Happy Mothers’ Day to all.

Congress continues in session this week. The FEHBlog keeps waiting for the Financial Services Subcommittees of the House and Senate Appropriations Committees to consider OPM’s proposed budget. Nothing has popped up on their calendars yet.

OPM has submitted a final FEHBP rule to the U.S. Office of Management and Budget for its approval:

AGENCY: OPM RIN: 3206-AN14
TITLE: Federal Employees Health Benefits Program; Subrogation and Reimbursement Recovery
** RECEIVED DATE: 05/07/2015 LEGAL DEADLINE: None

There are several other FEHBP rules that are in the finalization process, e.g., self plus one enrollment type, new plan performance assessment system.  The FEHBlog appreciates reginfo.gov.

On Friday, the U.S. Attorney in Jacksonville, Florida, announced that “the United States has settled allegations that nine hospitals in Jacksonville had a practice of routinely ordering basic life support ambulances when this type of transport was not medically necessary. The United States has also settled allegations with an ambulance company for its role in submitting millions of dollars of false claims to federal healthcare programs.”  The false claims totaling millions of dollars
affected the FEHBP as well as other federal health care programs.

It’s the 70th anniverary of the Allies victory over Nazi Germany in World War II. Around noontime, the FEHBlog watched a World War II warplane flyover on the National Mall here in Washington, D.C.  Cool.

Here’s a link to the Week in Congress. The Senate joined the House of Represenatives this week in passing an FY 2016 budget resolution that includes reconciliation provisions to repeal the ACA. Timothy Jost reviews the ACA aspects of the budget resolution here.

Health Data Management reports on the latest Ponemon Institute study on health care related data breaches.

For the first time, criminal attacks are the leading cause of data breaches in healthcare, with such attacks up 125 percent versus five years ago, replacing lost laptops as the top cybersecurity threat to the industry. That is the finding of a new study by the Ponemon Institute, sponsored by security software and services vendor ID Experts, in which 45 percent of healthcare organizations indicate the root cause of their data breach was a criminal attack and 12 percent say it was due to a malicious insider.

Wow. The lost laptop problem was resolved by encryption. Hopefully it won’t be long before operating system data can be encrypted without disrupting operations.

Employee Benefit News reports on the growing patient and payer comfort level with telehealth services.

The U.S. telemedicine market is expected to reach $4.5 billion by 2018 – a massive gain from $440.6 million in 2013, notes a recent study by business information provider HIS. In addition, a recent Harris Poll found that 64% of the 2,019 U.S. adults it surveyed are willing to have doctor visits via video telehealth.
Employers are now warming up to the concept, which could save them more than $6 billion a year in health care costs, according to Towers Watson analysis. The consulting firm also found that 37% of U.S. employers with at least 1,000 employees expect to offer telemedicine consultations by 2015 compared with 22% in 2014 and another 34% are considering it for 2016 or 2017.

Drug Channels reports based on 2014 sales data that Walgreens and CVS sit on top of the pharmacy chain mountain.

Kaiser Health News reports based on a Harvard study that hospital closures generally do not adversely affect community health care.

• Govexec.com reports that Rep. Steven Lynch has introduced a bill in Congress (H.R. 2715)  that “would prohibit [FEHBP prescription benefit managers] PBMs from switching drugs without a physician’s approval; demand PBMs return to the federal plan 99 percent of all rebates, market share incentives and other monies from pharmaceutical companies in exchange for FEHBP business; and create stronger disclosure requirements.” The National Treasury Employees Union came out in strong support of the bill.  NEWS FLASH:  The Office of Personnel Management introduced these reforms by contract five years ago as first explained in Carrier Letter No. 2010-04.  In contrast to Medicare, reforms can be implemented and revised contractually which is much more flexible than passing a law. 
• In their press release, the NTEU states “FEHBP cannot buy drugs off the Federal Supply Schedule, which is why the program’s prescription costs are 15 percent to 45 percent higher than those for Medicare and federal health care systems run by the Veterans Administration and the Pentagon, the NTEU leader said.” Be careful what you wish for.  There are two components to cost — price and volume. In order to take advantage of statutorily low prices, the government must restrict the drug formulary to those low priced drugs.  In any event, the FEHBP already has high generic drug utilization in the FEHBP — a big cost saver — and the federal supply schedule focuses on drugs that are still under patent. 
• This brings me to my final point related to this bill. The FEHBlog often reads that prescription drug spending is 30% or so of the FEHBP’s benefit spend. That is  ten to fifteen percentage points higher than the commercial sector.  The reason for the 30% figure is that the FEHBP has a boatload of annuitants with Medicare Part A hospitalization coverage. Medicare covers the hospital bills for these annuitants, and the FEHBP covers their prescription drug costs. The FEHBlog expects that absent Medicare, FEHBP’s spending on prescription drugs would be in line with other commercial carriers.
• Yesterday, according to Accounting Today, the IRS released the 2016 dollar adjustments to limits on contributions to health savings accounts,  the minimum deductibles for high deductible health plans, and the upper limit on out-of-pocket cost maximums for those plans IRS Rev. Proc 2015-30).
• The FEHBlog also noticed an interesting FierceHealthPayer article about a New Jersey health insurer QANI now part of Cigna that stratified its membership by high, moderate, and low utilizers / risks and then focused appropriate managed care attention on each segment. The attention relied on technology and member engagement.  “The engagement program has succeeded to the point that, as of 2015, QANI applies it across its membership base.”

