Congress of course is in session this week in the run up to the end of the current federal fiscal year on September 30. The Hill’s Floor Watch reports and the FEHBlog agrees that the chances of a government shutdown seem very remote — both parties have been down this road a few times in the last few years, and seem to strongly prefer avoiding a shutdown.  Particularly because deadline for increasing the debt limit also is approaching, we could still see some compromise on the Affordable Care Act, possibly a delay of the individual mandate until 2015 (just like the employer mandate — advocated by many Republicans) and/or overriding the OPM proposed rule providing a government contribution for members of Congress and their official staffs in the exchanges next year (advocated by Sen. David Vitter (R La.).

The FEHBlog expects that this week OPM will make its press release on 2014 FEHBP changes to the government contribution and premiums. Furthermore, with the October 1 date for rolling out the state health insurance programs rapidly approaching, OPM also should be announcing its multi-state program plan contractors who will be participating in at least 31 state health insurance exchanges next year.

In its most recent / March 2013 benefits and rates proposals call letter, OPM endorsed the Choosing Wisely campaign. According to the campaign’s website, “An initiative of the ABIM Foundation, Choosing Wisely is focused on encouraging physicians, patients and other health care stakeholders to think and talk about medical tests and procedures that may be unnecessary, and in some instances can cause harm. Bravo. Earlier this month, the Society of General Medicine, the American Academy of Orthopedic Surgeons, and the American College of Surgeons each made five new evidence based recommendations about medical procedures or tests that should be avoided. That’s how the cost curve can be pushed down.

The Washington Post reports that the House of Representatives did pass essentially along party lines a continuing resolution (H. Jt. Res. 59) funding federal government operations — excluding the Affordable Care Act — through December 15, 2013. The Hill reports that the White House is seeking meetings with Congressional leaders to avoid a government shutdown on October 1. This us going to come down to the wire in all likelihood.

Yesterday, the Senate Homeland Security and Governmental Affairs Committee held a hearing on Postal Service reform. At the hearing, the Postmaster General testified that

The Postal Service has reached its statutory debt limit of $15 billion and it held unrestricted cash representing only 11 days of average daily operating expenses. Current projections indicate that it will continue to have a dangerously low level of liquidity in the foreseeable future. The Postal Service will be unable to make the required $5.6 billion Retiree Health Benefits (RHB) prefunding payment due by September 30, 2013. This is in addition to similar payment defaults on $11.1 billion in 2012. Our cash position will continue to worsen in October 2013, when the Postal Service is required to make its annual payment of approximately $1.4 billion to the Department of Labor (DOL) for workers’ compensation expenses. By mid-October 2013, the Postal Service projects it will have a cash balance on hand of approximately five days of average daily expenses. For an organization the size of the Postal Service – which has revenues of $65 billion and a total workforce of approximately 490,000 career employees – that is a razor thin margin.

The American Postal Workers Union President and the Rural Letter Carriers Association made good constructive points in their testimony.  The Senate HSGA Committee will be holding a second hearing on this topic next Thursday. Federal News Radio reports that the Committee “is set to take on the Postal Service’s healthcare benefits more broadly at” this hearing.

The Washington Post also took note of the fact that OPM may be without an acting director soon. The Post added one fact that the FEHBlog’s post failed to note — OPM has not had a deputy director since July 2011.

The S&P Healthcare Indices for July 2013 were released today:

Four of the nine S&P Healthcare Economic Indices showed the same annual growth rates for July 2013 as for June 2013 [3.06%]. They were the Composite Index, the Medicare Index, the Commercial Index, and the Hospital Medicare Index As measured by the S&P Healthcare Economic Commercial Index, healthcare costs covered by commercial insurance plans rose by 4.15% in July.  Annual growth rates in Medicare costs increased by 1.40% in July, according to the S&P Healthcare Economic Medicare Index. The Hospital Medicare Index’s growth rate recorded 2.29% in July. These indices’ growth rates remain flat from June to July

On a similar note, Business Insurance reports that

In 2012, total U.S. health care spending hit $2.807 trillion, or $8,948 per person. While a record, expenditures rose only 3.9% in 2012, the same percentage increase as in 2011, 2010 and 2009, according to statistics compiled by researchers at the Centers for Medicare and Medicaid Services and published in the journal Health Affairs.

