Happy Fourth of July to all!

The Towers Perrin actuarial consulting firm issued a report for multi-national employers this week on 2012 global medical trends. The FEHBP does cover people all over the world! The FEHBlog did not notice any surprises in the blurbs about the report which is available at the link.

The AMA News is crowing this week about the growth of physician-led accountable care organizations.  It’s interesting to note (as did AHIP) that

Those working within the ACO model said private payers allowed for
more flexibility. Participants in the Medicare shared savings program
must have a minimum of 5,000 members and meet 33 quality measures in
four domains. Those arranged with private insurers can be designed for
lower numbers and different benchmarks.
For instance, PinnacleHealth System, a nonprofit health system based
in Harrisburg, Pa., announced June 13 the formation of an accountable
care organization with Capital BlueCross. The insurer will provide
resources such as nurses to coordinate care and technology to analyze
where cost savings could be achieved. Pinnacle is looking to establish
more of these arrangements with other insurers in the area and has no
plans to apply to a government program at the moment.
“The government has a very strict formula,” said Chris Markley,
Pinnacle’s senior vice president of strategic services. “Capital
BlueCross is more flexible, and it was a very collaborative process to
set up.”

Ah, the benefits of market flexibility!

Now let’s turn to health care fraud news. The Justice Department reported this week a False Claims Act settlement with Nextcare, an urgent care center owner in several states.  NextCare agreed to pay $10 million and enter into a corporate integrity agreement to settle (without admitting liability) allegations that its centers ordered unnecessary tests and upcoded certain services provided to FEHBP members, among others. The former Nextcare employee who blew the whistle by filing a False Claims Act lawsuit on the federal government’s behalf and her lawyers will received $1.614 million.

The Washington Post reports that the prescription drug manufacture GlaxoSmithKline yesterday agreed to plead guilty to Food and Drug Act violations and pay the federal government $3 billion based on allegations that GlaxoSmithKline encouraged off-label use of its blockbuster antidepressant drugs Paxil and Wellbrutin. When the FDA approves a prescription drug for marketing it labels its approved uses based on the clinical studies. While doctors can prescribe the drug for non-approved uses in the exercise of sound professional judgment, the manufacturers cannot advocate such off label use. In this case, two False Claims Act whistleblowers and former Glaxo employees sued Glaxo for among other things advocating Paxil’s use with children which was an unapproved use. The Post reports that

Starting in 2001, Thorpe [one of the whistleblowers] reported to his district manager, then to
Glaxo’s human resources department and finally to Glaxo’s chief of
global compliance about a number of improper marketing practices. The
compliance chief began an internal investigation, which confirmed
Thorpe’s allegations through various ways including marketing materials
and interviews with Hamrick and other sales representatives, according
to lawyers for the two men.

But the article goes on, Glaxo did nothing and so the whistleblowers sued. Their share of the recovery has not yet been determined. The size of this settlement is staggering and illustrates just how much money flows around in the health care system.

The House and the Senate are taking a recess for the Fourth of July holiday this week.

Before the recess last week, Congress passed a transportation authorization bill (H.R. 4348) that among other things authorizes OPM to implement a phased retirement program for federal employees (Sec. 100121). As the Federal Times explains, the provision, once implemented, will allow employees to ease into retirement over a period of months or even years, while transitioning their workload to younger employees. The new program evidently will not affect FEHB coverage because the FEHBlog sees no reference to the FEHBP in the provision. There will be some interesting bounces of the ball though, e.g., when an over age 65 employee engaged in a phased in retirement be considered retired for purposes of coordination of benefits with Medicare? The required OPM regulations (and perhaps the existing CMS regulations) may help answer that question. This is likely to be a popular program.

The FEHBlog likes to give credit where credit due, and for that reason he suggests reading this Cleveland Plain Dealer article about a Cleveland Clinic effort to better manage the care offered to its chronically ill patients. The facility is pilot testing three different coordinated care models in an effort to settle on one approach to use with a Medicare accountable care organization.  “The three new pilots will expand what Hopkins [one Cleveland Clinic location] has been doing to a much
larger scale, measuring all 33 of the quality metrics outlined in the
ACO regulations, and using larger teams, including newly trained
“chronic-care coordinators,” nurses who will follow medically complex
patients.”

