FEHBlog

OPM finalized a rule today that released the Blue Cross Blue Shield Federal Employees Program from its current limit of offering two options and a high deductible plan with a health savings account. Beginning next year, Blue Cross can offer any type of third option that OPM is willing to approve.

The Internal Revenue Service (“IRS”) reversed itself today when it announced that the 2018 maximum health savings account contribution for family coverage will be $6,900. In May 2017 the IRS announced that the family maximum would be $6,900 for 2018. Then earlier this year, the IRS announced that due to the adoption of the chained CPI-U in the new tax law, the family maximum would be lowered to $6,850. We fortuitously have come full circle.

The Federal Times reports that OPM Director Dr. Jeff Pon

has called on agency heads to ensure that anyone appointed to the Chief Human Capital Officers Council from their agency should be a “very senior-level” person that “serves as an integral part of the leadership team.”

With major civil service reforms, information technology modernization efforts and changes to various federal benefit programs under consideration, I need the advice and assistance of the most senior management officials in planning and implementing human capital initiatives,” Pon wrote in a April 23, 2018, memo.

Today, the Department of Health and Human Services announced new steps in implementing HHS Secretary Alex Azar’s value driven agenda. In that regards, yesterday, the Centers for Medicare and Medicaid Services (“HHS”) disclosed public suggestions to reshape the Medicare Innovation Center which the Affordable Care Act funded with $10 billion.

The [public] responses focused on a number of areas that are critical to enhancing quality of care for beneficiaries and decreasing unnecessary cost, such as increased physician accountability for patient outcomes, improved patient choice and transparency, realigned incentives for the benefit of the patient, and a focus on chronically ill patients. In addition to the themes that emerged around the RFI’s guiding principles and eight model focus areas, the comments received in response to the RFI also reflected broad support for reducing burdensome requirements and unnecessary regulations.

The FEHBlog, of course, is on board with those objectives across the health care industry. Today, CMS released a proposed rule on the Medicare acute care and long term care hospital inpatient prospective payment systems for the next federal fiscal year which begins October 1, 2018.  Here’s a link to the fact sheet on the proposed changes. CMS leads with the policy changes but here’s the dollar impact:

The proposed increase in operating payment rates for general acute care hospitals paid under the IPPS that successfully participate in the Hospital Inpatient Quality Reporting (IQR) Program and are meaningful electronic health record (EHR) users is approximately 1.75 percent. This reflects the projected hospital market basket update of 2.8 percent reduced by a 0.8 percentage point productivity adjustment. This also reflects a proposed +0.5 percentage point adjustment required by legislation, and the -0.75 percentage point adjustment to the update required by the Affordable Care Act. 

CMS projects that the rate increase, together with other proposed changes to IPPS payment policies, will increase IPPS operating payments by approximately 2.1 percent, and that proposed changes in uncompensated care payments, capital payments, and the changes to the low-volume hospital payments will increase IPPS payments by an additional 1.3 percent for a total increase in IPPS payments of 3.4 percent.

Health Affair’s new issue focuses on how health care providers can consider social determinants of health when caring for their patients.

A host of new payment arrangements—from accountable care organizations to value-based purchasing to pay-for-performance initiatives—are encouraging health care providers to broaden their traditional focus on health care services and consider the social determinants of health that are impacting their patients. A recent Deloitte survey found that 80 percent of hospitals are committed to addressing patients’ social needs as part of their clinical care.  The potential rewards from a more balanced, integrated approach are vast. 

Good luck with that effort.

The FEHBlog noticed that Congress has been complaining that the Labor Department had not issued guidance on how the 21st Century Cures Act, passed in December 2016, interacts with the 2008 Mental Health Parity Act. The Labor Department’s Employee Benefit Security Administration released a boatload of guidance today, including a proposed ACA FAQ #39 (see Mental Health Parity heading) . The proposed FAQ, in particular, goes on for 12 pages and is worth reading.

Reason Magazine has an interesting, favorable article on Food and Drug Commissioner Scott Gottlieb.

The Wall Street Journal reports today that

The median hospital operating cash flow margin—monitored by Moody’s Investors Service as a signal of financial strength—fell to 8.1% last year from 9.5% a year earlier, in a preliminary analysis of 160 nonprofit and public hospitals and hospital systems with credit ratings from the agency, a Moody’s report said.  * * * 

[T]he metric’s decline points to new challenges for U.S. hospitals as more patients seek medical care in nonhospital settings, and as enrollment surges in Medicare, which typically pays hospitals less than commercial insurers do. Those trends are squeezing hospital revenue, while a tight labor market is driving expenses higher, Moody’s said.

