FEHBlog

The President’s Council of Economic Advisers issued its 2018 report this week.  Public health issues are covered from pages 279-321.  The report provides a useful perspective on major public health issues that concern OPM — opioids, obesity, and tobacco use.  The opioid discussion raises a point (p. 293) that the FEHBlog noted last month when discussed Sam Quinones’ excellent book Dreamland.

The opioid epidemic evolved with three successive waves of rising deaths due to different types of opioids, with each wave building on the earlier one (Ciccarone 2017). In the late 1990s, in response to claims that pain was under- treated and assurances from manufacturers that new opioid formulations were safe, the number of opioid prescriptions skyrocketed (CDC 2017b). What followed was an increase in the misuse of and deaths related to these prescriptions (figure 6-2). As providers became aware of the abuse potential and addictive nature of these drugs, prescription rates fell, after peaking in 2011. Deaths involving prescription opioids leveled off, but were followed by a rise in deaths from illicit opioids: heroin and fentanyl. Heroin deaths rose first, followed by a rise in deaths involving fentanyl—a synthetic opioid that is 30 to 50 times more potent than heroin and has legitimate medical uses but is increasingly being illicitly produced abroad (primarily in Mexico and China) and distributed in the U.S., alone or mixed with heroin. In 2015, males age 25 to 44 (a core group of the prime-age workers whose ages range from 25 to 54) had the highest heroin death rate, 13 per 100,000. Fentanyl-related deaths surpassed other opioid- related deaths in 2016. 

Emphasis added. Very sad. The government should have placed more focus on this issue years ago.

The Wall Street Journal reports that the new budget law will require high earning seniors to pay more for their Medicare coverage.

Starting in 2019, individuals with incomes of $500,000 or more and couples earning $750,000 or more will be broken out of the current top bracket and required to pay 85% of the cost of their Medicare parts B and D benefits, up from 80% now. (In contrast, Medicare beneficiaries with incomes of $85,000 or less—or $170,000 or less for couples—pay only 25% of the cost of their benefits.) 

For higher-income beneficiaries, this increased premium surcharge comes on the heels of a separate increase that went into effect on Jan. 1. Under that increase, Medicare beneficiaries with incomes of $133,501 to $160,000 (or $267,001 to $320,000 for couples) now must pay 65% of the cost of their parts B and D benefits, up from 50% before Jan 1. And beneficiaries with incomes between $160,001 and $214,000 (or $320,001 and $428,000 for couples) were shifted from a 65% surcharge into the highest income group that currently pays 80% of the cost of their benefits.

Higher Medicare Part B premiums discourage Medicare eligible federal annuitants from picking up Medicare Part B. Granted federal annuitants typically don’t fall into these income levels. The problem as the FEHBlog sees it is that the income levels in the second paragraph might encompass a cadre of  federal annuitants in the early years of retirement. If you don’t pick up Medicare Part B promptly following retirement, you will be penalized for late enrollment. (That’s the approach that the ACA should have used.)

The article also points out that

The [budget] law also closes the Medicare Part D coverage gap, known as the doughnut hole, in 2019—one year sooner than planned. Part D prescription drug plans typically cover 75% of the cost of medication, leaving the participant to pick up 25%. But after the total cost of a participant’s drugs reaches a set amount per year—$3,750 in 2018—he or she falls into the doughnut hole. Once there, the participant is currently on the hook for 35% of the cost of his or her brand-name medications, up to $5,000 in total out-of-pocket costs, said Ms. [Juliette] Cubanski [, an associate director of the Henry J. Kaiser Family Foundation’s program on Medicare policy].  At that point, catastrophic coverage kicks in, limiting participants’ outlays, typically to 5%. Next year, when the doughnut hole disappears, Part D beneficiaries will pay 25% of their total costs until the catastrophic coverage kicks-in. 

This really frosts the FEHBlog’s cake because OPM does not permit FEHB plans to integrate their prescription drug benefits with Medicare Part D prescription drug plan coverage through an employer group waiver plan even though the Medicare law expressly permits FEHB plans to take this step. EGWPs would lower the cost curve for FEHB plans which is why the Postal Service wants them in the Postal Service Health Plans contemplated by the postal reform law (HR 756).

