It has been a busy week for the FEHBlog. No rest for the weary.

The ACA regulators are at it again. The FEHBlog has written about reference pricing which involves health plans setting a benchmark price for surgeons (think knee replacements) or pharmacies (think specialty drugs). If plan members use those providers the bill is paid in full. If members use providers who don’t accept the benchmark, they have to pay the difference between their provider’s price and the reference price. And according to an ACA FAQ that came out in the springtime, the out of pocket cos would not count toward the ACA’s out of pocket maximum.  Cost curve down right? Not exactly, for today the ACA regulators weighed in with consumer protections in ACA FAQ XXI

OPM has been militating in favor of transferring FEHB prescription drug benefits administration from the carriers to the agency. This change requires legislative approval. It does not make a lot of sense to the FEHBlog because integrating medical and pharmacy benefit administration can and does lower the cost curve. BCBSA just released a major study that included FEP claims confirming the validity of the FEHBlog’s working assumption.

The study examined yearly medical costs of 1.8 million members of Blue Cross® and Blue Shield® (BCBS) independent companies, whose pharmacy benefit services were divided between “carve-in” and “carve-out,” which is the term used when an employer chooses a pharmacy benefit manager to manage prescription benefits separately from the insurance company administering medical benefits.
Blue System members covered under insurance plans that integrate pharmacy benefits within their overall product offering had nine percent fewer hospitalizations and four percent fewer emergency room visits than members with a pharmacy benefit administered separately from the insurer. Those with integrated pharmacy benefits also incurred 11 percent lower medical costs, with an average savings of $330 in yearly medical costs. The study, conducted with data spanning 2010 and 2011, showed patients with integrated pharmacy benefits incurred total medical costs of $3,176 versus $3,506 for members with a separate pharmacy benefit.*

that his favorite OPM Benefits Administration Letter of the year — Significant FEHB plan changes for the following year – here 2015 — was released today. The letter provides all of the details on plan adds, drops, enrollment code splits, service area changes, etc.  Now it really feels like the fall.

Medicare Part B base and income adjusted premiums and the calendar year deductible will remain unchanged for 2015. The monthly base premium and the calendar year deductible are $104.90 and $147, respectively.

There are “modest” changes in Medicare Part A:

The Medicare Part A deductible that beneficiaries pay when admitted to the hospital will be $1,260 in 2015, a modest increase of $44 from this year’s $1,216 deductible.  The Part A deductible covers beneficiaries’ share of costs for the first 60 days of Medicare-covered inpatient hospital care in a benefit period. Beneficiaries must pay an additional $315 per day for days 61 through 90 in 2015, and $630 per day for hospital stays beyond the 90th day.
For beneficiaries in skilled nursing facilities, the daily co-insurance for days 21 through 100 in a benefit period will be $157.50 in 2015, compared to $152.00 in 2014.

These Medicare changes are relevant to the FEHBP because many FEHBP members also have Medicare coverage and FEHB plans are obligated to coordinate their benefits with Medicare.

Also this week, CMS released a new user guide for group health plans, including FEHB plans, required to report certain enrollee information to CMS for Medicare COB purposes, colloquially known as Section 111 reporting.

Thee Washington Post, Federal Times, Govexec, and Federal News Radio all have stories on the OPM press release. FedWeek helpfully identifies the four HMO plans coming into the FEHBP for 2015 and the five HMO plans that are leaving for 2015. “The dropouts affect more than 25,000 enrollees, who will have to elect new coverage for 2015.”

Blue Cross FEP already has posted its 2015 benefit changes. Watch for other plans to follow suit soon.

A couple of the OPM press release stories mention that Postal employee contributions for certain plans will be jumping 19%, more than 4 times the average increase for civil service employees and annuitants. A sharp eyed friend of the FEHBlog pointed out that there is a flaw in OPM’s rate comparison chart for Postal employees. Last year, Postal employee category 1 showed rates for the Postal Service Police. This year Postal employee for the major collective bargaining unit members. So the chart provides an apples to oranges comparison. The FEHBlog trusts that OPM will fix the chart in due course.

Finally, the FEHBlog wants to add a note on the OPM press release not found in any of the articles. The FEHBP carriers, many of whom are FEHBlog clients, deserve a lot of credit for maintaining relatively low premium increases over the past four years. According to the press, OPM officials credit the Affordable Care Act. However, the ACA’s onerous heath insurer tax which falls on most FEHB plans and its transitional reinsurance fee which fall on all FEHB plans for 2014, combined with health care cost trends, are responsible for premium increases. Absent those taxes, the increases would have been materially lower. With the ACA, it’s cost curve up, not down, unfortunately.

