HHS Secretary Sylvia Mathews Burwell is expected to be confirmed the week after next. Next week Congress will be on a Memorial Day recess. The Senate Finance Committee will vote on her nomination tomorrow according to the Hill.

The OPM Director Katherine Archuleta touted the success of the Blue Cross multi-state plan in her blog yesterday.  OPM does deserve credit for getting this ACA mandated program off the ground.

A federal judge in Pennsylvania today legalized same sex marriage in that State.  According to the New York Times, “In the last several months, judges have struck down marriage limits in seven states: Utah, Oklahoma, Virginia, Texas, Arkansas, Idaho and, on Monday, Oregon.”  Most of these courts have stayed their decisions pending appeal. The significance of these decisions is that within two years this issue will reach the U.S. Supreme Court. Of course this decision would expand the number of FEHBP covered spouses in states that currently ban same sex marriage.

Fierce Heathcare Payer reports on an interesting Commonwealth Fund study suggesting four ways that insurers can combat the rising prices associated with healthcare provider consolidation. Thanks!

Finally, the FEHBlog noticed this Modvive.com article about a study projecting cancer trends over the next 15 years or so. “Presently, lung cancer is already the top killer overall, but pancreatic and liver cancer will surpass the current 2nd (breast and prostate cancer for women and men respectively) and 3rd (colorectal cancer) most deadly cancers.” On the bright side, “the Recalcitrant Cancer Research Act signed into law by President Obama last year is expected to provide more attention and resources. Recalcitrant cancers are those with a 5-year survival rate lower than 50%, and include liver and pancreatic cancer.”

Speaking of finances, Kaiser Health News reports that Medicare reversed a decision to deny a beneficiary’s prescription for the expensive Hepatitis C cure, Sovaldi. A recent Wharton School of Business blog discusses the factors behind Gilead’s pricing of that drug.

Speaking of healthcare literacy, Insurancenewsnet.com reports that United Healthcare received a health care literacy award for its Happiness Counts kits provided to Medicare beneficiaries. “The brightly colored kit includes daily journals, postcards and other information to help seniors take actions and create a stronger mind-set for staying upbeat even in the face of illness.”  The award illustrates how insurers do try to work cooperatively with members to improve health care literacy.

Turning to the core claims administration side of the business, Healthdata Management reports that Aetna is seeking to transition all of its network doctors from paper to electronic benefits statements / remittance advice and payments.

Aetna in recent years has been increasingly offering EFT payments but with Medicare’s recent move to mandate EFT, Aetna knew the time was right to make its own move. Employees routinely are electronically paid these days and personal electronic banking is common, [Jay] Eisenstock [Aetna’s head of provider e-solutions] notes. While payers are required to offer EFT and ERA and benefit from it, the bulk of benefits come when providers take advantage of it.  For now, Aetna’s plan for EFT and ERA includes no penalties for non-compliance, Eisenstock says. But the insurer is changing its payment policy and at some point providers not going electronic will have to decide whether to keep their relationship with Aetna.

Smart move.

ACA FAA XIX’s discussion of the reference pricing strategy has agitated the consumer advocates according to this AP article. The article explains that

The new strategy works like this:
Your health insurance plan slaps a dollar limit on what it will pay for certain procedures, for example, hospital charges associated with knee and hip replacement operations. That’s called the reference price.
Say the limit is $30,000. The plan offers you a choice of hospitals within its provider network. If you pick one that charges $40,000, you would owe $10,000 to the hospital plus your regular cost-sharing for the $30,000 that your plan covers.
The extra $10,000 is treated like an out-of-network expense, and it doesn’t count toward your plan’s annual limit on out-of-pocket costs.
That’s crucial because under the health care law, most plans have to pick up the entire cost of care after a patient hits the annual out-of-pocket limit, currently $6,350 for single coverage and $12,700 for a family plan. Before the May 2 administration ruling, it was unclear whether reference pricing violated this key financial protection for consumers.

The strategy also works with prescription drug benefits. The article goes on to discuss the critics but the FEHBlog likes this upside.

Forbes writes about the increasing connections between hospital systems and pharmacies / PBMs, especially to support the pharmacies’ in-house clinics.

Finally, Congress is in session this week according to the Hill’s Floor Watch blog. The Senate may confirm the HHS Secretary nominees Sylvia Mathews Burwell.

The non-profit Health Care Cost Institute announced today that beginning next year it will make available to the public a free web-based health care cost and quality transparency tool based on claims data provided by Aetna, Humana, and United Healthcare (and hopefully others). Forbes reports that

“Consumers, employers and regulatory agencies  will now have a single source of consistent, transparent health care information based on the most reliable data available, including actual costs, which only insurers currently have,” David Newman,  the Health Care Cost Institute’s executive director said in a statement issued this morning.

