The Congressional Budget Office issued its March 2015 baseline report on the ACA last Monday.  Here’s a Modern Healthcare perspective on the report. The FEHBlog was surprised that compared to the January benchmark CBO lowered the Cadillac tax’s projected revenue over the period 2016 – 2025 by $62 billion to $87 billion. This shows that employers are actively pursuing their options to lower their tax liability, e.g., by switching to consumer driven plans. The chances of repealing the Cadillac tax increase as the revenue projection drops.

The FEHBlog discovered yesterday in this iHealthbeat article that late last month, CMS issued a notice to providers advising that Medicare will not process claims with ICD-9 codes for dates of service after September 30, 2015 — no dual processing. A separate set of rule applies for hospital stays that begin before October 1 and end on after October 1 as explained in the CMS notice. This simplifies matters for health plans which generally take their lead from CMS on coding issues. However, you never know whether Congress will require a CMS dual coding accommodation to providers. Time will tell.

Fierce Healthcare reports that CMS has release information on a next generation version of accountable care organizations. The new model is intended to allow “participants to take on more financial risk with more predictable financial targets and the potential to obtain a greater reward.” Again time will tell.

Avoiding hospital readmissions has been an OPM objective for the FEHBP. Medscape reports on a study finding that “Hospital readmissions were significantly reduced when patients with multiple chronic conditions and a greater than 20% baseline risk for readmission received follow-up within 7 days of discharge, according to a study of 44,473 Medicaid recipients in North Carolina with 65,085 qualifying discharges.” “Better patient support = fewer readmissions” makes sense to the FEHBlog.

Congress is in session this coming week. Here’s a link to a report on last week’s work on Capitol Hill.  Modern Healthcare predicts that Congress will pass another extension of the Medicare Part B patch that prevents the statutory sustainable rate of growth formula from cutting reimbursements to doctors by 21.2%. The deadline for Congressional action is the end of this month.

Modern Healthcare also reports that Blue Cross of Massachusetts, a member of the value based care vanguard, lost $119 million from operations last year due to Hepatitis C drug costs and ACA and local taxes. The operating loss for this non-profit insurer was on “$6.5 billion in revenue, a -1.8% operating margin. When factoring
in investments and other income, the insurer posted an $8 million
surplus in 2014.”

Federal News Radio reports that “Just over 9,200 federal employees filed for retirement benefits in the shortest
month of the year, enough to swell the government’s backlog of retirement claims
to its highest point in more than 18 months.”  The point here is not to knock OPM but rather to illustrate FEHB demographics which skew toward an older demographic.

Kaiser Health News reports on the serious problem that has arisen due to the fact that the government spent $30 billion on electronic medical record systems that don’t communicate with each other electronically. Health Data Management reports that the Senators are not impressed by the government’s roadmap to interoperable electronic medical records. The FEHBlog is placing his bets on private sector organization like the eHealth Initiative and CAQH CORE to solve the problem.

Drug Channels offers an intriguing analysis of CVS’s SEC reports.  Here are a tidbit:  “CVS Health’s Caremark pharmacy benefit management (PBM) business
accounted for a record 35% of CVS retail pharmacies’ prescription
revenues. That’s much higher than Caremark’s overall market share.” The article focuses on the marvelous synergies of CVS’s Maintenance Choice program for both CVS and payers.

It’s been a busy week for the FEHBlog so TGIF indeed.  The FEHBlog wishes to point out more tidbit from the 2016 Notice of Benefit and Payment Parameters. The notice set the 2016 in-network out-of-pocket limit for self-only coverage at $6,850 and for other than self-only coverage at $13,700. The notice’s preamble (80 Fed. Reg. at 10,824-25) advises that beginning with the 2016 plan year, HHS will require that whenever a member of a self and family group reaches the plan’s self only max for in-network care, the plan must cover that member’s in-network cost sharing (deductibles, coinsurance and copayments) for the remainder of the plan year.  Once the family in-network max is met, then the entire  family’s in-network cost sharing is waived. 

