The FEHBlog is currently on a flight to Hartford for a weekend in the Nutmeg State. Aon Hewitt released an employer survey finding that employers are focusing on the ACA’s Cadillac tax which takes effect in 2018. You can’t start too soon to plan for this 40% excise tax on premiums above the law’s thresholds — $10,200 for self only and $27,500 for self and family, subject to certain adjustments. Employers are anxious for the IRS to issue proposed rules on the tax.

OPM has encouraged FEHB plans to keep an eye on community health concerns. The Trust for America’s Health has posted a new interactive map on state obesity rates here.

Enjoy the weekend.

My how time flies! Today begins the Medicare open enrollment period. The FEHB Open Season begins on November 10, and the ACA health insurance marketplace open enrollment period begins on November 15..

In preparation for the FEHB Open Season, OPM has finalized its rule that brings the federal government into compliance with the ACA’s employer shared responsibility mandate by extending coverage to temporary, seasonal, and intermittent employees who work on average at least 130 hours per month over at least 90 days. Because the early bird usually does catch the worm, OPM exempted the Postal Service from this rule. The Postal Service began a health benefit program for its part time employees at the beginning of this year. OPM also created an easy opt out process for Indian tribal employers. LifeHealthPro reviews civilian agency comments on the rule here.

Since the Supreme Court decided on October 6 not to review several lower court decisions finding a constitution right to same sex marriage, nine States have started to issue marriage licenses to same sex couples joining 21 other States and the District of Columbia. More States are sure to follow.  The interesting twist here is that beginning this year OPM has allowed federal employees to add the children of their same sex domestic partners to their self and family coverage if the employee lives in a State that does not license same sex marriages. If during the course of the year but before the first day of the Open Season, here November 10, the State of residence begins to license same sex marriages, then the domestic partner’s children lose coverage at the end of the year unless the employee and domestic partner marry.

The FEHBlog has no idea how many domestic partner children have been added to self and family coverage in the fourteen States that have begun to license same sex marriage just this year.One of the States that just began to license same sex marriages is Virginia. There are a lot of federal employees who live in Virginia. But same sex couples residing in these 14 States may be in for a rude awakening on January 1 when the domestic partner’s children are no longer covered under the FEHB plan because they decided on a Spring 2015 wedding, for example. No good deed goes unpunished as they say.

Congress remains on the campaign trail. The FEHBlog is rather despondent because the Washington NFL team is 1 and 5.

Following up on the FEHBlog’s entry last Friday about the new ACA guidance restricting reference pricing (also discussed in this Health Affairs blog entry), the FEHBlog noticed this Kaiser Health News article about a National Institute for Health Care Reform study questioning the utility of reference pricing. The FEHBlog continues to find the idea attractive because it places pressure on health care providers to tow the line.

Another idea that the FEHBlog has advocated is using Medicare’s RBRVS as the benchmark for paying out of network providers because after all how can the providers challenge Medicare’s schedule when the AMA plays a large role in its construction?  Today, a Washington Post columnist hammered on a local health insurer for using the RBRVS as its out of network payment benchmark. Of course the real problem is created by providers who don’t participate in provider networks. It’s unfortunate that Congress in the ACA did not require doctors to publicize the networks in which they participate similar to the summary of benefits and coverage obligation that the law imposes on insurers.

Finally, the Washington Post reports that on Friday the Food and Drug Administration approved a new Gilead Sciences pill dubbed Harvoni to treat Hepatitis C that combines its blockbuster drug Sovaldi with two related drugs that form the complete treatment. Gilead plans to charge $94,500 for a 12 week course of treatment. The Wall Street Journal provides some additional background:

Harvoni’s price is comparable to the cost of the Sovaldi regimen, and is less than the roughly $150,000 paid for an unapproved combination of Sovaldi and a Johnson & Johnson JNJ -0.83%  pill called Olysio that many patients have been taking this year, according to Gregg Alton, a Gilead executive.
Also, Mr. Alton said Harvoni will cost a third less–$63,000—for patients requiring eight weeks of treatment. Gilead estimates that about 35% to 40% of hepatitis C patients fall into this category, because their infections haven’t progressed far enough to scar the liver.
Insurers could “look at using the eight-week regimen more proactively as a way to reduce cost” long term because they wouldn’t have to pay for more longer and more expensive drug therapy later or for even costlier liver transplants after that, Mr. Alton said.
Yet insurers are counting on competition from other drug companies to reduce their costs. AbbVie Inc. ABBV -2.36%  says the U.S. Food and Drug Administration is scheduled to decide on approving its new treatment before the end of the year.

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.