The CBO discussed this rather low (yet above the CPI) spending rate in his blog.  He makes three points:

1. Growth in spending for the fee-for-service portion of Medicare has slowed markedly in the past few years—apparently not because of the financial turmoil and recession but because of other factors affecting the behavior of beneficiaries and providers.
2. The slowdown in health care cost growth has been sufficiently broad and persistent to persuade us to make significant downward revisions to our projections of federal health care spending.
3. Despite the recent reductions in our projections of federal health care spending, growth in such spending remains the central challenge in putting the federal budget on a sustainable path.

The abstract for the Health Affairs article adds

Improving economic conditions, combined with the coverage expansions in the Affordable Care Act and the aging of the population, drive faster projected growth in health spending in 2014 and beyond. Expected growth for 2014 is 6.1 percent, with an average projected growth of 6.2 percent per year thereafter. Over the 2012–22 period, national health spending is projected to grow at an average annual rate of 5.8 percent.

Cost curve up. Next week OPM should announce the FEHBP’s 2014 average premium and government contribution changes.

In contrast, to the near shutdowns that occurred in 2011 OPM has maintained its shutdown furlough website. Because the FEHBP is separately funded (see the CBO Director blog article), the FEHBlog expects that the FEHBP will continue operating even Congress can’t agree on a continuing resolution before October. The OPM website explains that shutdown furloughs will be treated as leave without pay and that federal employees will be able to reimburse the federal government for advance FEHBP enrollee contributions when they return to work:

Q. Will an employee continue to be covered under the Federal Employee Health Benefits (FEHB) program during a shutdown furlough if the agency is unable to make its premium payments on time?
A. Yes, the employee’s FEHB coverage will continue even if an agency does not make the premium payments on time. Since the employee will be in a non-pay status, the enrollee share of the FEHB premium will accumulate and be withheld from pay upon return to pay status.
Q. What happens if an employee wants to terminate Federal Employee Health Benefits (FEHB) coverage while in a nonpay status in order to avoid the expense?
A. Unlike other types of non-pay status, employees in a non-pay status due to a lapse of appropriations (shutdown furlough) will not have the opportunity to terminate or cancel FEHB coverage. The employee will remain covered; the enrollee share of the FEHB premium will accumulate and be withheld from pay upon return to pay status. 

Happy Constitution Day!  The Senate was back to work today after yesterday’s Navy Yard tragedy. The Senate confirmed Elaine Kaplan to be a U.S. Claims Court judge by a 64-35 vote. After Ms. Kaplan is sworn in, OPM will need to designate a new acting director. The Senate Homeland Security and Governmental Affairs Committee postponed yesterday’s business meeting to tomorrow afternoon.

This is National Health Information Technology Week. Yesterday, HHS held a Consumer Health IT Summit to tout (what else?) the Blue Button and the new Blue Button Plus (as discussed in this Modern Healthcare article). MobiHealth News provides a roundup on the summit. In the better late than never department, HHS has released an updated model HIPAA notice of privacy practices — the compliance date is next Monday September 23.  WEDI is sponsoring a free webinar tomorrow on the ICD-10.

The Washington Post’s Wonkblog accurately points out based on a new CDC report that taking antibiotics that you don’t need can kill you. Healthcare professionals and health plans should continue to spread the word on this issue.

The Washington Post reports that the U.S. Food and Drug Administration has halted imports of eleven generic drugs from Ranbaxy’s Mohali factory in Punjab province, India. “With revenues of $2.3 billion for the last fiscal year, Ranbaxy is the leading drugmaker in India’s $26 billion generic pharmaceutical industry.” In other words we do import drugs from other countries provided that the plants are under FDA supervision.

