FEHBlog

The acting OPM Inspector General has posted on the internet his semi-annual report to Congress for the period ended September 30, 2017. The report, which has a flashy cover, leads with a lousy recommendation in the FEHBlog’s view.

The acting Inspector General wants Congress to apply a horribly complicated Medicare, Medicaid and TRICARE law, known as the federal healthcare programs anti-kickback act, to the FEHBP.  This law places restrictions on discount arrangements between healthcare providers and health plans. This law makes some sense with Medicare, Medicaid and TRICARE where the government dictates the pricing for the most part. The law makes no sense with the FEHBP where the discount arrangements are contractually negotiated. If the OIG’s recommendation is accepted, FEHB plans would be required to re-negotiate thousands of contracts and providers may be unwilling to play ball under the new rules. This type of chaos will not lead to better, more affordable healthcare.

The FEHBlog had hoped that OPM management would push back on this request but the management response does not oppose the recommendation, notwithstanding the President’s call for de-regulation.  This is a big bowl of wrong.

And it’s time to get in a post before the big game begins.

Congress is in session this week. Here’s a link to the Week in Congress’s account of last week’s actions on Capitol Hill.  Congress is expected to approve a further continuing resolution funding the federal government past February 8. Meanwhile, on Tuesday, the Senate Homeland Security and Governmental Affairs Committee will hold a hearing on the obvious problems with governing through continuing resolutions. Healer, heal thyself because the House of Representatives did pass a spending bill before September 30. The hold up has been in the Senate.

While on the topic of complaints,

• Health Data Management discusses why healthcare interoperability moves at a snail’s pace. 
• Medpage Today documents the mediocre progress in implementing value based medicine (but don’t give up hope yet), and 
• Modern Healthcare reports that doctors are concerned that new Medicare quality measures ding them for cost out their control.  “‘Physicians are questioning what the patient’s part in all these is going to be,” [surgeon Brad] Johnson [M.D.] said. “Are they going to sign a contract that requires them to do follow ups or to quit smoking?” 

This brings us back to the announcement that Amazon, J.P. Morgan Chase, and Berkshire Hathaway plan to team up to bring health care to their employees. This consortium, which this helpful Fortune Magazine article discusses, is not ground breaking. More importantly, the consortium is not writing on a blank slate. It’s unfortunate that the companies (and doctors) were not more involved when the Obama Administration designed the electronic medical record giveaway. The Obama Administration’s disregard for electronic medical record interoperability gave birth to the current mess. The Affordable Care Act multitude of consumer protections also restricts independent development although the law allows the most flexibility to the large group market. Nevertheless, even the large group market is subject to ACA requirements, like the prohibition of annual dollar limits, that have caused the number of million dollar health plan claims to escalate. Furthermore, the consortium will have to deal with the significant cost shifting from Medicare and Medicare to private sector plans. These headwinds caused the FEHBlog to quip that the consortium leaders exhibited hubris. But good luck to them.

The FEHBlog always seeks to make readers aware of innovations. For example, MedPage Today explains why Americans need to learn more about genetic sequencing. Good luck to all innovators.

Six more weeks of winter and continuing resolutions! Roll Call reports that the Republican Congressional leadership is confident that Congress will timely extend the current continuing resolution funding the federal government beyond next Thursday, February 8. The FEHBlog have seen other articles suggesting an extension through March 22.

“The program results far exceeded our expectations,” the study said. “Throughout the 3-month program, the response rate was around 37%, and the 3-month average refill request rate was 18%. We had also expected that since this was an older patient population the response time span might be stretched out a little longer, but this was not the case with over 80% of refill requests received within 8 hours of the initial reminder.”

Yesterday, as the Chicago Tribune reports, Alex Azar was sworn in as Health and Human Services Secretary.

Modern Healthcare tells us that the 3700 physicians out of Medicare in 2017 as compared to 7400 in 2016 and 3500 in 2015. Very little FEHBP coverage is available if you are an annuitant over 65 whose doctor has opted out of Medicare. See Section 9 of your FEHBP brochure.  The Modern Healthcare article lead me to this useful CMS website which tells you whether your doctor has opted out of Medicare.  Opt out doctors are required to have to their Medicare Part B patients sign an opt out agreement.

The New York Times Upshot column has an interesting column with the following lede —

The idea that spending more on preventive care will reduce overall health care spending is widely believed and often promoted as a reason to support reform. It’s thought that too many people with chronic illnesses wait until they are truly ill before seeking care, often in emergency rooms, where it costs more. It should follow then that treating diseases earlier, or screening for them before they become more serious, would wind up saving money in the long run.  Unfortunately, almost none of this is true.

No kidding.

Healthcare Dive reports that Amazon, Berkshire Hathaway, and JP Morgan Chase are forming a not-for-profit company to reduce healthcare costs for their employees and presumably employees from other large employers. Here’s a link to their announcement.  The FEHBlog sees this as a quite a display of hubris but yesterday’s post illustrates the fact that the FEHBlog can make mistakes.

