FEHBlog

The Federal Times, Govexec, and Federal News Network all reported on the House Oversight and Reform Committee hearing yesterday on the Administration’s plan to dismantle OPM. The FEHBlog heard the acting Director Margaret Weichert, who was not combative, explain that she was hoping for a bipartisan legislative solution, but she received no support from the subcommittee members or the other witnesses at the hearing.  Unfortunately watching the hearing was not entertaining.

The Office of Management and Budget posted its Spring 2019 regulatory agenda today.  The FEHBlog regrettably has not seen much deregulation, if any, in the FEHBP. In any event, here’s a link to OPM’s regulatory agenda.

Health Payer Intelligence reports that “At Health Partners Plans [which is based in Philadelphia], a medically-tailored meal delivery program is improving outcomes and reducing costs for members with chronic disease.” It’s certainly worth reading.

As price transparency is referenced in OPM’s 2020 call letter for benefit and rate proposals, it is worth noting this Modern Healthcare article which explains that ]

Here’s a link to House Oversight and Reform subcommittee hearing on the OPM reorganization held this afternoon. At the link, you can find witness testimony and a video recording of the hearing.

Things are looking up for judicial affirmation of the CVS – Aetna merger settlement with Justice Department as a combination of red and blue states who originally opposed the settlement have not filed a brief supporting it, according to Healthcare Dive.  The hearing will be held beginning June 4 in the federal district court in Washington DC.

Fierce Healthcare reports on a study concluding that “there was little variation among primary care physicians when it comes to hospital readmission rates, leaving the researchers questioning whether policies that hold these doctors accountable for reducing readmissions may miss the mark.” If doctors shouldn’t be held responsible for hospital readmissions then why should health plans which has several more degrees of separation from the event be held responsible?

The Kaiser Family Foundation published an interesting study on third party reimbursement of prescription drug costs.

Highlights from this analysis include:

• Private health insurance, Medicare, and Medicaid accounted for 82% of total retail prescription drug spending in the U.S. in 2017, while patients paid 14% of the total as out-of-pocket payments.
• For spending on specific drug products, the top five drug products with the highest total spending alone account for at least 10% of total prescription drug spending in large employer plans, Medicare Part D, and Medicaid.
• While some of the same drug products appear among the top 10 drug products with the highest total spending in large employer plans, Medicare Part D, and Medicaid, there is also variation that reflects differing covered populations.
• Out-of-pocket drug spending per user among people in large employer plans and Medicare Part D is highest for drugs to treat cancer, multiple sclerosis and rheumatoid arthritis.
• Antidiabetic agents, antivirals and psychotherapeutics are among the top therapeutic classes by total spending in large employer plans, Medicare Part D, and Medicaid.

No one in the private sector would blink if corporate management decided to merge two related overhead departments like human resources and internal services. Nevertheless, it appears from the House Oversight and Reform Committee meeting notice and this Federal News Network article that tomorrow’s Congressional hearing on the Trump Administration’s plan to take a similar approach with OPM is going to be a real three ring circus. Get the popcorn ready.

Kaiser Health News reports that

Walmart Inc., the nation’s largest private employer, is worried that too many of its workers are having health conditions misdiagnosed, leading to unnecessary surgery and wasted health spending.

The issue crystallized for Walmart officials when they discovered about half of the company’s workers who went to the Mayo Clinic and other specialized hospitals for back surgery in the past few years turned out not to need those operations. They were either misdiagnosed by their doctor or needed only non-surgical treatment.

A key issue: Their diagnostic imaging, such as CT scans and MRIs, had high error rates, said Lisa Woods, senior director of benefits design for Walmart.

So the company, whose health plans cover 1.1 million U.S. employees and dependents, has recommended since March that workers use one of 800 imaging centers identified as providing high-quality care. That list was developed for Walmart by Covera Health, a New York City-based health analytics company that uses data to help spot facilities likely to provide accurate imaging for a wide variety of conditions, from cancer to torn knee ligaments.

Walmart will enforce this policy with increased cost sharing on those who fail to follow this policy. The FEHBlog hopes that Walmart will evaluate, and share with the public, whether this policy delivers results.  

A healthcare quality pal of the FEHBlog’s called his attention to this Joint Commission announcement about a sea change in hospital quality reporting. The Joint Commission is the principal accrediting body for hospitals.

