FEHBlog

Congress is in session for one more week until it takes time off for the Independence Day holiday. The U.S. Supreme Court ends its October 2017 term this week.

The Senate Finance Committee will hold a hearing on prescription drug costs on Tuesday morning June 26. The scheduled witness is the HHS Secretary Alex Azar.

A few weeks ago, the FEHBlog called readers attention to a PriceWaterhouseCoopers analysis of medical cost trends. The FEHBlog noticed an interesting Health Payer Intelligence article that pulled a couple of nuggets out of that report.  To wit,

Health plans with narrower, high performance networks (HPNs) can help generate cost savings by focusing on improvements in care quality and member satisfaction. HPNs allow payers to invest greater financial resources in a limited number of providers in order to maximize the effectiveness and efficiency of provider care. HPNs also hold providers accountable by measuring their performance with quality measures.

and

Payers and employers are also using health advocates to assist high deductible health plan (HDHP) members with accessing effective and affordable healthcare services. 

HDHPs are a popular employer-sponsored plan offering that can contain costs by shifting greater financial responsibility to health plan members. However, that greater financial responsibility sometimes discourages HDHP members from seeking needed services in order to cut back on personal costs. 

Health advocates are gaining popularity within the employer-sponsored market because they can effectively help HDHP beneficiaries to use affordable healthcare services. 

The New York Times reported today on the journey of a  young primary care provider in her efforts to understand her patients suffering from opioid addiction.  

Opioid overdoses are killing so many Americans that demographers say they are likely behind a striking drop in life expectancy. Yet most of the more than two million people addicted to opioid painkillers, heroin and synthetic fentanyl get no treatment. Dr. Gastala, 33, is trying to help by folding addiction treatment into her everyday family medicine practice. She is one of a small cadre of primary care doctors who regularly prescribe buprenorphine, a medication that helps suppress the cravings and withdrawal symptoms that plague people addicted to opioids. If the country is really going to curb the opioid epidemic, many public health experts say, it will need a lot more Dr. Gastalas.

Amen to that sentiment.

Finally, the Wall Street Journal reported last week that

Some current and former federal government employees are taking a look at their credit activity after the Justice Department said this week that data stolen by suspected Chinese hackers in 2014 cyberattacks at the Office of Personnel Management may have been used to commit identity fraud.

Federal prosecutors on Monday said a Maryland couple had pleaded guilty to using information stolen in the OPM breach to set up fraudulent car-loan applications with a Langley, Va., credit union.

Here’s a link to the U.S. Attorney’s office press release. It’s clear that two days later U.S. Attorney’s office walked back from the statement that the information had beens stolen in the OPM breach. Here’s the qualification:

As stated in the Statement of Facts for defendants Cross and McKnight, numerous victims of the LFCU identity theft fraud also identified themselves to DOJ as victims of the OPM Data Breach. The Government continues to investigate the ultimate source of the PII used by the defendants and how this PII was obtained.

Time will tell.

Following up on the Whither OPM? posts, the FEHBlog now sees that the OPM HR policy shop would wind up alongside the Office of Management and Budget as part of the Executive Office of the President.  OPM Director Pon has voiced his support for the President’s reorganization plan.  Federal News Radio offers an expert opinion on the proposal to “abolish OPM.”

Yesterday the Senate Appropriations Committee unanimously approved its Financial Services and General Government appropriations bill.  This is the bill that funds OPM and the FEHBP. It allows for a 1.9% civil service raise next year.

Today, according to the Hill, the House of Representatives approved its massive bill to address the opioid crisis by a 396 to 14 vote.

The legislation, passed Friday, includes a range of measures to fight the epidemic, including lifting some limits on prescribing Buprenorphine, a drug used to treat opioid addiction. The bill also requires health-care professionals to write prescriptions for Medicare beneficiaries electronically in order to better track prescriptions and to allow Medicare to cover treatment at addiction treatment clinics.

