The Washington Post this morning is reporting this morning that the threat of a government shutdown looms. The current continuing resolution funding the Government expires on Friday December 16. The final “megabus” appropriations bill for the current Government fiscal year is done or nearly done, depending on who you believe. However, the Senate leadership, in a tactical move, is keeping the megabus in the garage until Congress completes work on the other major piece of legislation, the tax extenders bill. That bill includes the payroll tax relief extension and the Medicare Part B reimbursement patch. ‘

The FEHBlog is interested in the appropriation bill because it always contains FEHBP provisions. The FEHBlog expects that Congress will extend the continuing resolution for another week rather than let the government shutdown. OPM explained earlier this year that in the event of a shutdown, the FEHBP would continue operating

Congress also is considering a national defense authorization bill (HR 1540) which is another annual exercise. Federal News Radio reports that the House Senate conference report which was released on Monday includes TRICARE premium hikes. This law often includes government procurement law changes that impact the FEHBP but the FEHBlog did not notice any such changes in this massive bill. The Hill reports that the President is quiet on his threat to veto this bill if enacted.

The FEHBlog noticed yesterday that OPM has posted its annual financial statement for the fiscal year ended September 30, 2011 (known as the performance and accountability report). It’s always interesting reading.

Monday December 12 is the last day of the Federal Benefits Open Season and the beginning of a busy week on Capitol Hill. The Washington Post is prognosticating that Congress will achieve a compromise on the final omnibus appropriations bill by the December 16 deadline.

A Washington Post columnist Steven Pearlstein has offered his views on why the Government should prevent the merger of two large prescription benefits managers, Express Script and Medco. The FEHBlog offer this link to illustrate why the FEHBlog thinks that the anti-trust winds are blowing against this deal even though the parties tried to anticipate this problem.

The FEHBlog loves his Ipad and is finding Walter Isaaceson’s biography of Steve Jobs quite interesting.  The FEHBlog is not sure about the Iphone because he likes the Blackherry’s key pad but this may be too much information. The point is that the Surgeon General has created a Medical Apps Challenge!  The FEHBlog read about one such app My Medications that the American Medical Association is hawking. For 99 cents, the FEHBlog, who isn’t getting any younger, is giving the app a whirl.

The Federal Benefits Open Season ends on Monday December 12 and the continuing resolution funding the federal government expires next Friday December 16. Yesterday, a House-Senate conference committee started meeting on a final omnibus appropriations bill for the current federal government fiscal year. According to the Hill blog, the goal is to release a bill on Monday.

These negotiations are separate from the competing bills to extend the Social Security payroll tax reduction for another year. The House leadership proposed their bill today which also would extend the Medicare Part B reimbursement patch for two years with a 1% payment sweetener. See Modern Healthcare for more details. However, the bill has provisions that adversely impact federal employees as Govexec.com reports.  The bill was not well received by the House minority or the Senate majority according to a Hill report. Time will tell.

Business Insurance reports that the government has announced that it will not accept Early Retiree Insurance Program claims incurred after the end of this year because the $5 billion appropriated for the Program in nearly tapped out.

Earlier this week, the Centers for Medicare and Medicaid Services announced a new policy concerning public access to the gigantic Medicare claims database. The Wall Street Journal which has been pushing the government to open up the database reports that

Under the new rules, the agency is allowing a new category of organizations to obtain the data: community groups comprising doctors, health insurers, businesses, consumers and government that work to improve health care at the local level.
These groups, which the agency estimates number about 25 nationwide, will be able to use the data to publish studies, such as report cards on certain procedures, hospitals or doctors. Although they will have to notify the subjects of their reports 60 days in advance, doctors won’t be able to block publication. Patient information will remain confidential.
The new rules make no mention of allowing news organizations to gain access to the data. The media might conceivably be allowed to partner with the local health-care monitoring groups that obtain the data to produce investigations, but that idea wasn’t specifically addressed by the department.

Also the FEHBlog ran across a website for a community pharmacists group that opposes the Express Scripts – Medco merger — Preserve Community Pharmacy Access Now! — which has its own blog!