The Joint Commission is shepherding in the next generation of clinical quality by expanding the capabilities of its quality measure program to provide accredited hospitals with year-round, real-time access to quality measures. Over the last two years, The Joint Commission has transformed its electronic clinical quality measure (eCQM) reporting process to increase value and reduce burden for thousands of their 4,500 accredited hospitals with a Direct Data Submission Platform (DDSP). The Joint Commission is now continuing that digital transformation by making the platform and quality measure results continuously available, allowing providers to measure and improve performance in near real-time without additional outside vendors.

In today’s Econtalk podcast, the host Russ Roberts, who has a Ph.D. in economics, spoke with Mary Hirschfeld, who has Ph.Ds in economics and theology. It was interesting conversation between Mr. Roberts who is a fan of Adam Smith and Ms. Hirschfeld who is a fan of St. Thomas Aquinas. In any event this Russ Roberts quote gave the FEHBlog a knowing smile:

“[Economic] incentives have problems * * * when you use incentives only for the things * * * that are measurable. * * * And you ignore the things that aren’t measurable.

Congress remains in session this week on Capitol Hill. Here’s a link to the Week in Congress’s report on last week’s actions on the Hill.

The Health Subcommittee of the House Ways and Means Committee will hold hearing concerning surprise medical bills on Tuesday afternoon. Fierce Healthcare looks at the differences between the two bipartisan surprise medical bills pending the Senate and the House.

The House Budget Committee will hold a hearing concerning the Congressional Budget Office’s recent report on key design considerations and components of establishing a single payer system on Wednesday morning. In this regard, Rep. Rosa DeLauro (D Conn.) re-introduced a Medicare for America bill (HR 2452). This bill would add a super-charged public option to the Affordable Care Act exchanges. In the FEHBlog’s view, and as explained in this Wall Street Journal op-ed, this bill is a Trojan horse for the single payer system.

Following up on yesterday’s leading items, Federal News Radio breaks down the Trump’s administration’s legislative proposal to dismantle OPM and Avik Roy offers some observations on CMS’s Medicare Advantage and Part D drug pricing final rule.

In the examples of how federal law impacts healthcare department —

• The Boston Globe reports on a recent study finding a substantial increase in mental health are claims over the past decade, a good thing which the FEHBlog attributes to the 2008 federal mental health parity law among other factors, and 
• The American Medical Association reports that “2018 marked the first year in which there were fewer physician owners (45.9 percent) than employees (47.4 percent), not so good thing for professionals which the FEHBlog attributes to the Affordable Care Act. To that end, “more than half of physicians, 54.0 percent in 2018, continue to work in practices that are wholly owned by physicians, sometimes referred to as “private practice.” This share is statistically lower than that of 2012 (60.1 percent) and 2014 (56.8 percent), but not that of 2016 (55.8 percent). More than half of the 2012 to 2018 shift away from physician- owned practice occurred during the first two years of that period.

If all these [electronic health record interoperability] APIs [such as HL7’s Da Vinci] work, the whole reporting of quality measures will, over time, eventually go away”  Dr. Rucker suggested that one day payers could access data from a provider through an API, and apply machine learning to extract quality measures. That would eliminate the need for clinicians to generate these measures “in a one-off kind of way,” he said.

A win-win for payers and providers.

Today, the Centers for Medicare and Medicaid Services issued their final Medicare Advantage and Part D Drug Pricing rule and it does not include the anxiety inducing provision to lower prescription drug prices by doing away with prescription drug rebates.  Part I.D. to the rule’s preamble explains, “We sought comment on the possibility of adopting a new definition of “negotiated price” under which plan sponsors would be required to pass through all pharmacy price concessions at the point of sale. We will carefully review all input received from stakeholders on this issue [nearly 8,000 public comments in total] as we continue our efforts to meaningfully address rising prescription drug costs for beneficiaries.”  Here’s a link to the CMS fact sheet on the final rule.

Govexec.com this evening shared with the public a May 16, 2019, Office of Management and Budget letter to the heads of Congress proposing legislation to dismantle OPM. In pertinent part,

The primary purpose of the legislative proposal is to authorize the transfer of the vast majority of the current functions and resources of OPM to GSA, including Human Resources Solutions, Information Technology, Retirement, Health and Insurance Services. GSA will create a new Personnel Service to house the human resources and employee lifecycle management shared service offerings. Agencies will benefit from GSA helping them to obtain more strategic and comprehensive support for their needs.

