FEHBlog

The House of Representatives and the Senate will be in session on Capitol Hill this coming week. The Senate Homeland Security and Governmental Affairs Committee will hold a business meeting afternoon to consider the nomination of Emily Murphy to be General Services Administrator.  The Committee initially intended to consider Ms. Murphy’s nomination along with the OPM Director and Deputy Director nominations. However, the Committee Chair Sen. Ron Johnson (R Wisc.) severed Ms. Murphy from the OPM nominees in order to maintain pressure on the agency to comply with his records request as discussed in the FEHBlog last week. Here’s a link to the Week in Congress’s report on last week’s activities on Capitol Hill.

The Department of Health and Human Services is proposing the 2019 Benefits and Payment Parameters Notice as required by the ACA. The notice principally pertains to the individual and small business plans operating in the ACA marketplaces. The one provision of the notice that applies to the FEHBP is its announcement of the maximum annual limitation on cost sharing [e.g. deductibles, co-payments, and co-insurance]: 

[W]e propose [based on statutory requirements] that the 2019 maximum annual limitation on cost sharing would be $7,900 for self-only coverage and $15,800 for other than self-only coverage. This represents an approximately 7 percent increase above the 2018 parameters of $7,350 for self only coverage and $14,700 for other than self-only coverage.

As usual, Prof. Timothy Jost and a colleague offer comprehensive coverage of the Notice here.

On Saturdays, the FEHBlog enjoys watching the Wall Street Journal Editorial Board program on television. The panel this week turned to the President’s declaration that the opioid crisis is a national public health emergency.  The panel referred to Sally Satel, MD, as a helpful take on the crisis. 

The FEHBlog had not heard of Dr. Satel who turns out to be a psychiatrist and professor at Yale University, a prolific author, and a scholar at the American Enterprise Institute.  The FEHBlog thanks to You Tube watched a panel on the opioid crisis that Dr. Satel chaired. One of the panels was Christopher Caldwell who authored an April 2017 article titled “American Carnage: The New Landscape of Opioid Addiction.” The FEHBlog encourages you to read the article which provides a history of the our country’s problems with opioids which dates back to the Civil War and an overview of the current problems. 

The Wall Street Journal also reported over the weekend that CVS Health has been on a big hunt for a health insurer partner

CVS Health Corp.’s bid for Aetna Inc. is the culmination of a wide-ranging hunt by the drugstore giant for a deal partner, highlighting a broader effort among health-care companies to find new avenues of growth by combining diverse businesses under one roof. 

The Woonsocket, R.I., company has been examining different deal possibilities for about six months, according to people familiar with the matter. CVS approached Anthem Inc. ANTM 2.14% about potentially buying the health insurer, and discussed a combination with UnitedHealth Group Inc., the people said. In both cases, the talks were preliminary and informal.

Interesting.

Modern Healthcare reports that

MS launched an initiative Thursday to help it determine what provider regulations it should junk or revamp, citing growing concerns that its regulations are reducing the time providers spend with patients.
As part of the Patient over Paperwork initiative, CMS officials will travel the country to gather information on the impact their regulations have on physicians. Those conversations have been taking place informally for weeks.
The outreach effort comes at a time that primary-care physicians are spending 27% of their time on clinical activities and 49% on administrative activities, according to a 2016 Annals of Internal Medicine study. The CMS now releases around 58 rules, or 11,000 pages of regulation, each year. 

Kudos to CMS for this initiative but what is CMS is doing for Medicare Advantage and Prescription Drug plans or OPM doing for FEHB plans in this regard? The ACA after all put the greatest administrative and financial burden on health insurers.

The FEHBlog mentioned the rising use blockchains as a defense against cyberattacks, in particular distributed denial of service (DDoS) attacks a week or two ago. PC Magazine has a good article that explains the blockchain defense for the layperson.

The FEHBlog who is back in DC nearly fell out of his chair this afternoon when he read on the Wall Street Journal website that “CVS Health Corp. is in talks to buy Aetna Inc.  according to people familiar with the matter, in a deal that could value the health insurer at upward of $66 billion.”  The latest article indicates that the acquistion talks have been underway six months. The FEHBlog now understands why Aetna announced selling its U.S. life and disability insurance business to the Hartford earlier this week. Aetna is preparing for the acquistion which of course would require government approval. Both CVS and Aetna are heavily engaged with the FEHBP. 


