FierceGovernment.com reports that the federal government shed 75,000 jobs in 2013 according to a Bureau of Labor Statistics report. Not all of these positions were FEHBP eligible. In that regard, Federal News Radio reports that OPM is laying off more than 300 employees from its Human Resources Solution office.

Kaiser Health News discusses how the Affordable Care Act’s preventive services mandate can be confusing to plan members. The fact of the matter is that it’s confusing for everyone because the nature of the mandate which relies on expert medical panels like the U.S. Preventive Services Task Force, requires HHS to interpret the medical expert’s positions, and HHS tends to take an expansive view of the required coverage. And it remains controversial whether or not all of these preventive services actually save health care dollars from a macro-standpoint as this Reuters article explains.

A 2010 study in the journal Health Affairs, for instance, calculated that if 90 percent of the U.S. population used proven preventive services, more than do now, it would save only 0.2 percent of healthcare spending.
Some disease-prevention programs do produce net savings. Childhood immunizations, and probably some adult immunizations (such as for pneumonia and the flu), are cost-saving, found a 2009 analysis for the Robert Wood Johnson Foundation. The vaccines are cheap, and large swaths of the population are vulnerable to the diseases they prevent. The cost of providing them to everyone is less than that of treating the illnesses they prevent.
Counseling adults about using baby aspirin to prevent cardiovascular disease also produces net savings. The counseling is inexpensive, the aspirin even cheaper and the costs of heart disease, which strikes one in three U.S. adults, are enormous. Screening pregnant women for HIV produces net savings, too.
Those, however, are exceptions.

But it’s the law.

The Drug Channels Institute is preparing to release its 2013-14 Economic Report on Retail, Mail, and Specialty Pharmacies. Here are some highlights:

• The top five dispensing pharmacies—CVS Caremark, Walgreens, Express
  Scripts, Rite Aid, and Walmart—accounted for about 65% of U.S.
  prescription dispensing revenues in 2013.

• Market share concentration in 2013 was slightly greater than that of 2012.

• We project total 2013 retail, mail, and specialty pharmacy revenues of $287.0 billion, up 1.6% from 2012.

Congress returns to work on Tuesday following the MLK holiday tomorrow. On Thursday, the Senate also approved the FY 2014 omnibus appropriations bill (H.R. 3547). The President has said that he will sign the bill into law. Federal News Radio offers a helpful chart showing how the bill impacts various federal departments and agencies.

The next checkpoint is the debt ceiling increase that will have to occur late next month according to the Treasury Department. The current debt ceiling suspension expires on February 7.  Politico reports however that the Senate Majority Leader thinks that a debt ceiling increase will not be needed until the Spring. In any event, all signs point to peace on the Potomac. No government shutdowns this year.

The lead article in the New York Times concerns how medical specialists are soaking the populace. The article focuses on the pecuniary benefits of dermatology.

[M]inor procedures typically offer the best return on investment: A cardiac surgeon can perform only a couple of bypass operations a day, but other specialists can perform a dozen procedures in that time span. That math explains why the incomes of dermatologists, gastroenterologists and oncologists rose 50 percent or more between 1995 and 2012, even when adjusted for inflation, while those for primary care physicians rose only 10 percent and lag far behind, since insurers pay far less for traditional doctoring tasks like listening for a heart murmur or prescribing the right antibiotic.

Of course, it’s the insurers’ fault.

Finally, one of the more onerous Affordable Care Act provisions is the complicated IRC 6055/6056 reporting that caused the IRS to delay the employer shared responsibility mandate for one year. The 6055 reports must be submitted by health plans, including FEHB plans, to document enrollee and dependent compliance with the individual shared responsibility mandate. The 6056 must be submitted by large employers to document their compliance with the employer shared responsibility mandate. This helpful report from Buck Consultants discusses the public hearing that the IRS held on these new reporting requirements in November 2013.

Following up on the weekend update post on personalized medicine, the Wall Street Journal reported yesterday on the useful expansion of personalized medicine from breast cancer to prostate cancer  .

Researchers say, for instance, that several new genomic prostate-cancer tests can help separate high-risk tumors from those at low or intermediate risk, offering information to doctors and patients to guide treatment choices.
About 240,000 men in the U.S. are diagnosed with prostate cancer each year. Most cases are low-risk forms of the disease that will have little effect on their lives or longevity. In these cases, a big concern is that overtreating the cancer puts these men at unnecessary risk for impotence, incontinence and other complications.
About 20% of diagnosed men are considered at high risk for having their cancers spread beyond the prostate gland based on a measure called the Gleason score and other factors. For some men with an aggressive form of the disease, the 10-year-survival rate is well below 50%. “We may not be treating them aggressively enough,” says William Polkinghorn, a radiation oncologist at Memorial Sloan-Kettering, in New York.

