The Federal Times brings us up to date on the recently resolved Medicare Part B issue and discusses where we stand with the ongoing self plus one roll out in the FEHBP.

Congress remains in session this coming week.  The Federal Benefits Open Season starts a week from tomorrow so the OPM and FEHB plan Open Season websites, such as this one, should be up and running this week.  OPM has added a lot of information to its self plus one enrollment type website.

The FEHBlog noticed today this Fedsmith.com article which explains more angles on the Medicare Part B premium fix. The upshot is that the $104.90 monthly hold harmless premium for 2016 is only available to those Medicare beneficaries who currently pay their Medicare Part B premium from the Social Security check. People who become eligible for Medicare going forward will pay the new $123.70 monthly premium.  So will current CSRS annuitants who don’t receive Social Security benefits and high income seniors (who will see greater Medicare Part B premium increases.)

The Washington Post reports that about 100,000 federal employees (perhaps 5% of the workforce) will be eligible for new locality pay areas that were created under rules published last week.

Last week the FEHBlog noted many articles  in the press about a prescription drug manufacturer Valeant and a mail order pharmacy Philidor. It turns out that according to this Los Angeles Times article, Valeant is one of the business that snaps up, and then jacks up, the prices of single source generic drugs. According to this New York Times article, Philidor was in some sort of unholy alliance with Valeant to sell those drugs to consumers.  Valeant did not own Philidor, but it had an option to purchase Philidor.  The alliance became public recently and the major prescription benefit managers have terminated their contracts with Philidor, which is closing down.  The PBMs are also looking for similar unholy alliances.  What a mess.

The FEHBlog has been on a rampage about the lack of interoperability in electronic medical records (“EMR”). As this 2008 American Medical Association News article illustrates, the last Administration was pushing the idea of interoperable EMRs.

In 2004, President [George W.] Bush set a goal of most Americans using an electronic medical record by 2014. In his vision, doctors by then would be using EMR systems with interoperable standards that would allow them to share lab results, images, computerized orders and prescription information with hospitals and other health facilities.

The AMA News article explains that doctors were reluctant to shell out for EMRs. A 2009  law, the HITECH Act provided $30 billion of funding to give health care providers EMRs in return for the provider’s agreement to adhere to the government’s meaningful use standards. The EMR developers adhered to the meaningful use standards which mysteriously did not provide for interoperability.  So by 2014 most providers were usings EMRs which are not interoperable.  HHS does not expect widespread EMR interoperability to occur through retrofitting the EMRS until the 2021 to 2024 era in its recently issued roadmap to interoperability.

Happy Nevada Day!  Health Day reports that “fewer Americans are dying from heart disease, cancer, stroke, diabetes and injuries” according to an American Cancer Society report.

CMS finalized its complicated 2016 Medicare Part B payment to providers rule today. It appears that CMS will begin to star ratings on physician and group practice quality of care based on its Physician Quality Reporting System (“PQRS”) beginning in 2017.  CMS already makes negative payment adjustments to providers who fail to satisfactorily report PQRS data. This will be the second shoe to drop.

The EEOC has proposed a rule that would permit “employers that offer wellness programs as part of group health plans [to] provide limited financial and other inducements (also called incentives) in exchange for an employee’s spouse providing information about his or her current or past health status.”  Basically, the proposed rule would extend the current rules to spouses of plan enrollees. Here’s a link to the EEOC’s FAQs.

Fierce Healthcare reports that while CMS penalized hospital readmissions have been decreasing since 2011, observation stays have been increasing at similar rates.  “Further study is needed, the [Health Affairs] authors write, to determine whether readmission rates are a reliable measure of how well hospitals reduce complications and coordinate care, and emphasizing readmission rates so heavily may allow hospitals to simply relabel patients rather than actively deliver better care.” American ingenuity at work.

The Drug Channels blog assesses the Walgreen’s acquisition of Rite Aid announced earlier this week. Of interest to the FEHBlog is the Drug Channel’s observation that Walgreen’s does not plan, at least immediately, to expand its presence in the prescription benefit manager market place with Rite Aid’s EnvisionRx unit.

The Washington Post reports that the Senate, following the lead of the House of Representatives, passed the budget deal over night. Rep. Paul Ryan (R WI) became the Speaker of the House this week as well. Here’s a link to the Week in Congress.

The budget deal brings the curtain down on partial government shutdown drama that has marked the Age of Obama since 2011.  The budget dead creates a structure within which Congress can reach agreement to finalize the continuing resolution funding the federal goverment before the temporary CR expires on December 11. Other features of the deal that bear on the FEHBP have been discussed in earlier posts this week.

