FEHBlog

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

Tomorrow, he Senate Health, Educations, Labor and Pensions Committee is holding a hearing on pain management during the opioid crisis.

Federal News Network reports that postal reform does not appear to be on the House Oversight and Reform Committee’s radar. Perhaps the Senate Homeland Security and Governmental Affairs Committee will take the lead on this important issue again.

The big health information technology conference, HIMSS, will be held this week. HIMSS offers HIMSS TV for those who can’t attend in person. Blockchain will be one of the topics addressed at the conference. Modern Healthcare offers an article with an update on the development of healthcare uses of blockchain, e.g., improving provider directories.

The Wall Street Journal’s review section from the weekend paper lead with an article on how to make practical plans for the end of life (not the will part).  It’s worth reading.

Congress has another week to avoid a resumption of the partial government shutdown. Fingers crossed.

OPM has named  Clare Martorana to be its new chief information officer according to the Federal News Network. Ms. Martorana joins OPM from the U.S. Digital Service. Ms. Martorana “becomes the fifth CIO since 2015.”

Studies, studies, studies —

• Express Scripts released its 2018 Drug Trends Report. According to the Center for Biosimilars, ESI expects U.S. drug spending to rise about 2% over the next three years. However,

Inflammatory drugs comprised the costliest therapy class for the third year in a row, costing employers $174.45 per member per year, up 14%. Diabetes came in second at $114.85 per member per year, an increase of 4.1%. Spending on insulin, which accounts for 15.3% of diabetes prescriptions, increased just 0.3% in 2018, with a 1.5% decline in unit costs and a 1.8% rise in utilization. In 2018, patients paid 16.9% of total insulin costs, an average of $43.19 per prescription, up $3.33 from 2017.

• Healthcare Dive reports that “More effective primary care could save emergency departments an estimated $8.3 billion annually, according to a new Premier analysis.” “The [Premier] report notes that chronic disease patients visiting EDs are often uninformed about how to manage their disease and often lack access to primary care services.” These expensive ED visits could be prevented if the patients regularly visited primary care providers. In this regard Health Payer Intelligence reports that Blue Cross’s Medicare Advantage experiment with using Lyft for members needing non-emergency care trips is paying off. 

Kaiser Health News provides a helpful overview of the healthcare topics in the President’s State of the Union address last night.  President “Trump vowed to take on prescription drug prices, pursue an end to the HIV epidemic and boost funding for childhood cancers.”

The Federal Times discusses an OPM request to the public for information on how to create a unified enrollment system for the FEHBP.  Benefeds provides a platform that works for the the federal employee dental, vision, and flexible spending. Here’s some advice from the FEHBlog make sure that the new enrollment system allows FEHBP carriers to reconcile premiums with enrollees. Stunningly, the current system does not provide that capability which the common operating rules for HIPAA 820 electronic premium roster transaction standardized for over five years ago.

Healthcare Dive reports on a study published in Health Affairs concluding that hospital prices have rising faster than doctor’s prices recently. “The findings suggest that policy measures aimed at cutting healthcare costs should focus on issues like antitrust enforcement, incentivizing more cost-efficient physician referrals and reference pricing.” The study must have struck a nerve because the Healthcare Dive report mentions an American Hospital Association retort to the Health Affairs study.

In that regard, Becker’s Hospital Review reports that “Dallas-based Baylor Scott & White Health and Houston-based Memorial Hermann Health System have decided to discontinue merger discussions roughly four months after signing a letter of intent to combine their organizations.” The merger would have placed 15% of the hospitals located in Texas under one management.

Healthcare Dive reports that two large Catholic healthcare systems, Dignity Health and Catholic Health Initiatives, have closed their merger agreement by forming a nonprofit health system called CommonSpirit Health. “The $29 billion system will serve 21 states with more than 700 care locations and 142 hospitals. The company also includes research, virtual care and home health capabilities.”

Healthcare Dive also reports that Amazon’s Pill Pack company appears poised to engage in a nationwide rollout. Pill Pack provides customers with personalized, ready to use, prescription pill packs. The FEHBlog thinks it’s a whale of an idea.

David Friend, managing director at BDO Consulting, said Amazon’s move with PillPack represents a threat to both traditional pharmacies and PBMs. Ultimately, “they’re going to cut out the pharmacy business and the PBMs,” Friend, told Healthcare Dive. “If they cut the prices enough, consumers are going to say, ‘why should I have to go through more complexity and pay more?'”

The FEHBlog’s favorite healthcare quality consultants, Discern Health, have released their notes on CMS’s Quality Conference. Check them out.

