The FEHBlog successfully predicted that the University of Connecticut (my alma mater)/ Team of Destiny would win the NCAA men’s basketball championship, but the FEHBlog is in no position to predict whether or not there will be a partial government shutdown on Saturday. The FEHBlog hopes for the best and notes the OPM posted shutdown guidance for federal employees on its website today.

Business Insurance reports that the Senate today joined the House of Representatives in repealing the Affordable Care Act’s expanded IRS Form 1099 reporting requirement against which large and small businesses rebelled.

The Washington Post reports on recent Justice Department anti-trust actions against health care providers and insurers. The actions are of interest because the violations arise out of provider network contracting actions in the context of a business with alleged monopoly power.

The FEHBlog moves from provider network contracts to out of network payment arrangements. The FEHBlog has discussed the New York State Attorney General’s (now Governor’s) settlement with Ingenix which lead to Ingenix handing over its out of network reimbursement databases to a new non-profit company called Fair Health, Inc. Fair Health has launched a new website which will give consumers estimated costs for medical and dental procedures by zip code. The site currently offers dental procedure pricing and in August 2011 it will provide medical procedure pricing.

The American Medical News ran an interesting story about the ongoing development of the essential benefits package which health insurance exchange plans must offer. The following paragraph is noteworthy for its praise of the FEHBP:

The AMA recommends that HHS strike a balance by using an existing model — the Federal Employees Health Benefits Program — as a reference when setting essential benefits. FEHBP plans cover hospital, physician, medical and surgical care, even though the program does not specify a standard benefit package, said Gerald E. Harmon, MD, a member of the AMA Council on Medical Service. Participating plans follow evidence-based guidelines for preventive care and are required to cover additional benefits, including childhood immunizations, prescription drugs and mental health services. Dr. Harmon emphasized that the definition of essential benefits must allow for a range of health plan options with a variety of benefits, cost-sharing levels and other features to ensure adequate consumer choice.

The current continuing resolution funding the Federal government’s operations expires on Friday April 8. The Washington Post accurately describes this week as crunch time.  On Friday, House Speaker John Boehner Let’s keep our fingers crossed for a resolution.

On Friday, April 1. OPM Director John Berry testified about his agency’s FY 2012 budget request before the financial services and general government subcommittee of the House Appropriations Committee. Govexec.com reports that

Berry drew praise from Republicans and Democrats for OPM’s health and wellness initiatives for federal employees, the agency’s efforts to increase diversity within the government workforce, effective administration of the Federal Employees Health Benefits Program, and Berry’s push to boost federal hiring of veterans, which resulted in an executive order.

The Affordable Care Act’s (“ACA”) regulators issued their sixth set of Frequently Asked Questions about ACA implementation. These FAQs focus on how to maintain grandfathered plan status. That train has basically left the station for the FEHBP.

OPM’s recent FEHBP call letter asked plans to focus on patient safety.   Modern Healthcare reports that over the objection of the American Hospital Association, the Centers for Medicare and Medicaid Services have posted a spreadsheet captioned “Hospital Acquired Condition calculations for IQR 2011”

containing facility-specific information on eight hospital-acquired conditions [per 1,000 discharges], including blood incompatibility, air embolisms and two types of healthcare-associated infections. The agency declined to comment on the data, but a CMS spokesman said more clarification of the HAC data would be available soon. The file is also scheduled to be posted on Hospital Compare, the CMS’ site for consumers, on April 21.

HHS released the long awaited proposed accountable care organization (“ACO”) rule today.  Now it’s off to the races for hospitals, doctors, and insurers to create these new creatures which are intended to provide higher quality care without locking patients into the provider network like the mean old HMOs. Kaiser Health Care has a helpful FAQ on the ACO rule and it’s always interesting to read the AMA News take on the proposed rule which logs in at 429 pages.  The FEHBlog appreciates AHIP President Karen Ignani’s comment that

We remain concerned that ACOs could accelerate the trend of provider consolidation that drives up medical prices and result in additional cost-shifting to families and employers with private coverage.  However, we appreciate that CMS, the Department of Justice, and the Federal Trade Commission recognize the potential for consumer harm and are taking steps to address this issue with proposed guidelines for evaluating ACOs and their potential impact on consolidation within the marketplace.”  

The proposed rule will be open for public comment during the 60 days following its publication in the Federal Register on April 7.

Tomorrow OPM Director testifies before the House Appropriation’s financial services subcommittee in support of his agency’s FY 2012 budget proposal.

Govexec.com now features a government shutdown countdown on its home page, and the USA Today reports that the government remains on radio silence about the consequences of a shut down.  The Christian Science Monitor and other press outlets report that a compromise is in the works that would avoid a shutdown.

