OPM launched the beginning of the 2014 FEHBP contract negotiations with its annual benefit and rate call letter. Carriers are allowed until May 31 to submit their benefit and rate proposals. The call letter was released on day #1 of the annual OPM AHIP carrier conference. Govexec.com covered the keynote speech here. The Washington Post’s Federal Eye reported on the call letter here.

Also today, according to a Hill report, Congress passed the continuing resolution extension funding the federal government through September 30, 2013. Government shutdown avoided. However, the federal employee pay freeze continues at least. Thank heavens for little miracles.

The Robert Wood Johnson Foundation updated for 2013 its U.S. county by county health rankings. The FEHBlog’s home county ranks #2 in Maryland

The Hill reports on a compromise reached today that will permit the Senate to vote on extending the continuing resolution funding the federal government until the end of this fiscal year, September 30, 2013. The House already has passed such a bill. Absent Congressional agreement on before next Wednesday, a government shutdown will occur. The FEHBlog is hopeful for a happy resolution.

The New York Times reports on ongoing efforts to repeal the ACA’s 2.3% excise tax on medical devices.

Lifehealthpro reports on an National Association of Insurance Commissioners draft flowchart of health insurance exchange eligibility options in 2014. (There are nine potential outcomes.) The FEHBP bounce of this ball is that federal employees will have the choice between (in all likelihood) unsubsidized exchange coverage and subsidized FEHBP coverage. There is a large cadre of federal employees who do take FEHBP coverage because they are covered under a spouse’s plan or choose not to purchase it. Federal employees would be nuts not to pick up FEHBP coverage during the five years preceding retirement because that is the prerequisite to post-retirement FEHBP coverage with the full government contribution. However, before then it will truly be their choice in 2014.

Kaiser Health News has two interesting reports today. One concerns consumer confusion over the multitude of reported hospital ratings. The FEHBlog would just stick with CMS’s Hospital Compare. The other concerns “a growing number of doctors have begun holding group appointments — seeing up to a dozen patients with similar medical concerns all at once.” The concerns that are the subject of these group appointments typically are chronic illnesses like diabetes or heart disease, not contagious illnesses.

For example, in a diabetes group visit, a doctor might ask everyone to remove their shoes so he can examine their feet for sores or signs of infection, among other things. A typical session lasts up to two hours. In addition to answering questions and examining patients, the doctor often leads a discussion, often assisted by a nurse. 

But does the provider charge the health plan a group discount?

Happy St. Patrick’s Day.  This week will feature the annual OPM AHIP FEHBP carrier conference. The FEHBlog will be in attendance. Congress also will be in session working on budgets and an extension of the continuing resolution funding the federal government through September 30, 2013, the end of the current federal fiscal year. Absent an agreement before March 28, a government shutdown will occur. The House of Representatives already has passed its version of the CR and the Senate will consider its version early this week. The Federal  Times and govexec.com review the impact of these efforts on federal employees and annuitants.

Fierce Health Finance reports that according to an Alarium Institute study health care spending rate is declerating to a level similar to that found in the golden years of managed care / gatekeeper HMOs in the mid to late 1990s. But it’s still going up.  The study credits the weak economy and cost pressures on providers of care for the slowdown.

Contributing to the slowdown according to a Decision Resources study reported in Modern Healthcare is the fact that

Endocrinologists and primary-care physicians use e-prescribing for 76% of their Medicare patients and 79% of their non-Medicare patients.. About 60% of these doctors say that within their e-prescribing program, they have access to their patients’ full lists of medicines, or formularies. As a result, they suggest that they pay closer attention to patient prescription costs. About 80% of these endocrinologists and primary-care physicians say that, if given information about their patients’ formularies and copays, they would prescribe less expensive/better-reimbursed options.

CMS has begun to penalize doctors who don’t use electronic prescribing.

The Hill reports on a House Energy and Commerce Health Subcommittee hearing about the expected impact of the Affordable Care Act on health insurance premiums next year. The FEHBlog’s take is that the Affordable Care Act will increase premiums but consumers who receive premium subsidies in the exchanges (up to 400% of the federal poverty line) will be shielded from the increases to one extent or another (that’s the Affordable part of the ACA).  Consumers who are eligible for employer sponsored coverage can only receive subsidized exchange coverage if there employer sponsored coverage premiums would be 9.5% or more of the employee’s W-2 annual income. If the employer offers a choice of coverage, the employer can select one low cost plan that is open to enrollment by all employees to serve as the benchmark under the IRS rules.