The FEHBlog is visiting lovely Denver Colorado. Meanwhile back in Washington, DC, Congress is in session this coming week. Here is a link to the Week in Congress’s review of last week’s activities.

This is also Public Employee Recognition Week.  Thank you government and postal employees.

At the OPM FEHBP Carrier conference in late March, OPM read off a laundry list of FEHBP regulations that the agency is in the process of finalizing. While none of those regulations have been submitted to the U.S. Office of Management and Budget for final approval as yet, reginfo.gov does tell us that an important HHS proposed rule is now pending at OMB:

AGENCY: HHS-OCR RIN: 0945-AA02
TITLE: Nondiscrimination Under the Patient Protection and Affordable Care Act
STAGE: Proposed Rule ECONOMICALLY SIGNIFICANT: Yes
RECEIVED DATE: 04/29/2015 LEGAL DEADLINE: None

Ah, it’s the first of May.  The beginning of the three best months of the year (weather-wise) here in Washington, DC.

Two other insurers, Cigna and Humana as well as the two big prescription benefit managers, CVS Health and Express Scripts, have reported their first quarter results. The winter weather did not adversely impact healthcare companies.

The Federal Times reports that the reconciled FY 2016 budget moving through Congress does not include any express federal employee benefit cuts. However, the resolution does direct the Congressional committees to reduce civil service spending which in turn could lead to reductions. Specifically, according to the Washington Post, “The joint budget agreement calls for cutting that amount over 10 years from programs under the House Oversight and Government Reform Committee,” which of course has jurisdiction over the FEHBP and other federal employee benefit programs. .Defense spending would be increased.

Yesterday, CMS released details on $103 billion of Medicare spending on prescription drugs in 2013. The Administration trumpets this action as evidence of its transparency and the action certainly has attracted press attention as illustrated by this Kaiser Health New collection of articles. However, the FEHBlog thinks that OPM’s “small ball” request made in the 2016 call letter that FEHBP carriers offer a webtool that allows consumers and their healthcare providers to see consumers would pay for prescription drugs pushes the transparency ball down the path further than this HHS move.

Health insurers and employers have been funding a Patient Centered Outcomes Research Institute (“PCORI”) to the tune of millions of dollars since the ACA’s enactment. The FEHBlog has wondered what the PCORI has accomplished other than spending the money on research studies. The FEHBlog is gratified that Modern Healthcare is asking the same question.

The Affordable Care Act created an independent organization to support research that assesses which healthcare interventions are most effective. But three years after it started funding studies, there’s no central repository of results or a clear strategy for making sure the knowledge reaches the clinicians it’s intended to influence.
The Patient-Centered Outcomes Research Institute distributed grants worth $30 million to its inaugural round of 50 projects. About 30 are complete and more results are anticipated this summer, PCORI leaders told Modern Healthcare.
It’s not clear, however, when or where those results can be found. PCORI says grantees are expected to have a plan for sharing their findings but also that it does not set timelines for completing studies.
As of last week the group said it had not been notified by project leaders of the completed research whether or not they have submitted manuscripts to peer-reviewed journals. The institute also said it does not have a central database where results can be shared, and researchers are not required to submit manuscripts to journals for publication. 

