OPM has posted a new page on its website announcing that

Beginning this Open Season [which starts in November 2011], paper copies of health plan brochures will not be automatically mailed to Federal Employees Health Benefits (FEHB) Program members.

You can quickly and easily view your health plan’s brochure online, anytime by visiting the FEHB website, or visit your health plan’s website. During the next several months, your FEHB health plan will contact you to offer you the option of obtaining your benefit brochure online or requesting a paper copy of the benefit brochure. If you want your health plan to mail a paper copy of your brochure to you for the next Open Season (November 14 through December 12, 2011), follow the instructions your health plan provides you. (For those of you who change plans this Open Season, your new health plan will mail you a paper copy of its brochure.)

You will continue to receive the Open Season package your plan normally mails to you, and this package will include an explanation of benefit changes for the next year and your new premium rate, but will exclude the health plan brochure.

The brochure is the FEHB plan’s contract statement of benefits so it’s a good idea for Plan members to download a copy for reference.

The National Institute of Medicine released today a report recommending that the Department of Health and Human Services treat the following services provided to women as preventive care that non-grandfathered health plans must cover in-network at no cost to the plan member under the Affordable Care Act:

• screening for gestational diabetes
• human papillomavirus (HPV) testing as part of cervical cancer screening for women over 30
• counseling on sexually transmitted infections
• counseling and screening for HIV
• contraceptive methods and counseling to prevent unintended pregnancies
• lactation counseling and equipment to promote breast-feeding
• screening and counseling to detect and prevent interpersonal and domestic violence
• yearly well-woman preventive care visits to obtain recommended preventive services

The House of Representatives and the Senate remain in session this week as their leaders continue to meet with the Administration in an effort to raise the national debt limit by August 2. The Federal Times offers various perspectives on the impact of a default situation on federal employees and annuitants. The Washington Post reports that on July 15, the Federal Postal Coalition sent a letter to the Office of Management and Budget Director and the Treasury Secretary inquiring about the impact of a default on the continuity of government operations.  One of the Coalition’s questions was

Will federal employees become subject to release through furloughs, and how will their wages and benefits be affected?

Good question.

A month or so ago, the FEHBlog noted that the Walgreen’s pharmacy chain was squabbling with prescription benefits manager Express Scripts. Chicago Business provides an update on the squabble and interesting background on the pharmacy chain and its CEO Gregory Wasson. Meanwhile, Investor Place.com compares and contrasts Walgreen’s with its competitor CVS which owns Caremark, one of the big three PBMs. (Caremark, Express Scripts, and Medco). CVS bought Caremark a few years ago, while Walgreen’s sold its PBM unit to Catalyst Health Solutions earlier this year.

This year OPM required all FEHB plans to offer enhanced smoking cessation programs. The Washington Post reports today on the alternative approaches that some large employers are using to discourage smoking among their employees.

On July 1, according to Bloomberg BusinessWeek, Macy’s began charging smokers $420 more a year in health coverage, something PepsiCo and Gannett already do (albeit at even steeper premiums). Last year, Whole Foods started giving non-smoking employees bigger discounts in their stores. And employers ranging from Scotts Miracle-Gro to the Cleveland Clinic to, now,Humana, are not hiring smokers at all, either company-wide or in certain states.

The article discusses the pros and cons of the carrot and stick approaches.

While the debt limit negotiations continue, the White House has issued a formal warning that it may veto the Fiscal Year 2012 financial services and general government appropriations that the House passed last month. According to the statement, “The funding level provided by the bill would limit OPM’s ability to implement and administer new statutory responsibilities.” The Senate has not passed its version of this appropriations bill yet.

Companies have won marketing approval so far this year for 20 innovative medicines that work differently or better than existing drugs, or tackle ailments lacking good treatments, according to the Food and Drug Administration. “New molecular entities,” the FDA calls them. There were just 21 such approvals all last year.

Recently approved are the first therapy shown to extend life for people with advanced melanoma, the deadly skin cancer; the first new treatment for lupus in over 50 years; and two drugs for hepatitis C that are far more effective than current care.

That’s good news that should help the pharmaceutical manufacturers recoup revenue that will be lost when many blockbuster drugs like Lipitor go generic later this year and next year. The country needs productive research efforts like this.

