Govexec.com offers a column with five reasons to consider changing your FEHB plan in the upcoming Open Season. The article notes that “A statistic that comes up during every health benefits open season is the fact that only about 5 percent of federal employees (and an even lower percentage of retirees) change their plan in the Federal Employees Health Benefits Program each year.” Of course 5% of the total of FEHBP enrollment of roughly 4,000,000 federal and postal employees is around 200,000 changes which is lot of people.

House Oversight & Government Reform Committee Chairman Darrell Issa (R CA) joined by a Democrat Congressman, Willam L. Clay (D Mo.) has introduced a bill (HR 3319) that would allow all Americans to enroll in FEHB plans with eligibility for Affordable Care Act premium subsidies and cost sharing. The FEHBlog does not expect this bill to become law but it’s an interesting concept which has been previously tossed into the ring by now Secretary of State Kerry when he ran for president in 2004 and Senate Homeland Security and Governmental Affairs Committee chairman Tom Carper (D Del) (according to the Federal Times report).

Today, HHS issued another massive ACA rulemaking concerning 2014 benefit parameters. This rulemaking concerns, among other topics, transitional reinsurance fee. This fee will collect $25 billion from insured and self-funded health plans over the period 2014 – 2016. A Democrat proposal in the last round of continuing resolution talks was to delay this fee which is a whopping $63 per belly button for 2014. The latest rule-making includes this fascinating statement — “We also intend to propose in future rulemaking to exempt certain self-insured, self-administered plans from the requirement to make reinsurance contributions for the 2015 and 2016 benefit years.” (p. 24). The fee will drop in those years but it will still be substantial. It is unusual for employers to both self insure and self administer their health plans, however. There are employee organization sponsored FEHB plans that are self insured and self administered. The FEHBlog will keep an eye out for this proposed rule.

The Leapfrog Group came out with its Fall 2013 hospital safety scores yesterday.

 Key Findings:
    Of the 2,539 general hospitals issued a Hospital Safety Score, 813 earned an “A,” 661 earned a “B,” 893 earned a “C,” 150 earned a “D” and 22 earned an “F.”
    On average, there was no improvement in hospitals’ reported performance on the measures included in the score, with the exception of hospital adoption of computerized physician order entry (CPOE). The expansion in adoption of this lifesaving technology suggests that federal policy efforts to improve hospital technology have shown some success.
    While overall hospitals report little improvement in safety, some individual hospitals (3.5 percent) showed dramatic improvements of two or more grade levels.
    The states with the smallest percentage of “A” hospitals include New Hampshire, Arkansas, Nebraska and New Mexico. No hospitals in New Mexico or the District of Columbia received an “A” grade.{FEHBlog note Several well known hospitals like Georgetown, George Washington, Washington Hospital Center, and Children’s Hospital are based here in DC.]
    Maine claimed the number-one spot for the state with the highest percentage of “A” hospitals.
    Kaiser and Sentara [FEHBlog note — a northern and southeastern Virginia chain] were among the hospital systems that achieved straight “A” grades, meaning 100 percent of their hospitals received an “A.”

 The FEHBLog was chagrined to discover that Standard and Poors no longer posts its monthly healthcare cost indices. Instead Standard and Poors now offers  healthcare claims indices on pharmacy, medical and composite bases — both nationally and regionally. The latest monthly changes are of course all up.

The Senate is in recess this week while the House is in session according to the Hill’s Floor Action blog. The FEHBlog can’t understand why Katherine Archuleta’s nomination as OPM Director remains stalled before the Senate. Meanwhile, Elaine Kaplan, whom the Senate has confirmed to be a U.S. Claims Court judges, remains at her post as acting OPM Director. (There currently is no OPM Deputy Director).

The FEHBlog enjoys reading the weekend issue of the Wall Street Journal. He noticed this feature article on the brain. Here’s how it begins:

Who hasn’t heard that people are either left-brained or right-brained—either analytical and logical or artistic and intuitive, based on the relative “strengths” of the brain’s two hemispheres? How often do we hear someone remark about thinking with one side or the other?
A flourishing industry of books, videos and self-help programs has been built on this dichotomy. You can purportedly “diagnose” your brain, “motivate” one or both sides, indulge in “essence therapy” to “restore balance” and much more. Everyone from babies to elders supposedly can benefit. The left brain/right brain difference seems to be a natural law.
Except that it isn’t. The popular left/right story has no solid basis in science. The brain doesn’t work one part at a time, but rather as a single interactive system, with all parts contributing in concert, as neuroscientists have long known. The left brain/right brain story may be the mother of all urban legends: It sounds good and seems to make sense—but just isn’t true.