Finally, in an article that the FEHBlog finds uplifting, plansponsor.com tells us that

ConnectYourCare’s 2018 report on consumer-driven health care account trends finds 44.9% of respondents chose to enroll in a health savings account (HSA) as a savings vehicle for future health care needs, over more immediate benefits like tax savings and lower premiums, up from 40.5% in its 2017 report. 

The majority of HSA account holders are spenders, both by their self-evaluation and backed up by spending and balance data. However, 44% of account holders saved at least half of their contributions in 2017, which may indicate a future shift in saver/spender trends. 

Twenty-two percent of respondents overall say that paying for health care in retirement is the health care issue that concerns them most. However, when segmented by age, this rises to the top issue causing concern for those ages 55 to 64 (37.4%) and those age 65 and older (30.9%). Those younger than 25 are most concerned about unanticipated health care expenses and those ages 25 to 54 are most concerned about increasing insurance premiums.

The FEHBlog started out as an HSA spender but now is an HSA saver while he can still contribute. Your ability to contribute to an HSA cuts off when you start to receive Medicare. You can delay Medicare coverage beyond age 65 if you are still working. Here’s a handy CMS worksheet. For most employers, including the federal government, the employer sponsored coverage remains primary to Medicare past age 65 until retirement. However, in the FEHBlog’s case, his business has less than 20 employees, so Medicare will be his primary coverage when he turns 65.  The health insurance savings from switching to Medicare outweigh the value of the additional HSA contributions that the FEHBlog could have made by delaying Medicare. But he can spend the HSA account funds past age 65 tax free on medical expenses including Part B premiums.  

A newly proposed FEHB rule will be published in tomorrow’s Federal Register. The rule concerns an anchronism in the FEHB Act that requires carriers to offer conversion coverage. The provision made sense when there was no ACA marketplace. Since 2014, replacement coverage has been readily available in the ACA marketplace, and the insurers that previously offered conversion coverage backed out of the market. Rather than simply ask Congress to repeal the requirement expressly, OPM has modified the requirements to integrate the conversion requirements with the ACA marketplace. The rule formalizes these modifications.  The proposed rule will be open to public comment for sixty days.

Today the ACA regulators from the Trump Administration proposed a new ACA rule that will permit insurers to offer short term health insurance coverage for up to 12 months. The ACA regulators under the Obama Administration had cut back on that coverage to a maximum of three months purportedly in order to protect the ACA marketplace.

If Congress in 2010 really had wanted to funnel people into the exchanges, it would have cut back eligible child coverage from 26 to 22 and eliminated COBRA and FEHB TCC continuation coverage and patchwork coverage effective for 2014.  Continuation coverage requirements generate losses for employer sponsored plans due to adverse selection. Congress also would given people in the marketplace more choice of coverage rather than dictate the scope of coverage. But that’s not where we are right now.

In other news, Albertson’s, a privately held grocery store chain that also operates under 17 brand names including Safeway, Von’s and Osco-Jewel brands, is buying the roughly 2,000 Rite Aid Stores that fell outside the Rite Aid’s previous deal with the Walgreen’s Boots Alliance.  The Wall Street Journal observes that

All three of the U.S.’s biggest pharmacy chains are now pursuing deals in a sign of the threats they face as customers increasingly shop online. CVS has agreed to buy health insurer Aetna Inc., and Walgreens, in addition to the scaled-back Rite Aid deal, is in talks to buy drug distributor AmerisourceBergen Corp. , The Wall Street Journal recently reported.

The Albertson’s deal which is subject to regulatory approval is expected to close in the third quarter of this year.

Congress is out of town this week. Here’s a link to the Week in Congress’s report on last week actions on Capitol Hill.

Following up on a couple of last week’s posts, the FEHBlog noticed an op-ed today in which the author complained that he had to bring a lawsuit against his insurer in order to correct a prior authorization decision. This isn’t the case. Patient Advocate explains that ACA marketplace plan members can appeal prior authorization decisions and obtain an independent review organization decision that is binding on the insurer. Why don’t people understand this when insurers are obligated to place members on notice of appeal rights. The fixable problem as the FEHBlog see it is that while member of employer sponsored plans, including the FEHBP where OPM acts as the independent reviewer, must exhaust their administrative remedies unless the insurer screws up procedurally, ACA marketplace members can choose between a lawsuit and independent review. Litigators are likely to choose the lawsuit route for their clients. Congress should align the individual marketplace with the employer sponsored plan marketplace as far as it concerns exhaustion of an available administrative remedy. That would lower costs for everyone.

