Health Data Management reports on ICD-10 coding concerns connected with the turn of the federal fiscal year on October 1, 2016.

Jim Daley, director of IT for BlueCross BlueShield of South Carolina and past chairman of the Workgroup for Electronic Data Interchange as well as WEDI’s ICD-10 co-chair, credits the success of organizations in meeting the Oct. 1, 2015, implementation deadline to the fact the industry had a lot of time to prepare.
One year later, Daley contends that organizations must now focus on three significant changes that will come into play starting Oct. 1, 2016:

• The ICD-10 Coordination and Maintenance Committee has lifted the partial code freeze and thousands of new codes have been added for federal Fiscal Year 2017, which begins October 1.
• The Medicare grace period on code specificity for Part B post payment audits will end Oct. 1, 2016.
• Payers may begin to adjust medical policies based on the new specificity offered by ICD-10.

The FEHBlog credits time to prepare plus the American Medical Association’s transition plan which ends on September 30, e.g., see second bullet.

CMS released  2014 Medicare Part D prescription drug spending data today.

The 2014 data set contains information from over one million distinct health care providers who collectively prescribed approximately $121 billion in prescription drugs paid for under the Medicare Part D program. This represents a 17 percent increase compared to the 2013 data set. The March 2016 Department of Health and Human Services report provided a detailed analysis of prescription drug spending trends, and noted that overall prescription drug spending in the United States rose by 12.6 percent between 2013 and 2014.

Cost curve up.

Healthcare Informatics shares interesting FBI observations on the cybersecurity front.

With regard to the biggest group of those threatening healthcare organizations right now, Wallach noted that the cyber-criminals involved now are conducting activity to steal information and monetize it. “Healthcare information is worth a lot of money on the dark web,” he said. “The bad guys want to target information that they can eventually monetize.” And patient records are treasure troves of usable data, unfortunately for the leaders of patient care organizations.

Ruh roh.

Finally, the FEHBlog enjoyed reading this STAT article about genetic variations in DNA. Medical researchers keep growing their knowledge base as genome sequencing technology improves. But there is still a lot of work to do. “It’s shocking that there are thousands of genes that are important, and we still don’t know what they do,” said [Dr. Jay] Shendure, the University of Washington geneticist.

Modern Healthcare has a timely article about the future of HIPAA as it approaches its 20th anniversary of enactment next month.  The law was updated in 2009.  Congress should take another look at it. In the FEHBlog’s view the major problem with the law is that it embeds technology in law and technology changes occur much more rapidly than changes in the law. 

Another Congressional initiative was to create a phased retirement option in the federal government.  Federal News Radio reports that less than 100 federal employees have applied for the option so far.

Retirement eligible federal employees who sign up for the program
agree to work part-time in their positions while collecting half their
salary and half their accumulated retirement annuity. Once approved,
phased retirees must dedicate part of their working hours — 20 percent
in some cases — to mentoring other employees who plan to take over their
job responsibilities once they leave.

Congress passed a law in 2012 authorizing the phased retirement program for federal employees. But final regulations
didn’t come from OPM until 2014. Agencies got the green light in
November 2014 that they could begin accepting applications for the
program from their employees.

Individual agencies are responsible for issuing and implementing
their own specific guidelines on phased retirement. But many agencies
have been slow to unveil them, and some, like the Social Security Administration, have opted not offer the phased retirement to their employees.

The Defense Department is the latest agency to offer more details
about its phased retirement program. DoD components are opting to
introduce phased retirement based on their own terms and mission needs.

Continuing on the topic of legislative initiatives, Health Affairs discusses federal and state efforts to enact “telehealth parity laws” which require the insurers to pay equivalent amounts for brick and mortar vs. telehealth visits. Supporters believe that parity will encourage the expansion of telehealth and while parity would improve the profitability of telehealth, would it lower the cost curve? 

Congress remains out of session until September 6.

On Friday, as  Bloomberg reports, U.S. District Judge Amy Berman scheduled the trial in the Justice Department’s lawsuit to block the Anthem/Cigna merger to begin on November 21.  According to the scheduling order,  [the government] will have no more than ten trial days in which to present their case-in-chief, defendants will have no more than six trial days in which to present their case-in-chief, and [the government will have two trial days for rebuttal. The trial will end by December 30, and the judge will issue her decision in January.

Both Judge Berman and U.S. District Judge John Bates, who presides over the Aetna/Humana merger case, have appointed retired D.C. Superior Judge Richard A. Levie to serve as special master to keep those cases on track given the compressed pretrial preparation period.

Modern Healthcare reports on the difficulty that insurers and providers are encountering when trying creating bundled payment methodologies for maternity cases.  What’s odd is that obstetricians traditionally have billed on a bundled basis, and hospitals bill for the mother and baby on a bundled basis.  Nevertheless, problems arise with the outlier cases, which can’t be readily predicted.