AHIP held its annual conference in San Diego this week. Healthcare Dive provides three takeaways from that conference.

Oh joy! The World Health Organization released Version 11 of the International Classification of Diseases (ICD-11) earlier this week. 55,000 Version 11 codes vs. 14,400 Version 10 (ICD-10) codes. “ICD-11 will be presented at the World Health Assembly in May 2019 for adoption by Member States, and will come into effect on 1 January 2022. This release is an advance preview that will allow countries to plan how to use the new version, prepare translations, and train health professionals all over the country.” Of course the January 1, 2022, effective date does not mean that U.S. health plans and healthcare providers will not begin using the ICD-11 on that date. The FEHBlog expects a five to ten year lag from for U.S. implementation based on the ICD-10 process.

Earlier today, the Trump Administration released its federal government reorganization plan,  As Federal News Radio accurately reported yesterday, the reorganization plan proposes (at page 51) to move OPM’s human resources, healthcare and insurance, and retirement services to the General Services Administration. OPM’s background search service would move to the Defense Department and the remaining employment policy functions would move to the Office of Management and Budget.

The reorganization plan requires Congressional approval. The House Oversight and Government Reform Committee will hold a hearing on the reorganization plan next Wednesday June 27 at 10 am ET.

Here’s the Federal Times article providing its overview of the reorganization plan.

Federal News Radio is reporting as its current lead article that the President’s government reorganization plan scheduled to be announced tomorrow will do away with OPM as we know it. “Multiple sources said the reorganization may also include a move of OPM’s health care and retirement services to GSA.”

Earlier today, per Healthcare Dive, “Amazon, Berkshire Hathaway and J.P. Morgan named Atul Gawande as CEO of their partnership focused on disrupting U.S. employee healthcare. Gawande will join the firm July 9.”

Gawande is a noted healthcare thought leader, author and surgeon. He currently practices general and endocrine surgery at Brigham and Women’s Hospital and is a professor at the Harvard T.H. Chan School of Public Health and Harvard Medical School.
Gawande has also written four New York Times bestsellers, including Being Mortal, and is a founder of Ariadne Labs, a joint effort between Harvard and Brigham and Women’s that focuses on medical errors and health system effectiveness. 

The business will be headquartered in Boston Massachusetts.

Healthcare Dive also reports that the shift from fee for service to value based health insurance is moving rather quickly at this point. 

Change Healthcare[‘s survey of 120 payers] said nearly two-thirds of payments are now based on value, and that structure reduces unnecessary medical costs by 5.6% on average, according to survey respondents. The survey found that nearly 80% of payers reported improvements in care quality, 64% have seen provider relationship improvements and 73% said patient engagement improved.

On a related note, Employee Benefit News tells us HHS Secretary Alex Azar is advocating for “a system without [prescription drug manufacturer] rebates, where PBMs and drug companies just negotiate fixed-price contracts,” Secretary Azar made this point Tuesday in testimony before the Senate Health, Education, Labor and Pensions Committee. “Such a system’s incentives, detached from artificial list prices, would likely serve patients far better.”

Finally, yesterday, the Labor Department finalized the association health plan rule that will permit small businesses to be treated like large businesses, rather than individuals (as the ACA has required), for health benefits purposes. The final rule will be published in tomorrow’s Federal Register and is available today at this website.

Congress remains in session this coming week while the Supreme Court keeps churning out opinions.

The Hill reports that the House of Representatives is poised to pass a passel of bills directed at the opioid epidemic. The Senate also is working on its related bills. Bear in mind that that the fuse was lit on this crisis in 1996 when the Food and Drug Administration approved Oxycontin. Congress and the executive branch should have taken more action in the Clinton, Bush, and Obama administrations. At this point, the problem is with curbing illegal opioids and treating the many people who became addicted to opioids. So better late than never. There’s plenty of blame to spread around on this issue.