The FEHBlog made a mistake in several posts about the current continuing resolution. He thought that the additional health insurer tax moratorium applies to this year. In fact, this moratorium applies to 2019. So the government will be collecting $14.3 billion from insurers this year which Congress evidently assumes was already baked in the premiums. Here’s a link to the IRS guidance on the 2019 moratorium.

Congress is in session this week on Capitol Hill.  The FEHBlog’s attention was drawn to a Hill newspaper article headlined “Congress takes the sting out of Obamacare.”  In the FEHBlog’s view, Congress started to take the sting out of the law by repealing the individual mandate but it has a long way to go still. Way too much stick and not enough carrot in that law.

For example, the FEHBlog pointed out a few weeks ago a December 2017 HHS report on 2016 medical loss ratio (“MLR) results.  The HHS report notes that “In 2016, the average MLR was 92.9 percent in the individual market, 86.1 percent in the small group market, and 90.3 percent in the large group market.”  The statutory MLR is 80% for the individual and small group markets and 85% for the large group market which includes the FEHBP. So you would think that the MLR rebates would have been small in 2016, but they totalled hundreds of millions of dollars because those refunds are determined using state-level MLRs for each insurer.

FEHBP insurers are in double jeopardy because they are subject to this state-level MLR and OPM’s contract level MLR. It’s no wonder that you don’t see new carriers joining the FEHBP.  In any event, all MLR penalties / rebates should be based on the insurer’s aggregate MLR per market with no state or contract breakdown.

Health Payer Intelligence points out a recent AMA report finding that the ACA reduced consumer out of pocket spending by 11.9% but increased consumer spending on health insurance premiums by 12.1% over the period 2012-2015. There has to be a better, less complex, way. The FEHBlog continues to like his idea of giving all high earners, not just small business owners, a 50% tax exclusion on health insurance premiums. Give all middle income people, not just employees, a full exclusion and repeal the ACA taxes on providers and health plans. The low income people would continue to have ACA subsidies. That would be a good, equitable start.

In prescription drug news, Wired has an interesting report on the state of CRISPR gene editing research.

[Last] week the National Institutes of Health announced it will be awarding $190 million in research grants over the next six years, in part to push gene editing technologies into the mainstream. “The focus of the Somatic Cell Genome Editing program is to dramatically accelerate the translation of these technologies to the clinic for treatment of as many genetic diseases as possible,” NIH Director Francis Collins said in a statement Tuesday. Which could encourage some of the more exotic, experimental delivery systems out in the research world—strategies like Crispr-covered gold beads, yarn-like ball structures called DNA nanoclews, and shape-shifting polymers to get the editor where it needs to go.

Let’s go.  Also, the Wall Street Journal yesterday offered a fascinating interview with  economist David Ridley.  Prof. Ridley came up with idea of having the Food and Drug Administrative give drugs that treat rare diseases an express lane pass for a future new drug application. What’s more the express lane pass can be sold to another drug manufacturer for “between $67.5 million and $350 million, though the price last year settled in the range of $125 million to $150 million.” The applicant must pay a $2.7 million fee to use the express lane. Congress enacted the idea in 2007. At the first the express lane pass was awarded for infectious tropical disease treatments, and in 2012 the initiative was extended to rare pediatric diseases. Last year, the FDA issued “five [passes or more formally expedited review vouchers] for drugs to treat rare pediatric diseases and one for the tropical Chagas parasite, which afflicts more than six million people world-wide.” Cool.

It continues to be a busy week.  As Healthcare Dives reports, the Senate confirmed Alex Azar to be Secretary of the Health and Human Services Department. Meanwhile, the President’s nominations to be OPM Director and OPM Deputy Director continue to cool their heels due to Sen. Ron Johnson’s hold. The FEHBlog can find no news about the status of those nominations. Mysterious and unfortunate in the FEHBlog’s view.

The FEHBlog recalls that about five years ago OPM was pushing a government initiative called Blue Button which would allow you to download your claims history into a spreadsheet. The initiative lost steam according to this government website. Never fear. Apple plans to permit hospitals and other healthcare providers to download your electronic medical record (more likely keys parts of it) into your phone. Becker’s Hospital Review discusses the Apple initiative which makes a lot of sense.

On the opioid crisis front, the Federal Trade Commission and HHS’s SAMHSA unit released a consumer factsheet yesterday with tips on how get the right help of opioid addiction.  Meanwhile and disturbingly, Beckers Hospital Review reports that

United States residents purchased nearly $800 million worth of fentanyl pills from China over the internet in two years [and delivered by the Postal Service], according to a Senate investigations report released Wednesday. The 104-page bipartisan report produced by the Senate Homeland Security Committee is the result of a yearlong Senate investigation.

Fentanyl is a dangerous synthetic opioid that you can’t just pick up at CVS. The report explains that

Commercial shippers like UPS and FedEx are required to provide U.S. Customs and Border Protection with information about the origin and contents of the packages prior to their arrival. However, customs officials do not receive information on all packages shipped through the United States Postal Service. The volume of shipments and the limited information made available from certain foreign postal services make identifying packages containing illicit drugs difficult.