Healthleaders Media reports about a Senate Homeland Security and Governmental Affairs subcommittee hearing on Tuesday at which the Centers for Medicare and Medicaid Services were “battered” about the ineffectiveness of Medicare anti-fraud measures.

A cornerstone of the nearly two-hour hearing included the release of a particularly negative report from the U.S. Government Accountability Office, which said CMS had allowed only 42 of 639 analysts to undergo training to use a database that was tailored to identify fraud and questionable claims worth $21 billion over 10 years. 

Additionally, CMS has not incorporated any data from Medicaid claims, a major potential source of healthcare fraud and abuse, into the system, GAO charges.

Yesterday, the Department of Health and Human Services released proposed rules intended to create a flexible framework for state health insurance exchanges and the federal fall back exchange under the Affordable Care Act (“ACA”). The HHS press release is titled  “HHS and states move to establish Affordable Insurance Exchanges, give Americans the same insurance choices as members of Congress.” While the FEHBlog believe that this title is an homage to the FEHB Program, the fact of the matter is that the ACA pushes members of Congress out of the FEHB Program and into the exchanges in 2014. (The President stays in the FEHB Program.)

The ACA requires that these exchanges offer health insurance options to members of Congress, other individuals, and businesses with less than 100 employees in 2014. Modern Healthcare reports that

Joel Ario, who serves as the director of the office of health insurance exchanges at the Office for Consumer Information and Insurance Oversight, said there are two main priorities this year for states to establish exchanges. The first is to adopt some form of governance structure, which he said 10 to 12 states have done already. “A second important step early on is the development of the IT infrastructure toward the exchanges,” Ario said. “Thirty states have started that process and are moving forward at varying levels.

The House and the Senate are in session this week as the leadership of the two bodies work with the President to cut a deal on raising the debt limit. The Washington Post reports that the White House negotiations ended tonight after 80 minutes. The discussions will continue tomorrow. The President has said that the negotiators have 10 days to reach an agreement in order for Congress to enact the required legislation before August 2. That is the day according to the Administration that the federal government will begin to default on its obligations according to Reuters..

Kaiser Health News reports that major health insurers are pressing the Department of Health and Human Services to exempt ex-patriate plans from the minimum loss ratio rules because plans covering overseas members necessarily have higher administrative costs “as a result of having to cover emergency evacuations, lining up providers in other countries and paying claims in a variety of currencies.”  A temporary exemption expires at the end of this year. While there are no FEHB plans that are limited to overseas members, there are FEHB plans, such as the Foreign Service Benefit Plan, that cater to federal employees and annuitants working and living overseas.

HHS announced on Friday that nearly 4,500 organizations, including over 2,000 hospitals, have joined the Partnership for Patients, a public-private coalition launched earlier this year to improve health care quality and safety.

The Federal Government issued its Spring 2011 semi-annual regulatory agenda today. The semi-annual regulatory agenda gives readers a heads-up on the Government’s regulatory plans. The agenda tells us that OPM has two FEHBP regulations in mind — one to implement the Affordable Care Act’s requirement to expand FEHBP coverage to employees of Indian Tribes and the other evidently to conform OPM’s disputed regulations (5 C.F.R. Sec. 890.105) to conform with the Affordable Care Act’s requirement that governmental plans comply with ERISA’s claim and internal appeal rules as enforced by the ACA regulators. This second requirement actually took effect at the beginning of 2011.

OPM requires carriers to report on NCQA’s Healthcare Effectiveness Data and Information Set measures. OPM explains that HEDIS is “a set of standardized performance measures designed to ensure that consumers have the information they need to reliably compare the performance of healthcare plans.” FEHBP HMOs report on all of the measures while FEHBP fee for service plans report on measure that are strictly based on claims data. This week NCQA announced HEDIS changes for 2012:

New MeasuresThe two new measures in the HEDIS 2012, Volume 2: Technical Specifications publication are:

• Human Papillomavirus Vaccine for Female Adolescents—This measure assesses the percentage of 13-year-old females who had three doses of the human papillomavirus (HPV) vaccine. The measure evaluates compliance with Centers for Disease Control and Prevention and Advisory Committee on Immunization Practices immunization guidelines.

• Medication Management for People With Asthma—This measure assesses the percentage of people 5–64 years of age who were identified as having persistent asthma and who received and remained on appropriate medications during their treatment period.