This problem could have a quicker fix than the electronic medical record interoperability problem. Time will tell.

Today, House and Senate leaders from the majority Republican Party agreed upon an FY 2016 budget resolution.  Once the resolution is approved by both Houses, the appropriations committee will pass FY 2016 spending bills based on the budget resolution. The budget resolution also includes reconciliation language that would permit the Senate (and of course the House) to enact an ACA repeal with 51 votes.  Of course, the President can veto the repeal and any of the spending bills so it should be an interesting period before the FY 2016 fiscal year begins on October 1.  Here’s a link to the Hill’s report on the budget resolution.

Following up on Sunday’s post, the Information Technology Committee of the House Oversight and Government Reform Committee did hold its hearing today on policy responses to encryption. However it turns out that the hearing was focused on the federal government’s negative reaction to the inclusion of encryption technology in mobile devices like cell phones, which is based on law enforcement concerns.  In one of her first public appearances, according to the Federal Times, our new Attorney General Loretta Lynch announced that combatting cybercrimes will be a high priority for the Justice Department, which is good news. To that end, the Justice Department has created a cybersecurity unit according to the Federal Times.

Publicly trade health insurers and other public companies have been announcing their first quarter 2015 results.  Aetna, United Healthcare, and Anthem all had positive news as ABC News and the Hartford Courant report.

The Leapfrog Group came out with updated hospital safety scores. “For the fourth time in a row, zero hospitals in the District of Columbia received an A grade.” That’s encouraging.

Finally, on the population health management front, the Social Service Research Council issued a Geographies of Opportunity report which ranks Congressional districts based on health. access to knowledge, and living standards. The health tidbits from the press release are not encouraging. For example,

Life expectancy ranges from just under 84 years in California District 19 (San Jose and part of Santa Clara County) to just under 73 years in Kentucky District 5 (rural southeastern Kentucky). This shocking gap is more extreme than the life expectancy difference between Japan and the Palestinian territories.

Check out your district.

From this morning’s WSJ — “On Feb. 10, Valeant Pharmaceuticals International Inc. bought the rights to a pair of life-saving heart drugs. The same day, their list prices rose by 525% and 212%.” According to the article, this is an MO for several drug companies.  Interestingly, the patents on these drugs expired years ago, but they currently have no generic competition. That may or may not change. But in any event,  cost curve up. 

Congress will be in session again this coming week. Here’s a link to The Week in Congress’s report on last week’s action. Here’s a link to a detailed Federal News Radio report on the House Oversight & Government Reform Committee hearing on cybersecurity held last Wednesday.  The Washington Post reported on a related House Small Business Committee hearing held the same day. This Wednesday, that Committee’s subcommittee on information technology will hold a hearing on encryption technology and potential U.S. policy responses which should be interesting.

Health Data Management reported on a Senate Appropriations Committee hearing about FY 2016 HHS appropriations held last Thursday. The Committee flailed the HHS Secretary Sylvia Burwell over the electronic health records program.

[Sen. Lamar] Alexander [(R TN)] referred to an American Medical Association-commissioned RAND Corp. study in which doctors identified EHRs as the leading cause of professional dissatisfaction, emotional fatigue, depersonalization and lost enthusiasm. To address these issues, Alexander, who is chairman of the Senate Health, Education, Labor, and Pensions Committee, told Burwell that he and ranking member Senator Patty Murray (D-Wash.) have formed a bipartisan working group to identify five or six EHR problems “that we can address administratively—in other words, you could do it—or legislatively if we have to.”

Sen. Bill Cassidy (R LA) also recommended that HHS allow doctors a two year implementation period for the ICD-10 coding system before imposing penalties. Currently, HHS plans to reject ICD-9 coded Medicare claims for service rendered on or after October 1, 2015. Health plans are generally planning to follow HHS’s lead.

Medical Practice Insider reports on Medscape’s 2015 physician compensation survey results.  Many key findings are presented graphically so check it out.  The survey finds a significant uptick in doctor participation in accountable care organizations (24% in 2013 to 30% in 2014).  Also, “across all types of payment models, specialists earned 45 percent more than PCPs in 2014.” Finally, “only 5 percent of respondents said they operated cash-only practices in 2014, down 1 percent from the prior year. Concierge care stayed level at only 3 percent participation in 2013 and 2014.”

