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.

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.