Here are links to the OPM press release, the FEHBP rates, and the FEDVIP rates, Enjoy and go Nats!

The FEHBlog mentioned a week or so ago that the renewal premium for his family group (wife and two over 18 kids) increased 58% in the ACA/Obamacare era. The FEHBlog has discovered that under the ACA’s pricing scheme there is no difference between individual and small group pricing. Each member of my family group is separately priced based on the family member’s age. What this means is that the FEHBlog will be moving to a high deductible plan, thereby putting his money where is mouth is and then getting his 24 year old daughter who thankfully is happily employed to shift her coverage over to her employer. It’s a brave new world.

This week OPM should announce 2015 FEHB premiums. Business Insurance reports 

Average health care benefit cost increases for active group and pre-Medicare retiree coverage are projected to range between 6.2% and 10.4% depending on the plan type, reflecting flat-to-moderate reductions in cost trend rates in 2014, according to Segal Group’s 18th annual Health Plan Cost Trend Survey, released Thursday.  Segal’s report also predicts an average 8.6% rise in prescription coverage costs in 2015, compared with an average 6.3% increase in the previous year.

We’ll see how FEHB premium changes stack up against this latest projection for all employers.

Kaiser Health News reports on the latest round of potentially avoidable readmission penalties that CMS has imposed on Medicare participating hospitals. The report explains that

As the penalties have played out, an increasing number of prominent experts are voicing concerns that the punishments are too harsh and doled out unfairly. For one thing, Medicare lowers payments to hospitals even if they have reduced their readmission rates from the previous year—so long as their rate is still higher than what the government believes is appropriate for that hospital. Medicare uses the national readmission rate to help decide what appropriate rates for each hospital, so to reduce their fines from previous years or avoid them altogether, hospitals must not only reduce their readmission rates but do so better than the industry did overall.
“You have to run as fast as everyone else to just stay even,” [AHA quality expert Nancy] Foster said. Only 129 hospitals that were fined last year avoided a fine in this new round, the KHN analysis found. 

And of course the safety net hospitals are taking it in the chops. All of these hospitals will increase rates on private sector, including FEHB plans, to recover the losses created by these penalties.

ISACA has a post on the five truths of HIPAA Security Risk Assessments. Risk assessments are write ups on the security threats that keep you up at night. Risk assessments are the starting point for HIPAA Security Rule compliance and it’s incumbent on covered entities and business associates to keep their risk assessments routinely updated.  

In the same vein, Government Health IT weighs in with five tips for managing HIPAA Security Rule risks created by third parties. Congress has in a sense reduced the risk on the covered entity by directly imposing Security rule compliance obligations on business associates. The article concludes with some sound advice:

Healthcare organizations should document their risk management policies and procedures. Documentation needs not be daunting — simply write down what your job entails, and have an independent party review it. This helps organizations identify gaps and avoid future security incidents.
The best way to prevent a breach is to have a robust program to assess how your vendors are managing data risks. That’s the only control you have. These five strategies can help covered entities stay in control of data, whether inside their firewall or in the hands of business associates and subcontractors.

The FEHBlog is rushing through work to get to the Nats game against San Francisco this afternoon. OPM has not released the 2015 rates yet. The odder situation is that CMS has not released the 2015 Medicare Part B premiums yet as far as I can tell and the Medicare Open Season begins in less than two weeks (October 15).

The FEHBlog did notice this interesting article from MedCity News today about best strategies for getting people engaged in their own healthcare.  

The focus is not so much on signups for fitness programs or penalties for smokers, but building the right support system. Each member of the “Direct From Big Employers: How Can Healthcare Help Them?” panel described the most effective strategy they have seen: building a support structure that includes navigators to help people make good decisions and traverse the healthcare system

The FEHBlog got engaged when his doctor scared the you know what out of him just about three years ago. Of course, all healthcare is local.

Welcome to federal fiscal year 2015 which began today, the first anniversary of the partial government shutdown and the healthcare.gov implosion. Fedweek joins the FEHBlog in asking where is OPM’s 2015 FEHBP premiums announcement.

