The Centers for Medicare and Medicaid Services issued two massive rules this week — the first discussed at this Morning Consult link made changes to the Medicaid and CHIP programs and the other discussed at this Diagnostic Imaging link  proposed to implement the MACRA law that created a Medicare Part B pricing system to replaced the physician detested sustainable rate of growth formula. MACRA along with the ACA is the law that generated all of the excitement at the LAN Summit earlier this week. The Diagnostic Imaging article which requires registration is the best overview that the FEHBlog ran across. Plus it’s headlined “MACRA to hit small practices hard.” The FEHBlog is concerned that the new law will continue to drive doctors out of Medicare.

In follow up to a much earlier post, the FEHBlog notes that the New York Attorney General reached a settlement earlier this week with seven insurance companies over the timing of coverage of the new Hepatitis B drugs. “As a result of these agreements, nearly all commercial health insurance plans in New York State will cover treatment for chronic Hepatitis C without requiring members to develop advanced disease, such as liver scarring, and will not deny coverage because the member uses alcohol or drugs, or because the authorizing physician is not a specialist.”

The Washington Post reported yesterday on the skyrocketing costs of emergency surgeries.

In a paper published in JAMA Surgery on Wednesday, researchers found a surprising pattern. In an analysis of 421,476 patient records from a national database of hospital inpatients, they discovered that a mere seven procedures accounted for approximately 80 percent of all admissions, deaths, complications and inpatient costs related to emergency surgeries. The sample included only adults who underwent a procedure within two days of admission from 2008 to 2011.
The seven dangerous and costly procedures are mostly related to the organs of the digestive system: removing part of the colon, small-bowel resection, removing the gallbladder, operations related to peptic ulcer disease, removing abdominal adhesions, appendectomy and other operations to open the abdomen.

Hmmm.

Finally, the Health Care Cost Institute confirmed with a new study that the prices of medical procedures vary.

The FEHBlog attended the federal government’s collaborative Health Care Payment Learning and Action Network (LAN) summit in Tyson’s Corner Virginia on and off for the past two days.  The event was very well attended.  The speakers were enthusiastic.  The LAN’s objective is to achieve the HHS’s Secretary’s “moonshot” objective of paying 50% of healthcare providers using alternative payment methods (“APMs) by 2018.

HHS already has reached the Secretary’s low hanging fruit objective of a 30% APM payment level by this year. This initiative is begin driven by both the ACA and the major Medicare law passed last year that requires HHS to replace the current Medicare Part B payment methodology by the end of the decade (or so).

APMs come in two flavors — population based payments and episodic based payments.  Population based payments are similar to ACO or PCMH approaches (as the FEHBlog understands them) — pay a facility or medical group on a fee for service basis for a determined period subject to a quality and risk adjusted global budget with gain and loss sharing.  An example of the episodic approach is the Medicare pilot to pay bundled prices (including payments for both facilities and doctors) for elective joint replacements. The LAN is developing “specs” for three episodic bundles that providers and payers can template — elective joint replacements, maternity, and cardiac care. Details can be found at the LAN website linked above.

The FEHBlog found the maternity care bundle interesting because obstetricians always have billed on a case rate basis — one price for the entire maternity and live birth — and hospitals have always included the baby’s bassinet charges with the mother’s bill. The trick is to  contractuallyknit together the two bills — assign one payment recipient — create quality metrics etc.

The FEHBlog is certain that this change is happening.  He has been reading about switching from fee for service to value based payments for about thirty years. Whether the change will lower costs remains to be seen. Stay tuned.

Both Houses of Congress are again in session this coming week. Here is a link to the Week in Congress’s review of last week’s actions on the Hill.

Tomorrow and Tuesday, the FEHBlog is going to check out the Healthcare Payment and Learning Action Network’s summit in beautiful Tyson’s Corner Virginia.  Why not? There’s no admission charge.

Tomorrow Truven Health Analytics announces the top 15 health systems for 2016. The FEHBlog can hardly contain his excitement.  The list will be posted here tomorrow.  Earlier this month, IBM closed on its $2.6 billion purchase of Truven. There’s no minimum loss ratio requirement on selling consulting services.

HHS Office for Civil Rights announced two substantial HIPAA privacy / security rule violation settlements with health care providers here and here.

Fierce Healthpayer reports on four best practices on value based payment approaches. Kaiser Health News reports on how large employers are paying their employees to travel to other parts of the U.S., e.g., Johns Hopkins, hospital to undergo surgery at bundled or other valued based rates.  This is similar to the center of excellence approach that has been around since the 1980s.  What the FEHBlog found most interesting is that

In addition to cutting the cost of procedures, another chunk of savings to the companies came from avoiding surgeries that probably shouldn’t happen in the first place.
“We’re seeing up to 30 percent — close to 30 percent of cases — who should not be moving forward with the joint replacement,” [Olivia] Ross [from the Pacific Business Group on Health] said.
What typically happens in these cases, she said, is that employees get a recommendation from a local doctor that they should have surgery, only to have physicians at the selected hospitals deem the operation inappropriate.
In some cases that may be because the employee hadn’t first tried less invasive treatments, such as physical therapy, Ross said. Or the employee may need to lose weight first, to make the surgery safer.