Earlier this month, the FEHBlog shook his head when he read the HHS press release promoting the 2014 benefits and parameters notice as stabilizing premiums in the health insurance exchanges. As the Wall Street Journal points out today  employers are recognizing to their dismay that this anticipated stabilization occurs on their backs via a $63 per covered individual payment to a transitional reinsurance fund.  

The fee comes on top of other costs employers expect to face.
Proponents of the law say it eventually will lower employers’ health
costs by expanding insurance coverage to 30 million Americans, meaning
employers won’t subsidize their unpaid medical bills.

Administrators for employee health plans
have warned federal regulators they could pare insurance benefits to
absorb the fee. Some benefits experts expect employers will at least
partially pass on the $63 to workers.

The balance will be passed on through higher consumer prices.  The article illustrates the fact that the law relies very much on cost-shifting rather than cost-reduction to cover the uninsured.

FEHB plans also will be hit with this fee next year. The article indicates that the fee is expected to add 1% to 2014 premiums.  The fee will decrease in 2015 and 2016, the last year for this three year program (unless Congress extends it). Congress expected that HHS will collect $25 billion over that period. HHS is using $20 billion for the reinsurance program in the exchanges and is refunding the balance to the U.S. Treasury to cover the cost of the ACA’s early retiree reinsurance fund. “A Boeing spokesman said the retiree program “was not advertised as a program prefunded by the government to be paid back at a later time,” according to the Journal. Boeing got $50 million out of the fund; FEHB plans got bumpkus due to an HHS rule.

Apro pos of nothing relevant to the FEHBP but certainly demonstrative of the unnecessary complexity of the ACA, the AP reports that the draft application to receive premium subsidies in a health insurance exchange is 15 pages long for a three member family and intrusive to boot. To top it off, health plans, including FEHB plans, will need to spend millions of dollars reporting to the IRS about who they cover beginning next year (IRC §§ 6055, 6006).

The FEHBlog found this interesting ihealthBeat perspective on the HIMSS conference that was held in New Orleans last week. HIMSS is a trade association for electronic health records and related vendors that is of course energized by the billions of dollars that HHS has been granting health care providers to buy EHRs. Next week is the always exciting (at least to the FEHBlog) OPM AHIP FEHBP carrier conference in sunny Arlington, VA.

The FEHBlog also ran across this report about a Consumer Reports survey on the consumer reaction to the summary of benefits and coverage (“SBC”) mandated by the ACA and rolled out last Open Season for the FEHBP and other health plans. Consumer Reports which is a proponent of the form commented that “What these results show us is that the Summary of Benefits and Coverage can make a difference in the consumer health insurance shopping experience – but too few consumers appear to be aware of the form. It’s clear that consumers like the form, but in order to get the most out of it we need to find a way to make sure consumers see the SBC when they are shopping for insurance.” How about requiring the same form for hospitals and doctors — I’m in this network but not that one, I charge $$$ for an office visit.

Finally, the AMA News reports that doctors are bracing for the 2% cut in Medicare payments that the sequester requires for services rendered on or after April 1. What to do? What to do? Hey let’s shift costs onto private sector health plans via higher prices? There’s nothing new there. For the height of chutzpah though check out the Healthcare Supply Chain Association’s Medical Device Tax Watch. This website  mau maus the medical device manufacturers that are shifting the ACA’s 2.3% medical device tax onto their customers just link any other sales tax. What do hospitals and doctors do everyday to make up for inadequate fees from Medicare and Medicaid? Raise prices for private sector health plans. Government initiatives tend to create such cost shifting and the ACA is no exception. But oh the humanity, the Washington Times reports today that the medical device tax is raising prices for veterinary care.

Both Houses of Congress are in session this week. Last week the House of Representatives passed a continuing resolution bill (H.R. 933) that will fund the federal government through the fiscal year end (September 30, 2013) subject to the current sequestration with a few exceptions as the Hill explains

The bill is a continuing resolution for most federal agencies, but for the Defense Department (DOD) and Department of Veterans Affairs, it includes a full appropriations bill. That language gives the DOD some flexibility in dealing with the sequester, by shifting $10.4 billion to the operations and maintenance budget.
The bill tries to cushion the effects of sequestration in some non-military areas. It adds $2 billion for embassy security in the wake of last September’s attacks on the U.S. Consulate in Benghazi, Libya, and provides $363 million more for nuclear security and $129 million more for FBI salaries, among other things.
It also includes other policy mandates, including a prohibition on the use of funds to move Guantánamo Bay detainees to the United States and a freeze on federal worker pay.