The Wall Street Journal has a report this afternoon about the number one hospital caused infection. That infection surprisingly to the FEHBlog at least is pneumonia, which my father call the “Old Man’s Friend,” not sepsis.

Hospital-acquired pneumonia is more pervasive and urgent than most people realize, a new study warns, and hospitals in America aren’t adequately addressing prevention. “Given the mortality, hospitals should be doing a lot more,” says Dian Baker, lead author of the study, which was published in January in the American Journal of Infection Control.

Pneumonia, which typically comes from germs that enter the body through the mouth, is the No. 1 hospital-acquired infection in America, according to the Centers for Disease Control and Prevention. That includes both pneumonia infections that some patients on ventilators catch from bacteria in their breathing tubes as well as the more common non-ventilator variety, the CDC says.

According to the article, NYU Langone Medical Center is requiring that patients who are about to undergo surgery brush their teeth. This has proven to be an effective technique to help stop the spread of pneumonia.

Finally Multibriefs.com reports that

Healthcare data breaches continued to rise in 2017, but the number of affected patient records declined 80 percent, a new report suggests. According to the Protenus Breach Barometer, 2017 may have simply been an off year for malicious actors, who may be regrouping for more attacks in 2018. [Let’s hope not.]

A total of 477 data breaches were reported to the Department of Health and Human Services’ Office for Civil Rights during the year, up from the 450 reported in 2016. However, the positive news for healthcare organizations and leaders is that fewer records were implicated in the breaches, specifically, 5.6 million in 2017 versus 27.3 million in 2016.

Ah, it’s the beginning of the last federal three day weekend that in turn launches the great federal holiday drought. No more three day weekends until Memorial Day.

The FEHBlog has been reflecting on Sen. Claire McCaskill’s opening comments at the Senate Homeland Security and Governmental Affairs Committee’s business meeting last Wednesday. Sen. McCaskill (D Missouri) is the ranking minority member on the Committee. She bemoaned the fact that the Committee was about to kill the ACA’s multi-state program rather than try to fix it.  The multi-state program was an OPM-administered program intended to cover the state based exchanges with commonly designed plans. One of the many problems with the multi-state program was the fact that the participating plans were subject to both OPM and state regulation. Blue Cross tried to help out OPM, but the Blue Cross multi state plans were competing with the local Blues plans in the exchanges. In other words, like many parts of this law, the multi-state program was overkill, and repeal is the proper outcome.

OPM’s administration of the multi-state program has unfortunate effects for the FEHBP. As the FEHBlog has mentioned, the large group market in which the FEHB sits has the loosest ACA restrictions while the multi-state program was in the individual market which has the tightest ACA restrictions. The multi-state program allowed OPM to learn about those tighter restrictions and apply them to the FEHBP. Cost curve up.

The point is that Sen. McCaskill should recognize that in many respects the ACA overreached and the best fix is to trim it back.

In a bit of good news, yesterday the Food and Drug Administration approved a blood test for concussions. The results are available in three to four hours. The New York Times reports that

The test, called the Banyan Brain Trauma Indicator, is also expected to reduce the number of people exposed to radiation through CT scans, or computed tomography scans, that detect brain tissue damage or intracranial lesions. If the blood test is adopted widely, it could eliminate the need for CT scans in at least a third of those with suspected brain injuries, the agency predicted.

Well done.

Earlier today, the Senate Homeland Security and Governmental Affairs Committee cleared for full Senate approval the President’s nominations of Dr. Jeff T.H. Pon to be OPM Director and Michael Rigas to be OPM Deputy Director and Chairman Ron Johnson’s bill (S. 2221) to repeal the Affordable Care Act’s multi-state program.  That program already is dying on the vine. Federal News Radio provides background on the story.

The Centers for Medicare and Medicaid actuary issued a projection of health care spending from 2017 to 2026. Cost curve up.  Here’s the Healthcare Dive story on the report.