Retired Measure

The obsolete measure, which will be removed from HEDIS 2012, Volume 2, is Relative Resource Use for People With Acute Low Back Pain.

Back pain can be difficult to treat. Medscape reports this week that “Massage therapy may effectively reduce or relieve chronic back pain for 6 months or more, according to the results of a parallel-group, randomized controlled trial reported in the July 5 issue of the Annals of Internal Medicine  and “Spinal manipulative therapy is only minimally effective for chronic low back pain, according to the results of an update of a Cochrane review reported in the June 1 issue of Spine.”

The Department of Health and Human Services, in accordance with Congress’s desire to ramp up HIPAA privacy and security rule enforcement, has contracted with the Big 4 accounting firm KPMG to perform compliance audits of covered entities (health care providers who engage in electronic transactions, health care clearinghouses, and health plans) and their business associates. Health Data Management reports that “Under the contract, OCR expects KPMG to conduct 150 audits by the end of 2012.”  Any violations that KPMG finds could result in heavy penalties under the HITECH Act’s revised civil penalty scheme.

The Wall Street Journal reports about a study published in the AMA Journal finding that

About 600,000 angioplasty procedures, which almost always involve placement of a tiny metal tube called a stent, are done in the U.S. each year [at an average cost of $20,000 per procedure]. Roughly 70% of these procedures are performed on patients suffering symptoms of a heart attack and aren’t medically controversial. But the remainder are done on stable patients who are suffering mild symptoms or no symptoms at all. Of those, 50% are deemed appropriate, 38% uncertain and 12% inappropriate, the report says.
“One in eight is probably higher than we would like,” said Paul Chan, a cardiologist at Saint Luke’s Mid America Heart and Vascular Institute, Kansas City, Mo., and the study’s lead author.

The good news is that the cardiologists are studying their own practice patterns in order to improve them.

Because the FEHBlog adheres to Dirty Harry’s dictate, “a good man knows his limitations,” he has decided not to delve into the Avastin or Chantix controversies, but they are worth noting..

The AMA News (whose website is refreshed on Mondays) reports on the AMA legislative body’s views on health care reform.

Issue: The federal government is working to define what it will call essential health care benefits that must be covered by plans for sale in the state-based health insurance exchanges.

Proposed action: Rather than recommend a list of specific benefits, reaffirm existing policy stating that the coverage offered by the Federal Employee Health Benefits Program should be used as a “reference” when identifying whether a plan offers meaningful coverage for adults. [Adopted]

Yeah FEHBP!

The AMA News also reports on a Goldman Sachs investors conference that many health insurance executives attended.

Aetna’s President, CEO and Chair Mark Bertolini, speaking at the conference, said the economy is succeeding where insurers have not: cutting costs. “As much as we like to say we do really good work, as a company and as an industry, a good majority — more than half — of the decrease in utilization is associated with externalities versus what we’re doing.” In early 2011, he said, the company saw members return to doctors — normal for the winter cold and flu season — but not fill the prescriptions doctors wrote for them. He said that was probably because they couldn’t afford the out-of-pocket drug costs. “That’s an unusual trend,” he said.

Interesting observation.

Happy Fourth of July Weekend! Both the House and the Senate will be in session this week following the holiday.

On Friday, the Centers for Medicare and Medicaid Services issued three proposed rules concerning updates to Medicare payment policies for physicians, hospital outpatient departments and ambulatory surgical centers and dialysis centers for 2012. CMS projects the Medicare Part B payments to doctors will drop by 29.5% under the current statutory formula unless Congress acts before the end of the year. Interestingly, as it is the subject of litigation out in California,

CMS is also proposing some changes in how it adjusts payment for geographic variation in the cost of practice.   The Affordable Care Act made some temporary adjustments that would be in place for two years while CMS and the Institute of Medicine study these issues.  As part of this initiative, CMS is replacing some of the data sources—such as using data from the American Community Survey (ACS) in place of HUD rental data and also using ACS data in place of the data currently used for non-physician employee compensation—as well as making other adjustments called for in prior year public comments.  Although these proposals result in very little change to the indices, they show that the data Medicare has used in the past and is proposing to use in the future produce consistent results—suggesting past year adjustments have accurately reflected geographic variations in the cost of practice. 

