Congress remains in session this coming week according to the Hill. “[A]t some point in the week, the Senate will swear in a new senator: current New Jersey Attorney General Jeff Chiesa (R), who will temporarily fill the seat of Sen. Frank Lautenberg (D)” until a special election in October.  The Hill also reports that experts believe that the sequester will survive into the next federal fiscal year.  The Federal Times reports that OPM is planning on offering about 300 employees buyout and early retirements.

Monday mornings in June are a special time for the FEHBlog because it’s fun to watch the live blog on the Scotusblog report the new U.S. Supreme Court opinions. Last week the FEHBlog was pleasantly surprised by a Supreme Court decision in a state law preemption case involving the Federal Employees Life Insurance Act (FEGLIA), Hillman v. Maretta. The Supreme Court still has not released its decision in the Defense of Marriage Act constitutionality case which could impact the FEHBA.

Health Data Management reports that the Equal Employment Opportunity Commission has filed its first lawsuits to enforce the 2008 genetic information anti-discrimination act and has settled one of the already. This law prohibits discrimination in health plan coverage and employment based on genetic information such as family medical histories and genetic tests. These lawsuits were brought against employers.  

The Federal Times reports that yesterday OPM issued a proposed rule implementing a phased retirement program recently authorized by Congress. In phased retirement, the phased annuitant would continue to work 50% of the time and keep on earning proportionate pension credits. The article explains that

Phased retirees would still get health benefits under the Federal
Employee Health Benefits Program, and would still be enrolled in the
Federal Employees’ Group Life Insurance program, and would be considered
as full-time employees. That means that employees’ agencies would pay
the full-time share of their FEHBP premiums, and FEGLI benefit coverage
amounts would be based on the full-time salary for their positions.

This means that if the phased annuitant is over age 65, the FEHB plan coverage will remain primary to Medicare coverage until the phased annuitant decides to fully retire. The public comment deadline is August 5, 2013.

OPM has been encouraging plans to adopt patient centered medical homes. Carefirst announced today that

In the second-year (2012) of one of the nation’s earliest, large-scale Patient-Centered Medical Home (PCMH) programs, health care costs for 1 million CareFirst BlueCross BlueShield (CareFirst) members covered by the effort were $98 million less than the company projected. The results represent a savings of 2.7 percent on the total projected 2012 health care costs for PCMH-covered members and improve upon the 1.5 percent savings against projected costs registered by the program in 2011.

Mazaal tov.  On a related note, the benefits consulting firm Aon Hewitt released the results of an employer survey today finding that

Thirty-one percent of employers said they decrease or increase health care vendor compensation based on specific performance targets, and another 44 percent are considering doing so in the next three-to-five years. Additionally, while just 14 percent of employers currently use integrated delivery models, including patient-centered medical homes, to improve primary care effectiveness, another 61 percent plan to do so in the next few years.

Finally, in a long awaited development, the Internal Revenue Service has released a version of the Form 720 that health plans and health insurers can use to pay the PCORI fee. Here is a link to the Form and to the related Instructions. The payment date for calendar year plans is July 31. The fee in 2012 was $1 per covered bellybutton, and it’s $2 this year.

Congress returns from its district work week following Memorial Day. The Hill updates us on anticipated activities there. Sooner or later the Senate will consider the President’s nomination of Katherine Archuleta to be OPM Director. Federal News Radio reports on what can Ms. Archuleta do for federal employees? The House Federal Workforce subcommittee is holding a hearing on Wednesday at 10 am on the topic — OPM’s Revolving Fund — A Cycle of Waste?

The New York Times had a front page article today on the high cost of colonoscopies. The article which spanned two full pages inside the A section bemoans the fact that people undergo colonoscopies when there are less expensive procedures readily available. That train however has left the station because the Affordable Care Act requires health plans to cover routine colonoscopies (in-network) with no enrollee cost sharing. See ACA FAQ XII.  Indeed, the article quotes a surprised patient as follows:

Although her insurer covered the procedure and she paid nothing, her health care costs still bite: Her premium payments jumped 10 percent last year, and rising co-payments and deductibles are straining the finances of her middle-class family, with its mission-style house in the suburbs and two S.U.V.’s parked outside. “You keep thinking it’s free,” she said. “We call it free, but of course it’s not.

The article quotes a researcher

While several cheaper and less invasive tests to screen for colon cancer are recommended as equally effective by the federal government’s expert panel on preventive care — and are commonly used in other countries — colonoscopy has become the go-to procedure in the United States. “We’ve defaulted to by far the most expensive option, without much if any data to support it,” said Dr. H. Gilbert Welch, a professor of medicine at the Dartmouth Institute for Health Policy and Clinical Practice.