The FEHBlog has spent a good deal of this week attending a Workgroup for Electronic Data Interchange (WEDI) in nearby Reston, Virginia.  Last year, a keynote speech by AMA President elect Steven Stack, MD, was energizing.  Dr. Stack pointed out the flaws in the ICD-10 code set and in the lack of interoperability among the electronic medical record (“EMR”) systems funded by the federal government to the tune of $30 billion.  Dr. Stack’s entirely valid point was that HHS missed the boat by failing to consult the medical profession when (a) approving that complicated code set and  (b) setting the meaningful use standards for development of the EMR systems.

This year’s keynote speaker was former HHS Secretary and Kansas Governor Kathleen Sebelius.  The former Secretary lauded the implementation of the ICD-10 coding system.  “We finally caught up with the rest of the world.”  The coding system implemention has gone quite smoothly.  Fierce Health Payer reports on discussion of the implementation process at the WEDI Conference here. The FEHBlog suspects that Dr. Stack, who opposed the ICD-10 implementation, deserves credit for this outcome due to the simplified implementation approach that the AMA negotiated with CMS this summer.  Who knows what will happen when (if?) CMS shifts to full blown ICD-10 coding? 

The former Secretary also lauded the $30 billion investment in the EMR system comparing it an integrated EMR system that blew up in Great Britain a few years ago. But how can our system be declared a success when its not interoperable? Doctors cannot easily share information unless they belong to the same practive. That big HHS mistake greatly diminishes the value of the investment. This gap also makes life difficult for FEHB and other health plans that need to collect health care data for NCQA HEDIS measures.

Finally, the former Secretary claimed that the current Administration is the first one to take real steps to convert fee for service medicine to value based medicine. The FEHBlog has been following such efforts for his entire career which spans over 30 years. Gatekeeper HMOs in the 1980’s and 1990’s, health plans shifting risk onto providers in the 1990s and again now, Medicare + Choice in the 1990’s, Medicare Advantage in the 2000’s.  This effort is nothing new. If the effort finally pays off that would be great.

Today, OPM posted on the Federal Register’s public inspection list a final rule that would assign to the lowest cost nationwide FEHB plan (excluding high deductible plans and plans that charge associate member dues) any enrollee who fails to select a replacement plan after his or her FEHB plan leaves the FEHBP.  Currently, this protection is ohttp://www.bloomberg.com/news/articles/2015-10-27/walgreens-agrees-to-acquire-rite-aid-for-9-42-billion-in-cashnly afforded to annuitant enrollees.  If a plan terminates one of several options, the enrollees in the terminated option would default into the lowest cost remaining option in that plan.

Details about the budget deal have been reported in the Washington Post and elsewhere. As noted yesterday, the deal does address the Medicare Part B premium problem for 2016. As this Washington Post article explains, the deal does not simply extend the hold harmless protection to all Medicare beneficiaries. Instead for those 15 million Medicare beneficiaries whose Medicare Part B premium is paid from a  source other than Social Security, e.g., many CSRS annuitants,  “Medicare’s Part B premiums * * * will increase from the current rate of $104.90 per month to $120 per month next year, plus a $3 surcharge. After holding level since 2013, the monthly premiums for these people would have soared to nearly $160 without the legislative adjustment.” The deal also limits the projected Part B deductible increase.

The budget deal also will repeal an Affordable Care Act provision that requires employers with more than 200 employees to auto enroll their new employees in their health benefits program. This provision which amended the Fair Labor Standards Act, which applies to the federal government and the Postal Service, included no effective date. The Labor Department advised employers back in 2010 that the provision would take effect when it said so. So far, it hasn’t.  The House is scheduled to vote on the budget deal tomorrow and the Senate on Thursday. The President is prepared to sign it.

Finally, this afternoon, Walgreen’s, the second largest U.S. pharmacy chain,  announced an agreement to acquire the third largest chain Rite Aid according to this Bloomberg report.  That reports notes significantly that “the Rite Aid deal gives Walgreens its first foray into the business of managing drug benefits for insurers and employers, an area where rival CVS is a leader. Rite Aid entered that business by acquiring Envision Pharmaceutical Services Inc. for about $2 billion this year.” The combined company would have 12,800 locations, which exceeds CVS.  The deal is subject, of course, to anti-trust review.

The Hill is reporting this afternoon that the White House and Congressional leaders are making progress on a two year budget deal (FY 2016 which began October 1 and FY 2017) that also would lift the debt ceiling and solve the Medicare Part B premium problem.

Congress remains in session this week. Here is a link to the Week in Congress’s account of last week’s activities on Capitol Hill.  In the coming week, the House of Representatives is expected to elect Paul Ryan (R Wisc) as its new Speaker.  Bloomberg reports that the House is expected to take up the issue of raising the federal debt ceiling this coming week.

The Federal Benefits Open Season starts two weeks from tomorrow on November 9.  Tammy Flanagan writes about the new self plus one enrollment type here. Ms. Flannagan notes that

The big surprise for many people is that there isn’t much difference in the premium between self-and-family and the new self-plus-one enrollment because of the number of older retirees who will be the prime candidates for the new option. You can find the complete list of 2016 premiums on the OPM website [or the FEHBlog]. Even more surprising is that in some cases, it is less expensive to continue enrollment in Self and Family.  