The California litigation alleges that the geographic variation is unfair to rural providers. On average, CMS will increase hospital outpatient departments payment rates by 1.5%, ambulatory surgical center payment rates by 0.9%, and dialysis center payment rates by 1.8%.

The Washington Post and Kaiser Health News reports today on the trend that the FEHBlog has been following — health insurer acquisition of medical providers. While the FEHBlog thinks that this trend is driven by the Affordable Care Act which encourages integration and caps insurer profits and could bend the cost curve down which is an expressed objective of the ACA, the article’s reporters seem to consider this trend to be the end of the world.

The Las Vegas Sun reports that

A Las Vegas physician has agreed to pay $5.7 million plus interest to settle allegations that he submitted false claims to federal health care programs for various radiation oncology services, the Justice Department announced Thursday.

The government accused Rakesh Nathu of submitting improper claims to Medicare, TRICARE and the Federal Employees Health Benefits Plan from 2007 through 2009.

Yesterday, OPM reissued its interim final rule creating a new minimum loss ratio methodology for pricing community rated plans in the FEHB Program.

Today, the Department of Health and Human Services issued an interim final rule adopting common operating rules for electronic health plan eligibility verification and claim status checks. These operating rules which take effect on January 1, 2013, will make it easier for health care providers to engage in these electronic transactions with insurers. CAQH, a coalition of health insurers and providers, was developing these rules at the time Congress passed the Affordable Care Act. Congress decided to codify them which the FEHBlog views as a mistake because technology changes a lot faster than the law. Modern Healthcare reports that
“the rule will carry near-term costs for healthcare entities, including up to $5 billion for insurers and $800 million for providers over the first 10 years, according to an HHS spokesman.” This new requirements come on top of the existing mandates to adopt new electronic transaction standards and the ICD-10 code set over the next eighteen months.

In a very interesting development, a Highmark, a western Pennsylvania health insurer, is making a major investment in the West Penn Allegheny Health System which according to a Forbes article was poised to shut down its hospitals in September for lack of capital.  The parties explained in a press release that

Highmark Inc. and the West Penn Allegheny Health System (WPAHS) today announced their intentions to pursue an affiliation aimed at maintaining the health system as a high-quality choice for health care services to millions of Western Pennsylvanians.

As part of the initial arrangement, Highmark is immediately providing a $50 million grant to the WPAHS, enabling the health system to sustain and strengthen its West Penn and Forbes Regional hospitals while assuring the continued delivery of quality medical services by the entire system. Highmark is making a total financial commitment of up to $475 million over four years, including $75 million to fund scholarships for students attending medical schools affiliated with WPAHS, and to support other health professional education programs. The management and boards of directors of Highmark and WPAHS will continue discussions in the weeks ahead with the goal of finalizing a definitive agreement.

The Wall Street Journal reports that

Govexec.com reports on privacy advocate reactions to the OPM system of records notices for its FEHBP claims data warehouses published in the June 15, 2011, Federal Register.

The AMA News reports on an Archives of Internal Medicine article that is provocatively titled “The Principles of Conservative Prescribing.” “The article makes several recommendations on how physicians can revamp their prescribing habits, including considering other treatment options, being more strategic about the prescriptions they write, being educated about and aware of possible adverse effects, and being cautious of prescribing new drugs.” Here’s another situation where doctors just need to change their thought processes in order to lower the cost curve and increase patient safety.

Bloomberg reports on another Archives on Internal Medicine study finding that “Physicians were willing to accept about 88 percent of patients who had private insurance in 2008, down from 93 percent in 2005, the study released today found.” The FEHBlog appreciated AHIP’s comments:

A reason that doctors may be accepting fewer patients is that some insurers have shrunk the network of doctors and hospitals they contract with to improve quality and value, said Robert Zirkelbach, a spokesman for America’s Health Insurance Plans. 

“Health plans are selective in who they contract with, so that their members have access to doctors and hospitals that provide safe, high quality care,” Zirkelbach said in a telephone interview.

While insurers have increased their scrutiny of medical claims to try to keep down costs, doctors also must do a better job of filing requests for payment correctly and on time. Too few use electronic records, and many file claims late or inaccurately, he said. “It’s a two-way street,” Zirkelbach said. 

Narrow, high performance networks do bring down the cost curve and increase quality as explained in this receCalifornia Healthline article.