Yesterday, the Labor Department issued its first annual report on self-insured health plans which is an ACA requirement.  Business Insurance informs us that “According to the report, just more than 82% of private-sector employers with at least 500 employees self-insure at least one of their health care plans, compared with nearly 26% for employers with 100 to 499 employees and 13.5% for employers with less than 100 employees.” Contrary to HHS, the FEHBlog anticipates that the ACA will incent more employers to self insure their plans in order to avoid, for example, the onerous fees imposed on health insurance carriers beginning in 2014. It’s worth noting that the federal government does not self insure its FEHBP. Instead the risk is borne by the carriers which include health insurers, like the Blue Cross Blue Shield Association, employee organizations like GEHA and Mail Handlers, and HMO carriers like Aetna.

Congressional Quarterly offers an update on the FY 2011 budget negotiations. The negotiators still have ten days to avoid a Government shutdown on April 9. Both the President and the House leadership have stated that they do not want another short term extension; they want closure on an issue that should have been resolved last year. A complicating factor is the new House leadership’s pledge to make bills be made public for at least 72 hours before the House votes, but hope springs eternal.

Thomson Reuters Healthcare released its 2011 U.S. hospital ratings.  The Wall Street Journal reported on the Veterans’ Affairs Departments VA Hospital Compare which sets the bar for quality reporting. Of course the VA manages the health system but the agency deserves credit for this high level of transparency. It’s unfortunate that other health care organizations do not engage in the same level of self-policing. VA Hospital Compare should be helpful to the many federal employees and annuitants who are veterans. Thank you for your service.

On a related note, the Wall Street Journal reports on its efforts to unveil the practice patterns of unscrupulous physicians by mining the Medicare claims database.  However, since 1979, a federal court acting at the request of the American Medical Association has enjoined the public from using this database to identify Medicare claims payments information to doctors by name.  The Journal has tried to work around this limitation while bringing a lawsuit to terminate the injunction.                      

Finally, the FEHBlog learned in a BNA publication about a Deloitte consulting report on healthcare value based purchasing, an objective of the Affordable Care Act. “Value-based purchasing (VBP) is a payment methodology that holds health care providers accountable for the quality and cost of the services they provide by a system of rewards and consequences, conditional upon achieving pre-specified performance measures.”  The report, among other topics,

• Looks ahead to VBP implementation under health care reform legislation;
• Reviews commercial health plans’ response to VBP and other payment reforms;
• Discusses potential challenges of implementing VBP;
• Provides key takeaways for health care providers, employers, health plans, state and federal government, and consumers

Odds of a government shutdown on April 9, 2011, are increasing according to the Washington Post. Govexec.com reports that “With the Obama administration officials remaining tight-lipped about their preparations for a potential shutdown, the American Federation of Government Employees is taking a proactive approach in its planning, offering its members a detailed explanation of what the union sees as their rights and protections. According to the AFGE, “benefits provided through the Federal Employees Health Benefit Program should also continue uninterrupted” during a shutdown.

OPM released its annual call letter for FEHB plan benefit and rate proposals which kicks off the 2012 OPM contract year. Carriers must file their benefit and rate proposals by the end of May 2011 and then OPM and the carrier settle on benefits and rates by the end of August. Then OPM and the carriers prepare for the Open Season which occurs from mid November through mid December.

At the OPM carrier conference yesterday, OPM’s Director highlighted the contents of the call letter as discussed in reports found in the Washington Post and Govexec.com

OPM released yesterday a benefits administration letter about the upcoming Open Season for the Federal Long Term Care Insurance Program. The Open Season will run from April 4 through June 24, 2011. Here’s a link to FAQs about this Open Season.

Also yesterday, the Department of Health and Human Services released to Congress and the public a national strategy to improve healthcare quality. National Underwriter notes that

Drafters mention the cost of care briefly in the new National Strategy for Quality Improvement in Health Care, a document that is supposed to shape U.S. quality improvement efforts. * * * To reduce costs, officials say, “the National Quality Strategy will foster care strategies that reduce redundant and harmful care, for example, by reducing health care-acquired conditions; establish common measures that will help assess the cost impact of new programs and payment systems.”

The New York Times reports on Washington State’s health technology assessment committee which determines which medical devices and procedures will be covered under the State’s Medicaid and state employee health programs. The Times describes the committee “as a living laboratory of the complexities of applying evidence-based medicine, something that is becoming more common as a way to rein in health care costs.” The Affordable Care Act created a Patient Centered Outcomes Research Institute to make similar decisions for the Medicare Program. This organization will be funded with per capita fees imposed on health plans beginning later this year (January 1, 2012, for the FEHB Program).

The AMA News reports that the Medicare Rights Center has convinced a federal judge in New York City to rule that the Medicare program must cover off label prescription drugs “when the treatment is medically necessary [according to peer reviewed literature even if] the use is not described in an official medical compendium [of approved off label uses].”  When the Food and Drug Administration (“FDA”) approves a prescription drug for the market because testing has proved the drug to be effective and safe, the agency also approves a “label” for the drug. Under the FDA’s rules, the manufacturer must market the drug strictly in accordance with the labelled uses, but with the exception of controlled substances, doctors can decide to prescribe the drug for so-called off label uses as the American Cancer Society explains.