Congress is in session this week. We should get a better perspective this week on the status of federal government funding beyond September 30.

The Hill’s Floor Action blog reports that tomorrow the Senate will vote on the President’s nomination to Elaine Kaplan to be a judge on the U.S. Claims Court. Ms. Kaplan, who is OPM’s General Counsel, currently is the acting OPM Director. The FEHBlog is not sure when the Senate will act on the President’s nomination of Katherine Archuleta to be OPM Director. Sen. Tom Coburn removed his hold on her nomination over a month ago. The HSGA committee is holding a business meeting tomorrow afternoon.. The FEHBlog will keep an eye out for the agenda. Hopefully the Senate will confirm Ms. Archulata before OPM has to appoint another acting Director.

Govexec.com reports that  “For thousands of civilians in the Air Force, this could be a stuffy, fever-y couple of months. Due to budget constraints, the Air Force will no longer offer free influenza shots to non-military employees. In 2012, about 12,000 civilians received the free flu vaccines.” The pessimistic article overlooks the fact that these FEHB plans will cover influenza shots with no enrollee cost-sharing, e.g., free.

Federal health information technology policymakers, aided by a number of healthcare IT organizations, will take another stab at achieving industry consensus on how to best match patients to their electronic health records to improve patient safety and care coordination. The goal is to make sure healthcare providers have the right EHR for their patient and aren’t mistakenly looking at the record for another person with the same name or birthday.

Good luck. Maybe this effort will lead to a resurrection of the patient identifier number.

Monday was the deadline for submitting public comments on OPM’s proposed rule on coverage of members of Congress and their official staffs in the health insurance exchanges next year. According to regulations.gov, over 59,000 comments were received. None have been posted yet.

The ACA regulators issued a technical release today (No. 2013-03) on the “Application of Market Reform and other Provisions of the Affordable Care Act to HRAs, Health FSAs, and Certain other Employer Healthcare Arrangements.”  Back in 1996, HIPAA made medical savings accounts (“MSAs'”) available to individuals. Employers and their consultants became jealous of MSAs which allowed individuals to set up accounts to pay for health care. In 2002, the IRS came up with the concept of health reimbursement accounts which could be offered by employers to their employees. However, the account balances would be owned by the employer, not the participant. Shortly thereafter Congress created an MSA analog for employer sponsored plans known as health savings accounts. The balances in those accounts do belong to the participants. HRAs and HSAs teamed up with high deductible plans soon became available and still are available in the FEHBP. This technical guidance came out today because there was a question as to whether HRAs would survive the ACA’s market reform prohibiting lifetime or annual benefit caps. This technical guidance explains how to preserve HRA’s in the ACA world. Nothing is simple anymore. The guidance also addresses health care flexible spending accounts and employee assistance plans.

According to this Business Insurance article, an upshot of the technical guidance is that employers will not be able to fund an HRA that a retiree could use to obtain subsidized exchange coverage. The technical guidance explains that “An individual is not eligible for individual coverage subsidized by the Code § 36B premium tax credit if the individual is eligible for employer-sponsored coverage that is affordable (premiums for self-only coverage do not exceed 9.5 percent of household income) and that provides minimum value (the plan’s share of costs is at least 60 percent).”  As the FEHBlog has noted, a retiree may opt for subsidized exchange coverage in lieu of employer sponsored coverage without have to meet these tests.