Let’s kick off the weekend with some career move announcements:

• Earlier this week, OPM announced “the hiring of a new permanent Chief Information Officer (CIO). David De Vries, currently the Principal Deputy Chief Information Officer at the Department of Defense, will join OPM as CIO in the coming weeks. De Vries joins OPM after a distinguished career spanning more than 35 years at the Defense Department, the last seven in the Senior Executive Service in DoD CIO. While at the Defense Department, De Vries was instrumental in the transition of DoD information technology (IT) to a single, secure department-wide architecture—similar to the plan OPM has been implementing. De Vries was also influential in the Defense Department’s cybersecurity initiatives.”  
• Yesterday, as Health Data Management reports, “Karen DeSalvo, national coordinator for health information technology, will be leaving her technology office position, to be replaced by Vindell Washington, MD, currently serving as the principal deputy national coordinator at ONC.” Ms. DeSalvo is moving to another position at HHS.

The Wall Street Journal reports this afternoon that U.S. District Judge John Bates has decided a trial in the Justice Department’s lawsuit to block Aetna/Humana merger will begin on December 5, 2016, and is expected to last 13 days. This injunction case necessarily will be tried to the judge.  The judge expects to issue a ruling in mid-January 2017. The defendants had wanted an October trial date and the Government had wanted a February trial date.  The article adds that ”  Judge Amy Berman Jacksonis now presiding over the Anthem[/Cigna merger] matter. She has set a hearing this Friday to discuss trial scheduling for that case.”

Kaiser Health News reports on a National Business Group on Health survey of large employers. The upshot of the report is that large employers are expecting a 5% increase in employee healthcare costs next year.

Speaking of healthcare costs, here are a few interesting tidbits:

• AHA News reports 

Medicare Advantage plans paid about 8% less for hospital services than fee-for-service Medicare in 2009 and 2012, according to a study published yesterday by Health Affairs. About one-third of the difference was due to the narrower hospital networks in Medicare Advantage, the authors said. “Consistent with previous work, we found that commercial plans paid significantly more than either Medicare Advantage or FFS Medicare,” the study notes. The data on MA and commercial plans was from the Health Care Cost Institute, and represented about 31% of the elderly MA population and 27% of the non-elderly population covered by commercial plans.

• Fierce Healthcare tells us about an eHealth Careers survey on healthcare provider incomes which finds that doctor and physician assistant incomes are up while nurse incomes are down. 
• The Wall Street Journal offers an eyepopping story on how the cost of new medical tests administered in doctor’s offices is driving up Medicare costs.  
• Given the fact that the Kaiser Health News article which lead off this section described the 5% projected increase as “moderate, the FEHBlog calls your attention to this Health Affairs Blog article suggesting that the U.S. may not be able to afford moderate healthcare spending increases like this. 

When Medicare Advantage patients pick up all their medication refills on the same day at the same place, medication adherence improves, according to a joint study from Penn Medicine and Humana’s research arm. “Synchronizing” refills over the course of 12 months increased adherence by 3 percent to 5 percent, according to the study. The researchers said the effect was more pronounced among patients with lower baseline adherence.

Interesting.

Congress remains out of town this week.  Here are a couple of mop-up items from the Hill newspaper:

• CMS unveiled its new 2017 value based comprehensive primary care program for Medicare in 16 states. The American Medical Association was pleased with the program “at first glance.”   Improving primary care in Medicare helps the FEHBP because so many FEHBP enrollees have primary Medicare coverage.  
• The Centers for Disease Control issued a study on tobacco smoking use in the U.S.  The report finds tha use remains high among certain ethic groups. The study suggests focusing anti-smoking efforts on those groups. 

Bloomberg reports that “U.S. District Judge John Bates in Washington {DC] said Friday he would keep the case against Aetna Inc.’s deal for Humana Inc., leaving the challenge to Anthem Inc.’s takeover of Cigna Corp. to another judge. Bates kept the Aetna case because it’s on a tighter deadline with its merger agreement expiring at the end of the year.” The article adds that “The Anthem case was assigned to Judge Amy Berman Jackson in Washington, who was appointed to the bench by President Barack Obama.”

Judge Berman promptly issued the following scheduling orderin the Anthem / Cigna merger case:

In light of the August 5, 2016 reassignment of United States v. Anthem, Inc. to this Court 41 , the Court has reviewed the status reports submitted by the parties 28 , 29 , and 30 , the transcript of the status conference held in this case and in United States v. Aetna, 16-1494 on August 4, 2016 39 , as well as the Order issued in both cases on August 5, 2016 40 . Since this Court agrees that it is advisable to appoint a single Special Master to facilitate efficient discovery in both of these cases, the parties to the Anthem case are directed to submit any recommendations concerning that appointment to this Court, as well as to the court in United States v. Aetna, by filing them on the docket in both cases by 5:00 pm on August 8, 2016. A scheduling conference will be held in Courtroom 3 on Friday, August 12 at 10:00 am. The parties are further ordered to meet and confer and submit a joint report pursuant to L.Cv.R. 16.3 by 5:00 pm on Wednesday, August 10. The report should include a proposed discovery schedule as well as each side’s current best estimate as to the amount of time needed to present its case assuming that some portion of the evidence may be submitted in the form of written testimony well in advance of trial, and it should address counsels’ availability — and identify any dates on which they are not available — in December 2016 and January 2017. 