Keep hope alive.

In another interesting development here’s a link to a press release about how a drug manufacturer Vivus is teaming up with Aetna to offer its new weight loss drug Qsymia as part of Aetna’s lifestyle coaching programs. “The Aetna pilot program is currently being offered to self-insured plan sponsors, and includes outreach to appropriate members and health care providers regarding covered options. Participants in the pilot will also receive free membership to Lose It!, a mobile app provided through Aetna Navigator® and CarePass®, to support weight loss and positive lifestyle changes.”

Finally, CIO magazine reports on how data analytics can help the accountable care organization model succeed in contrast to capitated rates lead to the failure of the gatekeeper HMO model in the 1990s and FierceHealthcare reports on the demonstrated benefits of the patient centered medical homes.

As noted in Friday’s post, Congress will be focused this week on passing an omnibus appropriations bill as required by the current continuing resolution (H. J. Res. 59). The Hill’s Floor Action blog elaborates here.

The FEHBlog was not terribly surprised to learn from EHR Intelligenence that that the American Medical Association has not give up on its belated fight against the implementation of the ICD-10 code set scheduled for October 1, 2014, under HIPAA.  HIPAA was enacted to facilitate electronic claims transactions and the current ICD-9 does the job well. However, this is what you get when technology standards are set in law. The AMA likely will be able to convince the Centers for Medicare and Medicaid Services to continue to accept ICD-9 coded claims for Medicare payment for a few months after this compliance date but that’s the most the FEHBlog expects will come of this campaign.

Speaking of technology, the FEHBlog ran across this genomeweb.com article about developments in next generation / lower cost DNA sequencing in 2013.  This technology permits rapid genomic comparisons for the purpose of identifying genetic defects that may cause cancer, for example. It turns out that the Food and Drug Administration approved the use of Illumina’s next generation sequencing technology last year. Illumina has licensed the technology to the big time laboratory services vendor Quest Diagnostics. The genomeweb.com article explains the Blue Cross, Aetna, and United Healthcare have established policies for covering the technology in certain circumstance.

House Appropriations Committee Chairman Harold Rogers says bipartisan negotiations on the broader spending bill will carry into the weekend in hopes that an agreement can be sealed by Sunday or Monday. The secretive talks have yielded agreement on at least eight of the omnibus bill’s 12 titles. But issues like funding implementation of the new health care law remain unresolved. 

The House leadership is proposing a three day extension of the continuing resolution in order to allow for the conclusion of negotiations and the application of regular order to the resulting omnibus appropriations bill.

As you also know, we are on a path that leads to Super Bowl XLVIII next month. Yesterday, the Affordable Care Act regulators came out with ACA Frequently Asked Questions XVIII.  What is the likelihood that the ACA regulators will reach FAQ L at the same time the NFL play Super Bowl L in 2016?

Enough musing though, the FAQs announce a new preventive care mandate that will apply to the FEHBP for 2015. The U.S. Preventive Services Task Force B level recommendation provides that “For women who are at increased risk for breast cancer and at low risk for adverse medication effects, clinicians should offer to prescribe risk-reducing medications, such as tamoxifen or raloxifene.” The ACA regulators make it clear that health plans must cover the prescription drugs not just the physician counselling with no member cost sharing in network subject to reasonable medical management practices. (The rule applies only to non-grandfathered plans which at this point are few and far between — the FEHBlog places this qualification in parentheses because OPM sensibly disregards this fine point for FEHBP purposes.)

The FAQs also allow plans to break up the statutory in-network out of pocket maximum applicable to FEHB and other group health plans (in 2014 $6,350 for self-only coverage and $12,700 for coverage other than self-only coverage) among different benefit categories as long as medical/surgical and mental health / substance abuse conditions fall under the same category. For 2014 only, plans can impose separate $6,350 / $12,700 limits on separately administered benefits like prescription drugs. But that administrative waiver is gone for 2015.

The FAQ is 10 pages long and full of good stuff.

Finally, for thirty years, CMS has exempted the State of Maryland from Medicare’s prospective payment system. Maryland has used its own system to regulate hospital prices, and Kaiser Health News reports that CMS has blessed a “radical” change to Maryland’s system.    