Speaking of conferences, mhealthintelligence.com discusses what’s on tap for next week’s big HIMSS conference which focuses on digital health. The conference will be held in Orlando. Focus will be placed on telehealth. Employee Benefit Adviser offers some guidance on how to build utilization of employer sponsored telehealth programs. “The missing piece of the puzzle is employee education, Matthew Herrera, assistant vice president of strategic partnerships at benefit provider Careington International, said. If employers aren’t advocating for the healthcare strategy, they shouldn’t be surprised by its lack of success.”

Last but not least, Forbes columnist Avik Roy offers his perspective on the Trump Administration’s initiative to end prescription drug rebate programs in Medicare and Medicaid.

As a result, any discounts that [prescription benefit managers] PBMs negotiate with drug manufacturers would have to apply to the “list price” that patients using those drugs pay, instead of being transmitted in the form of rebates that reduce everyone’s premiums.

The likely result, over time, should be that list prices in the future look more like the net prices of today, as rebates get converted into direct price discounts. That should mean lower out-of-pocket spending and better patient adherence to medications, especially for seniors enrolled in Medicare Part D prescription drug plans.

Most importantly, the end of PBM rebates in Medicare Part D should lead to higher utilization of low-cost generic and biosimilar drugs, as PBMs will no longer have an incentive to favor branded drugs in their formularies, unless those branded drugs compete with generics on price.

Congress remains in session this coming week on Capitol Hill. Here’s a link to the Week in Congress’s report on last week’s actions on the Hill.  The President’s State of the Union address will be given on Tuesday night.

On Tuesday morning, the Senate Health, Labor, Education and Pensions Committee will hold a hearing on how primary care affects health care costs and outcomes. In the FEHBlog’s view, positively.

On Wednesday mornings, House Committees will be holding hearings on protecting workers with pre-existing conditions and the Texas v. United States lawsuit challenging the Affordable Care Act’s constitutionality. The oddity of the first hearing is that Congress passes a law protecting those workers in 1996. It’s unfortunate that Congress did not extend that law to the individual as well as the group market. In any event, if the Supreme Court were to find the ACA unconstitutional, which the FEHBlog finds highly unlikely, the 1996 law (HIPAA) would go back into effect.  As for the Texas v. U.S. case, it’s worth noting that on Friday, U.S. District Judge Ellen Hollander dismissed the State of Maryland’s lawsuit that is a mirror image of the U.S. v. Texas lawsuit. The court found that the Maryland lawsuit is unnecessary. Here’s a link to the opinion. The FEHBlog, as a Maryland taxpayer, agrees, and he hopes that Maryland will call it a day on this case. Maryland is an intervenor defendant in the Texas case.

NPR has a story discussing winners and losers from the the Trump Administration’s recent proposed decision to end prescription drug rebate arrangements in Medicare and Medicaid. The FEHBlog sees it as a financial wash for PBMs and health plans. About a decade ago, OPM required experience rated FEHB plans to engage in transparent pricing with prescription benefit managers (“PBMs”) in order to facilitate audits of the PBMs.

As a result of this decision, the PBMs must give 100% of rebates to the experience rated carriers. PBMs increased their administrative fees in response to this decision which maintained the economic status quo. In this case, which in the FEHBlog’s opinion, will eventually impact the FEHBP, the PBMs and manufacturers will lower point of sale prices to account for the end of rebates. The manuafacuterers will continue to pay volume discounts.  Plan prescription drug spending will drop as will cost sharing for those who use formulary drugs. It’s a change that will help the chronically ill. Time must be given to implement it.

Today, the Department of Health and Human Services announced a proposed rule that would modify the federal healthcare programs anti-kickback act to redirect prescription drug rebates from the prescription drug plan to consumer at the point of sale.  It strikes the FEHBlog that this change, if implemented, will encourage consumer compliance with prescription drug manager formularies and will be a big help to people in high deductible plans.  The rule would apply to Medicare and Medicaid but not to the commercial market including the FEHBP or the ACA marketplace. However, once the Medicare dam breaks, commercial plans will follow the same practice in the FEHBlog’s view. Of course, some commercial plans do so because the prescription drug managers can accommodate this practice already.

Speaking of PBMs, Fierce Healthcare reports that

Anthem is planning to begin moving members into its new PBM, IngenioRx, in the second quarter of 2019, bumping up the projected launch from 2020. Anthem announced the change as part of its fourth-quarter earnings (PDF), saying it moved up IngenioRx’s launch because Cigna closed its acquisition of Anthem’s current pharmacy benefit manager, Express Scripts.  Anthem’s contract with Express Scripts will end on March 1, with the yearlong process of migrating members to IngenioRx beginning the next day, it said.

