FEHBlog

Both Houses of Congress are out of town this coming week, although the Senate will be back here for the week of August 13. Before leaving town, the Senate passed 92-6 its amended version of the interior department minibus appropriations bill (HR 6147) which includes OPM and FEHBP appropriations.  The two Houses of Congress now must establish a conference committee to resolve differences between their respective versions of HR 6147.

The FEHBlog nearly fell out his breakfast nook yesterday morning when he read in the Wall Street Journal that

Activist investor Carl Icahn has built a sizable stake in Cigna Corp. and plans to vote against the health insurer’s $54 billion purchase of Express Scripts Holding Co., the latest sign of trouble for the planned tie-up.

Mr. Icahn, whose stake amounts to less than 5% of Cigna’s shares outstanding, believes the company is paying too high a price for the pharmacy-benefit manager, which faces threats on a number of fronts, according to people familiar with the matter.

He therefore plans to vote against the merger. Last evening, the Journal’s Heard on the Street columnist reported that while Cigna’s second quarter 2018 report suggests the Mr. Icahn has a valid point, his “uphill” challenge may be in the FEHBlog’s “a day late and a dollar short.” The Cigna / Express Scripts merger requires the supporting vote of a majority of stockholders (of record as of July 10, 2018) by August 24, 2018.

Here are links to Healthcare Dive’s reports on Cigna’s and Aetna’s second quarter earnings reports for your information. Both companies and their merger partners do business in the FEHBP.

Take a look at this Healthcare Dive report on a Mayo Clinic study of opioid prescription coverage in the commercial insurance and Medicare Advantage markets over the period 2007 – 2016.

Also consider the Wall Street Journal’s set of charts seeking to explain why Americans spend so much on healthcare.

As this series of charts shows, Americans aren’t buying more health care overall than other countries. But what they are buying is increasingly expensive. Among the reasons is the troubling fact that few people in health care, from consumers to doctors to hospitals to insurers, know the true cost of what they are buying and selling.

Providers, manufacturers and middlemen operate in an opaque market that can mask their role and their cut of the revenue. Mergers give some players more heft to enlarge their piece of the pie.

Consumers, meanwhile, buoyed by insurance and tax breaks, have little idea how much they are really spending and little incentive to know underlying costs. 

In the FEHBlog’s view, high deductible plans coupled with health savings accounts do provide consumers with a greater incentive. Efforts are underway to create more transparency. The charts indicate why it’s a tough row to hoe. The Drug Channels blog reminds us that

In June, Alex Azar, Secretary of the U.S. Department of Health & Human Services (HHS), summarized his long-range vision for a new drug channel system: 

“[W]e may need to move toward a system without rebates, where PBMs and drug companies just negotiate fixed-price contracts. Such a system’s incentives, detached from artificial list prices, would likely serve patients far better.” (emphasis added)

No one has yet explained what a system without rebates would look like. 

The Drug Channel blog posted his vision of such a new system for public comment.  Keep the faith and have a good weekend.

Medpage Today reported on yesterday’s Senate Health Education Labor and Pensions Committee third hearing on controlling health care costs. This hearing focused on administrative savings.

CMS announced yesterday that “for the second year in a row, the average basic premium for a Medicare Part D prescription drug plan in 2019 is projected to decline. At a time when health insurance premiums are rising across-the-board, basic Part D premiums are expected to fall from $33.59 this year to $32.50 next year.”

HHS released its short term health plan rule this morning.

The rule allows for the sale and renewal of short-term, limited-duration plans that cover longer periods than the previous maximum period of less than three months. Such coverage can now cover an initial period of less than 12 months, and, taking into account any extensions, a maximum duration of no longer than 36 months in total. This action will help increase choices for Americans faced with escalating premiums and dwindling options in the individual insurance market.

The rule is effective in 60 days.

Federal News Radio reports that

The Homeland Security Department is standing up a new one-stop shop aimed at protecting and sharing cyber threat information with major industries, including banks, electric companies and telecommunications companies.

DHS Secretary Kirstjen Nielsen, speaking Tuesday at an agency cybersecurity summit in New York, said the National Risk Management Center would help break down some of the communication barriers that exist between the government and sectors.

The new center builds on the work of the Automated Indicator Sharing Program launched in 2016. Here’s a link to the agency’s press release.

The Republican leadership of the House Energy and Commerce Committee sent a letter to the Federal Trade Commission last week asking the agency to conduct a retrospective analysis of prescription benefit manager mergers that occurred over the past decade or so — CVS Health and Caremark, Express Scripts and Medco, and Optum and Catamaran.  The purpose of the analysis would be to assess whether the FTC’s antitrust enforcement authority “has been effective as necessary.” The Committee asked for a reply to the request by August 10. The analysis is likely to occur.