Sadly, ABC News reports that the suicide rate in the U.S. is 24% up over the last 15 years.

Sally Curtin, statistician at the NCHS and one of the report’s authors, said that this report may actually underestimate how pervasive suicide attempts are in the U.S. “What we are measuring here is suicide death,” Curtin told ABC News. “We do know that the deaths are the tip of the iceberg for the public health issue. There are many more attempts and hospitalizations.” 

Modern Healthcare digs into the story here.

There were nearly 43,000 U.S. suicides in 2014. More than 14,000 of them were middle-aged whites — twice the combined total for all blacks, Hispanics, Asians, Pacific Islanders, American Indians and Alaska Natives.

On Monday, the Centers for Medicare and Medicaid Services issued their proposed rule describing Medicare Part A reimbursement and policy changes for the federal fiscal year that begins October 1, 2016.  Medicare Part A applies essentially to hospital services.  Per the American Hospital Association’s press release, the rule appears to be a mixed bag for hospitals.

Morning Consult reports on the House hearing held yesterday morning about CMS’s implementation of a new valued based system for paying doctors under Medicare Part B. Heavens to Betsy, Medicare is a complex program.

Health Data Management has an interesting story about how a regional urgent care center chain has integrated telemedicine into its business, thereby boosting patient satisfaction.

Some urgent care providers are wary of telemedicine because they view it as a threat to their businesses, says Alan Ayers, vice president of strategic initiatives for Practice Velocity, a Rockford, Ill.-based vendor that provides technology and billing capabilities for urgent care centers. Telemedicine is not currently taking business from urgent care now, but that could change in the future, he says. “Longer term, we do see urgent care cases increasing in acuity, and if urgent care is going to be an alternative to the emergency room, providers should be treating conditions that are just short of those that need to go to the ER,” Ayers says. “It’s not necessarily a bad thing that telemedicine would take away some of the routine, low-touch care.”

NPR reports on a Journal of the American Medical Association study of U.S. life expectancy patterns.  “The study suggests that the relationship between life expectancy and income is not ironclad, and changes at the local level can make a big difference.”  Intriguing.

Finally, FCW writes about an odd loose end stemming from the OPM data breach, and the St. Louis Business Journal brings us up to date on the early stages of Anthem’s lawsuit against is prescription benefit manager Express Scripts. A busy week so far.

One noteworthy point is that the FEHBlog has been on the web for ten years this month.  The FEHBlog writes the blog to stay up to date for the FEHB plan trade association that he represents.  When the FEHBlog began, the FEHB Act, 5 U.S.C. Ch. 89, governed the FEHB Program. The FEHB Act is a 55 year old of legislative simplicity.  Contract for plans, allow for annual open seasons without pre-existing condition restictions, and let market forces  and consumer choice do their work. The Program was working well.  Four years later, the Affordable Care Act was enacted. The ACA largely trumps market forces with loads of statutory provisions and regulations.  The regulatory maze continues to require the FEHBlog’s attention. He’s not going anywhere.

Congress will be in session this coming week. Congress did not meet its April 15 deadline for enacting a budget resolution.  Space Policy Online reassures us that “Congress has ways around the Budget Resolution process (this wouldn’t be the first year that Congress could not pass one) and since the budget deal worked out last fall between Congress and the White House covers FY2017, the total spending figures exist already.” Here’s a link to the Week in Congress’s account of last week’s activities on the Hill.

On Tuesday, the House Energy and Commerce Committee’s health subcommittee will hold a hearing on Obama Administration initiative to implement new value based Medicare payment methods. Here’s a link to a majority memorandum on the hearing. The Administration is moving fast with these initiatives.  The committee will hear from the medical community.

The FEHBlog noted a few Sundays ago that he had signed AHIMA’s White House petition to remove a long time budget restriction on development of a voluntary patient identifier. (Actually HIPAA calls for a mandatory patient ID – that’s the development initiative that Congress blocked.)  AHIMA needs over 91,000 signatures by Tuesday if it wants a White House response.  AHIMA should develop its own voluntary patient ID.  That may get Congress’s attention.  After all Congress plopped up a good deal of CAQH CORE’s work on HIPAA operating rules right into the ACA.

Sitting in the airport waiting to return to DC, no public wifi and my phone is running low on its battery so this post will be short.

Rx stuff — The Insurance Journal reports on the IMS report  Medicines Use and Spending in the U.S.: A Review of 2015 and Outlook to 2020.  Politico Pulse observed

PRESCRIPTION DRUG COSTS SPIKED 8.5 PERCENT IN 2015 — That’s according to a new report from the IMS Institute for Healthcare Informatics. That figure would be the second straight year of historically high spikes in pharmaceutical costs — but it’s significantly higher than the roughly 5 percent growth reported by both Express Scripts and CVS Caremark. Why the discrepancy? According to Murray Aitken, executive director of the IMS Institute, there’s a likely explanation: benefit managers cover retail pharmacy spending but not hospital-administered drugs, which have seen sharper cost increases.

