Modern Healthcare reports “measured enthusiasm” from healthcare providers on the proposed one year long long ICD-10 delay. The AHIMA trade association of techies thinks that it could have been worse. And it could have been worse — HHS could have given a longer delay just to doctors. AHIMA thinks that a longer delay would have encouraged doctors to suspend work on the project.

A federal district court judge heard three hours of oral arguments on Tuesday about the drug store trade association’s motion to keep separate the respective assets of Express Scripts and Medco while their anti-trust action is pending. According to Drug Store News, the judge indicated that she will rule on the preliminary injunction motion and the defendant’s motion to dismiss later. What the FEHBlog finds interesting is that there has been no rush to the courthouse by any State Attorney General to challenge the merger. The fat lady may be warming up.

In other bit of anti-trust news, the U.S. Justice Department’s Anti-trust Division announced Tuesday that it was closing its investigation into Highmark’s affiliation agreement with the six hospital West Penn Allegheny Health System. In November 2011, Highmark announced a $475 million capital infusion into the financially ailing system which has sparked a controversy between Highmark and the competing hospital chain UPMC. The Pittsburgh Post Gazette surveys the reaction here.

Finally CMS announced that 27 accountable care organizations in 18 states have been admitted to the Medicare Shared Savings Program. Modern Healthcare reports that

The first ACOs will include more than 10,000 physicians, 10 hospitals, and 13 smaller physician-led entities and serve an estimated 375,000 beneficiaries. The announcement follows the January launch of the modified Pioneer Model ACOs with 32 healthcare groups. The mix of organization types—just over half are physician-led—was touted by CMS officials.

Of course, the AMA was ecstatic but be careful what you wish for because a lot of physician risk bearing health care organization went under in the 1990s due to bad risk management.

The FEHBlog never ceases to marvel at how HHS can keep its sunny side up. HHS trumpeted today the news that a newly proposed unique national health plan identifier number will save $4.6 billion over the next ten years. While the HHS press release credits the Affordable Care Act for this innovation, in fact this identifier was required by the Health Insurance Portability and Accountability Act (HIPAA) over 15 years ago in 1996.  In the FEHBlog’s view it was a colossal error to consign technology changes to law as HIPAA did.

The anticipated compliance date for this new proposed rule (unless of course the American Medical Association complains (FEHBlog joke) is October 1, 2014 according to the HHS fact sheet. The proposed rule also will create an identifier for healthcare claims clearinghouses and third party administrators and fix a problem with the national healthcare provider identifier.

HHS also announced its proposal for one year delay in the ICD-10 compliance date for all covered entities. The FEHBlog misread the HHS tea leaves to expect a delay only for small medical practices. The newly proposed compliance date also would be October 1, 2014. The FEHBlog cannot yet find any reaction from the AMA which had clamored for a delay. However, Government Health IT reports the stunning fact that according to “the Regulatory Impact Analysis (RIA) of this proposed rule, HHS 
acknowledged that “a 1-year delay of the ICD-10 compliance date * * * would
add 10 to 30 percent to the total cost that these entities [read that as meaning health plans] have already
spent or budgeted for the transition.”

The Baltimore Sun reported on the oral argument presented to a panel of U.S Court of Appeals judges in Boston on Wednesday. At issue was the constitutionality of the Defense of Marriage Act which prohibits the FEHBP from covering same sex spouses. “Gay rights advocates said they were cheered by the tone of the argument.
The three judges asked relatively few questions during the hourlong
argument, but the most skeptical questions were directed to attorney
Paul Clement, * * * who is defending the federal law on behalf of House Republicans.” The FEHBlog agrees with the article’s conclusion that this case is headed to the Supreme Court.

Business Insurance reported on an important annual study issued by IMS Health on national prescription drug spending. The IMS Health report finds that prescription drug spending increased 3.7% to $320 billion while per capita prescription drug use dropped 1.1% and doctor’s office visits dropped by 4.7%. The AMA News continues to fret about this drop in doctors visits. There was a jump last year in new drug approvals (34) and older drugs shifting to generic status.