The Supreme Court upheld the constitutionality of the Affordable Care Act today in a widely reported, close decision. Implementation of the law will continue on its current course, and therefore there’s not much to discuss in the FEHBlog about the case. Nevertheless, here’s a link to a Wall Street Journal article in which both sides of the debate compliment the Chief Justice John Roberts, who was the swing vote, for the pragmatic decision.

The Wall Street Journal reports that earlier this week the Senate followed the House by approving a compromise version of the Food and Drug Administration user fee bill. The President is now expected to sign the bill. As the FEHBlog previously has explained, this new law will extend the FDA user fee program, which accelerates the approval of new drugs, to generic and biosimilar drugs.  In drugs news, the Chicago Tribune reports that the FDA approved a new obesity drug Belviq for the first time in over a decade. The FEHBlog expect that the plaintiff’s bar already is trolling for clients among the people who use this drug.

Health Data Management adds with respect to the FDA user fee bill that

The bill requires the Department of Health and Human Services within 18 months of enactment to publish a report “that contains a proposed strategy and recommendations on an appropriate, risk-based regulatory framework pertaining to health information technology, including mobile medical applications, that promotes innovation, protects patient safety and avoids regulatory duplication.”

The regulatory strategy and recommendations would be published on the Web sites of the FDA, Federal Communications Commission, and Office of the National Coordinator for Health Information Technology. The HHS Secretary could convene a working group of stakeholders to give input on the strategy and recommendations.

In that regard, the AMA News reports this week that

PremierConnect, created by Premier and available June 25, a performance improvement alliance of more than 2,600 hospitals, will give physicians and health care systems easy access to a wide variety of data, including population information and patient-specific data. The Premier alliance is free to join, and use of PremierConnect is a free member benefit. Doctors can buy technology apps from Premier that present data in focused reports to show specific areas for improvement or action.

PremierConnect databases are aggregates of several data sources, including claims, lab, billing, purchasing and operational data that are updated every 30 days. The data can be queried, based on individual needs or found through pre-generated reports prepared by Premier or other users. The data also include information captured from hospital electronic health record systems.

According to Premier’s website, “approximately 200 hospitals, health systems and providers, including large systems operating multiple hospitals, academic medical centers associated with universities, and community-owned hospitals” own the company. Good for them.

In other tech news, AHRQ has posted its 2011 state snapshots which provide State-specific health care quality information, including strengths, weaknesses, and opportunities for improvement. The goal is to help State officials and their public- and private-sector partners better understand health care quality and disparities in their State.” The snapshots may be helpful to health plans.

The HHS Office for Civil Rights which enforces the HIPAA Privacy and Security Rules has posted its covered entity and business associate compliance audit protocols on the web. The HITECH Act required HHS to establish this audit program which it implemented in 2010.

Finally, the AMA News reports on Aetna’s efforts to combat (via litigation) outrageous pricing by out-of-network health care providers. Good luck Aetna.

The FEHBlog is back from the beach and will be carefully following the Scotusblog’s live coverage of the Supreme Court’s decision day tomorrow morning.

The House and the Senate are in session this coming week before the Fourth of July holiday. No doubt the outcome of the Supreme Court’s healthcare decision may be impact their schedule this week.

The Washington Post had front page coverage on Saturday about a cool arrangement between Aetna and Inova Health Systems which seeks to coordinate care and bend the cost curve down. Indeed the arrangement will share any savings with participating employers in northern Virginia where Inova is located. What puzzles me about the article is its man hits dog tone. Cooperation like this between insurers and providers is good news. Insurers don’t need to be banged on the head to recognize the benefits of collaboration. Insurers are incented to control costs like this regardless of the Affordable Care Act’s status. The article criticizes providers for their reliance on fee for service medicine but that reliance stems from the fact the Medicare and Medicaid are so penurious in their payments. It will take innovation like this to change the rubric.

It’s not a usual Friday for the FEHBlog because it’s the end of the beach week but it’s a Friday nonetheless.

The Supreme Court did not issue its healthcare decision yesterday but it is expected to do so next week — likely on Monday. While that is the last scheduled decision day of this term, the Court can create an additional decision day.