Can the genie be put back in the bottle? Unlikely. The article accurately notes that

[T]he United States health care industry is nimble at protecting profits. When Aetna tried in 2007 to disallow payment for anesthesiologists delivering propofol during colonoscopies, the insurer backed down after a barrage of attacks from anesthesiologists and endoscopy groups. 

Indeed at the time that the ACA was enacted, a federal panel of medical experts sought to pull back on routine mammograms and Congress overturned their decision.  This is the first of a series of New York Times articles basically urging regulated healthcare pricing for everyone.

Govexec.com updates us on the Postal Service’s efforts to pull out of the FEHBP.  Most interestingly, the article reports that “U.S. Comptroller General Gene Dodaro told a Senate committee in February the Government Accountability Office would issue a report on the effects of USPS withdrawing from FEHBP — both on postal workers and the rest of enrollees — in July.”

The ACA regulators today released the final employee wellness program rules with little change from the proposed rule according to this Hill article and the FEHBlog’s quick review.  This rule allows employers to discount premiums by up to 30%  to incent employees to engage in healthy behaviors (50% for tobacco cessation). The rule concentrates on providing a level playing field for all employees in order to encourage participation in these programs. OPM’s budget proposal calls for a change to the FEHB Act in order to implement such premium discount programs in the FEHBP.

The HHS Office for Civil Rights and the National Institute of Standards and Technology recently held its annual conference on HIPAA Security Rule implementation. The presentations made at that conference are available here.

Congress is not in session this week.  Following up on last week’s post, the Washington Post reports that President Obama has nominated “Katherine Archuleta, a top official in his 2012 campaign, to head the Office of Personnel Management.”

The AMA News reports on how actress Angelina Jolie’s disclosure of her preventive double mastectomy has driven patient interest in a genetic mutation test called BRCA. The article explains that

More than 90% of women with family histories not linked to increased risk of the genetic mutations will not benefit from genetic counseling or testing, according to the U.S. Preventive Services Task Force. Although the testing is not physically burdensome, for average-risk women, it often yields ambiguous results that can heighten their anxiety.

“At this point, scientific evidence only shows that BRCA1 and BRCA2 testing is beneficial for women who have reviewed their family history of breast or ovarian cancer with a primary care professional and discussed the pros and cons of the screening test with a trained genetic counselor,” task force chair Virginia Moyer, MD, MPH, said in April before the Jolie news broke.

The article also notes that the test currently costs $3000 because the originator patented the test. A challenge to the patent is pending before the U.S. Supreme Court and a decision is expected in June. CNN reviews  this and the other big cases pending a Supreme Court decision next month here. The AMA News article indicates that if the Supreme Court rules against the patent, the charge for the test could drop to $200.

OPM is asking FEHB plans to update their bariatric / obesity treatment surgery coverage for 2014. For that reason, the FEHBlog’s attention was drawn to this Kaiser Health News article reporting that several states, including Alabama, Louisiana, Texas, Arkansas, and Mississippi, will not consider bariatric surgery to be an essential health benefit that plans in the individuals and small business markets must cover in 2014. This policy may not be as short-sighted as Kaiser Health News suggests because a recent study in the AMA Journal found that

“[O]verall health care resource use among obese individuals undergoing bariatric surgery is relatively stable during the six years following surgery. When these individuals’ health care costs are compared with those of a matched comparison group, total costs are significantly greater in the surgical cohort in the second and third years following surgery, but overall costs of those undergoing surgery are not lower than those of the matched comparison group during follow-up years four through six,” the authors note.

The study results indicate that total costs were greater in the bariatric surgery group during the second and third years following surgery but were similar in the later years. But the bariatric group’s prescription and office visit costs were lower and their inpatient costs higher. The study also suggests that those undergoing laparoscopic surgery had lower costs in the first few years after surgery, but those differences did not last.

“Bariatric surgery does not reduce overall health care costs in the long term. Also, there is no evidence that any one type of surgery is more likely to reduce long-term health care costs. To assess the value of bariatric surgery, future studies should focus on the potential benefit of improved health and well-being of persons undergoing the procedure rather than on cost savings,”

The FEHBlog is not questioning OPM’s letter which of course, considers bariatric surgery to be a last resort treatment. The FEHBlog is pointing out that public health cost savings are not self-evident.

To wit, Modern Healthcare reports that

Engaging patients in their care is often touted as a surefire way to control costs and reduce utilization of services, but new research calls that assumption into question. Armed with eight years of survey data from more than 20,000 patients, researchers from the University of Chicago argue that shared decision-making may actually result in increased inpatient spending and longer lengths of stay.

While engaging patients can improve health care quality and patient satisfaction,  that qualitative improvement does not necessarily translate quantitatively into lower costs.