A bi-partisan group of Senators including Sen. Bill Cassidy (R LA), a physician who sits on the Senate Health Education Labor and Pensions Committee, introduced a bill to stop surprise billing. It’s a different approach from the House bi-partisan proposal discussed here last week as it covers all surprise situations, not just emergency cases, and it allows for independent dispute resolution.  The bill would apply to the FEHBP. The FEHBlog does expect a bill on this topic to enacted this year.

At this morning’s business meeting of the Senate Homeland Security and Governmental Affairs Committee, the Committee reported favorably Dale Cabaniss’s nomination to be OPM Director and Chairman Ron Johnson’s (R WI) bill to end the ACA’s multi-state program which OPM manages. There is currently only an Arkansas Blue Cross plan participating in that program.  For what it’s worth, the FEHBlog expects that Ms. Cabaniss will be confirmed as OPM Director within the month.

Becker’s Hospital Review discusses the Leapfrog Group’s Spring 2019 hospital patient safety ratings.

For the spring update, Leapfrog contracted with the Johns Hopkins Armstrong Institute for Patient Safety and Quality to update its mortality estimates linked to medical errors, infections and injuries at graded hospitals. Researchers found that patients treated at hospitals given a “D” or “F” safety grade face a 92 percent higher risk of avoidable death, compared to 88 percent for “C” hospitals and a 35 percent for “B” hospitals.

The Wall Street Journal reported today that

About 3.79 million babies were born in the U.S. in 2018, according to provisional data from the Centers for Disease Control and Prevention’s National Center for Health Statistics. That was a 2% decline from the previous year and marked the fourth year in a row that the number fell. The general fertility rate—the number of births per 1,000 women ages 15 to 44—fell to 59.0, the lowest since the start of federal record-keeping.

With the latest decline, births in the U.S. have fallen in 10 of the last 11 years since peaking in 2007, just before the recession. Many demographers believed that births would rebound as the economy recovered, but that trend hasn’t materialized.

The article adds that

“We see these continuing trends: births to older moms increasing, births to younger moms going down,” said Brady Hamilton, a statistician/demographer with NCHS who co-wrote the report.

The trends suggest that a decline in unplanned pregnancies is a big part of America’s lower fertility. Research led by Kasey Buckles, an associate professor of economics at the University of Notre Dame, found that about 35% of the fertility decline from 2007 to 2016 is because of declines in pregnancies that were likely unintended.

“It’s really remarkable, not something that we’ve seen over the last century,” Prof. Buckles said of the changing fertility patterns. 

Also

Abortion doesn’t appear to be responsible for the birth decline. The Guttmacher Institute found that both the total number and the overall rate of abortions have fallen to their lowest levels since around the time that Roe v. Wade legalized the procedure in 1973.

OPM Acting Director Margaret Weichert held a press roundtable today about the agency reorganization. Govexec and the Federal Times have reported on this event. Moreover, Govexec has shared an OPM document explaining the reorganization and the underlying rationale therefor.  Acting Director Weichert will be presenting her case for reorganization to the House Oversight and Reform Committee next Tuesday May 21.

The Health Affairs blog discusses a bipartisan proposal to fix the surprise billing problem (“with the notable exception of ambulance service”) that the House Energy and Commerce Committee unveiled today. “The [proposed] legislation achieves this objective by combining the following three components:

• Require the health plan to treat the out-of-network service as if it were in-network for purposes of enrollee cost-sharing, deductibles, and out-of-pocket limits;
• Set a minimum payment amount that the health plan must pay to the out-of-network provider; and
• Prohibit out-of-network providers from “balance billing” patients — that is, from billing the patient any amount above the patient’s in-network cost-sharing.

The New York Times offers an extensive article today on stem cell transplants used to treat joint problems.

Dr. Scott A. Rodeo, a surgeon and researcher at the Hospital for Special Surgery in New York, said the treatments were being studied there. So far, he said, “modest data” suggested that platelets might ease pain in arthritic or inflamed knees and elbows. “There’s great potential,” he said. “We are just not there yet. The marketing and use far outpace the science.”

For that reason, as explained in the article, health plans generally exclude these services from coverage.

MedCity News reports on the Food and Drug Administration’s biosimilar production guidance that was issued last week.

Knock-off versions of biotech drugs have been on the market for several years now, but one way that the US market for biosimilars has lagged behind its European counterpart is on the question of interchangeability of biosimilars with their reference products.

