Govexec.com and Federal News Radio report on an OPM memorandum to federal agencies about the Affordable Care Act. It’s not clear to the FEHBlog if this is OPM’s effort at complying with Section 1512 of the ACA as explicated in Labor Department Technical Release No. 2013-02.

The National Business Group on Health released its most recent large employer survey findings:

The cost of providing employee health care benefits at the nation’s largest employers is projected to increase 7% in 2014 – the third consecutive year employers have budgeted this amount, according to a new survey by the National Business Group on Health, a non-profit association of more than 365 large U.S. employers. The survey – one of the industry’s first look at costs and plan design changes for 2014 – also found that some employers believe health insurance exchanges could be a viable option for certain populations. Additionally, more companies plan to offer workers a consumer-directed health plan as their only health benefits option in 2014.

Next month we will find out how the FEHBP’s average 2014 premium increase stacks up against this benchmark.

Over a decade ago, a pharmacist told the FEHBlog that health plans should use her profession as a readily available resource for controlling health care costs. It’s therefore interesting to the FEHBlog to see that according to HealthLeaders Media, Aetna is instituting a pilot program to control hospital readmissions by using pharmacists to help recently discharged patients with multiple prescriptions to manage their health.

The Hartford-based insurer is teaming with CVS Caremark and Dovetail Health, a Massachusetts-based care management company, for a 6-month trial. The program will be offered in Maryland, Virginia, and Washington, D.C. Caremark and Dovetail say they will dedicate specific pharmacists to the pilot. The program is expected to help members manage their health through personal support from a pharmacist including in-home consultations.

Makes sense to the FEHBlog.

Today, the IRS published its final individual shared responsibility rules. The IRS fact sheet is here. Individual shared responsibility is the ACA’s terminology for the individual mandate.  From an FEHBP perspective, the significant parts of the rulemaking are its decisions that annuitants who decline FEHBP coverage and former enrollees and their dependents who decline FEHBP temporary continuation of coverage are eligible for subsidized coverage in the healthcare exchanges if their household income falls below 400% of the federal poverty line ($45,960 for an individual and $94,200 for a family of four this year).  In the FEHBlog’s opinion, it would be a huge mistake for an annuitant to decline FEHBP coverage (with the full government contribution) in favor of the exchange because there is no going back to the FEHBP under current OPM rules. However, it would make sense for a former enrollee or dependent to opt for subsidized exchange coverage over unsubsidized TCC.  The Journal of Accountancy provides a broader perspective on the rule here.

In a related development, OPM released a Benefits Administration Letter and Fast Facts on the individual shared mandate and the FEHBP today.

The Hill reports that Senate and House Republicans plan to submit bills that would require the President, Vice President, Members of Congress, and all political appointees in the Administration to receive unsubsidized healthcare exchange coverage with no Government contribution, thereby partially overriding the recently proposed OPM rule. Official staff would receive the Government contribution for exchange coverage but Congressional offices would not be able to decide who is in their official staff as the OPM proposed rule permits. A copy of the press release from Senators Vitter (R La) and Enzi (R Wyo.) is here.

Finally, the FEHBlog noticed an interesting article on wellness programs in the Employee Benefit News.

The FEHBlog was visiting NYC this weekend so it’s another Monday update this week. Congress remains out of town until the week after Labor Day.

A recurring theme of the FEHBlog is “cost curve up.”  Columnist Robert Samuelson put this theme into perspective over the weekend

[T]he Center for Sustainable Health Spending in Ann Arbor, Mich., * * * compares health spending to the economy’s total output, gross domestic product (GDP). From December 2007 to June 2013, health spending rose a respectable 14.7 percent. Meanwhile, GDP grew a lowly 4.6 percent. Exclude health spending from GDP, and its growth is only 2.7 percent.

Wow.