Yesterday HHS posted on the internet pharmaceutical payments to doctors and teaching hospitals. Having read a Wall Street Journal article earlier this week that pharmaceutical manufacturers are shifting their marketing attention from doctors to hospital administrators, the FEHBlog assumed that the open payments information may be a date late and a dollar short. Boy was the FEHBlog wrong. As noted in the CMS press release and the Wall Street Journal today,

Drug and medical-device companies paid at least $3.5 billion to U.S. physicians and teaching hospitals during the final five months of last year

That is a staggeringly large number which suggests that something is wrong in the state of Denmark.

“The financial relationships between doctors and drug companies and medical-device companies are a source of conflicts of interest,” said Allan Coukell, director of the Pew Prescription Project, which has supported the Sunshine Act. “They have the potential to influence the care that patients get and so they’re a matter of interest both to individual consumers and to policy makers.”

The FEHBlog credits Sen. Chuck Grassley (R Iowa) for pushing this initiative.  

The FEHBlog wishes to call readers attention to this Becker Hospital Review article suggesting ways that accountable care organizations can coordinate care by keeping patients in network. Health plans may be able to use these tips.

The FEHBlog and his wife watched Jordan Zimmermann pitch a no hitter against the Miami Marlins at Nationals Park this afternoon. What a lovely day! This was the first no-hitter pitched at Nationals Park.

Of course, Congress is out on the campaign trail but may come back before the midterms to address the situation in the Middle East. The Supreme Court returns a week from tomorrow.

The Wall Street Journal featured an interesting story about how groups of family members and friends of chronically ill patients hack into medical devices in order to improve their usefulness. The process sidesteps the FDA which is responsible for approving these devices. For example a parent figured out a way to use the internet to transmit glucose readings from his teenage daughter’s glucose monitor so she could take overnight trips. American ingenuity is amazing.

On Friday afternoon, the ACA regulators issued a final rule clarifying the scope of benefit programs that are excepted from the ACA’s reforms, e.g., child coverage up to age 26. The rule concerns dental, vision, health care flexible spending accounts, and employee assistance programs (“EAP”), all of which the federal government offers.  The rule which takes effect for 2015 explains how to structure these programs to avoid the ACA’s impact. LifeHealthPro explains that that the rule helps dental and vision plan sponsors, but  may “hurt” EAP sponsors.  

A week or so ago, the IRS issued a new notice that identifies two limited situations in which an employee participating in a cafeteria plan can revoke his employer health plan coverage in favor of ACA marketplace coverage.  Over time, employers may find themselves competing for good risks with the marketplace plans. That would be counterproductive, in the FEHBlogs view.

Here it is September 26. According to OPM.gov, OPM released the next year’s premiums on September 26, 2011 (for 2012), September 20, 2012 (for 2013), and September 24, 2013 (for this year). It appears that the 2015 premiums won’t be released until at least September 29, 2014. This allows the FEHBlog an opportunity to vent about his own health insurance premiums. His firm’s carrier kindly renewed coverage on December 1, 2013, to allow me one last year before ACA rating kicked in. The FEHBlog received his December 1, 2014, renewal rates this week. A 58% increase. It turns out that for small group each family member is age rated and because my wife and I are around the same age BANG ZOOM as Jackie Gleason would have said. The FEHBlog is exploring options such as a high deductible plan with an HSA. In this regard, the FEHBlog notes this Business Insurance report that employers in anticipation of the imposition of the Cadillac tax in 2014 are attempting to integrate their high deductible health plan offerings with voluntary (employee pay all) offerings such as hospital indemnity and critical illness coverage.

J.D. Powers came out today with its annual customer satisfaction study on brick and mortar pharmacies broken out by supermarket (the winner was Publix), chain drug store (Good Neighbor), and mass merchandiser (Sam’s Club).  Walgreens was rated above average and CVS Health below average in the study.

In an interesting but not particularly surprising development, the ranks of original participants in Medicare’s Pioneer Accountable Care Organizations has dropped from 32 to 19  according to this Wall Street Journal story. Here’s the punch line:

Chas Roades, chief of research at the Advisory Board Co., said that while ACOs did give hospital systems experience in managing population health, many are finding that Medicare Advantage programs or ACOs with commercial insurers are more advantageous.
“The [original Medicare] ACO program is just too complex—there are too many quality metrics to track, and the incentives aren’t strong enough, so they’re moving forward with other coordinated care strategies,” he said.