The U.S. House of Representatives started its August recess last week. The Washington Examiner reports on the Senate’s plans for the coming week as it remains at work on Capitol Hill.  The FEHBlog noticed that the Senate Health Education Labor and Pensions Committee will be holding a full Committee hearing on healthcare spending on Tuesday beginning at 10 am.

The Office of Personnel Management announced last week that the agency has upgraded its unlocktalent.gov website which provides a lot of useful demographic and satisfaction with employment information on federal employees.  A lot of information is made available to the general public; other information is restricted to federal employees who can log into the site.

Healthcare Dive discusses an interesting Walgreen’s initiative called Find Care Now.

The [initiative’s] goal is to help consumers find convenient and lower-cost care such as urgent care centers co-located at Walgreens drugstores and telemedicine. The platform lists prices for services ranging from lab tests to an optometrist or hearing specialist to physician house calls and telehealth consultations.

Currently, 17 providers are taking part, including Advocate Health Care, New York-Presbyterian Hospital, MedExpress Urgent Care and MDLive.

Good luck.

Govexec.com and Federal News Radio also reported on yesterday’s Senate subcommittee hearing features OPM Director Dr. Jeff Pon and GSA Administrator Emily Murphy, if you are interested in their perspectives.

Employee Benefit News adds some details on the House of Representatives’ HSA bill passed earlier this week. To wit — the bill, if approved by the Senate, would

allow [High Deductible Health Plans} HDHPs to cover up to $250 (self-only) and $500 (family) annually for non-preventive services that currently may not be covered pre-deductible. This will allow pre-deductible coverage for chronic condition treatment and telehealth services, for example. 

The article describes administrative concerns about the provision but implementing the provision is optional. If not 2019, then 2020. More flexibility is a good thing.

The Centers for Medicare and Medicaid Services released proposed calendar year 2019 changes to Medicare’s outpatient hospital prospective pricing system and its ambulatory surgical center benefits.

CMS is moving toward site neutral payments for clinic visits (which are essentially check-ups with a clinician). Clinic visits are the most common service billed under the OPPS. Currently, CMS often pays more for the same type of clinic visit in the hospital outpatient setting than in the physician office setting. * * *

The proposed rule aims to address other payment differences between sites of service, so that patients can choose the setting that best meets their needs among safe and clinically appropriate options. For 2019, CMS is proposing to:

• Expand the number of procedures payable at ASCs to include additional procedures that can safely be performed in that setting;
• Ensure ASC payment for procedures involving certain high-cost devices parallels the payment amount provided to hospital outpatient departments for these devices; and
• Help ensure that ASCs remain competitive by stabilizing the differential between ASC payment rates and hospital outpatient department payment rates.

As planned, the FEHBlog attended the Senate Homeland Security and Governmental Affairs subcommittee hearing today concerning how the Administration’s government reorganization plan impacts OPM and GSA. To recap, that plan would move the OPM policy shop to the Executive Office of the President, move the background check program to the Defense Department, and move OPM’s other operations, including the FEHBP, to the GSA which would be renamed the Government Services Administration. The opening statements of the two witnesses, OPM Director Dr. Jeff Pon, and GSA Administrator Emily Murphy as well as the video of the hearing can be found here.

The hearing room was packed. Here are the highlights from the FEHBlog’s perspective:

• The top OPM/GSA priority is to transition OPM’s HR Solutions to GSA. HR Solutions is a service that OPM sells to government agencies. GSA is generally responsible for selling and arranging to sell services and supples to government agencies. The OPM Director indicated OPM and GSA are considering whether this transition can be made without additional legislative approval. The Senators appeared to appreciate the synergies, and the Chairman requested a transition timeline.

• This HR Solutions transition is the subject of these OPM and GSA transition teams about which the Federal New Radio article reported on Monday.  Transition of the employee benefit functions, including the FEHBP, from OPM to GSA is not under active discussion now. It is considered phase two. The OPM Director remarked that he wants to fix the agency’s retirement program administration problems before transferring those functions to GSA. He thinks that fix will take 18 months. 

The U.S. House of Representatives this week has passed a series of healthcare related bills of interest to readers:

• A bill to repeal the ACA’s anti-innovation medical device tax, which currently is suspended (H.R. 184).
• A bill that would expand the availability and utility of health savings accounts (inside and outside the ACA’s heath insurance exchanges (H.R. 6311). The bill would permit federal employees over age 65 to continue to contribute to their FEHBP HSAs even though they are eligible for Medicare Part A. This bill also would extend the suspension of the ACA’s onerous health insurance tax from 2019 to 2021.
• A bill that would override the ACA’s silly provision that prohibits health plans, health savings accounts or medical flexible spending accounts from reimbursing over the counter drugs unless a doctor had a issued a prescription for the purchase. The bill also would allow the accounts to reimburse menstrual products (H.R. 6199)

Federal News Radio reports that

Following the General Services Administration’s lead, the Office of Personnel Management named an experienced executive to lead its reorganization effort.