According to the Hill’s Floor Watch, the Senate takes up the House bill this week in an effort to avoid the government shutdown that would occur if an impasse occurred. The Federal Times offers more perspective on the Senate’s efforts here.

In the good old days, OPM ran the FEHBP. However, particularly since enactment of the Affordable Care Act, OPM has shares that role with the three ACA regulators, HHS, the Labor Department and the Internal Revenue Service. Hence, it’s worth noting on the FEHBlog that President Obama according to the Washington Post and other sources is prepared to nominate Thomas Perez, the assistant U.S. Attorney General for civil rights, to be the Labor Secretary, replacing Hilda Solis who recently resigned.

In that regard, the FEHBlog further notes that last Friday, the Labor Department issued lucky ACA FAQ XIII which concerns the application of the ACA to expatriate plans.

Finally last week the National Business Group on Health released the 18th annual Towers Watson/National Business Group on Health Employer Survey on Purchasing Value in Health Care.  The survey finds that

The best performers had an average health care cost increase of 1.7% in 2012, less than half the median increase and roughly in line with the general inflation trend. In 2013, this group took a number of significant steps to improve the efficiency of their health care programs. They:

• Consolidated vendors to improve delivery and coordination of health management programs, while also taking steps to incent providers to invest in new technologies to improve the coordination of care
• Focused more on communication to help employees make smarter health care decisions, leveraging popular culture technology like social media to make sure they have the best information on health care providers available
• Stepped up emphasis on transparency in provider prices as well as quality and results
• Invested in case management to more proactively and effectively manage their high-cost cases
• Placed more responsibility on employees, tying financial incentives to measurable improvements in their health, and extended incentives to spouses
• Started implementing new payment methods to providers, placing greater responsibility on them to deliver high-quality, efficient care.

FEHB plans which rank among these best performers use all of these strategies except for placing more responsibility on employees principally because of a statutory and thus inflexible government contribution formula.

The FEHBlog forgot to mention two items in last night’s post:

• Yesterday, Express Scripts, the large prescription drug manager, released its 2012 Drug Trend report which found that for the first time in 20 years the level of spending on traditional / small molecule prescription drugs decreased in 2012 compared to 2011 largely due to an explosion of brand name to generic conversions in block buster drugs like Lipitor. However, the level of spending on specialty / large molecule drugs continues to increase in part because there is still no regulatory pathway to generic or biosimilar versions of these specialty drugs. The European Union created such a pathway about ten years ago. The ACA gave the FDA the greenlight to create such a pathway here. Almost three years later, no such pathway has been established. 
• The Labor Department has created an ACA self-compliance tool for health plans. The tool illustrates the delightful complexity of the ACA. 

The Washington Post reports today that OPM Director John Berry is the leading candidate to be the U.S. Ambassador to Australia. Mr. Berry had been considered a candidate for Interior Secretary but he was not selected for that position.

The Hill’s Healthwatch reports on today’s House Ways and Means Committee hearing on Affordable Care Act taxes. Rep. Charles Boustany (R La.) explained his plan to include the repeal of the medical device tax and the health insurer fee as part of broader tax reform.   The article concludes that Repealing any of the healthcare law’s taxes would increase the deficit. The device tax is set to generate about $20 billion over the next decade, while the tax on insurance plans will raise roughly $100 billion.” Will someone pleae explain to the FEHBlog how imposing these onerous taxes — which will be passed onto consumers — can make healthcare more affordable?

The AMA News reports that the Department of Health and Human Services has informed the American Medical Association that there will be no more extensions of the ICD-10 coding initiative’s October 1, 2014, compliance date. The FEHBlog sympathsizes with the AMA because the ICD-10 coding initiative will do nothing to speed electronic claims transactions — the objective of HIPAA — but the AMA should have tried to block this change at the end of the last decade and not after the final rule came out. Health plans already have spent millions of dollars coming into compliance with this rule.