It’s a red letter day. The Washington Post reports that the Food and Drug Administration approved earlier today “the sale of the first-ever biosimilar drug in the United States, opening the door to a cheaper class of drugs that could expand patient access to life-saving treatments. The FDA approved Novartis AG’s copycat version of Neupogen, a biologic cancer drug that recorded $1.2 billion in worldwide sales last year.”  The article notes that the FDA has four other biosimilar applications on its plate. Also, the “FDA is expected to issue more guidance on “interchangeability,” which could mean greater take up of biosimilars. A product deemed interchangeable could be automatically substituted for the original biologic at the pharmacy, similar to how traditional generics replace their brand-name counterparts.”

I Health Beat reports that the AMA and a boatload of other medical groups are urging CMS to create ICD-10 contingency plans if things go awry on October 1. The FEHBlog bets that Congress mandates contingency planning in the near future.

Gallup reports that according to its surveys U.S. federal government workers are thriving in their financial well-being more than the rest of the workforce. The article explains that

Gallup research defines financial well-being as managing one’s economic life to reduce stress and increase security. Financial well-being is not necessarily related to absolute income, but rather to approaches to saving and spending and future expectations of job security, among other subjective factors. The survey data indicate that working for the federal government is associated with higher financial well-being when compared with other U.S. workers, holding across income and education levels. Federal workers reporting higher levels of financial well-being could mean good news for the U.S. government because financial well-being is a crucial aspect of overall well-being, which has a significant effect on healthcare costs and engagement on the job.

That’s interesting.

The FEHBlog is of course aware that the Supreme Court heard the King v. Burwell case this week. The FEHBlog long ago gave up predicting the outcome of Supreme Court cases and in any event this case while important does not have a direct impact on our beloved FEHBP.

The Washington Post reports that Congress sent a clean Homeland Security funding bill to the President today, thereby ending the FY 2015 appropriations process without any government shutdown.

The Hill included an op ed by a Republican Congressman Reid Ribble (R Wisc) and a Democratic Congressman Kurt Schrader (D Ore) supporting the President’s proposal to “modernize” the FEHBP with more plan types.  Neither member sits on the House Oversight and Government Reform Committee, which has oversight responsibility for the FEHBP.  Of note, Mr. Ribble is a member of the Republican Study Committee, and Mr. Schrader is a member of the Energy and Commerce Health subcommittee, among others.

The FEHBlog likes to link to hospital quality surveys. He has noticed that there’s not a lot of noticeable alignment among the surveys. CNN reports on a Health Affairs study concluding that the FEHBlog’s observation is correct. Here’s the Health Affairs squib on the study:

Matt Austin of Johns Hopkins Medicine and coauthors compared four well-known national hospital rating systems designed for use by US consumers: U.S. News & World Report’s Best Hospitals; HealthGrades’ America’s 100 Best Hospitals; Leapfrog’s Hospital Safety Score; and Consumer Reports’ Health Safety Score. They analyzed ratings covering the time period from July 2012 to July 2013.
With each system using its own rating methods, having a different focus to its ratings, and stressing different measures of performance, the authors found that only 10 percent of the 844 hospitals rated as a high performer by one system were equally rated by any of the other rating systems. The complexity and opacity of the different rating systems, conclude the authors, “are likely to cause confusion instead of driving patients and purchasers to higher-quality, safer care.” They recommend that organizations sponsoring ratings assist patient interpretations of their ratings through the media and other information channels.

The FEHBlog prefers to ask nurses and allied health professionals for their opinion on hospital quality.

Quite a few interesting tidbits crossed the FEHBlog’s desk today.

