Congress will be in session again this coming week. Here’s a link to The Week in Congress’s view of last week’s activities. Last Thursday, the President signed the Medicare doc fix bill into law. On April 22 at 2 pm, the full House Oversight and Government Reform Committee will hold a hearing on enhancing cybersecurity of third party government contractors and vendors.

Last Friday, the FEHBlog mentioned a Wall Street Journal article on rising hospital prices.  Modern Healthcare notes that

The Altarum Institute’s Center for Sustainable Health Spending estimated that spending on hospital care jumped 9% from February 2014 to February 2015. That’s a “giant” increase, said Paul Hughes-Cromwick, a senior health economist at Altarum. By contrast, hospital spending climbed only 3.1% from February 2013 to February 2014.

The ACA regulators came out with FAQ XXV yesterday. This one concerns wellness programs in employer sponsored plans. As the FAQ points out, those wellness programs are blanketed by a crazy quilt of laws and rules. The Equal Employment Opportunity Commission issued a long awaited proposed rule yesterday on the relationship between wellness programs and Title I of the Americans with Disabilities Act which applies to the employment relationship.  Kaiser Health News reports that the proposal is earning business praise, consumer concerns.

As yesterday, the Centers for Medicare and Medicaid Service issued a new version of its on line Hospital Compare service. The new version gives hospitals star ratings (one to five).  To see a selected hospital star rating, you have to select the hospital for comparison and then click on the survey of patient experiences tab. The two hospitals closest in distance to the FEHBlog’s home both have two stars.  According to iHealtbbeat,

Medicare awarded five-star ratings to 251 of the 3,553 eligible hospitals — or about 7% of the nation’s hospitals. In addition:
1,205 hospitals, about 34%, received four stars;
1,414 hospitals, about 40 %, received three stars;
582 hospitals, about 16% received two stars; and
101 hospitals, about 3%, received one star.

Perhaps the FEHBlog should consider moving.

Yesterday’s Wall Street Journal had a fascinating story on hospital prices. Hospitals have been raising their list prices because the rack rate comes into play for Medicare purposes when the patient is consider an outlier  from / sicker than the standard patient population considered when CMS develops is standard prospective price. The prospsective price is based on diagnostic related groups or DRGs.

Hospitals’ list prices have faced criticism for years as patients—often with limited or no insurance—received towering bills. The hospitals argue that few pay those rates, often called the “chargemaster” prices. Private insurers negotiate discounts with hospitals in their networks, and Medicare has its set prices for services.
Will Fox, who advises hospitals on pricing strategies as an actuary with Milliman Inc., said that, even so, “there’s still a big reward” for increasing list prices. He said hospitals raise prices primarily to increase revenue from private insurers, which sometimes reimburse based on list prices. Higher Medicare payments, he said, are viewed as a smaller “bonus.”

The Journal notes a ripple impact on non-Medicare patients who receive out of network coverage for hospital services.

Forbes reports that “In 2014, the U.S. healthcare system spent $373.9 billion on drugs—13.1% more than it did the previous year and the highest rate of spending growth since 2001, according to a new report from IMS Health’s Institute for Healthcare Informatics.  This should come as no surprise given the Hepatitis C drugs, generic inflation, and the ACA.  Drug Channels reports on the status of generic drug inflation which may be easing after a surge last year.

Finally the big HIMSS conference wrapped up in Chicago with HHS keynote speakers.  MedCity News reports

In the face of growing criticism and impatience with the Meaningful Use EHR incentive program, National Health IT Coordinator Dr. Karen DeSalvo remains upbeat but aware of the tough work ahead to achieve the vision of a learning health system underpinned by a network of interoperable EHRs.
“Interoperability is a priority, but it is still just a means to an end,” De Salvo said Thursday morning in a keynote session on the last day of HIMSS15 at McCormick Place in Chicago. Without interoperability, it will be difficult to achieve healthcare payment and delivery reform, she added.

No kidding.

The Senate passed the House of Representatives version of the Medicare Part B doc fix bill last night. The President had agreed to sign the House version. This means that the sustainable rate of growth formula for reimbursing doctors under Medicare Part B has been replaced by a phased in approach that is intended to do away with fee for service medicine in Medicare in 2019. Doctors will get a 0.5% pay raise from Medicare Part B beginning on July 1.  Wealthier Medicare beneficiaries will pay higher premiums beginning in 2018. Full / necessary details are in this Kaiser Health News piece.

It took Congress over 15 years to fix this problem. Congratulations to the House Speaker and Minority Leader for their leadership rolls. This stabilizing law is important to the FEHBP because there is a large cadre of Medicare Part B annuitants in the FEHBP and the FEHBPs nationwide plans use the Part B formula to pay doctors for services render to annuitants who don’t elect Part B (5 U.S.C. Sec. 8904(b)).