The American Medical Association, which is holding its annual meeting this week, issued its fifth annual health insurer report card. Piling chutzpah on top of chutzpah, the AMA, which typically objects to rating doctors, takes credit for reducing an unbelievably high error rate found in last year’s survey. AHIP responded

‘Health plans and providers share the responsibility of improving the accuracy and efficiency of claims payment,’ AHIP spokesman Robert Zirkelbach wrote in an email to MedPage. Health plans are doing their part by collaborating with providers and investing in new technologies to improve the process for submitting claims electronically and receiving payments quickly. At the same time, more work needs to be done to reduce the number of claims submitted to health plans that are duplicative, inaccurate, or delayed,’ Zirkelbach wrote.”

In other words, take the log out of your eye, AMA, first.

Standard & Poors issued its monthly healthcare index report yesterday.  The cost curves continue to point up.

As measured by the S&P Healthcare Economic Commercial Index, healthcare costs covered by commercial insurance plans increased by 8.46% over the year ending April 2012, up from the +7.78% reported for March 2012. Growth rates in Medicare claim costs rose by 2.60%, according to the S&P Healthcare Economic Medicare Index, up from March’s +2.42%.  The Professional Services Index annual growth rate also increased from its March 2012 +5.58% rate to April’s +6.18%. The Hospital Index annual growth rate increased to +5.81% in April, from its +5.44% March rate.

Happy Summer Solstice!

The Hill reports that on Monday Congressional leaders announced that a compromise had been reached on the Food and Drug Administration user fee bill. This is a big deal for big Phrma. Nevertheless, it’s also good news for health plans and consumers because the bill includes new user fee programs for all types of generic drugs which hopefully should get the FDA off the dime onapproving a regulatory pathway for bio-similar specialty drugs.  As the FEHBlog has noted that pathway was created in the EU several years ago.

Modern Healthcare reports on a House Ways and Means Health subcommittee hearing on a June 2012 Medicare Payment Advisory Commission report to Congress. In the FEHBlog’s view, the report and the hearing illustrate the problems faced by a public option like traditional Medicare in keeping current.

The AMA News reports that Consumer Reports included a 24 page insert in its July 2012 issue being mailed to Massachusetts residents. The insert provides ratings on internist and pediatric practices with three or more primary care doctors in that state. The ratings are based on surveys of over 64,000 Massachusetts residents. “Survey questions covered six general areas of the patient experience:
communication; coordination of care; how well physicians get to know
patients; the patient’s experience with office staff; whether the
physician advised the patient on staying healthy; and pediatric care.” Consumer Reports is working with the Robert Wood Johnson Foundation and others  to test different methods of rating primary care doctors in the U.S. “The magazine already has ratings of thoracic and heart surgeons, hospitals and insurance companies.”

The FEHBlog is vacationing on the Outer Banks of North Carolina this week. He delayed the weekend update until this morning to watch the U.S. Open and the NBA Finals and see if the Supreme Court issued its healthcare decision. It didn’t. The last two decision days are next Thursday and next Monday. The Scotusblog live blogs the Court’s announcement which is geeky fun.

The House and the Senate are in session this week. Last week, the Senate Appropriations Committee approved a Fiscal Year 2013 financial services and general government appropriations bill. This is the bill that funds the FEHBP. The bill includes the traditional FEHBP related appropriations provisions. Here’s a link to the Federal Times article on the bill’s broader implications for federal employee compensation.

The Hill reports that Steve Larsen, the CMS executive who runs the Center for Consumer Information and Insurance Oversight, is leaving the agency next month. CCIIO is responsible for ACA implementation.

Firehouse.com reports that “A seasonal wildland firefighter with the U.S. Forest Service started an online petition in late May to extend federal healthcare benefits to him and thousands others, and within the last few days it has really begun to pick up some steam.”  The problem is that such seasonal employees do not meet the FEHBP’s statutory eligibility requirements. Congress addressed a similar problem by extending FEHBP coverage to Indian tribal employers in the Affordable Care Act. There were Indian tribal employees who worked for the federal government (typically the Indian Health Service) for part of the year and the tribe for the other part. Congress could extend FEHBP coverage to seasonal firefighters but the question then becomes where do you draw the line because there are a lot of people who work for the federal government or the Postal Service on a part time basis who are not eligible for the FEHBP.

OPM has been encouraging FEHBP carriers to introduce wellness initiatives in their plans. The AMA News reports on the trend of health insurance carriers that offer their members personal / lifestyle coaching on smoking cessation, weight control, etc.   (Of course the AMA News sees evidence of a nefarious health insurer plot to attract good risks.)  The FEHBlog received an email from DPS Health which provides a virtual weight loss coaching program to a major FEHB plan carrier, GEHA. The FEHBlog was alerted that readers can download a white paper about this program at this link.