The AMA News article discusses a Willis survey of 2300 employers concerning the impact of Affordable Care Act compliance:

While only about a quarter of the responding employers have quantified the cost of compliance within their
health plans, a majority (nearly 56 percent) of those employers said the cumulative cost amounted to
an increase in cost; over 15 percent noted that the cost increase was between two and
five percent, and over 15 percent said that the cost increase was more than five percent.
Employers report that their most significant cost drivers are the provision of adult child coverage
up to age 26 and the removal of the annual/lifetime limits for “essential health benefits.”

Finally USA Today reports this morning that “A new report shows costs vary as much as 700% for some preventive
examinations, and as the federal health care law increases demand for
those procedures, it can mean an increase in premiums if employees don’t
pay attention to those costs.”  Keep your eye on the bouncing ball. Happy Passover!

Well the Federal Trade Commission announced yesterday morning following a 3-1 vote that it would not object to the merger of the two large prescription benefit management firms Express Scripts and Medco Health Solutions. The FTC did not attach any strings to this decision. The merger closed shortly after the announcement according to an Express Scripts press release. 

The opposition remains vociferous as illustrated by this press release from two drug store associations. Bloomberg reports that the federal judge in Pennsylvania has scheduled an April 10 hearing on the motion to undo the merger in a connection with a private anti-trust case. No state attorney generals have filed suit against the merged company yet.

It’s interesting that the press was reporting that the FTC asked the drug store trade associations and consumer groups for suggested strings to attach to the deal, but none were. It appears that Express Scripts and Medco did a very skillful job crafting this deal and the opponents simply overplayed their hand.

Senator Joe Lieberman (I CT) recently announced that he has 21 new Senate co-sponsors for his bill that would open up the FEHBP to same sex domestic partners of federal employees.  A panel of U.S Court of Appeals judges will hear a constitutional challenge to the Defense of Marriage Act tomorrow morning in Boston. The Defense of Marriage Act requires that the word spouse be interpreted to mean a person of the opposite sex whenever the word spouse is used in a federal statute or regulation. The FEHB Act defines family coverage to include the enrollee’s spouse. This issue is likely to reach the U.S. Supreme Court later this year. The DOMA issue is narrower than the Lieberman bill issue because there is only a small but growing number of states that recognize same sex marriage.

OPM’s 2013 call letter encourages FEHB plans to expand their wellness programs. The AMA News and Business Insurance report that wellness programs similarly are popular with state and private sector employers.

Finally, the AMA, now feeling its oats over the HHS announcement of a delay in the ICD-10 implementation date for certain covered entities has joined up with other medical groups to ask CMS to delay other regulatory deadlines so that the providers can focus on their patients.  Let’s not lose sight of the fact that the Affordable Care Act showered the health insurance industry with regulatory deadlines.

The House and the Senate are now in recess for two weeks, and tomorrow is National Employee Benefits Day.

Over the next week we could see the Federal Trade Commission rule on whether or not the proposed merger of two large prescription benefit managers Express Scripts and Medco comply with federal antitrust laws. The parties intelligently included provisions in their deal that would spin off certain businesses in order to satisfy the regulators. Press reports indicate that the FTC asked the parties objecting to the deal if there were other changes that could be made to satisfy them. In other words, the deal may look somewhat different if the FTC rules  in favor of the deal. 

Forbes reports that “the Express Scripts–Medco merger may go through very soon, there is fresh speculation that the Walgreen’s drug store chain may enter into a new deal with Express Scripts” within the next month or two. As noted in the FEHBlog Walgreens and Express Scripts had a contract spat last year that lead Walgreens to stop serving Express Scripts members. (This explains why your local CVS pharmacy has signs reading “Welcome Express Scripts members.” Walgreens lost quite a bit of business as a result of the breakup.

As the FEHBlog has noted several state attorneys general are contemplating a lawsuit if the FTC approves the merger, and drug store trade associations are not leaving anything to chance. The Wall Street Journal reports that the trade associations are seeking a temporary restraining order in federal court against the merger.  The Journal also reports that legal experts predict that the associations will have a very tough row to hoe if the FTC approves the deal.

Happy New Year! OPM kicked off the new FEHBP contracting year yesterday by issuing the annual call letter for benefit and rate proposals at the OPM AHIP FEHBP carrier conference. OPM’s Healthcare and Insurance Director John O’Brien gave the keynote speech. Carriers have until the end of May to submit their benefit and rate proposals for 2013. Mr. O’Brien announced that he expects ten new plans to join the FEHBP for 2013.