There’s a lot of press reports on an Aetna case in California where the Aetna medical director, who since has left Aetna’s employ, admitted in a deposition that he had relied on the Aetna nurse’s review of the medical records when he requested additional testing before granting necessary pre-authorization for a medical service. Here’s Healthcare Dive report. 

The medical profession is expressing outrage because it hates the practice insurer pre-authorization. The press accounts are equally overheated. The Affordable Care Act was supposed to avoid these disputes by requiring that all insurer decisions on medical necessity, etc., be referred to an independent medical review organization. This case arose in 2011 when that part of the law was in effect. In other words, the medical director did not have the final say. Yet, the FEHBlog does not see any mention of IRO review in the articles. IRO review is much more cost effective than litigation.

On the bright side, the Wall Street Journal reported yesterday that

In a bag of backyard dirt, scientists have discovered a powerful new
group of antibiotics they say can wipe out many infections in lab and
animal tests, including some microbes that are resistant to most traditional antibiotics.
Researchers
at Rockefeller University in New York reported the discovery of the new
antibiotics, called malacidins, on Monday in the journal Nature
Microbiology.
It is the latest in a series of promising antibiotics found
through innovative genetic sequencing techniques that allow researchers
to screen thousands of soil bacteria
that previously could not be grown or studied in the laboratory. To
identify the new compounds, the Rockefeller researchers sifted through
genetic material culled from 1,500 soil samples.
“We extract DNA
directly out of soil samples,” said biochemist

Sean Brady

at Rockefeller’s Laboratory for Genetically Encoded Small
Molecules, a senior author on the new study. “We put it into a bug we
can grow easily in the laboratory and see if it can make new
molecules—the basis of new antibiotics.”

Bravo. 

Yesterday, the Trump Administration issued its Fiscal Year 2019 budget proposal.  The Washington Post this morning discusses the impact of the budget on federal employees and annuitants. The budget includes a proposed statutory change to the government contribution for FEHBP coverage which is detailed in this budget document at page 182:

This proposal would revise the government contribution rate to base it on a plan’s score from the Federal Employees Health Benefits (FEHB) Program Plan Performance Assessment. Currently all FEHB carriers participate in the assessment, which includes 19 measures of health outcomes, quality, and efficiency. Under this proposal, the Government contribution would range between 65-75 percent depending on a plan’s performance.

As it stands the government contribution ranges from approximately 65% – 75% of the selected plan’s premium due to the impact of the statutory cap on the government contribution. The current government contribution formula is 72% of the enrollment weighted average capped at 75% of the selected plan’s premium. The FEHBlog is not suggesting that this is nothing burger but it also is not going to attract new plans. Too much emphasis on metrics for the FEHBlog’s taste.

OPM also released its new strategic plan. The plan is much shorter than it’s immediate predecessor. The predecessor plan had a chapter on the FEHBP. The new plan has a section (1.4) that fits in under one page. Brevity is a virtue.

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

The Senate Homeland Security and Governmental Affairs Committee is holding a business meeting on Wednesday morning. The first orders of business are to consider the President’s nominee’s for OPM’s Director, Dr. Jeff T.H. Pon, and Deputy Director, Michael Rigas. The Chairman, Sen. Ron Johnson (R Wisc) has lifted the hold on their nominations which he had placed as leverage to obtain OPM’s cooperation in his investigation of OPM’s 2013 decision to provide an FEHBP level government contribution toward coverage of members of Congress and their staffs in the DC small business exchange. This makes the FEHBlog quite happy.

The Committee also will consider Chairman Johnson’s bill (S. 2221) to repeal the ACA’s multi-state program which OPM administers and has only one participating plan operating in one state, Arkansas Blue Cross, for 2018.

The President will release his FY 2019 budget tomorrow. Of course, Congress has already passed and the President has signed an FY 2019 budget agreement but the devil is in the details.

Federal News Radio reports that OPM has released its Quadrennial Federal Workforce Priorities Report, the first of its kind, details the steps agencies should consider when reshaping the government workforce and improving employee engagement. The report does not discuss the FEHBP.