• Here’s a link to the Edington Associates’ presentation from the population health management webinar that the FEHBlog attended last Thursday. You can view a recording of the webinar at this link.
• This statement does not surprise the FEHBlog but he was surprised that a study came to this intuitive conclusion — “Based on publicly available information, there is scant evidence to back up claims by large, nonprofit integrated health systems that they deliver higher quality care more efficiently [than for-profit systems], according to a new study released today from the nonpartisan National Academy of Social Insurance (NASI).”  Here’s the link. 
• It should come as no surprise to anyone that Information Management reports that medical identification thefts are on the rise due to the government incubated growth of electronic medical records. Paper records were more secure but that ship has sailed. Let’s hope we do get the bang for the buck out of this $30 billion government investment.
• The Washington Post reports that a Northern Virginia security firm has linked the Anthem data breach to China.  “Malicious software used in the Anthem hack conclusively matches malware that was used to target a small U.S. defense contractor and that the FBI has said originated in China, said Rich Barger, chief intelligence officer of ThreatConnect. “The malware is so unique — the digital signature is so precise — in these two incidents that we strongly feel the same Chinese actors were involved,” Barger said. He said the links do not reveal who exactly carried out the Anthem hack but point to involvement of Chinese government-sponsored entities.”
• Truven Health Analytics today released its 2015 lists of top 100 hospitals in the United States.

The FEHBlog is back from NYC and woo boy is it icy here in Washington DC.  Congress remains in session this week, and Homeland Security appropriations remains at the top of its agenda. Here is a link to the Week in Congress’s look at last week.  The Supreme Court will hear arguments in the King v. Burwell case on Wednesday morning.  This case involves the  legality (not the Constitutionality) of providing ACA subsidies in the federally managed marketplaces.

The Wall Street Journal reports that a higher percentage of ACA marketplace enrollees changed plans in the last Open Season than typically occurs in an FEHBP open season. The FEHBlog hardly finds that surprising with an immature program, but it’s worth noting.

The Washington Post reports that the battle over providing subsidized marketplace coverage to members of Congress and their official staffs continues apace.  Back in the day, the FEHBlog thought that this problem could be solved by a Congressional appropriation. However, the IRS then overruled years of precedent by holding that employers can’t reimburse their employees’ health insurance premiums on a pre-tax bas.  Even then Congress could have provided the subsidy on an after tax basis which is probably where we all will wind up in a few years, e.g, no more employer exclusion for health care coverage with tax credits toward health insurance coverage for lower income folks.

Finally, last week the nation’s fourth largest PBM Catamaran (after CVS, Express Scripts, and Optum Rx) announced the acquisition of Health Solutions Inc. for 4405 million. Here are Chicago Crain’s articles about Catamaran’s “comeback story” and this deal.

The FEHBlog is up in New York City. His oldest daughter’s wedding shower is tomorrow and he is helping out his wife.

The FEHBlog did participate in yesterday’s Eddington Associate’s free webinar on population health management. The most interesting factoid was that close to 80% of the population is considered low health risk. Part of the challenge is keeping people in that category as they age. Here’s a link to their webinar page.

Otherwise, things keep rolling right along. It looks like Congress will will kick the can down the road on both the Homeland Security appropriations bill (deadline imminent) and the Medicare Part B doctor reimbursement formula (deadline March 31 extension four to six months).  CMS boasted about favorable ICD-10 end to end testing results but that major conversion still could be problematic when the rubber hits the road on October 1.

Yesterday, the FEHBlog listened to a population health management webinar presented by the National Diabetes Education Project.  The upshot of the webinar, presented by an MD and a public health researcher is that people who don’t smoke, eat sensibly, and exercise at least moderately will live a longer life and encounter a quick, low cost death. 80% of heart disease and 40% of cancers are attributable to life style. In other words, everyone should work together to prolong longevity and compress morbidity.  The speakers encouraged employers to take this tack with their employees. Each dollar spent on treating employee illnesses and injuries reportedly is tied to $2-3 lost on absenteeism and presenteeism.  The last factoid didn’t ring true to the FEHBlog because depression causes the most presenteeism problems and more spending on health care probably would reduce the ancillary cost of depression. But oh well, point taken. The speakers referred participants to Diabetes at Work, HERO Health, and a new blog by Dee Eddington (a thought leader). Tomorrow the FEHBlog plans to listen to a webinar put on by Eddington Associates.

Healthgrades.com has released its latest list of top hospitals — broken out by top 50 and top 100.  The closest top hospitals near the FEHBlog’s residence outside DC are in Baltimore and Richmond. No Washington DC metropolitan area hospitals! Here’s a link to Fierce Healthcare’s article on the top hospitals.