Mr. O’Brien also discussed the new minimum loss ratio based pricing methodology for community rated FEHB plans (except for those using traditional community rating). This methodology replaces the similarly sized subscriber group or SSSG methodology that has been in use for decades. OPM issued a final rule implementing this change, which was tested for the current plan year. The rule, which will be published in the Federal Register on Monday is available here.

Earlier this week, the FEHBlog noticed press reports that the Federal Trade Commission might issue a decision approving the Express Scripts Medco merger (with changes) by today. The order has not been forthcoming. The news, however, evidently did provoke trade associations of drug stores to bring their own anti-trust lawsuit against the two PBMs in a federal court located in Pittsburgh PA. The Legal Newsline reports that “A coalition of public interest groups and leading competition advocates are calling on state attorneys general to block [this proposed merger.”

Federal News Radio, among other sources, reports on the House Federal Workforce Subcommittee hearing concerning the Postal Service’s plan to withdraw from the FEHBP.  The hearing was held yesterday  morning. The report describes the lawmaker’s reaction as skeptical. The FEHBlog suggest reading Walton Francis’s testimony before the Committee which places the issue in perspective and explains the skepticism.

Last year, a federal employee sued OPM in federal court to force the agency to cover her same sex spouse. OPM had declined the request based on the Defense of Marriage Act. The federal court which sits in San Francisco (which is not a crack because the Judge is a George W. Bush appointee) held that the Defense of Marriage Act is unconstitutional as applied to this case. The Court ordered OPM to grant the federal employee’s request. Although the case has been appealed to the Ninth Circuit, no party sought to stay this order, and the Washington Post reported yesterday that OPM appropriately has complied with the order. The U.S. Court of Appeals for the First Circuit, which sits in Boston, will consider the same issue in arguments to be made before the entire court (rather than a three judge panel) on April 4.

The Federal Trade Commission did release its consumer privacy framework on Monday. “The final report calls on companies handling consumer data to implement recommendations for protecting privacy, including:

• Privacy by Design – companies should build
  in consumers’ privacy protections at every stage in developing their
  products. These include reasonable security for consumer data, limited
  collection and retention of such data, and reasonable procedures to
  promote data accuracy;
• Simplified Choice for Businesses and Consumers
  – companies should give consumers the option to decide what information
  is shared about them, and with whom. This should include a
  Do-Not-Track mechanism that would provide a simple, easy way for
  consumers to control the tracking of their online activities.
• Greater Transparency – companies should
  disclose details about their collection and use of consumers’
  information, and provide consumers access to the data collected about
  them.”

Closer to home, Fierce Health IT reports that the mega-rule implementing the 2009 HITECH Act’s changes to the HIPAA Privacy and Security Rules applicable to FEHB plans, other health plans, health care providers, healthcare clearinghouses, and their business associates has been sent to the U.S. Office of Management and Budget for its final review before the rule is published in the Federal Register.

[The rule] combines four separate rulemakings: the changes to HIPAA’s privacy and
security rules mandated by the HITECH Act; the new enforcement
requirements and higher penalty requirements; the final regulations of
HITECH’s breach notification rule; and changes to HIPAA to incorporate
the Genetic Information Nondiscrimination Act (GINA). OCR also will
release guidance to help entities implement the changes, including an
updated business associate agreement.

The House and Senate will be session this week. The Federal Workforce subcommittee of the House Oversight and Government Reform Committee will hold a hearing on Tuesday morning at 10 am about whether a stand alone Postal Service health plan would solve the Postal Service’s financial crisis. The witnesses will be the Postmaster General and Walton Francis, an expert on the FEHBP.

On Thursday and Friday of this week, OPM and AHIP will hold the annual FEHBP carrier conference. OPM traditionally makes the call letter for 2013 benefit and rate proposals public at this conference. The FEHBlog will be in attendance.

Of course, the U.S. Supreme Court will hold three days of arguments this week on the constitutionality of the Affordable Care Act.  The FEHBlog gave up on predicting Supreme Court decisions about five years ago. The Court is expected to issue its decision in late June.

Modern Healthcare reports that the Federal Trade Commission will issue a privacy framework tomorrow at 11 am. “A key issue in the report could be the FTC’s position on the role of
consent in the sharing or trading of an individual’s personally
identifiable information.”