The Office of National Coordinator for Health IT (the health IT czar) issued an update privacy and security guide for healthcare providers.  The guide is over 60 pages long which is bound to discourage small practices. As far as the FEHBlog can tell, the guide does not include the best advice which is to apply for and purchase cyber-liability coverage. The insurer’s underwriting rules will help you get in shape.  IHealthBeat reports on a recent study illustrating the fact that this problem will be with us for a while at least.

Health Data Management reports on the keynote address by Humana’s CEO Bruce Broussard to the big HIMSS health care technology conference this week.

Here’s a link to a fascinating and lengthy Strategy and Business interview with Aetna’s CEO Mark Bertolini about Mr. Bertolini’s preventive disruption approach to his business.

Spring has sprung here in DC!  Congress resumes its session on Monday.  Iran, the Medicare Part B doc fix bill, and reconciling the House and Senate budget resolutions will be on the front burner.

Last week, Optum, a UnitedHealth Group division, announced the acquisition of a walk in medical care center chain called Medexpress.  Medexpress, which several emergency room doctors started in West Virginia, has 141 locations in 11 states and it’s growing. The FEHBlog thought that Medexpress was Optum’s introduction to this business, but Healthcare Finance News illuminated the FEHBlog with news that Optum already has a chain of nine Optum walk-in clinics. The first Optum Clinic opened in Houston last year. The FEHBlog is skeptical about insurers getting into healthcare and healthcare systems getting into health insurance, but the ACA is driving this integration movement unquestionably.

It’s not just the FEHBlog’s viewpoint. Forbes reports that Walgreen’s CEO, Italian billionaire Stefano Pessina, is predicting more healthcare merger and acquisitions activity due to the ACA.  (Walgreens recently merged with a major European pharmacy chain Boots Alliance.)  Forbes and Drug Channels queries whether Walgreens may target Rite Aid for acquisition. The St. Louis Post-Dispatch (Express Scripts is based in St. Louis) examines whether Walgreens may target Express Scripts which of course would be humorous considering the battle between those companies just a few years ago following the Express Scripts Medco merger.) Time will tell.

On Friday, HHS issued a report to Congress blaming anti-competitive instincts of healthcare providers and their information technology developers for the electronic medical record interoperability mess according to the Nextgov.com report. However, “agency heads acknowledged there isn’t yet much quantifiable information about the practice.” The FEHBlog continues to credit the insights of AMA President elect Steven Stack who has explained that the federal government’s meaningful use standards, which IT developers strictly followed, failed to include interoperability standards because the government did not consider the individual user’s / doctor’s needs.

The sun is coming out here in downtown DC which suggest a promising Spring weekend weather-wise. Congress resumes its session on Monday April 13, and Modern Healthcare suggests that the bill to repeal and replace the sustainable rate of growth formula for reimbursing doctors under Medicare Part D will pass the Senate. The House passed the bill, which includes a two year Children’s Health Insurance Program extension and more funding for community health centers, by a wide bi-partisan vote late last month. This permanent doc fix is important to the FEHBP because a large cadre of Medicare prime annuitants are enrolled in Part B and the experience rated plans use Medicare Part B reimbursement rates to pay doctors for services rendered to Medicare prime annuitants who don’t elect Part B. OPM is encouraging annuitants to pick up Part B.

Nothing frosts the FEHBlog’s cake more than the fact that the experts who devised the meaningful use standards for the free electronic medical record systems that Congress handed out to hospitals and doctors did not include interoperability standards.  Now over five years later a lot of back-filling and mitigating is going on. It strikes the FEHBlog that authorizing HHS to create a patient identifier would boost these efforts but as Healthcare Data Management reports Congress continues to block appropriations for this logical action on privacy ground.  That publication also is reporting that the Federal Trade Commission is warning that EMR interoperability could impair competition which was a surprise to the FEHBlog. Let’s just get this problem fixed so the country can receive the full benefit of its $30 billion investment in these systems.  There’s no doubt in the FEHBlog’s mind that interoperability will improve healthcare and lower costs.

Kaiser Health News reports that a new coalition of healthcare providers, payers and consumer organizations has launched the Clear Choices Campaign in an effort to improve healthcare pricing transparency. Good luck with that effort.

Health Affairs this month includes a study on the public health costs of mammograms that produce false negatives — $ 4 billion annually.  That’s a lot of money.

In recent years, the prevalence of false-positive mammography
screenings and overdiagnosis of breast cancer (diagnosis of cancer that
will never cause symptoms or death during a patient’s lifetime) has been
well-documented. Until now, however, the full, national-scale cost
burden has not been documented.