Drug Channels timely reports here on “outrageous markups” on hospital-administered drugs.

In better news, the Washington Examiner reports that the Food & Drug Administration under Congressional pressure approved more than 700 generic drugs for marketing last year, an agency record. That should help prevent gaming the system.

Finally, Healthcare IT News warns that an ICD-10 claim delay problem may raise its ugly head on October 1, 2016, when the current AMA-CMS compromise expires.

While it’s tempting to think that the healthcare industry pretty much aced the ICD-10 deadline, and those worries have been put to rest, the 6-month mark is a good time to ask if such concerns really have been settled?
The one-year span between Oct. 1, 2015 and Oct. 1, 2016, after all, is something of a grace period during which the Centers for Medicare and Medicaid Services and commercial payers are offering more latitude on claims details.
“The bottom hasn’t been reached yet because CMS came along and said it wouldn’t be as hard on physicians for 12 months after the deadline,” [Mary Jean] Sage [a consultant] said. “There haven’t been too many denials yet, but that could change. So we may not have seen things that we will see after Oct. 1, 2016.”

The FEHBlog is attending a subrogation conference in beautiful Asheville, NC.  But that’s no reason not to share these interesting tidbits:

• Employee Benefit News reports on five things that plan sponsors should know about the new, lengthy DOL fiduciary rule. Although the rule is focused on retirement plans, it also applies to health savings accounts. 
• That publication also reports on new trends in controlling employer sponsored health plan costs according to a Willis Towers Watson survey. “Much of employers’ planned design changes will focus on creating — and maintaining — a healthier population of employees.”
• Healthcare Dive tells us about a new CMS Medicare payment model initiative involving primary care providers.  “Building on the Comprehensive Primary Care initiative launched in late 2012, the five-year CPC+ model seeks to benefit patients by helping primary care practices support patients with serious or chronic diseases to achieve their health goals and work with hospitals and other clinicians, including specialists, to better coordinate care.”
• Employer sponsored coverage must be minimum value (bronze level) and affordable in order to meet the requirements of the ACA’s employer share responsibility mandate. Coverage is affordable if the employee share of the self only premium for minimum value coverage does not exceed a certain percentage of the employee’s W-2 income (or another proxy).  The IRS has announced that for 2017 that percentage will be 9.69%.
• Finally Beckers Hospital Review reports that “Even though CMS’ star ratings system for hospitals is based solely on patient experience scores, researchers from Harvard have found that higher rated hospitals do in fact have lower mortality and readmission rates than their lower rated counterparts.” Surprise!

Both Houses of Congress will be in session on Capitol Hill this coming week. Friday is the deadline for Congress to pass an FY 2017 budget resolution. The Hill discusses the significance of the date here.

The Washington Post this morning featured a story on an unfortunate woman from rural Oklahoma who died at age 54 due to alchohol abuse.  The bright light in this sad story is a rural letter carrier.  The Post used the story as evidence to support its lead story asserting that

progress for middle-aged white Americans is lagging in many places — and has stopped entirely in smaller cities and towns and the vast open reaches of the country. The things that reduce the risk of death are now being overwhelmed by things that elevate it, including opioid abuse, heavy drinking, smoking and other self-destructive behaviors.
White men are also dying in midlife at unexpectedly high rates. But the most extreme changes in mortality have occurred among white women, who are far more likely than their grandmothers to be smokers, suffer from obesity or drink themselves to death.

The stories are worth reading.   Public health problems like these are very complicated and broadly based that can’t be solved with HEDIS scores.

As an aside, Kaiser Health News reports that majority of consumers according to a recent Health Affairs study don’t “associate price with quality” which in the FEHBlog’s view is an accurate perception that should help health plans.

The acting OPM director Beth Cobert wrote a blog post and tweeted yesterday about OPM’s decision to mandate FEHB coverage of applied behavioral analysis for children on the autism spectrum for 2017.  If you are interested in this expansion of coverage, take a look at these OPM FAQs.

Mid-week, the ACA regulators finalized the summary of benefits and coverage template that will be used in the 2018 FEHBP open season. Prof. Tim Jost provides his detailed assessment of the new SBC here.

In other follow up points —

• Healthcare Dive reports that the doctor shortage in the U.S. is real. What’s more telehealth is not going to fill the gap by itself because the shortage is particularly striking in surgical specialties. 
• According to Employee Benefit News, the Congressional Budget Office projects that “In 2016, most Americans between the ages of 18 and 65 will get their health insurance from their employer—and they will get it for less because the federal government will give them tax breaks to the tune of $266 billion.” This large number causes many economists to pine for the 40% high cost plan excise tax, a/k/a the Cadillac tax. But rather than follow through on that insanely complicated and counter-productive tax, Congress could reduce tax exclusion for high wage earners which is what already happens to small business owners.