In its recent proposed rule, OPM agreed to provide the FEHBP contribution toward healthcare exchange coverage for members of Congress and their official staffs in 2014. A fly in the ointment is that the exchanges are not designed for people aged 65 and older. No doubt there are members of Congress and official staff members in this golden age group.  USA Today reports today that

While the Obama administration is encouraging uninsured Americans to enroll in health coverage on the new online insurance marketplaces, federal officials are planning a campaign to persuade millions of seniors to please stay away — don’t call and don’t sign up.

Presumably OPM will address this issue in the final rule, perhaps by offering reimbursement for Medicare Part B, Medicare Advantage or Medigap coverage for the exiting FEHBP enrollees aged 65 and older.

The AMA News (how the FEHBlog will miss it) reports that doctors are up in arms about paying service charges on credit card payments from the Veterans Administration and health insurers.

The AMA is urging CMS, which regulates electronic billing transactions, to prohibit insurers from paying physicians less than contracted rates when using electronic payment methods. The agency also should encourage payers to adopt new electronic funds transfer standards that promote the White House’s administrative simplification efforts before a Jan. 1, 2014, deadline, the letter stated.

The cost of an automated clearing house transaction to move a $2,500 payment is 34 cents. A same-day wire transfer would cost $10.73. A virtual [credit] card transaction would cost the most at $75.10, which accounts for a 3% interchange fee and a 10-cent transaction fee.

Good point. Presumably the AMA is not upset over the debit cards which flexible spending account plans hand out to their members as the debit cards carry a lower fee.

We are now one month away from the compliance date for the Omnibus HITECH Act rule, which is September 23, 2013. It’s high time for covered entities and business associates to attend to necessary changes to business associate agreements (particularly as the business associate obligations now flow down to lower tiers) and for covered entities to update their notices of privacy practices (the required changes depend upon whether you are health plan or a health care provider.) The AMA News reports an significant uptick in purchases of cybersecurity insurance coverage by health care providers. Good idea.

The Kaiser Family Foundation released its 2013 Employer Health Benefits Survey. “The 2013 survey included almost three thousand interviews with non-federal public and private firms.Annual premiums for employer-sponsored family health coverage reached
$16,351 this year, up 4 percent from last year, with workers on average
paying $4,565 towards the cost of their coverage,”  2013 FEHBP premium generally increases fell below that average (3.4% on average according to OPM). 2014 FEHBP premium changes will be announced next month.

In an interesting development, United Healthcare announced this week that members can now pay their providers via UHC’s online claims management portal, myclaimsmanager. UHC teamed up with a company called Instamed to create this feature. Developments like this make the FEHBlog shake his head when he thinks about the AMA’s animosity toward health plans. Have a great weekend.

Yesterday, the Government Accountability Office released its report on the Postal Service’s plan to withdraw from the FEHBP.  The GAO recognizes that the Postal Service plans to reduce its own employee health benefit costs by shifting expenses onto the already rickety Medicare program. GAO also notes the reaction of OPM officials that  “any time a large change occurs in the [FEHB] program there can be unintended and unforeseen issues that arise. FEHBP has not experienced a reduction in enrollment of this size in the past.”  Based on the FEHBlog’s 30 years of experience with the FEHBP, he could not agree more. The Washington Post, the Federal Times, and Govexec.com all have written about the GAO report. Tomorrow at 10 am Federal News Radio will discuss the GAO report and OPM’s proposal to add a self and one option to the FEHBP.

The US Preventive Services Task Force recommends recommends with a “B” rating that “women whose family history is associated with an increased risk for deleterious mutations in the BRCA1 or BRCA2 genes be referred for genetic counseling and evaluation for BRCA testing.”  The ACA regulators in ACA FAQ XII decided that when the medical counselor recommends BRAC testing, the plan must cover the test with no cost sharing when performed in-network. Now Cigna is changing its policy to require genetic counseling before the health insurer pays for extensive testing to determine if the [member] have genes associated with breast cancer [the BRAC test], ovarian cancer, colorectal cancer or a heart condition called Long QT syndrome” according to the Hartford Courant.  Bloomberg discusses the impact of the policy change on the manufacturer of the BRAC test.  In the FEHBlog’s view, Cigna’s approach reflects common sense.