The Wall Street Journal has a story today about how the Food and Drug Administration published guidance on Monday to assist generic drug manufacturer in presenting applications to market a generic version of the inhalable asthsma drug Advair. According to the article this guidance may accelerate generic competition with the brand name manufacturer Glaxo Smith Kline when the window for a generic competitor opens in 2016. The article explains that

Many analysts had doubted that generics could hit the market by 2016 because of the difficulty of copying inhaled drugs and confusion about what regulators would require before approving copies.
Advair combines two drugs in a fine powder inhaled through an intricate device called a Diskus. Few generic companies have the know-how to make complicated inhaled drugs, and even the ones that do have found Advair a tough one to crack.
The stakes for Glaxo are high: Advair had global sales of £5 billion ($8 billion) last year, making up about 20% of Glaxo’s global sales of £26.4 billion.
The challenge illustrates an important change in the generics wars. For years, the most profitable drugs—mostly pills made of chemicals—have been fairly easy for generics companies to copy, requiring a straightforward chemical synthesis. But a new wave of blockbusters include more complicated inhaled drugs and others made of complex biological ingredients. Replicating them requires skills that some generics makers don’t have.

The FEHBlog does not have a problem with the FDA attempting to level the playing field.

Also it’s worth noting that the GAO just released a report on dental insurance coverage trends from 1996 to 2010.

The ACA regulators clarified in an FAQ today that the law does not impose a fine or penalty on an employer that fails to distribute the health insurance marketplace notice required by the ACA / new Fair Labor Standards Act § 18B.  This notice requirement was explained in Labor Department Technical Release No 2013-02.  OPM distributed a modified version of this notice to federal payroll offices for distribution to federal employees in late August.

The Federal Times reports that yesterday the House of Representatives leadership introduced a continuing resolution to fund the federal government until December 15, 2013, but today it decided to postpone a vote on that resolution from tomorrow until sometime next week. A Govexec.com article discusses the issue of whether a busy fall Congressional schedule will derail consideration of postal reform.

The Hill reports that NARFE, NTEU and AFGE sent a letter to the members of the Senate Homeland Security and Governmental Affairs Committee criticizing the FEHBP and Federal Employees Compensation Act provisions of the postal reform bill (S. 1498) introduced by the Committee’s chairman Tom Carper (D Del) and its ranking member  Dr. Tom Coburn (R. Okla.).  The letter states in FEHBlog pertinent part that

[T]he health insurance provisions of S.1486 will undermine the successful, long-standing Federal Employees Health Benefits Program (FEHBP) and increase costs for millions of federal employees, retirees and their families. 

The FEHBlog agrees.

Congress returns to Capitol Hill tomorrow following a five week long district work session. Congress had been expected to address the impending end of the federal fiscal year on September 30 and the debt ceiling issue, but now the Syria resolution is taking top priority. The Washington Post and the Federal Times reports that because the House of Representatives is waiting for a Senate vote on Syria first, the House may adopt a simple continuing resolution funding the federal government until December 15, 2013.

Kaiser Health News features a round robin of reports on the IRS’s recently proposed rules implementing the ACAs’ reporting requirements on health plans (Internal Revenue Code § 6055) and large employers (those subjected to the employer shared responsibility mandate, including the federal government, IRC § 6056). The purpose of the reporting requirements is to assess compliance withe the shared responsibility requirements that the ACA imposes on employers and the individual plan participants. The requirement has been delayed one year administratively along with the employer shared responsibility provisions. The first reports will be due in January 2016 for the 2015 calendar year (regardless of whether the health plan operates on a fiscal year that does not match the calendar year.)

The articles try to keep their sunny side up, discussing IRS efforts to minimize the reporting obligation but the bottom line is that health plans will be obligated to report on all participants which means obtaining social security numbers for all enrollees and dependents or meet the IRS’s alternative requirement (make at least two efforts annually to obtain the SSN and provide the birthdate.)  It is a shame that Congress has prohibited HHS from creating the patient identifier number called for by HIPAA in 1996. A patient identifier would help coordinate information sharing on the electronic health information exchanges including these ACA requirements.

Here’s quite a conundrum as Newman would impishly say on Seinfeld. Modern Healthcare reports that a New Zealand medical study reported in the British journal Lancet finds that electronic cigarettes are equally effective as nicotine patches in helping people to quit smoking.