This week, the Centers for Medicare and Medicaid Services have been holding its annual Quality Conference in Baltimore MD.  The conference is a hot (and free) ticket. A friend tells the FEHBlog that nearly 3,000 people were in attendance. You can watch the plenary sessions on the conference’s website. Here’s a link to an AJMC report on CMS Administrator Seema Verma’s keynote speech. “As she has in other recent speeches, she also criticized the idea of Medicare for All, saying, ‘we can barely afford the program that we have.’” Bear in mind commercial health plans, including the FEHBP, pay more to providers who can’t survive solely on Medicare’s low reimbursements. Ms. Verma also announced that Medicare is now making available on the Apple and Google stores a Medicare what’s covered app.

The Federal News Networks offers a comprehensive report on federal employee pay and benefit now that the partial shutdown is over. Here’s a snip about the FEHBP:

Agencies may give eligible employees more time to enroll or change their enrollment in the Federal Employees Health Benefits Program (FEHBP) due to a qualifying life event that occurred during the government shutdown, OPM said.
“In cases where the effective date would normally be the first day of the first pay period following the day the employing office receives the enrollment request and that follows a pay period during any part of which the employee is in pay status, agencies may assign the effective date as if the employee had submitted the enrollment request immediately following the event,” the memo reads.
Agencies can also use their belated enrollment authority to extend the time that an employee would otherwise have to request or change enrollment, OPM said.
Agencies should adjust federal employees’ retroactive pay to reflect typical deductions and government contributions toward FEHBP. Standard deductions and contributions would apply as if the government shutdown hadn’t occurred.

Kaiser Health News gives an account of the Congressional hearings on prescription drug prices that were held this morning.   Drug Channels takes a contrarian view here.

A bipartisan group of Senators and Representatives has introduced a bill to allow federal employees who are in the National Guard or Military Reserve to enroll in the TRICARE program. Nearly 20 years ago Congress pulled a large contingent of FEHBP enrollees who held military retirements into TRICARE. That move caused some FEHBP premiums to increase and it has cost TRICARE a ton of money according to the Congressional Research Service. The FEHBP is a good program. Leave well enough alone.

Becker’s Hospital Reports points us to the most recent Verizon data breach report which finds that over half of healthcare data breaches in 2018 were caused by insiders. Ouch.

In a bit of good news, AHRQ tells us that

New data released today by the Agency for Healthcare Research and Quality (AHRQ) and Centers for Medicare & Medicaid Services (CMS) show reductions in hospital-acquired conditions such as adverse drug events and healthcare-associated infections helped prevent 20,500 hospital deaths and save $7.7 billion in health care costs from 2014 to 2017.

AHRQ’s preliminary analysis (PDF, 545 KB) estimates that hospital-acquired conditions were reduced by 910,000 from 2014 to 2017. The estimated rate of hospital-acquired conditions dropped 13 percent; from 99 per 1,000 acute care discharges to 86 per 1,000 during the same timeframe.

Finally, check out Forbes columnist Avik Roy’s interesting column on the importance of controlling hospital costs. “The new Democratic House has not talked a lot about tackling high hospital prices, preferring instead to train their fire on prescription drug prices: an important problem, but a smaller one relative to hospital prices.” Mr. Roy offers a solution but the FEHBlog is not sure the solution is feasible, to wit.

At my think tank, the Foundation for Research on Equal Opportunity, I recently put out a detailed plan to tackle the problem of hospital consolidation. Its key feature is to eliminate the ability of local hospital monopolies to charge exploitative prices, by precluding them from charging the privately insured and uninsured more than they charge Medicare. (Hospital monopolies would remain free to charge less.)

I’m glad to report that a new bill, the Hospital Competition Act of 2019, introduced by Indiana Rep. Jim Banks[H.R. 506] , reflects many of these concepts. Members of Congress who want to do more than talk about the high cost of American health care would do well to take a look.

The Office of Management and Budget announced Friday night

Today, the President signed a continuing resolution that brings employees back to work and reopens many government functions. All employees who were on furlough due to the absence of appropriations may now return to work. You should reopen offices in a prompt and orderly manner.

Congress remains in session this week on Capitol Hill. Both the House Oversight and Reform Committee and the Senate Finance Committee will be holding hearings on Tuesday morning, January 29, about reducing prescription drug prices. Last week the Chairman Sen. Charles Grassley and Ranking Member Sen. Ron Wyden of the Senate Finance Committee introduced a bill to “crack down on big pharma games.” The first witness at the Senate hearing is a woman whose child’s insulin-dependent diabetes.