The FEHBlog really got a kick from this ihealthbeat article and this Healthcare Finance News article about the annual Physicans Sentiment Index compiled by Athenahealth. To sum it up,

Physicians remain concerned over the future of U.S. healthcare, a new survey reveals. Among the survey’s findings, most physicians think EHRs and the ACA will adversely affect the quality of patient care, and nearly two-thirds anticipate that quality of healthcare will worsen over the next five years.

This is an ironic — not a humorous — line because the ACA’s burdens on health insurers dwarf those imposed on doctors. What’s more the government has spent over $5 billion on electronic health records systems and doctors are dissatisfied. That’s really no surprise to me because the doctors didn’t have to invest any capital in the systems. There’s no incentive on the doctors to make the systems work. They evidently would rather complain. It’s not unusual to complain about regulatory burdens like the meaningful use of electronic health records rules but those rules were the government’s consideration for the $5 billion expended on those systems. In contrast all that health insurers get from ACA compliance is the right to stay in business.

Speaking of the ACA, the Wall Street Journal reports that the Supreme Court will have three more decision days in the current term, Monday and Thursday of next week and Monday of the following week. The experts are betting that the ACA decision will come down on the final decision day.  The FEHBlog is already receiving invites to listen to talks about the decision.

Of course, the Supreme Court did not issue its decision on the constitutionality of the Affordable Care Act yesterday. The Court has two more decision days this term, next Monday June 18, and the following Monday June 25. It would be just the FEHBlog’s luck if the Court issued its decision next Monday when he is on vacation.

The FEHBlog noted on Sunday that the American Medical Association was urging calm in the face of the impending decision. Kaiser Health News reports that several large health insurers took the same tack by “promising to continue following some of the rules in the federal health law that are already in effect.” It’s, of course, presumptuous to assume that the Supreme Court will strike down the entire law, but if it does, it will be up to Congress and not just the insurance companies or the doctors to pick up the pieces. For example, the health insurers indicated that they have no problem keeping on covering employees’ children up to age 26. But while the employers and insurers could agree to do so, the tax code in effect before the ACA would have imputed income tax on the premiums paid to cover adult children. What’s more Congress never aligned the FEHB Act’s dependent eligibility provision with the ACA. So, if worse comes to worse for the Obama administration’s position before the Supreme Court, Congress will have to act quickly.

There’s an interesting piece in the Hill’s Healthwatch about the ACA. The ACA requires non-grandfathered group health plans to cover preventive services with grade A or B recommendations from the U.S. Preventives Services Task Force with no employee cost sharing. OPM has applied this requirement to all FEHB plans regardless of grandfathered plan status. The PSTF recently lowered the recommendation of PSA testing below the mandate threshold. Health plans can continue to cover this prostate cancer test without cost sharing but they aren’t required to do so. According to this article, Sen. Kay Hutchinson (R TX) went nuts about this decision.   “Hutchison denounced the group as a ‘panel of bureaucrats’ denying access to a vital test by ‘fiat.'” But the decision affects the cost of the test, not access to the test.

The AMA News advises its readers on three way to challenge insurer policies — joining with organized medicine, getting government assistance, and going to the media. Of course the fourth means — litigation — is offered by my profession. It’s too bad that the AMA News can’t shift the focus to trying to work together with insurers, an approach that does succeed.

Speaking of government assistance, Modern Healthcare reports on a New York State attorney general press release concerning two medical expense balance billing settlement — one with an insurer and the other with a medical group.

Finally, Health Affairs released national health expenditures study today that finds

For 2011–13, US health spending is projected to grow at 4.0 percent, on
average—slightly above the historically low growth
rate of 3.8 percent in 2009. Preliminary data
suggest that growth in consumers’ use of health services remained slow
in 2011,
and this pattern is expected to continue this year
and next.

After 2013, the ACA’s exchanges and multitude of other requirements kick in and the health care spending curve tilts up sharply according to this report.

In 2014, health spending growth is expected to accelerate to
7.4 percent as the major coverage expansions from
the Affordable Care Act begin. For 2011 through 2021, national health
spending
is projected to grow at an average rate of
5.7 percent annually, which would be 0.9 percentage point faster than
the expected
annual increase in the gross domestic product
during this period.