Thought provoking, no?

The Federal Times reports that the continuing resolution that Congress passed on Wednesdays supports the President’s budget proposal for a 1% across the board raise for federal employees.

Aon Hewitt, the actuarial and benefits consulting firm, released its 2013 survey of health plan costs and found low increases this year with a big jump for 2014 (6 to 7%) — significantly above the average FEHBP increase (3.7%) that OPM announced last month. The Aon Hewitt release also discusses how employers are addressing health plan issues.

Medscape discusses the importance of doctors considering and discussing with patients the cost of outpatient tests before ordering them. The article notes that by just checking a few boxes along with a pap smear the total cost of the test package can skyrocket from under $50 to $1000. Doctors are the front line on controlling healthcare costs.

A Med Xpress article discusses a study on emergency room use which quotes the study’s author, a University of Michigan ER doctor as follows:

“Accessing the ER is a cultural learned behavior partly because the public knows that the ER is always open if they have difficulty accessing care,” [Adrianne Haggins, M.D.] says. “We have to offer them alternatives once they are there, and better understand what factors drive them there. We need to coordinate with other ambulatory settings to help patients find providers and be aware of alternative settings to change patterns of healthcare seeking.”

And, if the goal of reducing emergency visits is a priority, she says, then emergency providers and outpatient providers must work together to coordinate a patient’s care after an emergency visit, including access to specialists when needed.

The health plans can’t do it alone.

The Senate agreement includes no major alterations to the 2010 health-care law. But the deal will include one
minor change sought by Republicans, setting new procedures to verify the
incomes of some people receiving government subsidies for health-insurance
costs. Negotiators rejected a Democratic proposal to delay for one year a fee
of $63 per insured person levied on groups that offer health policies,
including employers, labor unions and insurance carriers—a fee opposed by many
large employers and unions. The agreement does includes backpay for all federal
workers who were furloughed during the government shutdown.

The Journal of Accountancy has more details on the ACA provision in the CR (as it’s a tax law provision).

Keeping going with the good news, the Wall Street Journal reports today that

New results from the Cancer Genome Atlas research project identify a host of genetic mutations that are common among 12 different types of cancer, reflecting the growing understanding that tumors can be defined by their underlying biology rather than their location in the body.

The article explains that

One of the mutations identified in the study, in a gene called BRAF, highlights both the promise and the challenge of finding what role the same mutation may play in different types of tumors.
The BRAF mutation already is implicated in more than half of cases of melanoma; in the new study, it was found in 7% of certain lung cancer tumors, 4% of colon cancer malignancies and in smaller fractions of brain, bladder, head-and-neck, kidney and ovarian cancers.  Roche Holding AG’s drug Zelboraf is approved for melanoma patients with a BRAF mutation, and in small studies it has shown promise among lung-cancer patients with the same mutation. But researchers say other studies indicated the drug used alone has little effect on BRAF-driven colon-cancer tumors.

Last spring, the U.S. Supreme Court invalidated a patent on a test for the BRAC genetic mutation.  Also last Spring, HHS determined that health plans must provide in-network coverage for the test without member cost sharing according to he ACA. Plans, however, may apply medical management techniques to ensure medical necessity for the testing. Bloomberg reported on Tuesday that

Quest Diagnostics Inc. (DGX), the biggest U.S. operator of medical labs, will sell a test for two breast cancer genes starting today [October 15], providing competition for Myriad Genetics Inc. (MYGN) and potentially helping to reduce costs for women fearful they are at risk of the disease.  Quest will sell the most comprehensive version of its test for the BRCA1 and BRCA2 genes for $2,500, said Richard Bender, a consultant for the Madison, New Jersey-based company. The price compares with almost $3,400 that Medicare pays for the most comprehensive version of a test from Myriad. About 85 percent of the Salt Lake City-based company’s $613.2 million in revenue came from BRCA testing in the fiscal year ended June 30. * * * Mutations in the BRCA1 and BRCA2 genes, the most common cause of hereditary breast and ovarian cancer, are present in roughly 1 in 400 women and give women an elevated risk of ovarian cancer as well as a higher breast cancer risk.

