FEHBlog

Congress is moving forward with enacting the conference report for H.R. 1, the Tax Cuts and Jobs Act. Here’s a link to a two pager highlighting the bill’s policy changes.

The U.S. Office of Personnel Management (OPM) proposed a rule today that would allow the government- wide plans, Blue Cross and the long vacant indemnity benefit plan carrier, to offer three options. The FEHB Act, 5 U.S.C. Sec. 8903 requires those plans to offer two options. OPM currently permits the other plan types — employee organization plans and comprehensive medical plans — to offer three plan types. OPM describes this proposal as illustrating FEHBP’s flexibilities. The FEHBlog hopes that this will be the first of many FEHB flexibilities offered to carriers over the coming year in an effort to create a more hospitable environment for competition. The comment deadline on this rule is February 20, 2018.

HHS’s Office for Civil Rights has created two new websites — one for professionals and the other for consumers — “providing specific guidance addressing HIPAA protections, the obligations of covered health care providers, and the circumstances in which covered providers can share information related to mental health and substance use disorder treatment [specifically with family members].”  Here’s a link to the HHS press release about these worthy actions.

In the latest mergers and acquisitions news, Humana has joined with two private venture firms to purchase Kindred Healthcare for $9 per share or $4.1 billion. USA Today explains that “The goal is for Humana, the Louisville-based health insurance company, to acquire full ownership of Kindred’s home care business in three to five years at a price to be determined later.”

Following up on Friday afternoon’s post, here’s a link to the House-Senate conference report on the Tax Cuts and Jobs Act, H.R. 1, which was released late Friday afternoon. The report starts out with the final statutory language which is followed by an explanation which breaks down each provision into current law, House version, Senate version, and Conference agreement.

In terms of healthcare, the noteworthy change is that the law will zero out the Affordable Care Act’s individual shared responsibility mandate effective January 1, 2019.  See Conference Report at 153. The Washington Post has a fair analysis of this change here.

As the Washington Post report explains the ACA’s tax penalty for failing to carry minimum essential coverage falls principally on lower income people who are eligible for ACA premium and cost sharing subsidies or perhaps even Medicaid. When this change takes effect in 2019, the ACA marketplace will work like the FEHBP did from 1960 to 2013 — no pre-existing condition limitations, annual open season, and eligible people who fail to enroll during the Open Season cannot enroll until the next Open Season except in the event of a special enrollment event. No mandate.

A tax law change that marginally affects the FEHBP is Congress’s decision to base tax law inflation adjustments, such as health saving account maximum annual deposits, on the Bureau of Labor Statistic’s chained consumer price index for urban consumers instead of the regular CPI-U.  Bloomberg provides background on the chained CPI-U here.

The House and Senate are expected to approve H.R. 1 this week and to extend the current continuing resolution funding the federal government into January. Then Congress will take a break until the new year which is only two weeks or so away. Here’s a link the The Week in Congress’s report on other Capitol Hill actions that occurred last week.

On Thursday, the Office of Management and Budget (“OMB”) issued its Fall 2017 unified federal regulatory agenda. The unified agenda provides an update on each federal department and agency’s regulatory plans. Here’s a link to OPM’s plans.  OMB reports that

The Agenda represents ongoing progress toward the goals of more effective and less burdensome regulation and includes the following developments:

• Better than 2:1 – Agencies plan to finalize three deregulatory actions for every new regulatory action in FY2018.
• 1579 Withdrawn or Delayed Actions – Agencies continue to eliminate, delay, or streamline regulatory actions in the pipeline. In this Administration, agencies withdrew or delayed 1579 planned regulatory actions, reflecting all such changes from Fall 2016 to Fall 2017.

Unfortunately, the FEHBP, in the FEHBlog’s view, has not seen any reduction in regulatory burden this year. The FEHBlog attributes this to the problems encountered in installing new political leadership at the agency.