Well, the clock continues to tick down to the end of the current continuing resolution on December 16. With so many issues up in the air, as Federal News Radio reports, Your guess about the income is as good as the FEHBlog’s.

In this year’s call letter for benefit and rate proposals, OPM encouraged FEHB plans to utilize the patient centered medical home (“PCMH”) concept which financially rewards primary care providers for pro-actively managing the care of their chronically ill patients. AIS reports that two large Blue Cross plans, Independence Blue Cross (“IBC”) and Blue Cross and Blue Shield of Tennessee (“BCBSt”), have found success with their patient centered medical home pilots.

PCMHs have proven so successful that BCBST is contemplating expanding them into other therapy areas next year, such as behavioral health, oncology and cardiology. IBC already has an oncology practice acting as a PCMH.

Two items reminded the FEHBlog that there are some important rules that should be finalized soon. AIS reports that a Senate Committee flogged the head of the HHS Office for Civil Rights because the rules implementing various provision of the HITECH Act, amending HIPAA’s privacy, security, and enforcement provisions. The GAO issued a report on the efficacy of the 2008 mental health parity act which notes that the regulators needs to issue a final implementing rule for that law too.

AHIP discussed  a recent longitudinal state by state study of health care spending by the CMS Actuary. Not surprisingly the report finds wide variations in spending.

The states with the highest per capita spending tended to be older in
population with higher per capita incomes. The lowest per capita states
reflected areas with younger populations, lower per capita incomes and
higher numbers of uninsured.

What did surprise the FEHBlog is an AMA news report that the use of antibiotics varies widely from state to state. You would think that this particular medical practice would be more standardized given the public health focus on avoiding antibiotic use for viral infections. Apparently a greater effort is needed.

We are entering the last full week of the Federal Benefits Open Season which ends on December 12. Govexec.com reports that “As the end of open season for changing health insurance elections draws
near, the refrain among health care specialists boils down to: Look into
changing your plan now, before it’s too late.”

The article also reports opinions that the Affordable Care Act won’t significantly impact the FEHBP when the health insurance exchanges take effect in 2014.The FEHBlog has a different perspective.

In 2014, the Affordable Care Act begins to impose a health insurance tax on the Blue Cross FEP, the HMOs participating in the FEHBP, and oddly enough the qualified health insurance plans operating in the health insurance exchanges. This tax and other Affordable Care Act taxes such as those on medical devices will increase plan premiums. Also in 2014, plans will be prevented from imposing lifetime and annual dollar limits on essential health benefits as defined by the HHS Secretary. Although the Institute of Medicine gave the Secretary very sound advice to take the cost of health care into account when establishing the essential health benefits, Health Care Finance News reports that the medical community and interest groups are pushing the Secretary the other way. Finally the tax on high cost plans (a/k/a the Cadillac tax) which takes effect in 2018 has the potential for disrupting the FEHBP.

While on the topic of the Affordable Care Care Act, the Department of Health and Human Services finalized on Friday the rule governing the minimum loss ratio imposed on insurers including those operating in the FEHBP. Modern Healthcare adds “A final regulation issued Friday to implement a federal medical-loss-ratio standard (PDF) rejected most changes requested by insurers to an interim version issued last December.” However, America’s Health Insurance Plans had a measured reaction:

HHS has conducted a thorough and balanced process in crafting this
final regulation. Today’s announcement takes important steps to make the
regulation more workable. The regulation also ensures that some of the
costs associated with modernizing the medical claims coding system are
appropriately recognized as activities that improve health care quality.
We believe health plans’ programs to prevent and combat health care
fraud should be given similar consideration and that additional steps
should be taken to ensure that consumers and small employers do not lose
access to the guidance of a trusted health benefits advisor between now
and 2014.  We will continue to work with the Department on these
important issues.

The continuing resolution funding the federal government, including the FEHBP, expires on December 16. The Hill reports 

House Majority Leader Eric Cantor (R-Va.) said Friday afternoon that
House Republicans are hoping to finish work on a complete 2012 spending
agreement by mid-December, which would let Congress avoid the need for
another continuing spending resolution.