After six months, similar rates of smokers — 6% to 7% — managed to quit after using either the nicotine-containing e-cigarettes or patches. Only 4% of smokers using the placebo e-cigarettes successfully quit. [The placebo electronic cigarettes did not deliver nicotine.]
Among smokers who hadn’t managed to quit, nearly 60% of those using e-cigarettes had cut down the number of cigarettes smoked by at least half versus 41% of those using nicotine patches. Smokers were also much bigger fans of the e-cigarettes; nearly 90% of users said they would recommend them to a friend compared to just over half of people who got patches.
Researchers also found similar rates of side effects in smokers that used the e-cigarettes and the patches. The most common side effect in all groups was breathing problems.

Nevertheless, Business Insurance reports an increasing trend among large U.S. employers to resist employee use of electronic cigarettes:

While some users tout e-cigarettes as a safe way to kick the dangerous tobacco habit, a growing number of employers, including United Parcel Service Inc. and Wal-Mart Stores Inc., have decided they are an unhealthy habit rather than a stop-smoking tool and are imposing tobacco-use penalties on employees who use them. That could put a chill on consumer demand. Ivette Lopez, a spokeswoman for UPS, confirmed that the company’s health plan would begin charging a monthly fee of $150 in 2014 to employees who used tobacco products, including e-cigarettes that carry liquid nicotine. 

The FEHBlog got back from Denver last night. Denver is a beautiful city with great weather. His youngest kid is now attending the University of Denver. One of the speakers at the parent orientation was an author Helen E. Johnson. She made an interesting point that’s relevant to OPM’s efforts to get federal employees to quit smoking.

Ms. Johnson explained that the brain has two periods of development — from birth to age five and then from age 15 to age 25.  The number of synapses in the brain’s cerebral cortex starts out at around 2,500, explodes to 15,000 at age 3, and then settles at around 7,000 in adulthood.  Our experiences cause us to strengthen and prune synapses from age 3 to age 25. For this reason, people are more prone to addition before age 26 and it’s harder to shake an addiction that arose before age 26. More background on brain plasticity is available here. (Perhaps Congress was onto something when it set age 26 as the end date for child coverage under health plans.)

The West Virginia Register Herald reports on a Highmark Blue Cross CEO discussion with that state’s Chamber of Commerce about how to address these addictive behaviors that are creating “unsustainable” costs.

From the sublime to the whatever. The ACA regulators came out with ACA FAQs XVII yesterday.  Not much of importance there to FEHB plan carriers or members.

Well, the FEHBlog just collapsed on his fainting couch. Modern Healthcare reports that “Bargaining leverage, not the cost of providing complex care, is the main reason why some hospitals can demand prices twice as high as their competitors’ and still get contracts to treat privately insured patients, according to a new study” by the Center for Studying Health System Change.

Healthcare IT News reports that healthcare information technology spending in the U.S. is expected to top $35.5 billion next year due in large part to (gasp!) regulatory mandates such as the ICD-10 conversion. The FEHBlog agrees with the AMA that the ICD-10 conversion is a waste of money, but that train has left the station.

Speaking of more IT costs, the IRS just released a proposed rule and additional guidance on IRC § 6055 a major new reporting burden on health insurers that has been delayed until 2015 by the Administration’s one year suspension of the employer mandate. The IRS is planning on holding a public hearing on November 19, 2013.

Finally, HHS has a released a list of the 33 healthcare related apps that it has sponsored. Physician’s Briefing.com identifies ten healthcare apps that doctors are likely to recommend to their patients.

The FEHBlog is visiting Denver Colorado this weekend. His youngest son is enrolling in the University of Denver.

The FEHBlog noticed a Washington Post article relevant to Labor Day. The article discusses the aging and admirable Postal Service workforce.  The federal civil service similarly is aging. The article makes you realize what a good job OPM and the carriers do in holding down premium increases from year to year. It also makes you wonder why the Postal Service thinks it will be better off outside the FEHBP.