Last week the House of Representatives Appropriations Committee approved its FY 2019 financial services and general government appropriations bill.  The bill contains the usual FEHBP related provisions (abortion coverage restriction, contraceptive coverage mandate, and ban on full cost accounting standards coverage), but none of OPM’s proposed FY 2019 suggestions, such as the cut to the civil service government contribution toward FEHBP coverage (although it offers a small increase to certain “high quality” plans.)

The relevant Senate appropriations subcommittee is holding a hearing on its version of the House bill on Tuesday morning at 11 am.

Also Health IT Security tells us that last week the HHS Office for Civil Rights which is responsible for the HIPAA Privacy and Security Rules “issued new guidance on the HIPAA Privacy Rule that explains certain requirements for an authorization to use or disclose PHI for research and clarifies aspects of the individual’s right to revoke an authorization.”

CNBC reports that yesterday soon after the Justice Department announced that it would not seek an emergency stay of the court order permitting AT&T’s merger with Time Warner, the deal between the two companies closed. Closing on the deal does not foreclose the government’s right to appeal but an appeal is unlikely.  Meanwhile Forbes tells us that while the court decision in the AT&T case was a good sign for anti-trust regulatory approval of the CVS Health – Aetna merger, it was equally good news that the American Medical Association did not go on record against the merger at its recent House of Delegates meeting.

Healio informs us about the measures that the AMA’s House of Delegates supported with respect to the Affordable Care Act at their recent meeting. Of note to the FEHBlog was the statement that

Due to concerns that insurers will leave some ACA marketplaces, AMA argued that a back-up plan is needed to ensure that patients have coverage options at all times. AMA advocated for the two largest Federal Employees Health Benefits Program insurers in counties without a marketplace plan to provide at least one silver-level marketplace plan.

Hey AMA, the FEHBP is an employer sponsored group health plan, not Medicaid. 

Finally, here’s an interesting Forbes article on the immediate fall out from enactment of the federal Right to Try law.

PriceWaterhouseCoopers reports that “Employer medical cost trend has plateaued. PwC’s Health Research Institute projects employer medical cost trend will be 6 percent for 2019, the same as 2018. Cost reduction efforts will shift to prices.”  That plateau remains well above the CPI-U.  Will it ever come down to the CPI-U?

Health Payer Intelligence informs us that

The Partnership for America’s Health Care Future (PAHCF), a newly formed coalition, consisting of leading healthcare provider societies and payer organizations, has committed to strengthening the nation’s private and public payer ecosystems. 

AHIP, the American Medical Association (AMA), the BlueCross BlueShield Association, PhRMA, and the Federation of American Hospitals are founding members of the consortium. 

PAHCF’s mission includes improving the quality and scope of Medicaid and Medicare, creating greater stability in the employer-sponsored insurance market, and supporting patients to make cost-effective healthcare decisions.

Good luck to them.

In this regards, Health Leaders Media reports about Blue Cross of Arizona’s successful Shared Savings Program.

HLM: Where do you see this model in five years? 

Wallace: First and foremost, we wanted to make sure we could bring all stakeholders to the same side of the table with an aligned vision. We’ve been able to prove that out.We’re already in discussions with multiple health plans across the country, specifically in four states and we will be in pro forma financial modeling in the next 60-90 days with two of those plans.We created this joint venture entity for other health plans to buy into, and it is important to have an equity position in the joint venture, which means finding the right partner. Ownership will be diluted down allowing other partners to participate.The benefit is they have a key structure in place where we have a set of metrics that we know are improving quality and the outcomes are bringing the cost of care down, and it’s been proven.  

U.S. District Judge Richard Leon this afternoon rejected the Justice Department’s effort to judicially block the vertical merger between AT&T and Time Warner. The Wall Street Journal reports

“I conclude the government has failed to meet its burden,” Judge Leon said. “The court has now spoken and the defendants have won.” 