In other news,

• Healthcare Finance News reports that Cigna has purchased a digital health startup called Brighter.
• The United Health Foundation, which United Healthcare created, updated for 2017 it annual report on America’s health rankings.  The report ranks the states based on the health of their populations. 
• The Blue Cross Blue Shield Association released a Moody’s Analytics report on understanding health conditions across the U.S.   

The report [which is based on the BCBS Health Index] shows that social determinants of health drive larger differences in the impacts for common chronic conditions such as hypertension, diabetes and coronary artery disease. In addition, the analysis shows these determinants drive smaller differences in the impact of other conditions such as cancer, substance use disorder and mental health, which are influenced more by individual factors such as family health history and personal lifestyle choices. The analysis also shows that relative to broader social determinants, differences in local health care system characteristics have a more modest association with the health impact of disease on a community’s commercially insured population.

FedWeek reports that

There is a common misconception that the Federal Employees Health Benefits program covers long-term care needs. In fact, long-term care is primarily not medical care and the benefits for such care under FEHB (or Medicare) are limited, covering only short periods and only certain types of care in some situations.

FEHB plans don’t cover custodial care, a stay in an assisted living facility, or a continuing need for a home health aide to help you with other activities of daily living. Limited stays in skilled nursing facilities can be covered in some circumstances. Specifics are in sections 5(a) and 5(c) of FEHB plan brochures.

Why would you need the Federal Long Term Care Insurance Program if the FEHBP already covered those services? The author’s conclusion is correct though.

The Centers for Medicare and Medicaid Services has added more quality information to its Physician Compare website. Oh, boy!

New York Presbyterian, a New York City based health system, announced earlier this week that

NewYork-Presbyterian and Walgreens are collaborating to bring convenient access to NewYork-Presbyterian’s world-class care through new telemedicine services, now available through Walgreens digital properties and at self-service kiosks at select Duane Reade drugstores in New York. NewYork-Presbyterian, New York’s No. 1 hospital, is offering the telemedicine services as part of its NYP OnDemand suite of digital health services.

Healthcare Dive added that

Speaking at an Axios event in Washington, D.C., last week, NYP President and CEO Steven Corwin underscored telehealth’s potential to disrupt healthcare.
This year alone, NYP has performed about 10,000 telehealth visits, Corwin noted. One area that has surpassed expectations is telepsychiatry. “I thought that was going to be something patient’s wouldn’t accept,” Corwin said. “Quite the contrary. The Net Promoter Score of the telepsychiatry consult is 95. The Net Promoter Score of Netflix is 75. We are talking about a sea change in the way that we’re delivering care.”

 Interesting.

The Politico offers an article today on OPM’s Healthcare Claims Data Warehouse, a project that began in 2010.  OPM has been planning to use this warehouse to hold longitudinal health histories of federal and postal employees.  FEHB plan carriers are covered entities for HIPAA Privacy and Security purposes and must accept the financial risk of coverage. As the article explains, carriers are willing to contribute claims data that is de-identified for HIPAA purposes and protects proprietary information. De-identified means that the contributed data cannot be linked back to any particular federal/postal employee, annuitant, or family member.

The article quotes the former OPM policy and planning director Jonathan Foley. The warehouse is his baby.  He gets the last word in the article as follows:

Foley called that [/the FEHBlog’s] argument a “smokescreen” because the data is not governed by HIPAA in the same way as health plans. The warehouse’s security is extremely stringent and it is federally authorized to handle sensitive health data, he said.

Section 8910(b) of the FEHB Act reads in pertinent part as follows

(b) Each contract entered into under section 8902 of this title shall contain provisions requiring carriers to-
(1) furnish such reasonable reports as the Office determines to be necessary to enable it to carry out its functions under this chapter; and
(2) permit the Office and representatives of the Government Accountability Office to examine records of the carriers as may be necessary to carry out the purposes of this chapter.

In short, the FEHBA authorizes OPM to collect, not receive copies of, carrier records. The 1959 FEHBA does not contemplate this data warehouse. If OPM wants the full-blown warehouse, then the agency should have asked Congress to amend the FEHB Act.