The Washington Post meanwhile reports this weekend that the State of Maryland plans to turn the screws on hospitals by tying total hospital spending to long term economic growth in the state. Maryland is unique among the fifty states in that Medicare allows the State to set hospital prices for individual procedures. The new aggregate caps will be placed on top of the individual caps. “State officials hope to get approval from federal officials over the next several months so they can put the new system in place by January.”  Hospitals are not happy with the proposal, and the FEHBlog is not a fan of government price fixing.

Just for fun, the FEHBlog calls attention to this LA Times article about premiums in the California health insurance exchange / marketplace next year and an AHIP analysis of that article.

ABC News and the Washington Post are reporting this morning that the President later today maynominate Katherine Archulete to succeed John Berry as director of the Office of Personnel Management which hold responsibility for managing the FEHBP.  Ms. Archuleta previously served as chief of staff to former Secretary of Labor Hilda Solis and she was national political director for the President’s re-election campaign last year according to those reports. The nomination requires Senate confirmation.

HHS announced today that “more than half of all doctors and other eligible providers have received Medicare or Medicaid incentive payments for adopting or meaningfully using electronic health records (EHRs).” Any why not as the federal government has shelled out $6 billion in this effort. Meanwhile, as a loyal reader of the AMA News, the FEHBlog is aware that doctors are not altogether happy with the situation. A Modern Healthcare article adds that

Last month, six Republican U.S. senators issued a white paper calling for a reboot of the federal efforts. The senators criticized the program as lacking a clear path toward interoperability, and they cited earlier concerns raised by the Justice Department that health information technology systems may facilitate billing fraud. They also cited an HHS inspector general’s report criticizing the CMS for a general lack of oversight of the EHR incentive payment program. More recently, in response to the senators’ call for comments, several healthcare organizations praised the federal program for boosting EHR adoption, while also noting the need for more standardization and interoperability. 

The AMA News also reports a “seismic shift” in hospital system revenues. Primary care providers rather than specialists are generating more revenue for hospital systems due to the development of accountable care organizations, health care system employment of physicians, and other ACA initiatives like “free” in-network preventive care.

In the category of specialists, noninvasive cardiology, invasive cardiology, gastroenterology, general surgery, neurology, neurosurgery, ophthalmology and pulmonology showed decreases from the 2010 survey, while hematology-oncology, nephrology, obstetrics-gynecology, orthopedic surgery, psychiatry and urology went up. Otolaryngology was added to the survey for the first time in 2013.

A few specialties had notable declines from 2010 to 2013. Ophthalmology fell from $1.7 million to $725,000. Neurology dropped from $940,000 to less than $700,000. Neurosurgery declined from $2.8 million to $1.7 million.

The New York Times reports that the Obama Administration is trying to get the cash strapped pre-existing condition plan across the December 31, 2013, finish line by issuing an interim final rule that caps provider reimbursements at Medicare rates and prohibits providers from balance billing patients enrolled in this ACA initiative.

The administration had predicted that up to 400,000 people would enroll in the program, created by the 2010 health care law. In fact, about 135,000 have enrolled, but the cost of their claims has far exceeded White House estimates, exhausting most of the $5 billion provided by Congress.

At the end of next week, FEHB plan carriers will be submitting their 2014 benefit and rate proposals to OPM. Business Insurance reports that “The average increase in medical costs for families enrolled in employer-sponsored preferred provider organizations was just 6.3% in 2012, according to a report that Seattle-based Milliman Inc. released Wednesday ”  Of course, FEHB plans have been able to hold their rate increases on average well below this benchmark.  According to the report highlights,

• Is this pattern of lower rates of increase over the past four years a sign that America is “bending the cost curve?” It is difficult to pinpoint a single cause of the slowing rates of increase, as a number of factors may be influencing trends. Possible explanations include the economy, provider integration, and a shortage of new “blockbuster” drugs coming online.
• We expect that the emerging reforms required by the Patient Protection and Affordable Care Act (ACA) will have little impact on the cost of care for our family of four in 2013 because this family tends to be insured through a large group health plan.

Congress is in session this week in the run up to the end of the three day weekend drought which runs from President’s Day in mid-February to Memorial Day at the end of May. The Hill’s Floor Action Blog as always provides a look at the week ahead. The Hill also reports that the federal debt ceiling debate will resume in October or November when the Government’s extraordinary measures lost their efficacy. In all likelihood that debate will get wrapped in the federal budget debate that will take place in September after the August recess.

The big excitement of the coming week is the release of the psychiatrist’s bible, the Diagnostic and Statistical Manual, 5th edition or DSM 5. (The shrinks have dropped their customary use of Roman numerals to identify DSM editions.) The FEHBlog read two interesting stories about the DSM in yesterday’s Wall Street Journal (the best newspaper of the week). CBS News summarizes the controversy here. It doesn’t matter that much to health plans which use the ICD-9 for diagnostic coding purposes under HIPAA.