In the last weekend update, the FEHBlog noted that the House Oversight and Government Reform Committee would be holding a hearing on enhancing cybersecurity of third party contractors and vendors.  Here is an FCW report on the hearing for those interested.

Two months ago today, the FEHBlog watched an online webinar about population health management (promote longevity – compress morbidity) presented by the National Diabetes Education Program which is part of NIH. Here are links to the slides and the script for that webinar. Very worthwhile.

Here’s an interesting perspective on last week’s HIMSS conference from Michael Arrigo, an advisor on disruptive healthcare regulations.  Five trends to follow.

OPM is encouraging FEHB plans to offer incentivized wellness programs.  Here’s an Employee Benefit Advisor report about an Optum survey of larger employers about their wellness program incentives.

• The most prevalent incentive mechanisms include company contributions to HSAs, HRAs or HIAs (38%); health premium reductions (34%–jumping from 27% in the prior year survey); and gift cards (29%).
• Only 16% of employers use cash incentives.
• The average value of incentives is $414, although 24% offer incentives in the $500-$999 range, and 11% provide incentives worth $1,000 or more.

Last week must have been employee wellness guidance week for the federal government. Fedweek reports that last Thursday OPM issued a memorandum to federal government employers urging support for employee wellness programs by explaining the business case for them. Both federal employing agencies and FEHB plans offer employee wellness programs.

The HHS Office for Civil Rights explained in a set of FAQs last Thursday that HIPAA privacy rights apply to health plan sponsored wellness programs but not to employer sponsored wellness programs. But there are other privacy laws that apply to the employment relationship. As the FEHBlog mentioned last week, there is crazy quilt of laws that apply to these wellness programs.

As employers, the internet, the media etc., are encouraging people to take an interest in their healthcare, Labcorp, a major laboratory test company, is making available a service by which people can self order laboratory tests. According to Bloomberg News,

Laboratory Corp. of America Holdings will let customers go online to pay for tests, visit a service center to get blood drawn, then view the results on the Web. The company has already been doing back-office lab work for a number of Internet firms that let people order up tests without a doctor.

Rapid and at-home diagnostics are a growing corner of the health-care market, with businesses like WellnessFX Inc. and Direct Laboratory Services LLC tapping into demand from patients who want to get sensitive results in private or seek to monitor their health outside of the traditional doctor’s office. Companies like LabCorp are tapping into demand from consumers who want to measure their bodies to monitor the effects of exercise and healthy living and to learn about their potential risks of disease.

“We need to retake that territory for ourselves,” LabCorp Chief Executive Officer David King said in a telephone interview. “It’s a growth opportunity for us. It’s something consumers increasingly want to have access to, and it’s something we’re doing already and our capabilities are being utilized without us getting the benefit from a branding perspective.”

This may in the words of Newman from the Seinfeld show create quite a conundrum for health plans which need health plan test claim information for many of the government mandated HEDIS quality measures. In this regard, the FEHBlog notes that because plans typically do not cover charges for “self-ordered” over the counter drugs, it’s likely that plans will not cover charges for self ordered lab tests. The FEHBlog doubts that a flexible spending account would reimburse such charges without a doctor’s prescription which may defeat the purpose of these new services, but then again who knows?

Employee Benefit News features an helpful article about how employers and health plans are addressing rising prescription drug costs.  The article was spurred by this Aon Hewitt report on the prospect of double digit prescription drug benefit increases. As OPM has recommended to Congress that the agency be allowed to administer prescription drug benefits for the FEHBP, it’s worth calling everyone’s attention to this AHIP ordered study prepared by the Menges Group which finds that

In the 28 states and the District of Columbia where Medicaid plans include (or carve in) prescription drug benefits in the coverage, they saved $2.06 billion in state and federal expenditures in 2014 alone, according to a new report by The Menges Group. The report attributes the significant savings to greater use of generics and lower-cost medications.
Meanwhile, the seven states that carve out prescription drugs forfeited $307 million in total savings last year by not integrating pharmacy and medical benefits. Those states also saw net costs per prescription jump 20 percent from fiscal year 2011 to 2014.

This is only the latest study supporting integration of these benefits.  Maintaining the current integration of these benefits in the FEHBP simply makes sense.