That strikes the FEHBlog as a heavy lift, but let’s keep hope alive.

To commemorate the introduction of the generic version of Lipitor, a bipartisan group of three Senators has sent letters to Lipitor’s manufacturer, Pfizer, three major PBMs, and two insurers “after a news report alleged Pfizer agreed to provide discounts to
pharmaceutical benefit management companies (PBMs) and insurance
companies if the PBMs and the insurers would block prescriptions for
Lipitor’s generic equivalent.”

For the next sixth months, we are in the transitional period where a limited number of generic manufacturers can offer generic Lipitor. After that six months, the FEHBlog believes that there is little that Pfizer can do to keep the generic genie in the bottle. The Wall Street Journal offered a user’s guide to generic Lipitor.

Govexec.com reports that the House of Representatives has passed on a bipartisan vote a package of reforms to the federal workers compensation program (FECA).  A similar bill is moving through the Senate. These would be the first major FECA program changes in 40 years, if enacted by both Houses.

Business Insurance reports that health care firms, such as hospitals, are particularly vulnerable to security breaches

because of factors that include stringent federal and state
regulations, widespread dissemination of patient data and a growing
black market for patient medical information.

At CNA Financial
Corp., for instance, health care represents about 25% of the data breach
insurance business written but 60% of all claims, said Mark Silvestri,
Quincy, Mass.-based vp of product development and director of CNA’s
NetProtect.

The publication also featured an article on best security practices.  The National Institute of Standards and Technologies offers a dandy set of security guidance known as the 800 Series Special Publications.  Publication 800-122 is a guide to protecting the confidentiality of personally identifiable information. Good stuff.

Senate Homeland Security and |Governmental Affairs Committee Chairman Joe Lieberman (I Conn) and Ranking Minority Member Susan Collins (R Maine) have reintroduced their bill to extend FEHB coverage to same sex domestic partners of federal employees.

The HHS Office for Civil Rights which is responsible for enforcing the HIPAA Privacy and Security Rules announced earlier this month that it has begun a pilot program of auditing covered entity and business associate compliance with these rules. The HITECH Act which was part of the 2009 economic stimulus law called for these audits. The 20 audits in the pilot program will be conducted over the next 12 months.  KPMG, one of the large public accounting firms, has been contracted to conduct the audits for OCR.

The AMA News reports with some alarm that

Physician office visits by privately insured patients
younger than 65 have fallen 17% in two years, according to a Kaiser
Family Foundation analysis released Nov. 15.

The research is the latest to suggest that the decline in how often
patients see their doctors, fill prescriptions and stay in the hospital
is due to factors beyond the recession and may last for a while.

Perhaps consumerism is working.

The FEHBlog hopes that everyone has an enjoyable Thanksgiving weekend. Congress returns to work this week as we begin the third week of the annual Federal Benefits Open Season which ends on December 12. What a relief that the Redskins finally won a fourth game today.

CBS News reminds us that the best selling prescription drug Lipitor will be available in generic form beginning this coming Wednesday November 30.  This will be a big savings for consumers and health plans. “Based on Lipitor’s sales of $7.2 billion last year, this one generic drug should save the overall U.S. system $6.5 billion.” Of course, nothing is simple and Lipitor’s manufacturer Pfizer is trying to hang onto some of its Lipitor profits, but the savings will be huge. Medco offers a long list of blockbuster drugs that will be going generic over the next 15 months.

Business Week reports that a cloud continues to hang over Walgreen’s due to its ongoing contract dispute with the prescription benefits manager Express Scripts. If the NBA and the NFL can reach settlements with their players so should these companies.

Govexec.com takes a look at the various “reforms” recently proposed for the FEHBP. It simply is odd that the FEHBP — the largest consumer choice program in this country and the model for Medicare Part D and the Affordable Care Act’s health insurance exchanges — has come under such scrutiny at a time when it is purring along so well — a 3.5% average premium increase for 2012 which well below the private sector estimate of 5.4% and just above 3.0% increase for Medicare Part B which relies on statutory pricing.