The article adds that Myriad is continuing its litigation to challenge competitor’s alleged use of Myriad patents that were not affected by the Supreme Court decision (a complicated legal issue). Quest brought a preemptive declaratory judgment action against Myriad in federal court to challenge this strategy.  

The FEHBlog’s fingers remain crossed as Congress continues to slog its way toward ending the current partial government shutdown and avoiding the impending X date when the government will not be able to fully fund its obligations. The X date is uncharted waters for everyone as the Washington Post explained in an article yesterday.

Sunday’s FEHBlog discussed a New York Times article about the high cost of asthma drugs. The Wall Street Journal is reporting that Sanofi’s steroid based allergy spray Nasacort won FDA approval to be sold over the counter at drug stores. This is a first. The product will be available next spring.

In an interesting ACA related business development, United Healthcare subsidary Optum has entered into a joint venture with the San Francisco based hospital and health care center chain Dignity Health to create a back room registration, pre-authorization, and billing operation / revenue management company according to Modern Healthcare. The new business will include 3,000 employees from Optum and Dignity.

The FEHBlog is keenly interested in bending the health curve down. The FEHBlog has been banking savings from biosimilar drugs. The ACA authorized the FDA to create a regulatory pathway for such drugs. Such a pathway has been approved in the European Common Market for over a decade.  Health Affairs reports however that  it will be a while before the FDA gets it act together.

The Robert Wood Johnson Foundation asked eighteen physicians for their opinion on how to lower the cost curve. Here are the five consensus opinions that RWJF drew from those conversations:

1.Payment models must be evidence-based, physician-endorsed, and thoroughly tested.
 2.Protecting and creating financial incentives is critical to broad physician buy-in.
 3.Meaningful consumer engagement requires better communication and guidance from physicians, more willingness from consumers, and greater investments in prevention.
 4.Improving quality and reducing cost requires a stronger health information technology infrastructure.
 5.Major changes in education and practice are needed to help reduce costs.

Happy Columbus Day Weekend. Senate leaders are continuing discussions aimed at a compromise to end the partial shutdown and avoid a possible default according to the Wall Street Journal and the Washington Post. The FEHBP has been rolling along without interruption during the partial shutdown because the FEHBP is funded through the Employee Health Benefits Fund in the U.S. Treasury. There was precedent for the status quo holding during a government shutdown because the FEHBlog remembers the partial shutdowns in 1995 and 1996.  The default, however, would be unprecedented, and the FEHBlog does not expect it to occur.

It is important to understand that the default will not occur on October 17. The federal government actually reached the debt limit back in May 2013. October 17 is the date that that Treasury expects to exhaust its extraordinary measures, but it is not the default or X date according to MSNBC and the Wall Street Journal’s Numbers Guy. The FEHBlog appreciates that it’s helpful to give Congress a a deadline, like October 17, but as we get closer to the deadline without a clear resolution at hand, it’s fortunate that the default will not occur according to Bipartisan Policy Center estimates until sometime between October 22 and November 1. Stay tuned.

The NY Times has a lengthy front page article today on the high price of asthma drugs. The article appears to the FEHBlog to advocate for wholesale price controls like Britain, Canada, Germany, etc.  (Bloomberg wrote about the fact that last week Maine started to permit consumers to order mail order prescription drugs from Canada which violates the federal Food and Drug Act in the FEHBlog’s understanding.)  The article points out that the drug spiral is attributable to a failure of regulators to coordinate their activities. The article explains that the cost of generic inhaled drugs skyrocketed in recent years because the EPA banned the traditional inhaler propellant. So the drug companies patented new approaches to propelling the drugs and the market contracted and prices shot up. This is not a market problem; it’s a regulatory problem.

The NY Times article also stresses the importance of the cost of drugs to consumers in the determining whether the consumer will take prescription or over the counter drugs.  For example

Juan Carlos Molina, the director of external communication for GlaxoSmithKline, which makes Advair, said in an e-mail that the price of medicines was “closely linked to this country’s model for delivery of care,” which assumes that health insurance will pick up a significant part of the cost. An average co-payment for Advair for commercially insured patients is $30 to $45 a month, he added. 