The opening witness at the Senate Finance Committee hearing will be a woman whose child is an insulin dependent diabetic. Health Payer Intelligence reports that the point of sale price of insulin doubled from 2012-2016 according to a Health Car Cost Institute study. The article notes that

Drug manufacturers are currently taking most of the heat for pricing issues, but insurance companies and pharmacy benefit managers also have a responsibility to control the market – not to mention a financial stake in the matter [a reference to the health plan practice of retaining manufacturer rebates to control plan costs, rather than lower point of sale costs.]

Reuters reports that a new hospital system generic drug manufacturer Civica Rx is poised to roll out 20 products this year in an effort to alleviate hospital shortages.

Modern Healthcare discusses a CVS Health effort to control skyrocketing dialysis costs for patients with end stage renal disease. Health plans must cover these costs for the first 30 months of care before Medicare becomes primary.  CVS’s idea is to shift the site of care from outpatient facilities to the patient’s home.

One potential driver of companies’ apparent enthusiasm for home treatment might be CVS Health’s announcement last [April] that it plans to disrupt kidney care by expanding home dialysis, identifying kidney disease earlier and developing new home hemodialysis technology. CVS hasn’t released many details, but Dr. Harry Jacobson, a nephrologist and co-founder of the investment firm TriStar Health Partners, described it as a “breakthrough.” He declined to share more detail because of a confidentiality agreement with the company. “It’s disruptive and it’s my opinion that it will be a real catalyst for increasing home hemodialysis,” he said. 

The shakin’ paid off. The Congress and the President agreed to reopen the entire federal government for three weeks through February 15 while negotiations over border security continue. The President according to the Wall Street Journal “thanked federal workers for going more than a month without pay and said he would ensure they received back pay ‘very quickly or as soon as possible.’”

The Wall Street Journal further reports that “Senate leaders passed a short-term spending Friday [afternoon] on a voice vote, enabling them to skip the chamber’s time-consuming procedures. The House has said it will move swiftly to consider the bill. It could also approve the bill on a voice vote, provided that no one objects.”   Govexec.com tells us that “Office of Management and Budget Deputy Director for Management {and OPM Director] Margaret Weichert in a memo to agency heads directed them to take steps in anticipation of reopening. Priorities include recalling furloughed employees, ‘restoring pay and benefits for employees,’ and ensuring access to equipment and information technology systems, she said.”

Odds are that the President will sign the short term funding bill today. It’s a good thing that it’s Friday which will allow two days to prepare for reopening.

In legislative news, Employees Benefit News informs us that a bi-partisan group of House members has introduced a bill to repeal the Affordable Care Act’s high cost plan / Cadillac tax (HR 748). Also AHIP tells us about bipartisan Senate bill to repeal the ACA’s senseless health insurer fee. Let’s go.

The Wall Street Journal reports that neither the Republican nor the Democrat crafted bill to end the partial government shutdown received the sixty votes necessary to achieve cloture. The Senate majority and minority leader are discussing compromise which amounts to progress.

Beckers Hospital Review reports that five health systems located in the northeast and central midwest (but not DC surprisingly) are offering furloughed federal employees breaks on cost sharing. Kudos to them.

Kaiser Health News reports that President Trump supports the effort to surprise billings on emergency care. The best idea that the FEHBlog has noticed lately is for hospitals to have their contracted healthcare providers, like emergency medical groups, join the preferred provider networks to which the hospital belongs.

Healthpayer Intelligence informs us that three large payers, Aetna, Anthem, and HCSC, have partnered with IBM and PNC Bank to bring blockchain technology to healthcare.

“The aim is to create an inclusive blockchain network that can benefit multiple members of the healthcare ecosystem in a secure, shared environment,” the companies stated. The goal is to allow the blockchain network to enable healthcare companies to build, share and deploy solutions that drive digital transformation in the industry.”

The first step for the collaboration — dubbed a health utility network — is identifying use cases that demonstrate the usefulness of blockchain for secure health data exchange. Work will then turn to signing up additional members ranging from providers to developers.

Go get ’em.

In a similar vein, Healthcare Dive discusses healthcare industry reaction to the use of artificial intelligence. The FEHBLog early this morning listened to Fox Business correspondent Maria Bartiromo interview the IBM CEO Ginni Rometti . Ms. Rometti explained how her company uses AI to help employees identify their best career paths within the company. Healthcare Dive adds that

AI currently holds the most promise in administrative and operational practice, where it has the potential to alleviate the burden of tedious tasks that fuel burnout. One such example is currently in use at Cleveland Clinic, where an AI platform that was initially built for retail is being used to track hospital bed use. The platform is able to identify where processes break down by monitoring resources and patient movements through the OR.