Standard and Poors released its March 2013 health care cost indices last week.

Data released today by S&P Dow Jones Indices for the S&P Healthcare Economic Composite Index indicates that the average per capita cost of healthcare services covered by commercial insurance and Medicare programs increased by 3.02% over the 12-months ending March 2013, decelerating from the +3.11% annual growth rate recorded in February. It posted the lowest rate of growth since January 2005.

Seven of the nine S&P Healthcare Economic Indices showed slower annual growth rates for March 2013 compared to February 2013. Annual growth rates for five of the healthcare indices hit their historic lows in March. As measured by the S&P Healthcare Economic Commercial Index, healthcare costs covered by commercial insurance plans rose by 4.46% in March, down from +4.63% reported for February. The Commercial Index rate hit its historic low in March. Annual growth rates in Medicare costs increased by 0.82%, according to the S&P Healthcare Economic Medicare Index, up from +0.78% recorded last month.

Cost curve up but not as fast as before.  The AP reports a similar outcome in a Fidelity Investments survey of retiree health care costs.

A 65-year-old couple retiring this year would need $220,000 on average to cover medical expenses, an 8 percent decrease from last year’s estimate of $240,000. The study assumes a life expectancy of 85 for women and 82 for men.  The projection assumes that a 65-year-old couple retires this year with Medicare coverage and no additional coverage from former employers.

Federal employees can thank their lucky stars that FEHBP coverage continues into their retirement with the full government contribution as long as they have five years of FEHBP coverage immediately preceding retirement.

In other ACA news, HHS announced that it will award $1 billion in health innovation awards “to provide better health care and lower costs.” The FEHBlog is not quite sure that throwing money at a problem has a good track record as a solution.

Speaking of throwing money at a problem,  Becker’s Spine Review (what a great name!) reports that 71% of U.S. physicians think that health information technology use will raise costs according to a Deloitte survey available here.

But there is good news.  Key survey findings include (according to the Becker’s article):

•    Seventy-five percent of all physicians said clinical capabilities are a major positive reason to collaborate with hospitals.
•    Seventy-three percent of all physicians believe that health IT will improve the quality of care provided in the longer term.
•    Only 31 percent of solo practitioners have an electronic health record system that meets meaningful use stage 1 requirements, compared with 82 percent of larger practices.
•    Overall, 63 percent of physicians are satisfied with their EHRs.
•    Seventy-four percent strongly agreed that faster and more accurate billing for services is the greatest benefit of EHRs.
•    Seventy-two percent of physicians in practices that do not have EHRs meeting meaningful use stage 1 requirements said the upfront financial investment is the greatest barrier to EHR adoption. 

Finally, and also on the innovation front (or perhaps more accurately old practices become new), the Philadelphia Inquirer reports a growing incidence of group medical appointments with primacy care practices for issues such as obesity:

The American Academy of Family Physicians found that 12.7 percent of family physicians held group visits in 2010, up from 5.7 percent in 2005. Some experts think that group appointments could accelerate, and help ease the doctor shortage expected as more people gain health insurance starting early next year under the Affordable Care Act. The idea behind group appointments is to give patients the tools to become their own advocates and full-fledged partners with doctors. The groups also enable physicians to treat more patients, see them more often, and practice a more personal and rewarding style of medicine.
  

This week’s AMA News reports that

HealthPocket, a website that ranks and compares health plans, asked 713 consumers if they would be willing to change physicians if it meant saving money on insurance premiums. Respondents also were asked how much money they would need to save annually to make that switch. Thirty-four percent thought keeping down out-of-pocket insurance costs was more important than retaining their doctors.

In addition, the savings wouldn’t have to be that significant — more than half of those willing to make a switch “would do so for the lowest savings amount presented by the survey, $500 to $1,000 annually,” according to a summary of the findings. This compares to the 7.5% who would change doctors only if they saved $3,000 or more per year.

Fascinating. Here’s a link to the HealthPocket survey.

Health Data Management reports that several large health insurers are requiring their business associates to implement the HITRUST Common Security Framework.  Standardization makes sense.

Fierce Healthcare reports that “A new survey from the American Hospital Association finds that most hospitals are implementing team-based care–nearly 75 percent, with 62 percent training to do so.” That’s good news.

The benefits consulting firm Towers Watson wrote about a May 3 Internal Revenue Service proposed rule that provides more guidance about the ACA’s requirement that employer sponsored plans offer “minimum value” in 2014.  The FEHBlog is willing to bet the ranch that FEHB plans meet this standard which basically requires that the enrollee cost sharing (deductibles, co-payments, coinsurance but not enrollee contributions) does not exceed 40% of standardized plan costs.  Woo boy, is the ACA a complicated law.