggests.

The real incentive is insurers paying for this data, and they are figuring out that early detection is worth it. It’s a lot cheaper to find a disease before it turns into expensive chronic care for heart disease or cancer. The machine learning output might be: “You may have pre-Stage 1 cancer in your pancreas, but no worries—we can zap it out for you.”

The article is worth reading.

OPM issued this afternoon its call letter for 2018 FEHB benefit and rate proposals which are due at the end of May. Here’s a link to that letter.

Last year, the call letter came out in February which now holds the World’s record for second speediest call letter issuance.  Interestingly, in 2009, the outgoing George W. Bush administration’s OPM did not preempt the incoming Obama administration’s OPM by issuing the call letter before January 20, 2009. The 2010 call letter came out rather late on April 20, 2009.

The 115th Congress enters its second week of life this coming week. Here’s a link to the Week in Congress’s report on last week’s activities on Capitol Hill. The Hill reports that the Senate will be holding Trump administration confirmation hearings this week. 

“Incomplete medical histories and undisclosed conditions, treatment or medications raises obvious concerns on the reliability and usefulness of patient health data in application of risk based analytics, care plans, modeling, payment reforms, and population health programming,” Black Book Managing Partner Doug Brown said in a statement. “This revelation should force cybersecurity solutions to the top of the technology priorities in 2017 to achieve tangible trust in big data dependability.”

Drug Channels is back from a holiday vacation with a report on merger and acquisition activity in the specialty pharmacy sector. It’s quite active.  Drug Channels “estimate[s] that total prescription dispensing revenues from specialty drugs at retail, mail, long-term care, and specialty pharmacies hit a record $115 billion.” Woo hoo!

Ah, the beginning of the first weekend of the NFL playoffs. Although my Redskins are not in the hunt, it still will be fun to watch so let’s get to it.

Following up on Wednesday’s post, the House did pass the REINS Act (HR 26). Reuters reports that the Democrats plan to fight the anti-administrative state bills in the Senate.

To the FEHBlog’s surprise, he noticed that U.S. District Judge Berman proceeded with the second / regional competition phase of the trial over the government’s effort to block the Anthem / Cigna merger. The FEHBlog expected a decision between the first / national competition phase and the second phase but that didn’t happen. Indeed the second phase of the trial, according to Healthcare Finance, ended on Wednesday. So both of the anti-trust cases involving health insurer mergers, the Aetna/Humana merger and this one, are in the hands of their respective judges for a decision which should be annnounced this month.

All of the federal agencies this week issued exit reports to assist the incoming Trump administration. OPM’s report can be found here.  The FEHBP is briefly discussed on the last page of the report.

The 115th Congress took the reins yesterday, and efforts to repeal the Affordable Care Act are underway.  The FEHBlog finds interesting the House of Representative’s efforts to strengthen Congress’s authority over the rulemaking authority of the regulatory agencies. This makes sense to the FEHBlog because the Constitution does give the legislative authority to Congress.  The House already has sent to the Senate a bill that would facilitate the Congressional override of Obama Administration regulations finalized over the past year (the Midnight Rules Act). The House also is actively considering a bill that would require Congressional and Presidential approval of major rules which by definition have an economic impact of $100 million or more on the national economy (the REINS Act). These laws supplement the in force Congressional Review Act.

 Happy New Year!  The 115th Congress goes to work tomorrow. This gives Congress a two and half week long head start on the executive branch before the clock starts to run on the Trump Administration’s first 100 days.

On Saturday afternoon, at the 11th hour, a federal judge from the Northern District of Texas ruled  that the government “Defendants are hereby ENJOINED from enforcing the [HHS PHSA 1557] Rule’s prohibition against discrimination on the basis of gender identity or termination of pregnancy.” A copy of the preliminary injunction decision is available here.  The FEHBlog was pleased for the plaintiffs but he erroneously thought that the lawsuit also encompassed other onerous provisions of the rule, such as the document translation requirements.

An injunction against provisions of the rule not found in the statute, such as the document translation requirements, would have nullified those requirements. The issue of whether PHSA Section 1557 reaches the two issues that the court addressed can be fought out in private litigation, even if the government cannot enforce the rule. So the decision is a half loaf, which of course is better than none.

Healthcare Dive had an useful report on the optimism and challenges for putting value in value-based care.

The FEHBlog also ran across two interesting studies:

• UPI reported on “A new [Journal of the American Medical Association] study of health care costs found that just 20 conditions make up more than half of all spending on health care in the United States. The study, which covered 155 conditions, showed the most expensive health condition was diabetes, which totaled $101 billion between diagnoses and treatment costs, and spending increased 36 times faster than the cost of heart disease.” Heart disease was ranked number 2 in the study.  Back and neck pain ranked third.  “Aside from the top three conditions, hypertension and injuries from falls made up 18 percent of all personal health spending and totaled $437 billion in 2013. Other conditions among the top 20 included musculoskeletal disorders, such as tendinitis, carpal tunnel syndrome and rheumatoid arthritis.”

• Physicians’ Briefing reports that 

[JAMA Pediatrics] researchers observed an increase in health care spending on children from 1996 to 2013, from $149.6 billion to $233.5 billion. The largest health condition leading to health care spending for children was inpatient well-newborn care in 2013. The second and third largest conditions were attention-deficit/hyperactivity disorder and well-dental care. In 2013, infants younger than 1 year had the greatest spending per child at $11,741. There was an increase in health care spending per child from $1,915 in 1996 to $2,777 in 2013. In absolute terms, the greatest area of growth in spending was ambulatory care among all types of care; among all conditions, the greatest areas of growth were in inpatient well-newborn care, attention-deficit/hyperactivity disorder, and asthma.

The FEHBlog presumes that it’s no coincidence that the federal government’s State Children’s Health Insurance Program law was enacted in August 1997.  Not a knock on health care spending for children; just an observation. 

It’s the FEHBlog’s final post of 2016.  Thanks to the readers who inspire the FEHBlog to keep going after 10 years. 2017 is bound to be an interesting year for the health sector of the economy, and the FEHBlog will be following it.

A new benefit plan year starts for annuitants on Sunday January 1, and according to this chart it starts on January  8 for employees (the first day of the first payperiod that begins in 2017).  That’s because annuitants make their contributions on a monthly basis, and employees do so on a bi-weekly basis.

The major FEHBP wide benefit change for 2017 is the addition of applied behavioral analysis coverage for autistic children.

Members will note that many plans are covering telehealth services. To get the most out of that benefit, register for it with the telehealth vendor before you need to use it.  Look into it.

Miscellaneous and perhaps inexplicable changes likely result from the Health and Human Service Department’s rule implementing Public Health Service Act Section 1557, which in the FEHBlog’s view was a bone thrown to the plaintiffs’ bar and other interest groups.  The FEHBlog had expected that rule to be enjoined by the U.S. District Court for the Northern District of Texas this week, but the FEHBlog checked online docket late this afternoon and no decision had been posted. The FEHBlog will keep watching.

Happy New Year!