The Washington Post reports that

OxyContin maker Purdue Pharma said on Saturday that it has cut its sales force in half and will stop promoting opioids to physicians, following widespread criticism of the ways drugmakers market addictive painkillers.
The drugmaker said it will inform doctors Monday [February 12] that its sales representatives will no longer visit physicians’ offices to discuss the company’s opioid products. It will now have about 200 sales representatives, Purdue said.
“We have restructured and significantly reduced our commercial operation and will no longer be promoting opioids to prescribers,” the company, based in Stamford, Conn., said in a statement.

Sometimes better late than never is not good enough.

That’s the headline of a weekend Wall Street Journal article that disturbed the FEHBlog. The article discusses two women who caught the flu last month and died. Both women were in the late 30s, were married with young children, and had health insurance. One of the women was a teacher and the other was an administrator. Their deaths shouldn’t have happened but they did.

Bloomberg reports that the flu and its big brother pneumonia currently are the cause of 1 in 10 deaths in America.

The death toll in future weeks is expected to grow even higher because flu activity is still rising—and the number of deaths follow the flu activity. Hospitalization rates are already approaching total numbers seen at the end of the flu season, which may not be for months.
“Unfortunately, more deaths are likely to happen,” [Centers for Disease Control acting director Anne] Schuchat said. “Over the next few weeks, we do expect and it would make sense to see more pneumonia and influenza-related deaths. The people who are likely to die are already in the hospital.”

In a sidebar, the Wall Street Journal discusses why this disease can be so deadly.

People over age 65, young children [particular those five and under], pregnant women and adults with chronic medical conditions such as heart disease or chronic lung disease are at high risk of serious complications. It is uncommon, but otherwise healthy people can develop them too.
Complications occur when the body’s immune system overreacts, triggering an exaggerated inflammatory response. Or flu infection can make it easier for bacteria to invade the bloodstream, causing a secondary infection. 

The article encourages people or caregivers in those categories to contact their doctor right away. Tamiflu, according to the article (and the FDA), can reduce flu symptoms particularly if taken within the first two days of getting sick.  The article also discusses when you need to head to the emergency room.

The bottom line is that people need to have a primary care provider in place before they get sick. Similarly, it’s important if you have a telemedicine service to register for that service before you need it. Even if you prepared as the two unfortunate women in the article mentioned at the outset were, tragic things can happen.

The Wall Street Journal also reports this morning that

As Americans suffer through the worst influenza outbreak in almost a decade, a Japanese drugmaker says it has developed a pill that can kill the virus within a day. But even if the experimental drug lives up to the claim, it likely won’t be available in the U.S. until next year at the earliest.
A late-stage trial on Japanese and American flu patients found that for the people who took the Shionogi 4507 -3.04% & Co. compound, the median time taken to wipe out the virus was 24 hours. That is much quicker than any other flu drug on the market, including Roche AG’s RHHBY -0.07% Tamiflu, which the trial showed took three times longer to achieve the same result. Quickly killing the virus could reduce its contagious effects, Shionogi said.
Also, Shionogi’s experimental drug requires only a single dose, while patients need to take two doses of Tamiflu a day, for five days.
Both Shionogi’s compound and Tamiflu take roughly the same amount of time to entirely contain flu symptoms, but Shionogi says its compound provides immediate relief faster.

Over night, as the Wall Street Journal reports, Congress approved a two year budget deal (October 1, 2017, to September 30, 2019) and extended the continuing resolution funding the federal government though March 23.   The Senate leadership struck the bipartisan deal in which the House Republican leadership and the President joined.

This means no more government shutdown nonsense at least through the mid-term elections. Of course, there will be other issues for legislative combat.

Becker’s Hospital Review lists the five takeaways from the budget deal for healthcare leaders here.

While we wait to see whether Congress can reach a budget agreement overnight, here are two AHIP PowerPoints and two earning reports to ponder:

• AHIP’s uplifting presentation on the value of employer sponsored health care
• AHIP’s helpful presentation on its initiative to address the opioid crisis.
• Healthcare Dive’s report on CVS Health’s 4th Quarter 2017 earnings. “CEO Larry Merlo said on the company’s Q4 earnings call that ‘nothing that has surfaced’ has come as a surprise, adding that he still expects the deal to close in the second half of 2018,” and
• CNBC’s report on Gilead’s 4th Quarter 2017 earnings. Gilead is the company that first brought the Hepatitis C cures to market at an astoundingly high price. Those glory days are over due to competition and the success of the drug.