After months of negotiations with state and the federal officials, the hospitals also agreed that their revenue from all sources — private insurance, government and employers — will rise no faster than growth in the overall state economy.
Maryland regulators with the power to cap spending will enforce the agreement, which analysts say could serve as a model for other states and eventually the nation. Enforcement muscle gives Maryland’s deal a better chance to succeed than a similar measure passed last year in Massachusetts, analysts said.
“Maryland is actually doing a leapfrog over Massachusetts,” said John McDonough, a Harvard University professor and former state legislator who helped design Massachusetts’ 2006 insurance-coverage expansion. “It really establishes a new frontier in terms of controlling growth.”  * * * Specifically, [starting in 2014] statewide hospital revenue for inpatient as well as outpatient care will rise no more than 3.58 percent annually — the state’s rate of per-capita economic growth since 2002.

Time will tell. Price controls do not have a great history of success. The article concludes by musing that Maryland hospitals took this deal because insurers outside Maryland are “starting to pit hospitals against each other, presenting a risk of a fierce price war like airlines.” Now, that’s more like it.

The current continuing resolution funding the federal government’s operations expires a week from today. The AP (via Federal New Radio) reports that Congress is on track to timely pass the necessary appropriations bills under the framework created by last month’s budget deal. Another deadlock could occur over the debt ceiling. The continuing resolution suspended the debt ceiling until February 7, 2014, and the Treasury Secretary has predicted that extraordinary measures will only be effective for another month due to the need to pay tax refunds. Fierce Government predicts, and the FEHBlog agrees, that Congress will settle this issue too without another partial federal government shutdown.

The FEHBlog has clients (outside the FEHBP) that offer employee assistance programs. The federal government also offers EAPs to their employees. OPM explains that

An EAP is a voluntary, work-based program that offers free and confidential assessments, short-term counseling, referrals, and follow-up services to employees who have personal and/or work-related problems. EAPs address a broad and complex body of issues affecting mental and emotional well-being, such as alcohol and other substance abuse, stress, grief, family problems, and psychological disorders. EAP counselors also work in a consultative role with managers and supervisors to address employee and organizational challenges and needs. Many EAPs are active in helping organizations prevent and cope with workplace violence, trauma, and other emergency response situations.

In the FEHBlog’s experience, employees don’t tend to use EAPs. Business Insurance has an interesting article on why EAPs are underutilized, e.g.  privacy concerns, failure to communicate the broad range of EAP services, etc. “If you build it they will come” proved to be true in the Field of Dreams movie, but it doesn’t always work out in real life.  

The House and Senate return for the second session of the current Congress this week according to the Hill’ Floor Action blog. The January 15 deadline for finalizing appropriations bills is about ten days away. Congress is expected to hit this deadline thereby avoiding another partial government shutdown.

Speaking of Congress, the Hill also reports that Sen. Ron Johnson (R WI) plans to announce today a lawsuit challenging the legality of OPM’s decision to fund exchange plans for members of Congress and their official staffs through the FEHBP.

Federal News Radio reports on two recently proposed OPM regulations that would align the Federal Employees Dental and Vision Program enrollment change rules with the FEHBP’s and restore a Federal Employees Group Life Insurance Program enrollment opportunity that was deleted in 2010 — the ability to elect FEGLI Options B and C upon reaching age 65.

Finally, Kaiser Health News reports on CMS’s release of all cause readmission rates for U.S. hospitals. Since 2008, CMS has been releasing readmission rate data on a three common diagnoses or causes — heart failure, heart attack, and pneumonia.  The article explains that

The all-cause readmission rates are particularly significant because the
Medicare Payment Advisory Commission (MedPAC), which advises Congress, has encouraged lawmakers
to use this measure when determining financial penalties for hospitals
in the Hospital Readmission Reduction Program. Medicare is currently fining 2,225 hospitals for excess readmissions for heart failure, heart attack and pneumonia patients. 

OPM also has expressed concern about the need to reduce hospital readmissions in the FEHBP.   The hsopital industry argues that the readmission rates are not adequately nuanced, and a quick review of the hospitals with relatively high readmission rates indicates that many well known, big city hospitals serving low income populations are listed there.

HIPAA was enacted in 1996 to stimulate the use of electronic health plan claims transactions. That’s a worthy objective but unfortunately Congress chose to the path of bogging down technology by embedding technical standards in law. Technology moves faster than the law. Plus the banking industry did not need the government to mandate electronic banking standards. The banking industry developed those standards because there is a financial incentive in lowering administrative costs.