In contrast, Healthcare Dive reports on the trend among health care systems to divest hospitals typically acquired in the wake of the ACA’s passage. . 

The FEHBlog noted on Sunday that the Senate Homeland Security and Governmental Affairs Committee planned to hold a business meeting today to consider the OPM Director, OPM Deputy Director, and GSA Administration nominations. Federal News Radio reports that the Committee indefinitely postponed the meeting.

“At this time, the committee cannot proceed to a vote on the nominations of OPM director and deputy director until OPM complies with the chairman’s request for documents related to the development of OPM’s regulation that exempted members of Congress from Obamacare,” a committee spokeswoman wrote in an email to Federal News Radio.

The FEHBlog sympathizes with the Committee Chair Sen Ron Johnson because the FEHBlog always expected that Congress would have to appropriate funds to provide an employer contribution toward marketplace coverage for staff members. The FEHBlog expected that members of Congress would wind up paying their own premiums in the marketplace like individual subscribers.

Nevertheless, the FEHBlog considers the Committee’s action to be short sighted. The FEHBlog expects that the Chairman would get answers from OPM more quickly if the Senate confirmed Dr. Jeff Pon and Michael Rigas as OPM Director and Deputy Director respectively.

“Today, House Ways and Means Committee Chairman Kevin Brady (R-Texas) and Senate Finance Committee Chairman Orrin Hatch (R-Utah) announced a bicameral agreement to pair concrete, structural Obamacare reforms with a temporary two-year funding extension for the health law’s cost-sharing reduction (CSR) program.”  Full legislative language is expected to be release this week. Heavens to betsy, the FEHBlog hopes that the full legislative language will include a repeal of the medical device and health insurer taxes and a further delay of the high cost employer sponsored plan / Cadillac plan excise tax from 2020 to 2026.  These taxes are not friendly to the FEHBP.

The Health Affairs blog is celebrating the fifth anniversary of ABIM’s Choosing Wisely campaign with a couple of interesting articles.  The campaign offers medical society recommended lists of medically unnecessary services that doctors should avoid and presumably health plans shouldn’t cover.

The American Hospital Association has released a toolkit of advice to hospitals and health systems on how address the opioid / illegal drug use epidemic. These folks are best positioned to address this problem.

Healthcare Dive tells us about a Centers for Medicare and Medicaid Services study aimed to determine whether MACRA (the current Medicare Part B reimbursement system) and physicians in the Merit-based Incentive Payment System (MIPS) can reduce Medicare spending. Capital idea.

Employee Benefit News reports about the Segal Company’s 2018 projections of employer sponsored health care spending. Drug Channels discusses Prime Therapeutic’s report on prescription drug spending. Prime Therapeutics is a prescription drug manager owned by a group of Blue Cross licensees. Both reports expects lower prescription drug spending.

Both Houses of Congress are in session on Capitol Hill this coming week. The Senate Homeland Security and Governmental Affairs Committee will hold a business meeting on Wednesday October 25 to consider the President’s nominations of Dr. Jeff T.H. Pon and Michael Rigas to be OPM Director and OPM Deputy Director respectively. Their nomination hearing were held last week. The rapid follow up is not surprising to the FEHBlog.

A Wall Street Journal columnist Holman W. Jenkins Jr. shredded to pieces a CBS 60 minutes / Washington Post investigation which alleged that Congress at the instigation of wholesale drug distributors had accelerated the opioid crisis by repealing authority held by the Drug Enforcement Agency in 2016.  The FEHBlog had noticed the Post article but he wasn’t buying what the Post was selling for the reasons that Mr. Jenkins explicated. Here are a few key points:

• [A]s the Centers for Disease Control and Prevention has pointed out, prescription opioid deaths remain roughly proportional to prescriptions written. The number of prescriptions, which tripled between 1999 and 2010, has been falling ever since. Today’s surging opioid death rate is due to black-market heroin and fentanyl.
• A federal survey finds misuse of prescription opioids peaked in 2012 and has returned to 2002 levels. 
• What we have here is a typical story of bureaucratic angst, promoted by the Post’s lead source, Joseph Rannazzisi, a former DEA official who now works for trial lawyers suing the drug industry.

The FEHBlog is poised for another trip out of town so this will be quick.