Ruh roh. More hospital cost shifting is on the way.

Congress remains in session on Capitol Hill this week. The Week in Congress has not updated its page for last week yet. Lo siento.

Bloomberg reported last week that Cigna has confirmed that the U.S. Justice Department is reviewing its proposed merger with Express Scripts for anti-trust law compliance. This comes as no surprise to the FEHBlog because of the size of the deal, among other factors.  Here’s the interesting angle which affects all of the healthcare mergers now pending, e.g., CVS Health / Aetna, Walmart / Humana:

[These] deals are so-called vertical transactions that combine companies operating in different parts of the same industry: health insurance and pharmacy benefit management. For years, such mergers have been approved by antitrust enforcers with conditions on how the firms conduct business in order to remedy any harm to competition from the tie-ups. 

But the Justice Department’s antitrust chief, Makan Delrahim, has taken a tough stand against those kind of settlements, arguing they force antitrust officials to become regulators who need to monitor the effectiveness of the agreements. That position led to his lawsuit last year against AT&T Inc.’s proposed acquisition of Time Warner Inc.

U.S. District Judge Richard Leon is now holding a bench trial in the federal government’s lawsuit to block the AT&T acquisition here in the U.S. District Court for the District of Columbia. The government has rested its case, and the defendants now are presenting their case.  Here is a link to the Wall Street Journal’s page on this important trial.

Health Payer Intelligence offers an interesting take on how Blue Cross of Michigan is approaching the task of bundling payments to providers. Have a look at your convenience.

HHS Secretary Azar has appointed James Parker to serve as Senior Advisor to the Secretary for Health Reform and Director of the Office of Health Reform at HHS. In the role, Mr. Parker will lead the initiative to address the cost and availability of health insurance.  Mr. Parker worked for Anthem for 20 years, among other places.

UPI informs us today that “Prescription opioid dosage volume declined 12 percent in 2017, the largest annual drop in more than 25 years of measurement, according to a report released Thursday by a healthcare consulting company.  IQVIA’s Institute for Human Data Science conducted the study examining last year’s overall drug use and looked forward four years to 2022.”  This study supports the FEHBlog’s view that payer focus should be placed more on opioid addiction treatment than oncontrolling opioid prescription dispensing as that pendulum is swinging in the right direction now.

On the healthcare fraud front, Verscend, a company that provides anti-fraud services, lists the top ten health care fraud schemes in the first quarter of 2018. Fierce Healthcare reports on a case that should make Verscend’s list for this quarter.

UnitedHealthcare is suing the owners of two lab companies for a fraud scheme that the insurer calls “greed personified.” The lawsuit is is the latest in a string of legal complaints against Sun Clinical Laboratory and Mission Toxicology, two Texas-based clinical laboratories that have been sued by several other insurers, including Aetna and Blue Cross Blue Shield of Mississippi.  In a complaint filed in a Western Texas district court, UnitedHealthcare alleges Sun Clinical owner Michael Murphy, M.D., was the architect of an elaborate fraud scheme in which UnitedHealthcare was “conned” into paying $44 million in improper lab claims over the course of less than two years. 

On the survey front —

•  The FEHBlog enjoyed clicking through this Becker’s Hospital Review survey. This publication “asked a hospital leader from every state to name the most pressing health concern facing their patients. We then asked how they are addressing it. This year, the opioid epidemic, access to care and social determinants are among common concerns cited by leaders. Here is an overarching look at population health — in leaders’ own words.”  Here’s the link. 
• Employee Benefit Advisor tells us that according to a survey the millennial generation is most gung ho about opening and funding health savings accounts. YOLO.
• MHealth Intelligence reports that 

Consumers are eager to have their doctors use telehealth – but many haven’t tried the technology themselves, and they’re not convinced it’s as good as an in-person exam.  Those somewhat contradictory points, made in a survey conducted late last year by Software Advice, offer more proof that the idea of telehealth may be great, but the execution of the concept has been lacking. And it once again underscores the need for healthcare providers and payers to educate their patients and members on the value of virtual care.

Also on the telehealth front, Healthcare Dive reports that experts find that the use cases for telehealth are clear while the return on investment is not as yet.  

Following up on some recent posts

• Healthcare Dive discusses a Moody’s report on vertical integration actions in healthcare, e.g., CVS Health acquiring Aetna, Cigna acquiring Express Scripts, Walmart acquiring Humana, UHC’s Optum acquiring the DaVita medical group. etc.

• The Washington Examiner reports on the legislation that the House of Representatives is preparing to address the opioid crisis. 