Bloomberg reports that “U.S. District Judge John Bates in Washington {DC] said Friday he would keep the case against Aetna Inc.’s deal for Humana Inc., leaving the challenge to Anthem Inc.’s takeover of Cigna Corp. to another judge. Bates kept the Aetna case because it’s on a tighter deadline with its merger agreement expiring at the end of the year.” The article adds that “The Anthem case was assigned to Judge Amy Berman Jackson in Washington, who was appointed to the bench by President Barack Obama.”

Judge Berman promptly issued the following scheduling orderin the Anthem / Cigna merger case:

In light of the August 5, 2016 reassignment of United States v. Anthem, Inc. to this Court 41 , the Court has reviewed the status reports submitted by the parties 28 , 29 , and 30 , the transcript of the status conference held in this case and in United States v. Aetna, 16-1494 on August 4, 2016 39 , as well as the Order issued in both cases on August 5, 2016 40 . Since this Court agrees that it is advisable to appoint a single Special Master to facilitate efficient discovery in both of these cases, the parties to the Anthem case are directed to submit any recommendations concerning that appointment to this Court, as well as to the court in United States v. Aetna, by filing them on the docket in both cases by 5:00 pm on August 8, 2016. A scheduling conference will be held in Courtroom 3 on Friday, August 12 at 10:00 am. The parties are further ordered to meet and confer and submit a joint report pursuant to L.Cv.R. 16.3 by 5:00 pm on Wednesday, August 10. The report should include a proposed discovery schedule as well as each side’s current best estimate as to the amount of time needed to present its case assuming that some portion of the evidence may be submitted in the form of written testimony well in advance of trial, and it should address counsels’ availability — and identify any dates on which they are not available — in December 2016 and January 2017. 

 Aetna and Humana urged [Federal District Judge John] Bates this week to hold trials and issue an opinion by the end of 2016. Bates said in a pre-trial hearing on Thursday that was unlikely to happen.

“That’s my determination: that I can’t do both (by the end of the year),” he said. “Unless the schedule is put off, I’m sending one of the cases back.” Bates declined to say which would be sent for reassignment.

Christopher Curran, a lawyer representing Anthem, said at the hearing that the failure to get a favorable ruling by year-end would doom the deal because Cigna would not agree to an extension.

“We’re in this pickle through no fault of our own,” he said, noting that the Justice Department had taken a year to decide whether it would file a complaint to stop the merger.

John Majoras, the lawyer representing Aetna, pushed at the hearing for a fall trial. He argued that his client’s deal had been announced first and was simpler.

Interesting.

Here are several end of the week tidbits:

• OCR took another scalp yesterday.  Healthcare IT News reports that “After multiple potential HIPAA violations involving electronic protected health information, Illinois-based Advocate Health Care Network has settled with the U.S. Department of Health and Human Services’ Office of Civil Rights for $5.55 million.” That’s OCR’s largest single recovery. 
• Tammy Flanagan reports on a recent research study of federal employees principally on retirement issues.
• Prof. Timothy Jost informs us about a newly proposed IRS rule concerning the complicated IRC 6055 / Form 1095B report process that health plans, including FEHB plans, must follow. 
• Kaiser Health News give us the latest on HHS’s program to penalize hospitals for purportedly unnecessary readmissions:

The federal government’s readmission penalties on hospitals will reach a new high as Medicare withholds more than half a billion dollars in payments over the next year, records released Tuesday show.  The government will punish more than half of the nation’s hospitals — a total of 2,597 — having more patients than expected return within a month. While that is about the same number penalized last year, the average penalty will increase by a fifth, according to a Kaiser Health News analysis.

Yesterday, CMS finalized its Medicare Part A prospective payment system rule for inpatient hospital services, and Modern Healthcare’s lede suggests that it’s not good news for hospitals.

In a final rule released Tuesday, the CMS said it will keep a controversial 1.5% cut to hospital reimbursement. Industry stakeholders had rallied against the move which aims to recoup a total of $11 billion in overpayments.  Hospitals expected the cut to remain at 0.8%​—as it has been ever year since 2014, two years after Congress mandated the CMS to recover funds allegedly lost as a result of incorrect coding on inpatient hospital stays.

The rule takes effect on October 1, 2016.  Robert Moffitt from the Heritage Foundation offer his expert views on the next 50 years of the Medicare Program here.  The FEHBlog predicts more Medicare cost shifting to FEHBP and other employer sponsored and for that matter ACA marketplace plans in the near term.

The Drug Channels blog offers seven takeaways from his review of the initial (subject to change) 2017 formulary lists released by CVS Caremark and Express Scripts. It’s interesting to see how the two companies’ strategies stack up.