A few business days ago, Standard & Poors released its latest health care cost indices:

Eight of the nine S&P Healthcare Economic Indices showed higher annual growth rates for June 2013 compared to May 2013. As measured by the S&P Healthcare Economic Commercial Index, healthcare costs covered by commercial insurance plans rose by 4.14% in June, up from 4.09% reported in May. Annual growth rates in Medicare costs increased by 1.27% in June, according to the S&P Healthcare Economic Medicare Index, up from a 1.22% rate recorded last month.
The Hospital Index’s growth rate posted 2.05% in June, up from 1.97% reported in May. The Hospital Medicare Index recorded a 2.17% annual rate in June, up from 2.09% posted last month. The Hospital Commercial annual growth rate posted 1.95% in June, up from 1.85% recorded last month.
The Professional Services Index annual growth rate was 3.86% in June, marginally up from the 3.85% May value. The Professional Services Commercial Index accelerated to 6.08% in June, up from 6.06% reported last month. The Professional Services Medicare annual growth rate hit a new low of -0.39% in June, down from -0.38% recorded in May.

Cost curve up!

Congress remains in its district work session / recess this week.

On Friday. OPM published its annual notice implementing the medically underserved area (“MUA”) provision of the FEHBA, 5 USC § 8902(m)(2). That provision requires fee for service FEHB plans to reimburse all State licensed provider for covered services rendered within the scope of their respective licenses in medically underserved states annually designated by OPM.  The provision expands the provider pool in medically underserved states.

Govexec.com reports that “Federal employees in Montana and South Dakota will no longer receive
special treatment for their health benefits coverage in 2014, the Office
of Personnel Management has announced” because those States are on the 2013 MUA list but are not on the 2014 MUA list. But surprise!  The Affordable Care Act has its own version of § 8902(m)(2) which applies nationwide. As the previously FEHBlog noted, in ACA FAQs XV, the ACA regulators discussed new Public Health Service Act § 2706 as follows:

[Under § 2706], to the extent an item or service is a covered benefit under the plan or coverage, and consistent with reasonable medical management techniques specified under the plan with respect to the frequency, method, treatment or setting for an item or service, a plan or issuer shall not discriminate based on a provider’s license or certification, to the extent the provider is acting within the scope of the provider’s license or certification under applicable state law. This provision does not require plans or issuers to accept all types of providers into a network. This provision also does not govern provider reimbursement rates, which may be subject to quality, performance, or market standards and considerations.

Cavest: § 2706 technically does not apply to non-grandfathered plans but OPM in othe cases has applied these reforms, such as the “free” preventive care to all FEHB plans regardless of their grandfathered plan status (which is entirely within OPM’s discretion in the FEHBlog’s view.)

Federal Radio News reports that OPM has kicked off its bi-annual Federal Employee Benefits Survey (“FEBS”).  The acting OPM Director explained in a memorandum that

The main purpose of the survey is to measure the importance, adequacy and value of employee benefits to ensure that available benefits align with best practices and employee needs. The FEBS will also help to evaluate whether or not Federal employees understand the flexibilities and benefits available to them.  Additionally, based on the ongoing focus on health and wellness programs across all Federal agencies, the survey will capture information regarding employee perceptions of health status and healthy living. As was the case in 2011, the 2013 FEBS will contain a section about the fully covered tobacco cessation benefit offered by all Federal Employees Health Benefit (FEHB) Plans.

The 2013 FEBS will be administered confidentially via e-mail to a random sample of Federal Government employees. Agency supervisors should be advised that employees may complete the approximately 15-minute survey during work hours.  The survey will be available online for a period of four weeks with periodic reminders e-mailed to respondents. As with previous administrations of the FEBS, the results will be reported Governmentwide and will be used in the development of benefits policy and educational programs. 