In any event, as the article explains, and the FEHBlog confirms, carriers cooperatively are working with OPM to create a warehouse that serves the agency’s purposes and protects the interests of carriers and FEHBP members. As the article explains,

An OPM spokesperson said the agency and its carriers were still negotiating release of the data, in de-identified form to ensure protection from breaches. In fact, OPM has convened a meeting with insurers next month on the topic, the spokesperson said. The agency did not explain how it could use de-identified data to create files with long-term information about patients, which is a key benefit of data warehousing to data analysts.

Believe the FEHBlog, carriers and OPM are working on creating a secure approach that will address the data analysts’ concern.

The FEHBlog noticed in Govexec.com this morning that yesterday Sen. Ron Johnson (R Wisc) and Rep. Mark Meadows (R NC) have proposed a bill to end OPM’s Multi-State Program (“MSP”). The Affordable Care Act created the MSP to encourage ACA marketplace competition. OPM explains on its website that

A Multi-State Plan (MSP) option is a high-quality plan offered on the Marketplace, under contract with the U.S. Office of Personnel Management (OPM), the agency that also administers health insurance for Federal employees. OPM negotiates plan benefits, monitors plan performance, and oversees plan compliance with the Affordable Care Act (ACA).

OPM started contracting with Blue Cross and several ACA co-op plans to offer these plans. The OPM webpage also indicates that only one State — Arkansas — will offer an MSP option for 2018.

Govexec.com notes

Johnson said in a statement that the program costs taxpayers $10 million a year, including expenses and the salaries of the program’s administrative staff. That money could be better spent on other initiatives, like OPM’s efforts to reduce retirement and security clearance backlogs, he argued. 

The Senate Homeland Security and Governmental Affairs Committee’s website is no longer listing a confirmation hearing for OPM Inspector General nominee John DuPuy on Thursday. The Committee continues to plan to hold a hearing for an Office of Management and Budget Deputy Director nominee on Thursday at 10 am. The FEHBlog plans to check in on the hearing Thursday to find out if Chairman Ron Johnson (R Wisc.) explains when Mr. DuPuy’s confirmation hearing will be held.  The FEHBlog is on record here that he would prefer that Sen. Johnson permit his Committee and the Senate to vote on the OPM Director and Deputy Director nominations soon.

The House Ways and Means Committee announced today that several of its Republican members have introduced a series of bills concerning ACA taxes.

The following bills were introduced today:
H.R. 4617, introduced by Reps. Erik Paulsen (R-MN) and Jackie Walorski (R-IN), provides relief from the job and innovation-killing Medical Device Tax for 5 years.
H.R. 4618, introduced by Rep. Lynn Jenkins (R-KS), provides relief for two years from the tax on over-the-counter medications, expanding access and reducing health are costs by once again allowing for reimbursement under consumer-directed accounts.
H.R. 4620, introduced by Rep. Kristi Noem (R-SD), provides relief in 2018 from the Health Insurance Tax that drives up health care costs, if the insurer provides the plan holder with a premium rebate and delays the tax in 2019 for all insurers.
H.R. 4619, introduced by Rep. Carlos Curbelo (R-FL), provides needed relief from the Health Insurance Tax, for 2 years for health care plans regulated by Puerto Rico.
H.R. 4616, introduced by Reps. Devin Nunes (R-CA) and Mike Kelly (R-PA), delivers three years of retroactive relief and one year of prospective relief from the harmful employer mandate paired with a one-year delay of the Cadillac Tax [from 2020 to 2021].

H.R. 4620 puzzles the FEHBlog because if Congress repeals the health insurer tax for 2018 and the taxes were built into the rate, the ACA’s medical loss ratio requirements should create a refund. If the plans set rates in the reasonable expectation that Congress would further suspend or delay the tax, those insurers would take in the chops. This tax, which adversely impacts the FEHBP, should be repealed now.

The Federal Benefits Open Season ends tomorrow December 11 at 11:59 pm. Joe Davidson from the Washington Post provides some closing observations for interested federal and postal employees and annuitants.