There will be three tiers of information provided. In one tier, any consumer will get average price information for an “episode of care” such as a knee replacement or heart surgery based on complex coding and claims data submitted to and analyzed by the Institute.

In another tier, consumers with coverage from Aetna, Humana or UnitedHealth Group will get more detailed price information given the health plan subscribers in their plans already have a relationship with the companies and therefore more specific information on their network of medical care providers that are part of the data set used by the Institute.

Meanwhile, employers will have access to even more “granular” information to help them customize information for employees, Newman said.

Continuing the FEHBlog’s focus on healthcare costs,

• Kaiser Health News reports on Medicare’s struggles with the expensive new Hepatitis C drugs. 

Researchers estimate that 3 to 5 million Americans carry the insidious hep-C virus. The biggest concentration is among those born between 1945 and 1965.

Many got hep-C from injecting street drugs in their youth. Other baby boomers got the virus from transfusions before 1992, a period when blood wasn’t screened. Some got it from sharing razors or toothbrushes, or from contaminated tattoo needles or hospital equipment. For some, transmission was sexual, although fortunately this isn’t the highest-risk route.

The timing of these infections spells trouble for Medicare, which insures Americans over 65 [and the FEHBP which is 50% annuitants] Hepatitis-C is a slow-acting virus. Over a period of 20 to 40 years, it causes liver damage in about 70 percent of people it infects.

A growing number of people who got infected in the 1960s through the 1990s have now “used up” the infection’s latency period, notes Dr. Camilla Graham of Beth Israel Deaconess Hospital in Boston, “which is why we’re now seeing this dramatic increase in the number of people developing complications and dying of hepatitis. And we expect this to continue to increase for the next 10 years.”

• Reuters reports that the new low dose CT scans for persons with a history of heavy smoking recommended by the U.S. Preventive Services Task Force will cost Medicare $9.5 billion over five years in unanticipated testing and early treatment costs. As the FEHBlog has noted the Medicare program may not pay for these tests, but the ACA requires FEHB plans to do so with no cost sharing beginning next year.

Just to catch up, the Senate is in session this week while the House of Representatives is not. Tomorrow afternoon, the Senate Finance Committee will hold a hearing on Sylvia Mathews Burwell’s nomination to serve as HHS Secretary.

A couple of tidbits on healthcare costs:

• Kaiser Health News reports on a recent Harvard research study concluding that “at least one in four Medicare beneficiaries received one of 26 “low-value” services during 2009, and possibly significantly more.”  The researchers suggested the use of bundled payments for care rather than fee for service would reduce the provision of low value services. The FEHBlog has been hearing about this “solution” for about 20 years. It’s time for the healer to heal him/herself.
• BNA reports on conference discussions about Sovald, the Hepatitis C pill, and other expensive specialty drugs. A research chemist friend told me the other day that Solvadi is a small molecule drug. The article notes that according to a Liverpool University pharmacist Gilead’s drug could be mass produced in large quantities at a cost of no more than $136 per 12 week course.  Here’s a link to Hill’s projections from hepmag.com.  Gilead set the price, according to the BNA article, based on the cost of an avoided liver transplant ($84,000 for a 12 week course of treatment). The FEHBlog recognizes that price and cost are independent variables, but this is highway robbery. 

The FEHBlog missed that weekend update because he was visiting Connecticut. His alma mater UConn invited him to be an alumni reader of the graduates names at one of the three College of Liberal Arts and Sciences graduations on Mothers Day. (Happy belated Mothers Day to all.)  (The FEHBlog had the graduation right before Shabazz Napier’s.)  The FEHBlog read about 300 names using a baseball announcer’s inflection.

Check out the beefeater hat in the picture to the right. Pharrell eat your heart out. When the FEHBlog was announced to the crowd, he doffed his beefeater hat. The FEHBlog also visited family and friends It was fun.

The FEHBlog will get back to serious FEHBlog posts tonight.

The Office of Federal Contract Compliance Programs (“OFFCP”), which is part of the Labor Department, has been on a crusade to impose government contractor affirmative action program requirements on hospitals that serve the TRICARE and FEHB programs. A couple of years ago, Congress tried to rein in OFCCP in a measure intended to protect TRICARE providers. OFCCP could not take no for an answer.

Recently, in reaction to a bill (HR 3633) introduced by Rep. Tim Walberg to complete the job of reining in OFCCP, the Labor Department announced a five year OFCCP enforcement moratorium for TRICARE providers. The purpose of the moratorium is to educate providers about the affirmative action program requirements, which are complex.