Cardiology Today reports on the Food and Drug Administration’s hearings last week about ways to expand the definition of over the counter drugs.   Pharmacists argued that greater pharmacist involvement would facilitate the expansion. The AMA was not so sure. Interestingly,

[One] idea generated included an algorithm available through a store kiosk or
the Internet that would allow consumers to find out whether a specific
medication would be right for them. The algorithm would include
questions about sex, age and chronic disease history and provide
information about the medication that would help consumers with
self-diagnosis.

It’s somewhat surprising that the Department of Health and Human Services (“HHS”) has not yet defined what it meant by stating that “certain health care entities” would be given an ICD-10 code set compliance date beyond October 1, 2013. Which health care entities and how long of a delay?

Iheathbeat reports on a scholarly Health Affairs article which makes the following conclusion

Instead of moving toward ICD-10 standards, the authors recommended that the health care industry move toward implementing ICD-11 code sets. They note that ICD-11 standards are closely linked with the Systematized Nomenclature of Medicine-Clinical Terms, which is a key part of the meaningful use Stage 2 criteria.

Under the 2009 federal economic stimulus package, health care providers who demonstrate meaningful use of certified EHR systems can qualify for Medicaid and Medicare incentive payments. The authors recommended that federal officials allow a grace period for compliance with the ICD-10 code sets or push back the compliance deadline by one to three years.

Of course, the HHS mandate is being issued under HIPAA, a 1996 law intended to facilitate the electronic payment of health plan claims. The law has nothing to do with public health, but public health reporting concerns are the foundation for switching to the ICD-10.  The FEHBlog expects that a lot of money could be saved by repealing HIPAA and letting the health care industry set these payment standards.

Speaking of electronic recordkeeping, CIO includes an article with the eye popping number from a Ponemon Institute study finding that “the average organizational cost per [electronic] data breach was $5.5 million in 2011, down
24 percent from $7.2 million in 2010. Additionally, the cost per compromised
record fell to $194 per record, down $20 (10 percent) from 2010.” The article adds this interesting tidbid

While the decline in costs should benefit businesses, the reason for the
decline may not be so reassuring.

“I think the root cause is that people are maybe becoming a little numb to
the notification,” Dr. Ponemon says when asked to speculate on the driver for the decline in lost
business costs. “Maybe most of us by now have received one if not more
notifications. Over time, if you don’t become a data breach victim as a result
of the event, it begins to lose its impact. These notifications are becoming
almost ubiquitous. It’s hard to determine which ones I should care about.”

The FEHBlog hopes that HHS reads this study as it certainly supports the interim HIPAA unsecured PHI breach notice rule’s harm prerequisite to issuance of such a notice.

On Monday, the Affordable Care Act regulators issued their eighth set of Frequently Asked Questions about the law, which is celebrating its second anniversary. These FAQs provide helpful and suprisingly flexible guidance to health plans about the new summary of benefits and coverage requirement. The new requirement made the FEHBlog think — wouldn’t it be nice if providers provided patients with standard information about their billing practices and networks in which they participate?

In that regard, the AMA News reports on readily available resources to improve health care literacy.

The FEHBlog noticed that the HHS rule on health insurance exchanges creates a role for paid “navigators.”  Not surprisingly, health insurance agents who have been squeezed by the minimum loss ratio rule, see this as a bone. More interestingly to the FEHBlog, the AMA News is reporting that health insurers are hiring companies that provide health system navigation services to consumers. “Most notably, Highmark, a Pittsburgh-based Blue Shield plan that has nearly 5 million members, will provide a call-in service. Highmark hired Health Advocate, based in Plymouth Meeting, Pa., to provide myCare Navigator, a service available to all members.” Highmark’s press release is here.

Modern Healthcare reports on a WEDI study on the state of ICD-10 code set implementation which according to MH suggests that delaying implementation beyond October 13, 2013, is a good call.

Finally, the FEHBlog noticed a Fierce Health article about the unnecessary costs of using general anesthesia with gastroenterological diagnostic procedures like colonoscopies and endoscopies. This is where public health cost estimates get so slippery. Yes those procedures could be done under local anesthesia. But if local anesthesia is required, how may patients would opt out of routine procedures which might avoid a deadly colon cancer. The FEHBlog would think twice.