Congress remains in session this coming week. Here’s a link to the Week in Congress’s report on last week’s actions on Capitol Hill. The FEHBlog notes that on Thursday, December 14, at 10 am ET, the Senate Homeland Security and Government Operations Committee will hold a hearing on the President’s nomination of John E. Dupuy to be Inspector General, Office of Personnel Management.

Healthcare Dive reports that two Catholic hospital chains Catholic Health Initiatives and Dignity Health signed a merger agreement last week. “The deal would create a system with $28.4 billion in combined revenue across 139 hospitals operating in 28 states.” The Wall Street Journal reports today that two larger Catholic hospital chains

Ascension and Providence St. Joseph Health are talking about combining, according to people familiar with the discussions. A deal would create an entity of unprecedented reach, with 191 hospitals in 27 states and annual revenue of $44.8 billion, based on the most recent fiscal year. That would dethrone the nation’s largest pure hospital operator, HCA Healthcare Inc., which owns 177 hospitals and ended 2016 with $41.5 billion in revenue.

And so it goes.

The New York Times today had a front page story that began as follows– “Having health insurance is supposed to save you money on your prescriptions. But increasingly, consumers are finding that isn’t the case.”  Insurance is intended to protect you against unexpected risks. Requiring health insurance cover low dollar, common expenses, as the ACA does, adds to the price paid by the consumer.

A related article explains how it is possible to get a better deal on prescription drug costs by paying cash. That reflects good consumerism, no poor insurance coverage. The best piece of advice in the article for those in high deductible plans like the FEHBlog reads as follows:

Several large retailers, like Walmart and Costco, sell generics at discounted prices, like $4 a prescription, which may be less than your insurance is asking you to pay. Some grocery stores, like Publix and Meijer, even give away certain medications — like antibiotics — for free. Pharmacy chains like Rite Aid also offer discounted prices to people who sign up for savings clubs. 

GoodRx and Blink Health are two companies that offer discounted rates on generic drugs. GoodRx allows consumers to compare what local pharmacies are charging for a drug (it includes prices from discount stores like Walmart), while Blink Health quotes a single price that it has negotiated. GoodRx offers coupons that consumers bring to participating pharmacies, while Blink Health requires users to pay upfront, then collect their prescription at a nearby pharmacy

House Republican tax writers are considering delaying Obamacare’s health insurance tax for only limited markets next year, leaving out small businesses and possibly private Medicaid plans, according to sources on and off Capitol Hill. They would suspend it for all markets in 2019. ***

The fate of the health insurance tax is being decided in negotiations over a year-end bill. Also in the mix is a two-year delay of Obamacare’s medical device tax, loosening the restrictions on health savings accounts, and [further] delay of the Cadillac tax. ***

On the Senate side, the tax bill has pushed the Obamacare tax delays to the back burner. Senate Finance Chairman Orrin Hatch (R-Utah) said the panel hasn’t considered delay legislation yet. “But we’ll have to get into it, there’s no question,” he said.

The health insurance tax has a big adverse impact on the FEHBP and so would the Cadillac tax (now set for 2020) as the FEHBlog has discussed.

The end of the current Federal Benefits Open Season is three days and change away, December 11.  OPM posted about its FEHB Quality Perspective on Wednesday.  Benefits expert Tammy Flanagan offers advice in Govexec.com on how to navigate Open Season when it’s crunch time.

As the FEHBlog anticipated, Congress did extend federal government funding for two additional weeks until December 22, 2017. The Wall Street Journal reports today that

Congressional leaders are working on a two-year budget agreement with President Donald Trump that would raise both military and nonmilitary spending above the levels, known as the sequester, established in a 2011 budget and debt limit fight. Those lower spending levels kicked in in 2013, but lawmakers have since then passed two budget deals bumping spending higher. The last budget deal ended in September, but lawmakers have kept the government running at that level, as of Thursday evening through Dec. 22.