Dr. Jeff T.H. Pon’s confirmation hearing for the OPM Director position went smoothly on Wednesday. The Federal Times report is here. The Homeland Security and Governmental Affairs Committee’s chair Sen. Ron Johnson (R Wisc.) warned that he would put a hold on Dr. Pon’s nomination (as he did on Beth Cobert’s 2015 nomination) if OPM fails to fully cooperate with his request for records explaining OPM’s 2013 decision to extend an FEHBP government contribution to members of Congress and their staffs to use in the DC small business marketplace or SHOP.  Dr. Pon advised that OPM is working on the request. Sen. Tom Carper (D. Del.) suggested that he and Sen. Johnson work out a bipartisan compromise to fund an employer contribution for staff healthcare. That makes sense to me. That is what Congress should have done in 2013.

Yesterday, the Senate passed by a 51-49 vote an FY 2018 budget resolution that the Senate expects the House to accept.  The House had passed its own budget resolution that included a reconciliation instruction requiring the House Government Oversight and Governmental Reform Committee to cut $32 billion in spending. The resolution suggested that the Committee look at reforming federal employee pensions and some concern was expressed that the Committee would change the FEHBP government contribution formula. However, as Federal News Radio reports, the Senate budget resolution does not include the reconciliation instruction that has been causing general distress.

The Health Affairs Blog reports on effort in the FEHBlog’s home state of Maryland to promote health care transparency. Good luck with that.

Today, OPM issued its annual list of significant changes to the FEHBP and FEDVIP. Here are links to the OPM cover letter and the list of changes. Again, no new carriers have joined the FEHBP. The most important point for enrollees is the following:

Employees in terminating plans (Table 1 [of the list]) or service area reductions with terminating enrollment codes (Table 2) must enroll in a new health plan during Open Season. If they do not enroll in a new plan, they will be enrolled in the Standard Option of the GEHA Benefit Plan (the lowest-cost nationwide plan option for 2018 as determined by OPM). 

New Coverage:  Coverage under an enrollee’s new health plan will be effective the first day of the pay period beginning on or after January 1, 2018; for most employees this will be Sunday, January7,2018.Enrollees will remain covered and receive the 2017 benefits of the old plan until coverage under the new plan becomes effective.

In other big news, the large Blue Cross licensee, Anthem, announced “it is establishing a new pharmacy benefits manager to be named IngenioRx. IngenioRx will begin offering a full suite of PBM solutions starting in 2020, which coincides with the conclusion of the company’s current PBM contract [with Express Scripts]. Anthem’s press release further explains that

IngenioRx will serve customers of Anthem affiliated health plans, as well as non-Anthem customers, with a seamless, integrated experience by taking Anthem’s new model to the national marketplace. The IngenioRx pharmacy leadership team combined has more than 100 years of experience in the PBM industry, which will be invaluable in helping to ensure a seamless transition for members. 

Anthem has signed a five-year agreement with CVS Health, for services beginning Jan. 1, 2020. IngenioRx will combine its member and provider engagement initiatives and market leading pricing with CVS’ expertise in point-of-sale engagement, such as member messaging and Minute Clinic. CVS will also provide prescription fulfillment and claims processing services.

Finally, Health IT Analytics reports that  “The distributed ledger methodology known as blockchain is piquing interest in the healthcare industry as organizations search for more secure and trusted strategies for managing big data.”  A recent Harvard Business Review article explains:

The technology at the heart of bitcoin and other virtual currencies, blockchain is an open, distributed ledger that can record transactions between two parties efficiently and in a verifiable and permanent way. The ledger itself can also be programmed to trigger transactions automatically.  * * *  

True blockchain-led transformation of business and government, we believe, is still many years away. That’s because blockchain is not a “disruptive” technology, which can attack a traditional business model with a lower-cost solution and overtake incumbent firms quickly. Blockchain is a foundational technology: It has the potential to create new foundations for our economic and social systems. But while the impact will be enormous, it will take decades for blockchain to seep into our economic and social infrastructure. The process of adoption will be gradual and steady, not sudden, as waves of technological and institutional change gain momentum.

Intriguing.