Mei-Sing Ong of the Boston Children’s Hospital Informatics Program
and Ken Mandl, Harvard Medical School professor and Boston Children’s
Hospital Informatics Program faculty member, assessed the costs from false-positive mammograms and breast cancer overdiagnoses
among more than 700,000 women ages 40–59, between 2011 and 2013.
Average expenditures ranged from $852 for every false-positive mammogram
to $12,369 for each misdiagnosis of ductal carcinoma in situ (abnormal
changes in the cells of the milk ducts of the breast—the most common
type of non-invasive breast cancer).

The authors found that the national costs of false-positive
mammograms and breast cancer overdiagnoses are $4 billion each year.
They note that these costs must be considered in debates about whether
screening guidelines should take into account additional factors beyond
age.

This is an example of how the ACA’s “free preventive care” mandates can boost healthcare costs. There’s no doubt that preventive care together with rapidly improving cancer care is saving lives but the medical profession needs to find a happy medium here.

The National Community Pharamacists Association is complaining the prescription benefit manager generic drug pricing schedule known as MAC lists are not keeping pace with rising generic drug costs that the FEHBlog has noted.  NCPA wants at least weekly updates and has pushed CMS to apply that rule to Medicare Part D plans beginning next year. NCPA wants a legislative fix that would apply to the FEHBP. Preferably the PBMs will listen to the pharmacists concerns voluntarily.

The Workgroup for Electronic Date Interchange is expressing concern about the slow pace of provider testing of ICD-10 coding according to Healthcare Informatics    Tempis fugit. A train wreck could be coming.

Modern Healthcare continues to report on public comments submitted on the government’s electronic record interoperability roadmap. 

The Robert Wood Johnson Foundation has released its 2015 U.S. county health rankings. Check out your county. 

Congress will be out of session in the coming week just as it was last week.  Congress resumes its session on April 13. Govexec.com recounts what’s happening with the budget process as it impacts federal employees, the FEHB and other federal retirement programs. The House plan would tie the government contribution to the rate of inflation (CPI-U) which is recently has been lower than the currently used enrollment weighted average, among other changes. The Senate report simply directs the Senate Homeland and Government Affairs Committee to “Improv[e]” the program to “help make it more efficient and affordable for hardworking taxpayers.”  Both resolutions pay deference to the 2010 Bowles-Simpson deficit reduction report which the President requested but largely has ignored. Bowles-Simpson made the following FEHB recommendation:

The Commission recommends transforming the Federal Employees Health Benefits (FEHB) program into a defined contribution premium support plan that offers federal employees a fixed subsidy that grows by no more than GDP plus 1 percent each year. For federal retirees, this subsidy could be used to pay a portion of the Medicare premium. In addition to saving money, this has the added benefit of providing real-world experience with premium support [to use with Medicare].

Note to the Commission (which the FEHBlog first made back in 2010) the FEHBP already is a defined contribution program because the government contribution is capped at 25% of the plan’s actual premium. The enrollee always pays at least 25% of the premium. If the plan’s premium is above the 25% cap then the enrollee’s share is proportionally higher.  GDP plus 1 sounds like a better deal than an unadjusted CPI-U, but it’s clear that Congress wants federal employees to be incented to enroll in lower cost plans (just like the ACA’s Cadillac tax).

Modern Healthcare reports on the trend among health care systems to start their own local insurance plan in order to obtain Medicare and health insurance marketplace dollars directly.  Modern Healthcare also offered an interesting interview with a healthcare executive on this topic. Here’s the quote that grabbed the FEHBlog’s attention — “Insurance “carriers simply do not wish to share [savings} with us. They say, “We love how
you all are providing care, the quality is outstanding and the cost
controls are wonderful. You just keep doing what you’re doing. You’re
making us lots of money. We’ll stay under fee-for-service.” This strikes me as nonsense. Insurers are seeking to bend the cost curve down and in any event are subject to a strict medical loss ratio.

Finally apropos of Friday’s discussion about telemedicine, the Wall Street Journal reports that health care providers in the U.S. are starting to use pre-surgical techniques – common in Europe – that help patients bounce back faster from surgery and lower costs.  Why did this change take so long? Europe also was a decade ahead of us on approving biosimilar drugs.

Following up on Tuesday’s tidbit about telemedicine, the FEHBlog ran across this American Bar Association article describing the legal complications involved with telemedicine. Logically you would think that practicing medicine across state lines would not be a big deal (pneumonia is pneumonia, after all), but laws do interfere with telemedicine.  The article notes that beginning this year, CMS is allowing Medicare to pay for annual wellness visits, psychoanalysis, family psychotherapy, and prolonged
evaluation and management services provided via telemedicine. The CMS policy coupled with the Supreme Court decision discussed in Tuesday’s post may break down some barriers.