On Friday, the Food and Drug Administration issued a final guidance on interchangeability, meaning the ability to substitute one product for the other without a prescriber’s involvement, as is the case for generic pharmaceutical drugs. It’s a finalization of a draft guidance issued in January 2017.

Here’s a link to the FDA’s press release.

Healthcare Dive discusses a recent J.D. Power survey of consumer views on health plans.

The J.D. Power study shows overall health plan member satisfaction up seven points from the prior three years, to 713 on a 1,000-point scale. Fueling the increase is greater satisfaction with coverage and benefits offered.

By contrast, high copays and clunky mobile apps pulled member satisfaction down. “Overall satisfaction scores are 254 points higher when members perceive their plan actively keeps out-of-pocket costs low, helped coordinate care and that there was enough coverage, yet 54% or fewer of health plan members say their plan delivers on each of these criteria,” according to the study.

The report also shows people want lower-cost options such as telehealth, urgent care and retail clinics. Nearly half (48%) of respondents said they are very or somewhat likely to consider telehealth, and that share increased to 51% among Gen Y members. Among all members, about a third have used urgent care centers.

If you, like the FEHBlog, want consultant Avik Roy’s views on the RAND study on hospital prices that the FEHBlog discussed last week, then click here.  This is the upshot —

Austin Frakt of Boston University, at his blog The Incidental Economist, has for years compiled the research that has shown that “cost-shifting” is a myth:

Indeed, one recent study found that from 1995 to 2009, a 10 percent reduction in Medicare payments was associated with a nearly 8 percent reduction in private prices. Another study found that a $1 reduction in Medicare inpatient revenue was associated with an even larger reduction — $1.55 — in total revenue. This would be impossible if hospitals were compensating for lower Medicare revenue by charging private insurers more.

Private prices go down when Medicare rates go down: not the sort of thing that would happen if cost-shifting is real. What’s actually happening is something much simpler: monopoly exploitation.

The FEHBlog believes that the problem stems from Medicare cost shifting and monopoly exploitation.

On the bright side, CNBC reports that

One of the biggest investment opportunities over the next decade will be in companies working to delay human death, a market expected to be worth at least $600 billion by 2025, according to Bank of America analysts. The analysts say companies such as Illumina and Alphabet are on the cusp of “bringing unprecedented increases to the quality and length of human lifespans. 

Happy Mothers’ Day, readers.

Congress remains in session this week on Capitol Hill. Here’s a link to the Week in Congress’s report on last week’s actions on the Hill. As noted last week, the Senate Homeland Security and Governmental Affairs Committee plans to vote on Dale Cabaniss’s nomination to be OPM Director during a business meeting on Wednesday morning.

The Federal News Network reports on the state of the Postal Service’s effort to create a 10 year business plan as the House Oversight and Reform Committee requested last month. “Ultimately, the question is, what’s the role for your government-sponsored Postal Service in a 21st-century marketplace, and how are you going to fund it? So that’s a broad public policy discussion that we will continue to have with our public officials as well as other postal stakeholders,” [Postmaster General Megan] Brennan said to a group of reporters.  She said to expect the report to be issued in 45 days.

Employee Benefit News reports that Ocean Spray plans to stop charging employees co-payments for mental health care in order to improve access to that care, which is a concern that OPM raised in the 2020 call letter for FEHB benefit and rate proposals. Nothing in the rather complex federal mental health parity law prevents a plan from providing better benefits for mental health vs. medical care.

Willis Towers Watson issued a survey on employer sponsored health care in the U.S. last week.  The FEHBlog took note of the fact that

Nearly four in 10 employers (38%) are considering opening a health center at their workplace location to provide preventive, primary and urgent care by 2020 — a jump from the 26% that offer this today. Further, just over one in four employers (26%) plan to offer near-site health centers by 2020 — an even greater jump from the 8% that offer this today.

Employers are also expanding the types of care offered at health centers, adding mental health services, such as behavioral health counseling, in the next few years. Roughly half indicate they will offer onsite or near-site mental health services through the vendor managing the health center or through a community provider by 2020.

In the FEHBlog’s view, one of the major defects in the Affordable Care Act lies its focus on providing highly regulated health insurance, rather than on improving access to health care services. As a result you get stories like the Sunday Washington Post lengthy story today on a struggling hospital in rural Oklahoma. Employers are acting on the problem, why doesn’t Congress?