In a highly unusual conclusion to the court session that underlined the magnitude of AT&T’s victory, Judge Leon urged the government to let the companies close their deal without further legal interference. 

The judge said he hoped the Justice Department would have the “wisdom” not to seek an emergency stay of his ruling, saying such a legal maneuver would be “manifestly unjust” to AT&T and Time Warner.  * * * 

The case marked the first time in 40 years that a court had seen a fully litigated challenge to a so-called vertical merger that combines companies at different links in the same supply chain. Such cases are considered more difficult for the government to win than the typical “horizontal” merger case, where the government challenges the combination of two head-to-head rivals and the loss of competition is more apparent. 

The court’s decision is good news for the vertical health care mergers now undergoing Justice Department review, e.g., CVS Health and Aetna, Cigna and Express Scripts, and Walmart and Humana.

The Hill reports that Department of Health and Human Services offices are meeting with prescription drug manufacturers for the purpose of encouraging them to lower prices voluntarily.

“We are working with stakeholders across the spectrum including drug companies, [pharmacy benefit managers], distributors, patients, health care professionals, physicians, insurers, etc., to respond to President Trump’s call to action and help patients pay less for their prescription drugs,” an HHS spokesperson told The Hill on Monday when asked about the meetings with drug companies.

According to Reuters, a new survey shows even though the ACA has required that in-network preventive services be covered at 100% since 2011, most Americans have not obtained those services. “Researchers looked at survey data from nearly 2,800 people over age 35 and found only 8 percent were getting all of the highly recommended preventive services with the greatest potential for improving health.”  As the old saying goes, you can bring a horse to water, etc. In the FEHBlog’s view, personal responsibility remains a key to good health.

The FEHBlog has been away for a few days attending a friend’s wedding and enjoying time with his grandson. He’s currently on the Vamoose bus traveling from New York City to Bethesda, MD.

What has been happening since last Tuesday?

• Earlier this year, a group of twenty state attorneys general filed a lawsuit against the federal government alleging that Congress’s decision to zero out the ACA’s individual mandate penalty effective next year rendered the Affordable Care Act unconstitutional. The FEHBlog having been around this block a few times did not take the bait.  However, a group of States lead by California intervened as defendants to support the law. Last week, the federal government of course represented by the Justice Department filed its opening brief. Hysteria ensued as documented in this Healthcare Dive article.  The Justice Department argued based on the Supreme Court’s decision in NFIB v. Sebelius and the federal government’s position in that case that the zeroing out of the individual mandate renders the individual mandate and the interrelated guaranteed issue and community rating provision unconstitutional. The other parts of the law including the employer mandate and the Medicaid expansion provisions are severable and unaffected by the zeroing out of the individual mandate, As a lawyer, the FEHBlog understands the government’s position. The FEHBlog thinks its bad policy because the ACA marketplace has been open for business for five years with the individual mandate in force. If people don’t understand the value of health insurance coverage by now, it’s not happening. The FEHBlog reflects on the fact from its inception in 1960 the FEHBP has been offered on a guaranteed issue basis — no pre-existing condition basis — and premiums are reflect the cost of benefits provided to the entire group of enrollees — a basic health insurance approach. But the FEHBP like other employer sponsored coverage was doing OK before the ACA became law in 2010. The problem was the individual market and the ACA’s reforms have not been the cure. Congress needs to fix this problem. 
• The Center for Disease Control issued a report on the growing problem of suicide in the U.S.  Read the press release.  Healthcare Data Management reports on an interesting VA project to reduce suicide among veterans using social determinants. 
• The Office of Personnel Management according to FEDWeek is encouraging federal government agencies to offer wellness programs to their employees. OPM also requires FEHB plans to offer those programs. It would be helpful if OPM coordinated these efforts. 
• In encouraging news, Govexec.com reports that postal stakeholders have been found their interactions with the President’s Task Force on Postal Service Reform to be productive.