Fedsmith.com recently conducted its own benefits survey which found the FEHBP to be quite popular.

Finally, the IRS now has a sporty new ACA website.

OPM decided to treat exchange plans are FEHB plans and make the government contribution on that basis. A surprising twist in the proposed rule is that while OPM does allow exchange coverage to count toward the five year requirement, the members of Congress and official staffers will have to receive their annuitant coverage in the exchanges. However, the exchanges are designed to cover people over 65 with Medicare coverage. That could change in the final rule.

The West Virginia Gazette reports that West Virginia Congresswoman Shelley Capito plans to refuse the Government contribution for exchange coverage and introduce a bill blocking members of Congress from receiving the Government contribution.  She could be a trendsetter.

A new political twist is that the OPM rule has generated an abortion coverage debate as explained in the AP story. Go figure.

The Wall Street Journal had a very encouraging story earlier this week about targeted cancer therapies. The article explains that just 10 years ago, doctors recognized two types of lung cancer — small cell and non-small cell. Now researchers have identified 15 genetic mutations representing 65% of lung cancer cases.  Drug companies are working furiously on targeted therapies to fix these mutations. The article discusses a 41 year old woman who was given three months to live in 2010 due to a lung cancer that had spread to her brain. Her doctor discovered that she has an indentified genetic mutation for which a targeted therapy exists. She is still alive today although long term effectiveness of the fix is not guaranteed. The article concludes that

Tests for mutations are less likely to be available in smaller doctors’ offices. Even many large centers are just putting in place systems to act on the information. “A lot of places can tell you they do this now, but few really have the people in place who know what to do,” says Roy Herbst, chief of medical oncology at Yale Cancer Center, New Haven, Conn., who is Ms. Carey’s current oncologist.
But rapid diagnostic advances are making it easier for any doctor to test for the newfound cancers. Tests now can hunt for more than 200 mutations—of lung and other cancers—in one biopsy.
Evidence that precision medicine works will likely broaden its use quickly. A June 2013 report on 1,007 patients with advanced lung cancer whose tumors were sequenced by a group of researchers called the Lung Cancer Mutation Consortium found that 62% had alterations suspected of being driver mutations.
The researchers reported that the 265 patients on the study treated with a targeted drug had a median survival of 3.5 years from diagnosis, compared with 2.1 years for the 361 patients for whom a mutation wasn’t identified.
“It opens up so many more doors for patients if you can find their target,” says Alice Shaw, an oncologist at Mass General in Boston.

The FEHBlog was saddened to learn yesterday from the Chicago Tribune that the American Medical Association is shutting down the AMA News on September 9, 2012, and the AMA News website at the end of this year. The FEHBlog has been a loyal subscriber of this publication for over a decade. The AMA News provides tremendous insights on the medical profession and it will be missed. But the FEHBlog plows on.

In this year’s call letter. OPM encouraged FEHB plans to take advantage of the Choosing Wisely campaign (which the FEHBlog had pitched before the call letter.)  “Choosing Wisely® aims to promote conversations between physicians and patients by helping patients choose care that is: Supported by evidence; Not duplicative of other tests or procedures already received; Free from harm, and Truly necessary.” These are the standard parts of any health plan’s medical necessity limitation.  The campaign’s principal sponsor, the ABIM Foundation, has announced that “In late 2013 and early 2014, leading medical specialty societies will release more than 30 new lists of specific tests or procedures they say are commonly ordered but not always necessary and could cause harm as part of the Choosing Wisely campaign.” Stay tuned.

Athena Healthcare released its annual physician sentiment index. The long and short of it is that physicians are not happy campers.