House Minority Leader Nancy Pelosi (D., Calif.), Senate Minority Leader Chuck Schumer (D., N.Y.) and Senate Majority Leader Mitch McConnell (R., Ky.) met with Mr. Ryan and Mr. Trump Thursday afternoon and spent most of the time working on where to set spending levels for the next two-year deal, an aide said. Republicans are pushing for $54 billion more in defense funding a year. Democrats want to ensure a comparable increase for nondefense spending, according to aides. 

“Nothing specific has been agreed to, but discussions continue,” Mr. Schumer and Mrs. Pelosi said in a joint statement after the meeting. 

Once that budget deal has been reached, lawmakers can write the detailed spending bill that would fund the government through the rest of the fiscal year, which ends Sept. 30.

It looks like any deal won’t be finalized until next month, but funding will continue through extensions of the continuing resolution.

In other Hill news, the Wall Street Journal reported yesterday that he tax-bill conference committee hasn’t formally met yet, but it could be done by the end of next week, said Sen. Rob Portman (R., Ohio). Mr. Portman, who is on the 29-member committee, spoke to reporters after leaving a meeting with some other Senate Republican committee members Thursday afternoon.

In other items that caught the FEHBlog’s fancy:

• The Health Affairs blog offers includes an opinion piece on why we need a serious conversation about health care spending. Agreed. 
• Forbes Magazine provides a link to Avik Roy’s recent interview with CMS Administrator Seema Verma at the annual Forbes Healthcare Summit.  It’s worth watching. The FEHBlog also watched on YouTube another summit session outlining “five fixes for healthcare.” 
• The FEHBlog’s alma mater, UConn, has a non-technical reader-friendly post about the state of human genetics research. 

There are only five more days in this year’s Federal Benefits Open Season.

Follow up on Sunday’s post about CVS Health’s acquisition of Aetna (subject to government review and shareholder approval) here are links to CVS’s press release which explains the company’s plans behind the acquisition and the Drug Channel blog’s observations on those plans.

In other mergers and acquisitions news, United Healthcare’s Optum unit announced its acquisition of the Davita Medical Group for $4.9 billion.  Davita is the nation’s leading provider of kidney dialysis services. Shortly after Medicare was enacted in 1965, Congress decided to extend Medicare coverage to people suffering from end stage renal disease. Congress expected that this would be the first extension of Medicare to a several chronic illness. This act turned out to be the first and the last because the extension cost much, much more than anticipated. After all if you build it they will come.

The Harvard Health blog has a useful comment concerning celebrity endorsement of medical procedures. The writer’s upshot is “For any medical test or treatment, ask [your personal doctor] whether it’s likely to be helpful.” Good advice.

Last but not least, the CMS actuaries today released a report on 2016 National Health Expenditures.

In 2016, overall national health spending increased 4.3 percent following 5.8 percent growth in 2015, according to a study by the Office of the Actuary at the Centers for Medicare & Medicaid Services (CMS) published today as a Web First by Health Affairs. Following Affordable Care Act (ACA) coverage expansion and significant retail prescription drug spending growth in 2014 and 2015, health care spending growth decelerated in 2016. The report concludes that the 2016 expenditure slowdown was broadly based as growth for all major payers (private health insurance, Medicare, and Medicaid) and goods and service categories (hospitals, physician and clinical services, and retail prescription drugs) slowed in 2016. 

During 2014 and 2015, the health spending share of the economy increased 0.5 percentage point from 17.2 percent in 2013 to 17.7 percent in 2015. The increases in the health spending share of the economy in 2014 and 2015 were largely due to coverage expansion that contributed to 8.7 million individuals gaining private health insurance coverage and 10.2 million gaining Medicaid coverage over the period and to significant growth in retail prescription drug spending. Health care spending grew 1.5 percentage points faster than the overall economy in 2016, resulting in a 0.2 percentage-point increase in the health spending share of the economy – from 17.7 percent in 2015 to 17.9 percent in 2016. 

That’s a lot of boxes of ziti as Tony Soprano would say.