Sources confirmed Kathleen McGettigan, OPM’s chief management officer, is heading up the intra-agency task force to  “break up” the agency under the Trump administration reorganization plan.

A subcommittee of the Senate Homeland Security and Governmental Affairs Committee will hear testimony from OPM Director Dr. Jeff Pon and GSA Administrator Emily Murphy on Thursday morning, July 26 on this matter.  The FEHBlog plans to attend.

Congress remains in session on Capitol Hill this week. The House of Representatives heads off on its August recess at the end of this week. The Senate will continue in session for a few more weeks after this one.

Last week the House of Representatives passed on basically a party line vote a “minibus” appropriations bill, H.R. 6147, for the Interior Department, EPA, and Financial Services and General Government in the 2019 fiscal year. The bill includes OPM and FEHBP appropriations. The bill includes the three routine FEHBP appropriations measures — the abortion coverage restriction, the prohibition on full cost accounting standards coverage, and the contraceptives coverage mandate. During deliberations on the bill held on July 19, the House passed an amendment (No. 947) to the bill that would “prohibit Federal Funds from being used by the Office of Personnel Management to administer the Multi-State Plan program. The bill also was amended to prohibit funding of the District of Columbia’s individual health mandate intended to take effect after the federal mandate zeroes out on January 1, 2019. This Senate could take up this bill before it goes on mid-August recess. The House and Senate already are holding a conference committee on the first FY 2019 minibus which includes military construction.

Here are a couple of interesting tidbits:

• Business Insider features an interview with Cigna CEO David Cordani. Mr. Cordani favors employer sponsored health coverage. In the regard, the Wall Street Journal reports

“For the first time in six years, the share of U.S. workers offered health insurance through their employer has risen, a sign a tighter labor market is prompting businesses to offer more generous benefits. 

In March, 69% of private-sector employees were offered medical benefits from their employer, according to an annual survey the Labor Department released Friday. That’s up from 67% in 2017, and the first time the rate has increased since 2012.”

•  Healthcare Dive reports on Humana study concluding that telehealth coverage is cost effective.

“Telemedicine visits were paid out at an average of $38 — a much lower price tag than the $114 cost of a face-to-face consultation, according to a yearlong study from Humana. Researchers used 2,740 patient pairs that were matched for diagnosis, profession, pharmacy coverage, age, net worth, location and other factors.”

“As for prescribing practices, doctors who saw patients remotely prescribed antibiotics at a lower rate (36.1%) than doctors in-office (40.1%).”

Greetings from Amtrak.

Following up on Wednesday’s post, Senators Lankford and Heitkamp yesterday announced a hearing to be held on Thursday July 26 to discuss “The Challenges and Opportunities of the Proposed Government Reorganization on OPM and GSA.”  The FEHBlog will be tuning in.

A lot has been happening on the prescription drug front

• Per the Wall Street Journal, two major manufacturers Merck and Novartis have joined Pfizer in heeding the Administration’s request that they better control their pricing. Good for them.
• The Food and Drug Administration (“FDA”) is encouraging drug manufacturers to make efforts to convert appropriate generic prescription drugs to over the counter drugs. The difference between the two is that prescription drugs requires a doctor’s supervision usually for safety reasons. 
• The FDA also has released a Biosimilars Action Plan.  Biosimilars are generic, lower cost versions of specialty drugs. The Plan explains that to date the FDA has approved 11 biosimilars, including five in 2017 and one of those was to treat cancer.  “As the U.S. market continues to expand and evolve, economies of scale should allow biosimilars to pass on more savings to payors and, in turn, patients. Prices should continue to fall as markets become more competitive.” The Plan explains the steps that the agency is taking to assist biosimilar development and approval. 
• The FDA also announced yesterday the formation of a workgroup to consider importing prescription drugs into the United States for the purpose of improving price competition on sole source prescription and generic drugs. 
• Healthcare Finance reports on public comments, particularly from the AMA and AHIP, on the President’s blueprint to better control drug prices. 
• Finally Reuters reports that the Office of Management and Budget is reviewing a proposed HHS rule that likely would impact the use of prescription drug manufacturer rebates with the Medicare, Medicaid, Indian Health Service and other public federal health care programs, but not the FEHBP. 

The report finds ransomware attacks actually reversed course in 2018 and trends lower in the first half of this year. While ransomware attacks rose in 2017, with an 89 percent increase in the frequency of reported attacks, these attacks as major IT/hacking data breach events impacting over 500 patient records dropped from 19 major data breaches in the first half of 2017 (the comparison period) to 8 major data breaches in the first half of 2018, marking a decrease of 57 percent.