As the American Hospital Association has explained  in support of HR 3633, OFFCP’s aggressive enforcement actions against this sector can discourage their participation in the TRICARE and FEHB programs:

The AHA previously explained in testimony to this committee that hospitals can spend hundreds of hours and tens of thousands of dollars simply updating and maintaining the Affirmative Action Plan required by the OFCCP. This time and capital expenditure increases dramatically during audit years, and the OFCCP is conducting compliance reviews with increasing regularity. 

These additional administrative costs divert vital resources from hospitals’ central mission of providing quality patient care. Faced with the risk of these increased burdens, some hospitals may decide to stop providing services to participants in TRICARE or the FEHBP, thus limiting the health care options available to federal employees, service members, and their families. 

AHA is not seeking an exemption from general employment discrimination laws, just these affirmation action program requirements applicable to government contractors and subcontractors. OPM has ruled that hospitals are not FEHBP subcontractors but that fact has not deterred OFCCP.

This week OFCCP issued an enforcement directive  implementing this five year moratorium.  The directive explains that the moratorium extends to healthcare entities that have network contracts with TRICARE or with TRICARE and FEHBP carriers but not FEHBP carriers alone. How equitable. However, health care entities that serve TRICARE also likely serve the FEHBP so it may be a distinction without a difference. Hopefully in the next five years, Congress will enact HR 3633.

The Washington Post reports on Sylvia Mathews Burwell’s first confirmation hearing yesterday. Everything remains on track for her Senate confirmation. The Wall Street Journal lists her top five healthcare related accomplishments here.

Speaking of accomplishments, the Journal also reports that “Researchers [from the Scripps Research Institute in La Jolla, CA]  for the first time created microbes containing artificial DNA, expanding the universal genetic code that guides life. The advance one day could lead to new antibiotics, vaccines and other medical products not possible with today’s bioscience.” Hope springs eternal.

The FEHBlog has followed the growth of convenient  nurse staffed clinics in pharmacies. The Wall Street Journal today reports on the growth of the next level of convenience — getting in touch with a doctor on a smartphone or tablet. “Three of the companies—Teladoc Inc., MDLIVE Inc. and American Well—hosted 400,000 to 500,000 doctor-patient interactions last year, more than double the number in 2011, according to the American Telemedicine Association, a trade group.”

The FEHBlog nearly fell off his chair yesterday when he was talking with a friend about federally regulated coverage to supplement Medicare colloquially known as Medigap.  Did you know that Medigap plans still can medically underwrite Medicare beneficiaries who seek to enroll after the one time, six month long individual open enrollment period expires? What’s up with that?  No other plan in America can do that under the ACA.

Finally, here’s a list from Fierce Health Payer of ten “must follow” Twitter accounts for health payers.

The investigation revealed that the breach was caused when a physician employed by CU who developed applications for both NYP and CU attempted to deactivate a personally-owned computer server on the network containing NYP patient [electronic protected health information] ePHI.  Because of a lack of technical safeguards, deactivation of the server resulted in ePHI being accessible on internet search engines.  The entities learned of the breach after receiving a complaint by an individual who found the ePHI of the individual’s deceased partner, a former patient of NYP, on the internet.

In addition to the impermissible disclosure of ePHI on the internet, OCR’s investigation found that neither NYP nor CU made efforts prior to the breach to assure that the server was secure and that it contained appropriate software protections.  Moreover, OCR determined that neither entity had conducted an accurate and thorough risk analysis that identified all systems that access NYP ePHI.  As a result, neither entity had developed an adequate risk management plan that addressed the potential threats and hazards to the security of ePHI.  Lastly, NYP failed to implement appropriate policies and procedures for authorizing access to its databases and failed to comply with its own policies on information access management.

The three other tidbits for today are rather counter intuitive:

1.   CMS has indefinitely postponed the end to end ICD-10 testing program that it planned to conduct in July 2014 shortly before the then October 1, 2014 compliance date. Of course that date is now extended to October 1, 2015 The FEHBlog guesses that CMS does not want to do testing unless it’s the eleventh hour. The linked Gov Health IT article makes useful observations.  

2.   Health Affairs published a study on a value based insurance plan design that successfully increase medication adherence. The design did not include a disease management program and only provided mail order drug coverage. Go figure.

3.   The Wall Street Journal reported that

Removing the word “cancer” from the terminology used for many slow-growing lesions in the breast, prostate, lung, skin and other body areas could ease patients’ fears and reduce the inclination of doctors to treat them aggressively, says a panel of experts advising the National Cancer Institute. 