Modern Healthcare reports about the trend among major insurer to reduce or waive consumer cost sharing from preventive drugs like Lipitor (or its generic equivalent) or lipids.

Aetna ha[s] gone further and reduced or waived cost-sharing for drugs used for secondary prevention, such as statins for patients who already have had a heart attack to reduce the chance of a reoccurrence. 

Other medications for which some insurers have reduced or waived cost-sharing include drugs for preventing or treating high blood pressure, asthma, stroke, diabetes, osteoporosis, pediatric conditions, and maternal and fetal problems.

There are no data on how many insurers have made these policy changes. But the moves are consistent with the U.S. healthcare system’s gradual shift toward a more primary-care and prevention-oriented approach and a greater focus on management of chronic disease.

Well, it looks like it will be a rainy weekend for us here in the Washington DC area. The press is reporting that the President continues to talk with the Republican leaders in Congress about a solution to the partial shutdown and the impending default. Fingers crossed that a resolution will be found this weekend.

The partial shutdown continues. Roll Call reports that the backpay bill for furloughed federal employees has run into a snag at the Senate. Govexec.com reports that many agencies, e.g. State Department, federal courts, are operating on unused fiscal year 2013 appropriations which could run out soon leading to “thousands” of more furloughs.

Here are some interesting developments on the benefit design front:

• Aon Hewitt reports that consumer driven plans continue to grow in popularity among employers. This trend will continue as we inch toward the 2018 date for implementation of the ACA’s Cadillac tax. 
• Aetna released a report on the success of its dental integration program:

The DMI program uses technology to automatically identify members with diabetes, cardiovascular disease, or who are pregnant. Members with those medical conditions who have not recently seen the dentist receive education by mail and phone on the importance of regular dental care. Aetna dental coordinators are available to help DMI members choose a dentist and schedule an appointment. DMI members qualify for enhanced dental benefits such as an extra cleaning and periodontal services covered at 100 percent to help prevent more serious and costly issues. The enhanced dental benefits are not subject to deductible or coinsurance and do not count toward annual plan maximums. There is no added cost to members or plan sponsors for the DMI program.

• Modern Healthcare reports that 

 A group of large employers including retail giants Wal-Mart Stores and Lowe’s Cos. announced they will offer their employees coverage for hip and knee implant procedures with no cost-sharing if they receive the procedures at one of four previously selected hospital systems.

The participating hospitals are Johns Hopkins Bayview Medical Center in Baltimore; Kaiser Permanente’s Orange County-Irvine (Calif.) Medical Center; Mercy Hospital Springfield (Mo.); and Virginia Mason Medical Center in Seattle.

The preferred network is similar in many ways to initiatives developed by Wal-Mart and Lowe’s that encourage employees to visit preferred academic centers like the Cleveland Clinic and Mayo Clinic for heart and spine surgeries.

In the same vein, Kaiser Health News reports on steps that health systems are taking to better manage high utilizers.

The Defense Department is calling back most of its furloughed workers based on a law that Congress passed last Monday. According to a Federal News Radio report,

The administration’s interpretation of the law will allow “most” of DoD’s 350,000 currently-furloughed civilians to return to work. Officials were not able to give a precise count of how many would be left sidelined, but Robert Hale, the Pentagon’s comptroller told reporters Saturday evening that he believed more than 90 percent of the overall civilian workforce would be back on duty and earning pay by next week. 

That represents over 3/8’s of the total furloughed workforce. The House also agreed yesterday to give backpay to the furloughed employees.  The Washington Post reports that the Senate is expected to approve this bill and the President will sign it. According to CNN and Modern Healthcare reports, a repeal of the ACA’s 2.3% medical device tax is attracting bipartisan attention.  Perhaps not the beginning of the end but at least the end of the beginning to paraphrase Winston Churchill.

Also because tomorrow is the first Monday in October, the U.S. Supreme Court’s new term will begin. The Wall Street Journal reports that the new term will begin with significant business law cases. The article concludes

Among the more intriguing possibilities is a dispute over the federal health-care law. U.S. Solicitor General Donald Verrilli has asked the court to decide whether corporations can assert religious rights to object to a provision that requires employers to include health-plan coverage for contraception. Lower courts have issued conflicting rulings on the issue.

 The ACA is the gift that keeps on giving to lawyers, including the FEHBlog.