Speaking of Medicare, the President nominated Marilyn Tavenner to succeed Donald Berwick as Administrator of the Center for Medicare and Medicaid Services according to this Kaiser Health News report.

The FEHBlog wishes everyone a Happy Thanksgiving. Of course, the Super Committee did not produce any deficit cutting recommendations. Congress will return to work after the Thanksgiving break. The AMA News makes it clear that the medical community is nervous about the looming end of the Medicare Part B reimbursement patch on December 31.  Modern Healthcare reports that the Democratic leadership in the House of Representatives has sent a letter to House Speaker John Boehner asking the Republican majority to “>to ensure three pieces of legislation get passed before Dec. 16: extension of the SGR [Medicare Part B] fix, extension of unemployment insurance, and extension and expansion of the “payroll tax holiday.”

A pre-holiday tidbit from Business Insurance is that the Early Retiree Insurance Program created by the Affordable Care Act has used up $4.1 billion or 80% of its $5 billion appropriation which Congress intended to last the Program through 2013. That’s up half a billion from the mid October 2011 report. It looks like the Program will be out of funding in the first quarter of 2012, and the FEHBlog would bet the ranch that Congress does not replenish the funding. In retrospect, although the FEHBlog considers it inequitable that the Affordable Care Act regulators excluded the FEHBP from the Program, there’s no doubt that including the FEHBP, with its large cadre of early retirees, would have accelerated the Program’s demise.

Congress has recessed for the Thanksgiving holiday, and according to news reports, including the Wall Street Journal,  the Super Committee will admit defeat tomorrow. As it turns out tomorrow, not Wednesday, is the Super Committee’s effective deadline because the Committee can only vote on proposals that have been made public for at least 48 hours before the vote.

The American Medical Association (“AMA”) must be freaking out because they were betting that the Super Committee would fix the statutory sustainable rate of growth formula that will impose a 27.4% cut on Medicare Part B compensation to doctors on January 1, 2012. The beauty part of the Super Committee process is that if the Committee had produced a set of proposals with $1.2 trillion in deficit reductions over 10 years, both Houses would have been required to give the proposals an up and down vote with no amendments. Now the AMA has to rely on the vagaries of the usual legislative process during the holiday season.

We enter the second week of the Federal Benefits Open Season. Federal News Radio reports that

For advice, insight and analysis, [its] Federal Drive [program] with Tom Temin and Amy Morris turned to three experts in the Open Season arena — Colleen Murphy, executive for PlanSmartChoice, an ADP product; Walton Francis, editor of the Checkbook Guide to Health Plans for Federal Employees; and Federal News Radio’s Senior Correspondent Mike Causey.

Details are available here.

Standard & Poors last week issued the September 2011 report on its healthcare index. Not good news.

Data released today by S&P Indices for the S&P Healthcare Economic Composite Index indicate that the average per capita cost of healthcare services covered by commercial insurance and Medicare programs increased by 5.75% over the 12-months ending September 2011. This is a slight increase over the +5.71% annual growth rate posted in August 2011 and the fifth consecutive increase since the index hit its lowest rate of +5.32% in April 2011.

As measured by the S&P Healthcare Economic Commercial Index, healthcare costs covered by commercial insurance increased by 8.03% over the year ending September 2011, also increasing for the fifth consecutive month. On the other hand, growth rates in Medicare claim costs hit yet another low, rising at an annual rate of +1.97% as measured by the S&P Healthcare Economic Medicare Index. The S&P Healthcare Economic Hospital Medicare Index also posted a record low annual rate of +0.71% in the year ending September 2011. This is a staggering 7.59 percentage points lower than the highest annual growth rate of +8.30% recorded for this index just two years ago in August 2009.

The Hospital and Professional Services Indices posted increases of 5.51% and 5.78%, respectively, from their September 2010 levels. These are marginal changes from the +5.40% and +5.83% respective annual rates posted in August 2011.

That my friends is strong evidence of significant cost shifting from the Medicare Program to the private sector.