Almost twenty years after HIPAA was enacted, HHS which administers the law still has not fully implemented all of the standards, and Congress put the kibosh on implementing a key requirement — the patient identifier.

Nevertheless, in the Affordable Care Act, Congress and the President doubled down on HIPAA by hijacking an industry initiative to create common operating rules for the HIPAA transactions. The ACA required HHS to promulgate those operating rules as federal regulations. Mission accomplished there.

The ACA also required HHS for 2013 to issue regulations requiring health plans to certify their compliance with the HIPAA standards subject to a significant civil monetary penalty for non-compliance.  HHS issued a proposed rule implementing this requirement yesterday.  Fierce Health Payer reports on the proposed rule here. Interestingly, the proposed rule requires health plans to obtain compliance certification from the industry resource CAQH CORE that was developing the standards that Congress hijacked (that’s not the only alternative). Also the anticipated deadline for the initial certification submission will be the end of 2015. Fierce Health Payer notes that

That will give health plans enough time for planning, evaluating, designing, and internal and external testing. The new date also better aligns with the requirement for CHPs to obtain a unique health plan identifier on or before Nov. 5, 2015, according to HHS.

Of course, the big HIPAA compliance date for this year is October 1, 2014, when the massive ICD-10 code set becomes the standard for all healthcare transactions.

HHS’s Office for Civil Rights is responsible for enforcing the HIPAA Security and Privacy Rules. The FEHBlog has no problem with the government regulating these areas. Fierce Healthcare reports that OCR’s Director Leon Rodriguez (who spoke at the 2013 OPM AHIP FEHBP carrier conference) may be leaving his post to become director of U.S. Citizenship and Immigration Services. The article discusses a contretemps between OCR and the HHS Inspector General over whether OCR is doing an effective enforcement job. In support of OCR, the FEHBlog notes that OCR recently negotiated a $150,000 penalty with a small dermatology practice that was not minding its HIPAA Ps & Qs. These HIPAA penalties for non-compliance with Privacy and Security Rules are no joke. Cybersecurity insurance is a good buy for health plans.

We have reached the end of another year. The FEHB Program has sailed along smoothly with a reasonable premium increase for 2014 and an uneventful open season.

Beginning tomorrow, the children of same sex domestic partners (living in states that don’t recognize same sex marriage) will be eligible for FEHBP coverage as stepchildren under a recent OPM rule.

The biggest FEHBP kerfuffle of the year involved the rocky transfer of member of Congress and their official staffs from the FEHBP to the DC SHOP exchange. (Indeed the kerfuffle gave rise to the FEHBlog being quoted in the New York Times. Unfortunately the FEHBlog’s prediction proved to be wrong.)  The FEHBlog was pleased that in its final rule OPM decided that members of Congress and their official staffs could return to the FEHBP upon retirement (if they are eligible for federal retirement).  This means that Capitol Hill will continue to have a vested interest in the FEHBP.

Going forward, the ACA’s employer shared responsibility mandate will apply to the federal government in 2015. In 2012, OPM promulgated regulations to the extend the FEHBP to seasonal firefighters and national disaster workers. For 2015, OPM will have to issue rules extending FEHBP coverage to all employees who meets the ACA’s 30 hour per week definition of a full time employee. Also for 2015, in accordance with an ACA amendment to the Fair Labor Standards Act, the federal government and all large employers (200 or more employees) will have to enroll new employees into their health benefits program. The ACA is the gift that keeps on giving to lawyers, etc.

Finally, we creep one year closer to the ACA’s Cadillac plan tax which takes effect in 2018. The Cadillac plan tax imposes 40% excise tax on employer sponsored plans (FEHBP and FEDFlex in the federal government) to the extent that the combined premiums exceed a statutory threshold — $10,200 for self only coverage and $27,500 for self and family coverage subject to certain adjustments. This Idaho Business Review article discusses how employers are preparing for this new assessment. The defect in this assessment is that high premiums typically are based on high costs and poor demographics not necessarily generous benefits.

Happy New Year!

Congress remains in recess this week. FEHBP Open Season changes for annuitants take effect on January 1, while those changes for active employees take effect at the beginning of the first pay period in 2014 which according to this GSA calendar is January 13.  According to OPM regulations, if a person who has made an Open Season change is hospitalized on the day that coverage change would take effect, the losing plan (if it is continuing to participate in the FEHBP) will retain responsibility for covering the hospitalization until discharge (or 90 days which is unheard of in this day and age).