Speaking of headaches, ihealthbeat reports on industry group reaction to the Health IT czar’s roadmap to electronic medical record interoperability.  Why EMR interoperability was not built into the meaningful use standards to begin with is a topic for public administration schools to study over the next century. It will be a while before this mess is straightened out.

On the bright side, Reuters reports on a study concluding the cancer diagnosis rate are dropping for adult men and are steady for adult women and that cancer mortality rates are dropping for all demographic groups, including children.

Yesterday, in the 24th ACA FAQ, the ACA regulators announced that while they do plan to issue a revised final rule on the summaries of benefits and coverage this year, they will hold off on requiring health plans to use new forms until the 2017 open season. In the proposed rule, the ACA regulators indicated the the new forms would be used for the 2016 open season, but the industry pushed back on that proposal.  The FEHBlog is not sure whether consumers actually use the summaries of benefits and coverage but if they do, then hospitals and doctors also should be required to disclose the health plans in which they participate, etc. That would be transparency.

Drug Channels and Reuters have interesting stories about the OptumRx (a unit of UnitedHealthcare) – Catamaran deal discussed in the most recent Weekend Update.  Reuters notes that stock analysts are suggesting that the deal may push Express Scripts and Walgreens into a merger and that if this deal goes through Humana would be the fourth largest PBM.

Ihealthbeat reports that a recent U.S Supreme Court decision exposing a North Carolina board regulating dental practices to antitrust liability could encourage state medical boards to liberalize their approaches to telemedicine. At the OPM AHIP carrier conference, the FEHBlog heard people complain about these state restrictions on telemedicine.  Right now, most of those medical boards generally require telemedicine doctors to be licensed in the state in which the online patient resides.  The Supreme Court decision allowed a restraint of trade lawsuit to proceed against the dental board based on its decision to restrict the practice of teeth whitening to dentists.  Time will tell.

Robert Pear of the New York Times has an interesting article about a provision of the House Medicare Part B doc fix bill that would prohibit states from imposing malpractice liability on doctors based on Medicare quality ratings.  The ingenuity of the FEHBlog’s profession may be unprecedented.  Congress is right not to limit the legal significance of these HEDIS and other quality measures.

Finally, the FEHBlog is very impressed by Aetna’s approach to cybersecurity as discussed in this Wall Street Journal article. Wikipedia informs the FEHBlog that there is an international treaty against hacking (the Budapest Convention) to which the U.S. and its allies are signatories but not the countries flying the pirate flag like Russia, China, North Korea, etc.  The WSJ article confirms that cybersecurity is a national security issue.

The FEHBlog’s family wedding was everything we had hoped for and now it’s back to work just as Congress takes two weeks off. The Week in Congress explains

The Senate and House have agreed to their respective Republican budgets and have adjourned until Monday, April 13th. When they return the process of reconciling the two budgets will begin. Once completed authorization and appropriation bills to authorize and fund all government agencies will begin aiming to result in a completed budget process by September 30, 2015. 

The Senate also will return to complete the Medicare Part B doc fix, and of course there are other matters on the front burners.

Joe Davidson from the Washington Post reports on federal employee union reaction to those budget resolutions.  The lead Washington Post online article this morning is about the skyrocketing cost of Hepatitis C drugs for the Medicare program.  It’s worth reading because it debunks the drug manufacturer’s principal argument in favor of the astronomically high prices for these drugs.  Competition has been bringing down the costs of those drugs this year. Nevertheless the manufacturers set a bad precedent for pricing drugs which have no competition.  

The Wall Street Journal reports this morning (make sure you are sitting down) that UnitedHealth Group, which has the third largest prescription benefit manager (after CVS Health and Express Scripts) is buying the fourth largest PBM Catamaran for $12.8 billion in cash, subject of course to regulatory approvals.  The article notes that

Insurers and employers are bracing for the prices tied to expected new treatments for cancer and other conditions such as elevated cholesterol. Pharmacy-benefit managers are eager to show they have tools to counter those costs on behalf of clients.
If the OptumRx deal with Catamaran is consummated, each of the big-three PBM players would offer a different setup. Express Scripts has the largest volume in the industry. CVS has its own network of pharmacies.
The new OptumRx would pitch the benefits of analysis and data, including the broad array of health information that Optum’s other businesses glean and crunch. “These capabilities can all be combined with the pharmacy side,” said Larry C. Renfro, the chief executive of Optum and vice chairman of UnitedHealth Group.