Another unhappy camper is Affinity Health Plan, Inc. which just agreed to pay the federal government $1,215,780 million to settle a HIPAA privacy and security rule complaint. The alleged violation arose when Affinity returned leased photocopiers to the lessor without wiping the hard drives included in photocopiers these days. The lessor then passed along one of the photocopiers to CBS News and the rest is history. According to the HHS press release,

Affinity estimated that up to 344,579 individuals may have been affected by this breach. OCR’s investigation indicated that Affinity impermissibly disclosed the protected health information of these affected individuals when it returned multiple photocopiers to leasing agents without erasing the data contained on the copier hard drives.  In addition, the investigation revealed that Affinity failed to incorporate the electronic protected health information (ePHI) stored on photocopier hard drives in its analysis of risks and vulnerabilities as required by the Security Rule, and failed to implement policies and procedures when returning the photocopiers to its leasing agents. 

Fool me once, etc.

Congress is out until after Labor Day. Before heading out of town, the House Energy and Commerce Committee approved 51-0 a legislative fix to the broken sustainable rate of growth formula that sets Medicare Part B reimbursements. The AMA News features a full report.

The AMA News also offers a tool to allow doctors and health plans know which screenings should be offered with no-cost sharing in 2014. The list can be broken down by gender and age group. (Technically the ACA only applies this requirement to non-grandfathered plans but OPM has directed all FEHB plans to comply with the requirement.)

AHIP issued a report on health plan efforts to improve health literacy. Illustrating the great ying and yang of life, Kaiser Health News reports on health insurer use of Twitter to improve customer service.

“Social media gives us a tremendous opportunity to learn what the community needs,” said Carissa O’Brien, social media director at Aetna.

She works with six people to address the approximately 250 people who seek help through social media with claims or other services each month. O’Brien said the team tries to respond within an hour to users, who tend to be between 35 and 54 years old.

The FEHBlog particularly enjoys following Twitter while watching sporting events on television.

Finally, in a bit of good litigation news, the American Lawyer reports that  a federal district court in Maryland ruled against the Equal Employment Opportunity Commission in a case challenging Freeman Inc’s use of credit history and criminal background checks.

In his opinion Friday, Judge Roger Titus wrote that while “some specific uses of criminal and credit background checks may be discriminatory and violate the provision of Title VII, the EEOC bears the burden of applying reliable expert testimony and statistical analysis that demonstrates disparate impact stemming from a specific employment practice before such a violation can be found.”

The judge was derisive of the EEOC’s evidence. This is an important decision because the HIPAA Security Rule encourages, if not requires, the use of such background checks on health plan employees who have access to protected health information.

The FEHBlog has always been intrigued by the PBM business. The Motley Fool has a video about a PBM newcomer Catamaran. The teaser explains that

Catamaran (NASDAQ: CTRX  )  is becoming a serious contender in the pharmacy benefits management, or PBM, industry.  The company reported quarterly results last week that crushed expectations.  Revenue was up 101%, and net income shot up 132% in year-over-year comparisons.  

Of course there has been an explosion of smartphone and tablet applications. The Privacy Rights Clearinghouse warns that

After studying 43 popular health and fitness apps (both free and paid) from both a consumer and technical perspective, it is clear that there are considerable privacy risks for users – and that the privacy policies for those apps that have policies do not describe those risks. However, these apps appeal to a wide range of consumers because they can be beneficial, convenient, and are often free to use.
Consumers should not assume any of their data is private in the mobile app environment—even health data that they consider sensitive.

(The Clearinghouse does not identify the apps that it reviewed.)  The AMA News warns doctors not to recommend apps unless they confirm that the app offers adequate privacy protections. That’s good advice for insurers too.

Finally the AMA News reports on a new trend of doctors using physicians assistants to conduct scripted telehealth calls to certain post-op patients. “Consultants said that although most insurers don’t pay doctors for phone calls, new payment models that reward physicians based on quality and efficiency of care might provide a boost to the idea of phone-based follow-ups.”