Loopholes as W.C. Fields remarked.  Opioid distribution, e.g., heroin, fentanyl, has returned to being principally a law enforcement issue. The fallout from opioids remains a key concern for providers and payers, in the FEHBlog’s view.

The U.S. Office of Personnel Management this morning issued its call letter for 2019 benefit and rate proposals.  The call letter describes the laundry list of initiatives that it wants the FEHB plans to cover in their 2019 benefit and rate proposals due May 31, 2018. The letter jumped the gun a little because it emphasizes on page 5 the potential impact of the ACA’s high cost excise or colloquially the Cadillac tax on FEHB plans. Yesterday, Congress delayed the effective date for that tax for two more years. The tax originally was scheduled to take effect this year. Two years ago, Congress delayed the effective date to 2020 and yesterday Congress further delayed the effective date to 2022.

The Cadillac tax is very inequitable to the FEHBP.  The tax assumes the average family size to be 2.7 members but the FEHBP family size is much lower which is why self plus one is popular. Consequently, FEHBP self only premiums tend to already be bumping up the ACA’s self only threshold of $10,200 plus adjustment while the self and family and self plus one rates tend to comfortably below the $27,500 other than self only threshold. OPM’s call letter does not appreciate this nuance.

Consequently, the FEHBlog thinks that it would be helpful for OPM to issue a draft call letter in January and a final call letter in early March. The Centers for Medicare and Medicaid Services take this approach with the Medicare Advantage program.

One of the other laundry list items in the call letter is immunizations. The FEHBlog’s internist told him today that Glaxo Kline has obtained Food and Drug Administration approval for a new shingles vaccine called Shingrix. CNN reports that the government has approved Shringix for adults aged 50 and older, even those like me who had the predecessor shingles vaccine, Zostovax.  Shingrix is two injections two months apart. The FEHBlog’s internist suggested waiting a couple months before approach CVS or another pharmacy for the new vaccine.

Speaking of vaccines, the FEHBlog noticed this essay about the flu in last weekend’s Wall Street Journal.

Despite medical advances, we are just as vulnerable today to a flu pandemic as we were a century ago. Vaccines in recent years have, on average, reduced the risk of flu illness among those vaccinated by just 40% (less than 30% this year). Current antiviral drugs only slow the virus—we have no reliable way to destroy it.

The author’s point was not to discourage people from getting the current flu vaccine. Instead, his point was to place focus on ongoing research to create a universal flu vaccine.  The essayist has some other ideas too.

Also today, the Health Care Cost Institute today came out with a report on health care spending from 2012 to 2016. HCCI maintains a HIPAA de-identified claims warehouse contributed by Aetna, Humana, Kaiser Permanente, and United Healthcare.

“It is time to have a national conversation on the role of price increases in the growth of health care spending,” said Niall Brennan, MPP, president of HCCI. “Despite the progress made in recent years on value-based care, the reality is that working Americans are using less care but paying more for it every year. Rising prices, especially for prescription drugs, surgery, and emergency department visits, have been primary drivers of faster growth in recent years.”

Congress ended the partial federal government shutdown today.  The new continuing resolution (H.R. 195) extends federal appropriations for the federal government through February 8, 2018, extends Children’s Health Insurance Program funding for six years, and suspends the ACA’s health insurer tax for 2018, the ACA’s medical device tax for 2018 and 2019, and further delays implementation of the ACA’s high cost employer sponsored plan excises tax (a/k/a) Cadillac tax from 2020 to 2022.

Also today, the U.S. Office of Personnel Management released a final rule on removal of family members from FEHB plan coverage. The rule concerns voluntary removal of otherwise eligible members and involuntary removal of ineligible individuals with, of course, appropriate due process. The rule will take effect on February 22, 2018.

Well, the FEHBlog never claimed to be all knowing. Federal appropriations did lapse on Saturday because the Senate was unable to achieve 60 votes in favor of debating (cloture) on the continuing resolution. Here’s a link to the Week in Congress’s report on last week’s activities on Capitol Hill.

Because the FEHBP Act, 5 U.S.C. Sec. 8909, creates a 4% surcharge on premiums and a quarter of that surcharge is available for OPM administrative operations, FEHBP operations at OPM are not funded by federal appropriations. So the FEHBP continues to roll on, notwithstanding the shutdown.

Kaiser Health News reports on how the shutdown affects other health programs, like Medicare.

Beneficiaries will be largely unaffected by a shutdown, especially if it is short. Patients will continue to receive their insurance coverage, and Medicare will continue to process reimbursement payments to medical providers. But those checks could be delayed if the shutdown is prolonged.

The Wall Street Journal adds that “There are two services that won’t be disrupted: the mail and the delivery of Social Security checks.”

Federal News Radio reports that the Senate is scheduled to consider a modified continuing resolution funding the federal government through February 8 beginning today at 10 am with a vote scheduled for noon.