1 Reduce barriers that limit competition and consumer choice, particularly those that limit patient access to new, lower-cost drugs;
2 Promote greater transparency and sharing of information regarding the pricing of prescription medicines;
3 Provide medical and healthcare professionals with the tools they need to support patient education and adherence; and
4 Promote additional regulatory changes that help patients get the right medicines for them, at the most affordable prices.

• Fierce Healthcare reports on the tong war between commercial health insurers and certain charities, like the American Kidney Fund, over the charities’ practice of paying health insurance premiums for people with end stage renal disease. Why? Commercial payers generate more revenue for the dialysis centers than Medicare does. Of course, the FEHBlog sides with the insurers but it’s noteworthy that these battles have not died down.  HHS needs to act. 

Govexec.com reports that the OPM Inspector General has advised OPM to create a formal contingency plan for the Federal Long Term Care Insurance Program because the market has shifted since the Program was created 2000.

“In 2000, there were 125 insurers in the long-term care insurance marketplace,” auditors wrote. “By 2014, there were only 12 insurers that were issuing at least 2,500 individual policies and only five insurers sold group policies.”

Additionally, only one firm still offers a group plan in the mold of FLTCIP. John Hancock discontinued the sale of new group policies in 2010, and it shuttered new individual long-term care plan sales in 2016. Instead, many insurance companies now offer a hybrid product that provides long-term care insurance along with either life insurance or an annuity.

The Inspector General’s advice makes sense to the FEHBlog but OPM asserts that it has the situation under control via regular contacts with John Hancock. Congress needs to take a look at this Program.

Today, the chairman and ranking minority member of the Senate Health, Labor, Education and Pensions Committee announced a bipartisan bill (S. 2680) including a series of forty measures to address the opioid crisis. The measures are described in this summary of the bill.  Some form of legislation directed at this crisis is bound to pass Congress before the August recess.  As this is an election year, there won’t be many legislative days left for Congressional action after the August recess.

Becker’s Hospital Review discusses Amazon Business’s decision to shelve its plan to become a major pharmaceutical distribution to major hospitals and other large heath care facilities. Instead, “the e-commerce giant will focus on beefing up its less sensitive medical supply offerings to smaller hospitals and clinics, sources familiar with the matter told CNBC.” The FEHBlog thinks that more competition at the distribution level could help control health care costs.

Health Data Management reports that CVS Health is moving full steam ahead with its strategy.

CVS Health is hiring a senior executive from a startup that specializes in primary-care clinics, a sign that the drugstore chain is serious about providing more medical services directly to consumers as it moves toward acquiring health insurer Aetna. 

Marc-David Munk will become CVS’s chief medical officer for its MinuteClinics and will oversee “expanded healthcare services across the CVS Health enterprise,” the pharmacy and drug-benefits manager said in a statement Friday. Munk was previously chief medical officer at Iora Health, a startup that operates about two dozen physician practices. 

In a 2015 blog post, Munk wrote about what he called “primary care 2.0” that should be “consumer-focused, well-managed and with a move toward higher-acuity, in-clinic diagnostics and treatment. Delivered by people you know, in a system you know.”

Forbes reports on an important advance in chemotherapy.

Adding Merck’s Keytruda to a standard chemotherapy regimen halved the odds that previously untreated patients with advanced non-small cell lung cancer would die, meaning that at the end of 21 months an extra 2 patients out of every 10 were still alive. 

The results set the stage for Keytruda to become a standard treatment for patients with non-small cell lung cancer, and herald another advance for the field of cancer immunotherapy, which uses drugs like Keytruda to harness the immune system to attack tumors. 

“I do think that improvement of overall survival is quite striking,” says Alice Shaw, a Harvard professor who has done leading research in lung cancer.

Healthcare Finance News tells us about a recent AHIP survey finding that the number of enrollees in high deductible health plans coupled with health savings accounts jumped 8% last year.  The article also discusses a number of pending bills in Congress intended to improve this arrangement. The FEHBlog who is enrolled in such an arrangement thinks it’s pretty, pretty good already. OPM did a good deed in the most recent call letter by permitting FEHBP carriers who offer these arrangements to make a higher contribution to the HSA for enrollees.

Finally Health IT Analytics reports that the American Medical Association and Google are holding a competition open to “technology developers who offer streamlined tools and standards-based methodologies to import, extract, and transfer patient-generated health data between mobile devices and clinical interfaces.”