In the FEHBlog’s view the fact that there isn’t much difference between the premiums of the two enrollment types is due to the fact that the average family size in the FEHBP is roughly 2.3 to 2.4 members. Some plans have somewhat larger family sizes and others have smaller. That’s the nature of averages.  A larger family size would tend to produce a larger difference in premiums.  The Government contribution for self plus one is less than the Government contribution for self and family. This fact that can cause the self plus family premium to be less than the self plus one.  Just remember that a federal employee or annuitant with one eligible family member can elect self plus family. Federal employees and annnuitants are not obligated to elect self plus one.

The FEHBlog mentioned last Friday that he had learned that the FDA has a large backlog of generic drug maunfacturing license applications. A Wall Street Journal editorial on Saturday noted that “FDA approval to manufacture any given generic takes 50 months on average and the backlog for permission has climbed in recent years to about 4,000 applications.”  The FDA is on top of new drug applications because the prescription drug manufacturers support the FDA’s cost of that regulatory process.

The FDA’s delay in generic drug licenses permits entrepreneurs to purchase the manufacturing rights to single source generic drugs and then ramp up the price without fear of competition. This Wall Street Journal editorial and this San Diego Union Tribune article discuss how in San Diego compounding pharmacy “Imprimis Pharmaceuticals, plans to compete against other manufacturers who sell generic drugs far above their cost ” The Union Tribune article explains that

The formulation is not FDA-approved, and can legally only be sold through a doctor’s prescription to a specific individual. The specific ingredients are FDA-approved, Baum said, and its compounding operations are FDA-inspected.

The Washington Post provides an interview with the CEO of 23andme a company that sells DNA testing services directly to consumers.  “After the FDA slapped the company with a warning letter in 2013, it stopped marketing its health tests and began working with regulators to come up with a product that would meet its rigorous standards for consumer testing, validation and analysis.” The company released its new product last week. It costs 100% more than the original product ($199 vs. $99).

The ACA regulators issued FAQ XXIX this afternoon with more consumer / preventive services goodies / impositions on health plans.  This is a basic problem with the law. The forces plans to cover a broad and ever increasing array relatively low cost items that consumers should be paying for themselves. Those reimbursable items wind costing the economy more and push the premiums ever closer to the high cost plan excise tax threshold.

The FEHBlog attended an excellent federal pharmacy symposium put on by the large pharmacy benefit manager Express Scripts.  It is worth relating that prescription drug manufacturers have a record number of new drugs in the research pipeline and that in 2014 the Food and Drug Administration approved a record number of new drugs for marketing. The FDA, however, is slow to approve generic drug manufacturing licenses which allows predatory companies to make a ton of money on single source generic drugs just by raising prices.

The FEHBlog has criticized the ACA-created and insurer funded Patient Centered Outcomes Research Institute as a white elephant. Here is a link to the PCORI’s annual meeting report. Judge for yourself,

Earlier this week, the American Cancer Society issued its updated recommendations on routine mammographies for breast cancer screening. Kaiser Health News reports that these guidelines “are unlikely to” impact insurance coverage for routine mammographies. The FEHBlog agrees.

Health Data Management reports on what’s coming in 2016 — another round of government audits on compliance with the HIPAA privacy and security rules. HIPAA covered entities and business associates be advised!

The  IRS today published a notice about inflation adjustments to various federal tax provisions for 2016. We learned that there will no change in the maximum annual contribution to health care flexible spending accounts which currently is $2550 (see page 14).  The employer sets the limit which cannot exceed $2550.

Healthcare Dive updates us on where we stand with the Medicare Part B premium issue now percolating on Capitol Hill.  Nothing definitive yet.

The Harvard Business Review offers hospitals advice on how to reduce the number of never events / preventable errors.  The Mayo Clinic takes a full look at the quality of care in addition to investigating identified problems

To look for opportunities to improve care, we examine all aspects of care rendered for every patient who dies in our facility — even those whose death was anticipated due to grave illness. We look for trends in opportunities in order to prioritize improvement work across our hospitals. * * * When we started this mortality-review process, we found care issues or opportunities for improvement approximately 23% of the time. More recently, that figure has declined to around 13% of the time. This is a reliable sign of progress in patient safety.

This Health Day article discusses the “time honored” tradition of the annual physical.

Some [doctors] want the once-a-year physical abandoned, based on a growing body of research that these exams don’t reduce your overall risk of disease or death.  But yearly checkups help build the relationship between doctor and patient, leaving both better prepared when illness does strike, other doctors respond.

The FEHBlog thinks that the “aye” side of the argument has the better side of the argument as the patient ages.  The article notes that the nay sides prefers seeing the patient every two to three years and relying on the electronic medical record to nudge the patient toward necessary preventive care in the outyears.