Finally, the Healthcare Cost Institute which is a consortium of large health insurance companies has created a website that will allow consumers to compare healthcare prices according to this Ihealthbeat article. Here’s link to the site which is called guroo.com . “The data set includes claims for more than 40 million U.S. residents. Consumers can use Guroo to query the prices for 70 services, such as diagnostic tests and office visits, in more than 300 cities, 41 states and Washington D.C.” Transparency is good.

The Affordable Care Act imposes a 40% excise tax on the cost of employer sponsored health coverage, including our beloved FEHBP, over certain dollar thresholds.  The tax is scheduled to take effect in 2018.  Like most ACA provisions this high cost plan excise tax a/k/a the Cadillac plan tax is a riddle inside an enigma. Today the IRS released 24 pages of preliminary guidance on the Cadillac tax.  The IRS is accepting public comment on this release and the Cadillac tax until May 15, 2015.

Congress returns to Washington this week. The legislature needs to resolve or at least kick down the road the Homeland Security funding issue this week.

Right after the FEHBlog hit publish on Friday’s TGIF post, the Department of Health and Human Services let loose two huge regulations — the proposed Medicare Advantage and Medicare Part D funding rule for 2016 and the final ACA notice of benefit and payment parameters also for 2016. The links are to the HHS Fact Sheets.

Here’s a link to the Hill’s article on the Medicare Advantage rule.  “The new rate proposal announced Friday would decrease payments
“modestly” by about 0.95 percent, said Sean Cavanaugh, deputy
administrator and director of the Center for Medicare and Medicaid
Services (CMS).” This reduction is bound to be controversial as Medicare Advantage is a popular program but the ACA is driving these reductions.

A hat tip to Tim Jost at the Health Affairs  blog, who has already written detailed reports on OPM’s final multi-state plan rule and the 2016 benefits and payments parameter notice.  This parameters notice continues to tighten the leash on the qualified health plans operating in the exchanges which includes OPM’s multi-state plan options. The most relevant portion of the notice for FEHB plans is its discussion of the transitional reinsurance contribution.

Here is the relevant preamble (p. 84) discussion of the transitional reinsurance contribution rate (self insured and self administered plans are exempt from this fee for 2015 and 2016)

Although we stated in the 2015 Payment Notice (79 FR 13776) that, for operationalreasons, HHS would not permit contributing entities to elect to make the entire benefit year’s reinsurance contribution by January 15, 2015, 2016, or 2017, as applicable, we have resolved those operational barriers, and now offer contributing entities the option to pay: (1) the entire 2014, 2015 or 2016 benefit year contribution in one payment no later than January 15, 2015, 2016, or 2017, as applicable (or, if such date is not a business day, the next applicable business day), reflecting the entire uniform contribution rate applicable to each benefit year (that is, $63 per covered life for 2014, $44 per covered life for 2015, and $27 per covered life for 2016); or (2) in two separate payments for the 2014, 2015, or 2016 benefit years, with the first remittance due by January 15, 2015, 2016, and 2017, as applicable (or, if such date is not a business day, the next applicable business day) reflecting the first payment of the bifurcated contribution (that is, $52.50 per covered life for 2014, $33.00 per covered life for 2015, and $21.60 per covered life for 2016); and the second remittance due by November 15, 2015, 2016, or 2017, as applicable (or, if such date is not a business day, the next applicable business day) reflecting the second payment of the bifurcated contribution (that is, $10.50 reinsurance fee per covered life for 2014,$11.00 per covered life for 2015, and $5.40 per covered life for 2016).

By operation of the ACA, the fee will sunset for 2017 for all types of plans.

Finally, the FEHBlog nearly intrigued by this Modern Healthcare article reporting that

As hospitals increasingly lose patients to medical care delivered in
clinics and home settings, hospital operators are escalating their
efforts to shrink capacity. Hospitals are operating with fewer beds or closing outright, in some cases to make way for new ambulatory-care centers.