The American Medical News also includes a helpful report on how to avoid data breaches.

Kaufman, Rossin & Co., an accounting firm in South Florida, issued a report in February that found practices and hospitals are more likely to experience a breach because of an employee losing a thumb drive, mobile device or stack of paper files than because they were targeted for a malicious hacking.

The firm analyzed 166 breaches affecting 500 or more patients that were reported to HHS’ Office for Civil Rights from September 2009 to September 2010 and found that theft and loss were the leading causes.

“Humans truly are the biggest vulnerability within an organization with regard to security and privacy,” said Rebecca Herold, a privacy and data security consultant based in Iowa.

Common sense truly is a wonderful trait.

Because Congress has recessed for the upcoming week, this week’s exciting event surely will be the FEHB Plan Carrier Conference sponsored by OPM and America’s Health Insurance Plans. Right around the time of the conference, OPM issues its annual “call letter” to carriers. The call letter initiates the benefit and rate renewal process for the next year. Benefit and rate proposals according to OPM’s regulations must be submitted by the end of May.

In 2008, several FEHBP annuitant enrollees who were over 65 sued the Department of Health and Human Services in the federal district court here in D.C. to decouple Medicare Part A from Social Security benefits. The plaintiffs wanted primary coverage under their FEHB  plans but HHS ruled that they could not refuse Medicare Part A without forfeiting their Social Security benefits. Last week, U.S. District Judge Rosemary Collyer entered summary judgment for the government. The Court in its opinion concluded that Medicare Part A coverage is statutorily mandated for Social Security recipients.

The Washington Post reported on a trend that the FEHBlog has noticed — health insurers are expanding outside of their core businesses in the wake of the Affordable Care Act. No doubt this sensible trend will continue.

The President signed into law today a new continuing resolution funding the federal government until April 8, 2011.

The Labor Department today issued a technical release (2011-01) extending the grace periods from enforcement of several new Affordable Care Act requirements on group health plans, including FEHB plans — most significantly the requirements for a 24 hour time frame (instead of the long standing 72 hour time frame) for making urgent care claims decisions, providing notices in a culturally and linguistically appropriate manner, and disclosing diagnosis codes and treatment codes and their corresponding meanings on explanations of benefits (thereby unnecessarily creating privacy issues).

These requirements created by a July 23, 2010, regulation, apply only to grandfathered plans in the private sector but OPM has decided to apply the claims and internal appeal requirements of that regulation to all FEHB plans. The Affordable Care Act regulators explained that the extended grace period is intended to give them time to publish new regulations necessary or appropriate to implement the internal claims and appeals provisions of PHS Act section 2719(a).

The FEHBlog has discussed the Golinski v. OPM case pending in federal district court in San Francisco. Ms. Golinski is suing for FEHB coverage of her same sex spouse. On Wednesday, the court dismissed Ms.Golinski’s complaint against OPM but allowed the plaintiff an opportunity to amend her complaint to raise the claim that that Section 3 of the Defense of Marriage Act is unconstitutional. A copy of the opinion is available here.

The House passed on a 271-158 vote a new continuing resolution (H. Joint Res. 48) to fund federal government operations until April 8. The Senate is expected also to approve the CR, and then we shall see whether a bi-partisan deal on the FY 2011 budget can be struck during the next three weeks. The Washington Post points out that this new “CR may also be the last, given the fraying support for short-term fixes among House Republicans, as well as from President Obama.”  Politico reports that no budget deal is imminent.

The Congressional Budget Office published yesterday its periodic report identifying policy options available to Congress to reduce the deficit. As the Federal Times points out, one option that CBO presents is to give federal employees vouchers to pay for FEHBP coverage. Currently, the federal government contributes 72% of the enrollment weighted average premium capped at 25% of the selected plan’s premium. Under the CBO option report, p. 37), federal employees and annuitants would receive  “a voucher that would cover roughly the first $5,000 of an individual premium or the first $11,000 of a family premium beginning on January 1, 2013.” The idea would be to provide an incentive for FEHBP members to enroll for low cost plans that would be covered in full by the voucher or leave the FEHBP for the state health insurance exchanges created under the Affordable Care Act. The vouchers would increase by the overall inflation rate (the CPI-U). CBO projects $32 billion in savings from this approach over the period 2012 through 2021.

Other ideas include accelerating the implementation and expanding the reach of the high cost health plan or Cadillac plan tax imposed by the Affordable Care Act (increasing government revenues by $300 billion from 2012 through 2021, p. 195) and repealing the Affordable Care Act’s individual mandate (saving the government $282 billion over the period 2012-2021, p. 199). The FEHBlog believes that any such acceleration and expansion of the Cadillac plan tax would drive employers to put their employees and retirees in the state health insurance exchanges. As a side note, Business Insurance reports that the federal goverment subsidy toward COBRA and TCC extension coverage cost the government over $34 billion.