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

The FEHBlog noticed that last week the House Ways and Means Committee held a roundtable discussion with hospital leaders about how to reduce red tape in Medicare.  Unquestionably, Medicare is an unnecessarily complex program, but all healthcare programs, including the FEHBP, are also bound up in too much red tape.  Congress, HHS, CMS, OPM, and the Labor Department need to let the health care providers and the insurers focus on doing their respective jobs, rather than on regulatory compliance and reporting, in the FEHBlog’s view. There needs to be a better balance.

Health Data Management reports on how health information technology seeks to tackle the top ten causes of death in the U.S.  Heart disease is listed as the number one cause of death. The FEHBlog recalls an AMA president explaining a few years ago that internists often default to heart disease on the death certificate when an autopsy is not performed. The top two causes, heart disease and cancer, lead to more deaths than the other eight combined.

Yesterday, the President issued an executive order creating a task force on the U.S. Postal System. The task force is chaired by the Treasury Secretary and its membership includes the OPM Director. The task force is expected to evaluate the Postal Service and present a report with “recommendations for administrative and legislative reforms to the United States postal system” no later than August 10, 2018, which allows the task force 120 days to complete its work. The creation of the task force no doubt will cause Congress to place its postal reform legislation (S. 2639 and H.R. 756) on the back burners for now.

Altarum reported today that

In March 2018, the Health Care Price Index rose by 2.2% compared to the previous year, fractionally higher than in February, and the highest rate since January 2012. Driving overall price acceleration is high hospital price growth of 3.7%, barely down from 3.8% in February—a more than 8-year high. This was driven by continuing high hospital price growth for Medicare (4.6%)—the highest Medicare rate since November 2009. 

In that regard, Reuters reports on a recent study concluding that price of cancer drugs does not reflect value of those drugs.

“The cost [of cancer drugs] is going up very steeply, and the improvements tend to be much more incremental, that’s really the fundamental issue,” Dr. Richard Schilsky, senior vice president and chief medical officer at ASCO, said in a telephone interview. 

Cost increases are similar regardless of whether a drug is a “true game changer that revolutionizes the approach to treating a kind of cancer, or the drug just produces a small incremental improvement over an otherwise available therapy,” he added. 

“Cost is not connected with benefit, and cost is going up quickly, and benefit is highly variable,” Schilsky said. “I think that as a society and as a healthcare system we need to introduce and experiment with some strategies that try to restore more normal market forces.” 

ASCO and other groups are supporting efforts to make cancer drug costs relate to their effectiveness, he added. “We clearly need to do something,” he said. “We can’t just allow the continued escalation in pricing and cost without making any effort to tie it to the benefits the treatment delivers.”

Good luck with that.

Becker’s Hospital Review and Healthcare Dive offers interesting perspectives on United Healthcare’s Optum division. Beckers points out that

Andrew Hayek, a leader in UnitedHealth’s care delivery operation, told Bloomberg the company has “been slowly, steadily, methodically aligning and partnering with phenomenal medical groups who choose to join us.” In the future, OptumCare hopes to expand its 30-market operation to 75 markets, including the nation’s most populous states: California, Texas, Florida and New York.

Whether it’s hospital- or insurer-employed physicians, Ken Marlow, an attorney with Waller Lansden Dortch & Davis, told the publication, “The smartest participants in the system are the ones who are going to be able to provide quality care at the lowest cost setting. Whoever gets there first, and whoever is able to do that, I think will be the winner.”

It’s hard to argue with that logic.

The Senate “read” the bipartisan Postal reform bill (S. 2629) a second time on Monday and placed the bill on the general orders calendar (item no. 366). The next step will be for the Senate leadership to bring up the bill for a vote.

The House Ways and Means Committee released a bipartisan staff report on stakeholder suggestions on how to address the opioid crisis.   The legislative themes that attracted majority stakeholder approval were opioid prescription limits, better data tracking, and increasing public access to medication-assisted treatment and non-opioid based pain remedies.

Healthcare Dive provides us with expert opinions on whether the U.S. can cope with a physician shortage and steps that are and can continue be taken to increase the number of physicians.. For example,

Edward Salsberg, director of health workforce studies at George Washington University’s Health Workforce Institute, does not share the concern that the nation is facing a severe shortage, pointing to how the industry is redesigning service delivery to enhance utilization. 

“While the number of new physicians is growing slowly, the number of NPs and PAs is growing very rapidly as is a whole host of other professions,” he told Healthcare Dive. “Making better use of the workforce we have through innovations in service delivery and modifications in scope of practice laws/regulations can help increase access, improve quality and constrain the growth in health care costs.”

 More recommendations —

• Revcycle intelligence.com discusses three strategies to reduce low value health care, and

• Health Affairs discusses two approaches that payers can take to improve the efficacy of accountable care organizations.