Finally, the Chicago Tribune reports on an AMA Journal study about a mortality index developed for people older than 50 (which cadre includes the FEHBlog). “The researchers created the index by analyzing data on almost 20,000 Americans over 50 who took part in a national health survey in 1998. They tracked the participants for 10 years. Nearly 6,000 participants died during that time.” The researchers expect that doctors will administer the index and use the results to advise patients on course of treatments for chronic illnesses.

The House and the Senate will be in session this week according to the Hill’s Floor Action blog. On Tuesday morning, the House Ways and Means Committee’s oversight subcommittee will hold a hearing on the plethora of taxes created by the Affordable Care Act.

The Wall Street Journal published an article about OPM’s multi-state plan regulation in its weekend paper (in the FEHBlog’s view the best newspaper issue from week to week). Here’s the skinny:

Cigna Corp. said it has opted not to apply to be one of the national-plan carriers, saying it “does not align with our focused approach,” according to a spokesman.

Spokesmen for UnitedHealth Group Inc. and Aetna Inc. both said this past week that their companies were still reviewing the multistate plan opportunity. A spokeswoman for the Blue Cross Blue Shield Association said that Blues plans in the states were interested in banding together to try to become the nonprofit plan, with some coordination from the association.

OPM posted a notice explaining how to apply to become a multi-state plan carriers on the fedbizopps.gov website about six weeks ago. OPM also has an MSPP website here.

The Wall Street Journal also published an article about ongoing negotiations between insurers planning to participate in the exchanges / marketplaces and health care providers. Shockingly, the article reports that consumers are sensitive to premiums and for that reason the insurers are looking for deeper discounts in return for offering narrow provider networks.   “Plans with smaller choices of health-care providers are a big focus for insurers, partly because many other aspects of exchange plans, including benefits and out-of-pocket charges that consumers pay, are largely prescribed by the law, giving them few levers to push to reduce premiums.”  The FEHBlog expects this trend to pop up in the FEHBP as the ACA continues to roll out.

The FEHBlog was intrigued by a Wall Street Journal article about innovative pharmacy chain practices designed to make healthcare more widely available. For example,

Rite Aid Corp. will open 58 stores, across four markets, which contain in-store clinics providing virtual doctor visits conducted via Web camera. The walk-in clinics—which charge patients $45 for a 10-minute chat with a doctor on a computer monitor—will be rolled out Friday in Baltimore, Boston, Philadelphia and Pittsburgh. Previously, Rite Aid had piloted the virtual clinics in nine stores in the Detroit area.

No doubt health plans will be covering these virtual office visits.

Finally Kaiser Health News reports on “a study, published Thursday by the National Institute for Health Care Reform, researchers found that while so-called “scope of practice” laws did not appear to restrict the primary care services nurse practitioners can provide to patients, they do affect how the advanced nurses are paid.”  In a nutshell, health plans pay less to nurse practitioners in states which effectively require the plan also to pay a doctor for supervisory services.

Four major ACA regulations were issued today. The first two impact the FEHBP.

The Internal Revenue Service issued a proposed rule implementing the health insurer fee (Internal Revenue Code § 9010). When you see your health insurance premiums increase significantly next year, don’t blame the sequestration, blame this fee which for 2014 allocates $8 billion across all lines of health, dental and vision insurance, including insured FEHB plans. The fee increases annually thereafter. The fee is expected to add 2% to premiums next year according to AHIP.

The Department of  Health and Human Services issued its final 2014 parameters notice which provides guidance on the transitional reinsurance fund fee. The fee expected to be $63 per belly button (excluding annuitants with primary Medicare coverage) in 2014 is imposed on all health plans, including FEHB plans, to provide a reinsurance fund for qualified health plans operating in the health insurance exchanges next year and reimburse the Treasury for the $5 billion spent on the ACA’s early retiree reinsurance program. Ironically, FEHB plans which are loaded with early retirees were prohibited from participating in this program but are being required to refund the appropriations. This assessment sunsets after 2016 (unless Congress changes the law.)  Cost curve up.

The Office of Personnel Management released its final rule governing the multi-state plan program. The ACA expects OPM to contract with at least two carriers to sponsor multi-state plans in the health insurance exchanges. Lifehealthpro.com reports on the final rule here.

The Department of Health and Human Services also released a proposed rule governing an adjunct to the health insurance exchanges for small businesses called the SHOP program. The Hill explains that “Through the SHOP system, workers will be able to compare plans side-by-side, and employers will have the option of making a monthly payment to SHOP rather than multiple insurance plans.”