That makes sense to the FEHBlog. Here’s the suprising part —

“People have to get over the concept that early detection saves lives,” said Laura Esserman, the lead author and director of the Carol Franc Buck Breast Care Center at the University of California, San Francisco. That idea, which took hold in the 1980s, presumed that treating cancers early would reduce those found later and cut cancer deaths as a result, Dr. Esserman said. But while there have been large increases in cancers diagnosed early, the drop in cancer deaths has been smaller than expected. That is leading some experts to conclude that many early cancers aren’t life-threatening and others that are deadly are slipping through the cracks.
“Cancer isn’t just one disease, so we shouldn’t treat it as if it is,” Dr. Esserman said.

Here is a San Francisco Chronicle background article on Dr. Esserman:

Dr. Laura Esserman – the breast cancer researcher, surgeon and visionary who runs the breast cancer center at UCSF – recently received the Journal of Women’s Health Award for outstanding achievement. Esserman is three years into a large-scale research program called Athena, focused on expediting and improving treatment by better understanding risk factors and outcomes. Esserman is 56 and has been at UCSF since 1993. She is known for being passionate about her patients and the science around breast cancer, and for her practice of singing to patients before they go under a general anesthetic.

Impressive woman.

This coming week also is Public Service Recognition Week,.which is “time set aside to honor the men and women who serve our nation as federal, state, county, and local government employees.” Here is a link to OPM’s press release.

Kaiser Health News reports on the results of a survey commissioned by the medical society lead Choosing Wisely campaign which the FEHBlog has been following. According to the KHN report,

The [Choosing Wisely] campaign focuses on encouraging conversations between patients and doctors about the suspect treatments it identifies. In the survey, 47 percent of doctors said one patient a week requests something unnecessary. While most doctors believe they are most responsible for interceding, 48 percent said that when facing an insistent patient, they advise against it but still order the test. Another 5 percent said they just order the test.

Not surprisingly, few of the doctors agree with health policy analysts who believe that the financial rewards that come from extra procedures are a major reason why they are ordered. Only 5 percent of physicians said they are influenced by the presence of new technology in their offices. Just 5 percent believe the fee-for-service-system of payment, where physicians are paid for each thing they do rather than a lump sum for keeping a patient healthy, plays a role.

It’s difficult for health plans to control these costs which add up.

Then you read the Washington Post’s story today about the expensive Hepatitis C drugs. The article notes that

Sovaldi costs $84,000 for a 12-week treatment, although some patients will need to take the drugs for 24 weeks. Olysio is about $66,000 for a 12-week treatment but is approved for fewer types of patients. Other drugs must often be used with the two new products, adding to the cost.
In the United States, drugmakers set prices based on development costs, as well as on what the market will bear, with companies demanding higher returns for products that have little or no competition. Until they lose patent protection, brand-name drugs in the United States often are able to garner the highest prices in the world. Prices generally fall sharply once generic rivals hit the market.
The drugmakers defend the pricing, saying the drugs are curative and can prevent the need for other costly care, such as liver transplants. “Gilead believes the price of Sovaldi is fair based on the value it represents to a larger number of patients,” Gilead spokeswoman Michele Rest said.

Is this the same way that penicillin was priced?

At the recent OPM AHIP FEHBP carrier conference, speakers stressed the importance of considering community health values to the performance of the health care system. In that regard, the Commonwealth Fund last week issued  the results from a scorecard of state health plan performance over the period 2007-2012.

It’s the FEHBlog’s first merry month of May post.

The Centers for Medicare and Medicaid Services informally has disclosed the October 1, 2015, will be the ICD-10 coding set compliance date according to ihealthbeat.  CMS made this announcement in the preamble to the proposed Medicare inpatient hospital pricing rule for FY 2015. According to the CMS press release on that rule:

CMS projects that the payment rate update to general acute care hospitals will be 1.3 percent in FY 2015

Hospital Readmissions Reduction Program.  The maximum reduction in payments under the Hospital Readmissions Reduction program will increase from 2 to 3 percent as required by law.  For FY 2015, CMS proposes to assess hospitals’ readmissions penalties using five readmissions measures endorsed by the National Quality Forum (NQF). Already, CMS estimates that hospital readmissions in Medicare declined by a total of 150,000 from January 2012 through December 2013.

Hospital-Acquired Condition Reduction Program.  CMS proposes to implement the Affordable Care Act’s Hospital Acquired Condition (HAC) Reduction Program.  Beginning in FY 2015, hospitals scoring in the top quartile for the rate of HACs (i.e. those with the poorest performance) will have their Medicare inpatient payments reduced by one percent.  This new program builds on the progress in this area achieved through the existing HAC program, which is currently saving approximately $25 million annually by reducing Medicare payments when certain conditions that are reasonably preventable are acquired in the hospital.

The rule also describes how hospitals can comply with the Affordable Care Act’s requirements to disclose charges for their services online or in response to a request, supporting price transparency for patients and the public.