The FEHBlog looks forward to watching (in the comfort of his office) the confirmation hearing for the President’s nominees for OPM Director, Jeff T.H. Pon, and OPM Deputy Director, Michael Rigas.  The hearing begins at 10 am ET.  Roll Call reports that the Senate Homeland Security and Governmental Affairs Committee Chair Sen. Ron Johnson (R Wisc.) plans to ask Messrs. Pon and Rigas about their respective positions on OPM’s 2013 decision to provide an FEHBP government contribution to members of Congress and their staff members who were forced out of the FEHBP into the DC small business health insurance exchange or SHOP.

Speaking of nominations, Employee Benefits News reports that the President has nominated Preston Rutledge to be assistant Secretary of Labor for the Employee Benefits Security Administration which administers ERISA, the federal law governing private sector employee benefit plans. Mr. Rutledge Rutledge “currently serves as senior tax and benefits counsel for Senate Finance Committee Chairman Orrin Hatch (R-Utah).” This position also serves an important role in ACA administration. It requires Senate confirmation.

Following up on Sunday’s post, the Senate Health Education Labor and Pensions (“HELP”) Committee chair Sen. Lamar Alexander (R. Tenn.) had reached a bipartisan agreement with the Committee’s ranking minority member Sen. Patty Murphy (D. Wash.) to extend the currently discontinued ACA cost reduction subsidies paid to ACA marketplace insurers for two years and allow States more flexibility in modifying ACA rules. The Hill reports that other Republicans see this initiative as a useful starting point for modifying the ACA. The FEHBlog will keep paying attention to these developments.

The Regulatory Affairs Professional Society reports that many questions were raised but few answers were provided at the Senate HELP Committee hearing today on prescription drug pricing. The FEHBlog found it interesting that the Committee chair Sen. Lamar Alexander asked whether ending the practice of drug rebates would simplify and lower pricing. The representatives of the Pharmaceutical Care Management Association, the prescription benefit manager trade association, and PhARMA, the drug manufacturers trade association, supported the Chair’s approach.

The FEHBlog continues to enjoy life in Estes Park Colorado which is near the Rocky Mountain National Park. Back to DC tomorrow night.

The House of Representatives is working in the home districts this week while the Senate is in session on Capitol Hill.  On Wednesday at 10 am the Senate Homeland Security and Governmental Affairs Committee will hold a confirmation hearing on the President’s nominees for OPM Director, Jeff T.H. Pon, and OPM deputy director, Michael Rigas.  The Senate Health, Education, Labor, and Pensions Committee will hold hearings on prescription drug costs and improving health outcomes on Tuesday and Thursday respectively.  Here’s a link to the Week in Congress’s report on last week’s activities on Capitol Hill.

Following up on last Friday’s post, here’s a link to Avrik Roy’s Forbes article that knowledgeably breaks down the President’s recent ACA actions. He concludes

What the White House has done, in effect, is to send the ball back into Congress’ court, where Congress has the authority—and the interest—in appropriating funding for cost-sharing subsidies. They should do so, if they can pair that funding with other reforms that would provide relief to those facing unaffordable Obamacare premiums.
Is this Congress capable of doing that? The jury is out.

The Motley Fool offers a useful article projecting 2018 Medicare Part B premiums that builds on the TGIF post.  Here’s the nub:

The Trustees of the Medicare program project that the for 2018 will remain [$134 monthly for Medicare Part B]. That’s good news for those who have been paying the base amount. 

However, there are millions of Americans who are paying less than $134 currently for their Part B premiums, and they can expect 2018 premiums to be higher than what they’re paying now. The reason for the disparity is the Medicare law’s hold harmless provision * * *.

For 2017, Social Security recipients got a small COLA of 0.3%. That allowed Medicare premiums for those protected by the hold harmless rule to rise slightly, but not to the full base amount. The average premium under the hold harmless provision this year was $109 per month. 

Social Security anticipates a much larger cost-of-living increase of between 1.5% and 2% to take effect in 2018. If that turns out to be the case [and it did turn out to be 2%], then many Medicare participants will have to pay the full $134 per month, resulting in a substantial increase.

The article explains that Medicare premium surcharges on higher income folks also will increase. CSRS retirees and new Medicare enrollees are not eligible for the hold harmless provision’s protection.

Last Thursday, OPM released the results of the latest federal employee viewpoint survey.  The results were favorable to the government managers. Here’s a link to the Federal Time’s graphic view of the survey results.