FEHBlog

The FEHBlog enjoyed his grandson’s first birthday party today. He wonders when OPM plans to announce the 2018 government contribution. The call letter was released early this year and the premium announcement is late. The wild card is the onerous ACA health insurer tax which falls on the Blue Cross FEP and the HMOs to one extent or another. The FEHBlog would have bet the ranch that Congress would have further suspended or repealed the tax by now as it raises premiums in the ACA marketplace as well as the FEHBP. But no dice.

Tennessee Senator Lamar Alexander, the chair of the Senate Health, Education, Labor and Pensions Committee has resumed work on a bipartisan ACA fix bil; with Washington Senator Patty Murphy, the ranking minority member of that committee. We will have to see whether that bill or another one  at least continues to suspend the health insurer tax and the medical device tax for another year or two. It’s hard to believe the Cadillac tax is now scheduled to take effect in only two years, 2020. That crazy tax will really mess up the FEHBP.

Congress is in session this week on Capitol Hill. Here’s a link to Week in Congress’s report on last week’s activities. The U.S. Supreme Court starts a new term, the first Monday in October.

Of course, it’s worth noting that last Friday Tom Price resigned as Secretary of Health and Human Services. This position is top dog in the ACA bureaucracy. It will be interesting to see who President Trump nominates to succeed him. In the meantime, the President “designated Don Wright, MD, MPH, as Acting Secretary of Health and Human Services.”

The FEHBlog noted with interested that Aetna has formed a partnership with Meals on Wheels.

The objective of the collaboration is to create a best in class model for care coordination, integrating Meals on Wheels’ daily nutritious meals, social support and critical safety checks into a continuum of care required as people age. Meals on Wheels and Aetna will pilot this model in several markets, and identify best practices intended to improve vulnerable seniors’ health outcomes. Results from these pilots will help build a scalable operational model that will address the challenges seniors face in their daily living.

This collaboration is a perfect fit for the FEHBP which has a large cadre of elderly members.

Yesterday, The Senate leadership decided against holding a vote on the Graham-Cassidy health care reform bill as more fully explained in this Bloomberg report.

Kaiser Health News attacked Anthem’s plan to require members to use lower priced medical imaging centers that are not owned by hospitals. Hospitals, which tend to be tax exempt, use these centers to spread their heavy overhead. In the Obama era, you could expect that the ACA regulators eventually would issue an ACA FAQ reining in or cancelling challenged insurer medical mangement practices whether or not they made sense.  The Obama administration issued 37 ACA FAQs over six years or so while the Trump administration has issued one that dealt with the recent 21st Century Cures Act in nine months.

In other news,

• OPM has not yet made the 2018 FEHBP premium / government contribution change announcement. You will see it here as soon as the announcement occurs. The FEHBlog expects that to happen this week. 
• Express Scripts medical director discusses pricing approaches for the new wave of expensive gene therapy drugs known as CAR-T therapies.
• United Healthcare has rolled out to employer sponsored groups a third party weight loss program, called Real Appeal, which leveraging interactive digital tools to create healthier habits for employees according to this Employee Benefit News report.

Both Houses of Congress are back in town this week. The Senate Finance Committee is holding a hearing on the Graham – Cassidy health care reform bill tomorrow. The Wall Street Journal accurately describes the bill as “on the ropes. “The major trade groups representing insurers, hospitals and physicians issued a joint statement Saturday opposing the bill, describing themselves as being in ‘total agreement’ over the Graham-Cassidy effort.” 

Sen. John McCain (R Ariz.) came out against the Graham-Cassidy healthcare reform bill today, which certainly lets the air out of the balloon as only three Republican votes are needed to defeat the bill if the Democrats remain firm. The FEHBlog heard Sen. Lindsay Graham express hope last night that Democrats would sign onto his bill but the FEHBlog expects that might only happen if the Republicans had 51 votes or even 50 votes (plus the Vice President). The FEHBlog has read several articles suggesting that the Graham-Cassidy bill is not ready for prime time, such as this one.

The Senate Finance Committee will be holding a hearing “to consider” the Graham-Cassidy healthcare reform bill (H.R. l628)  on Monday September 25 at 2 pm. Senate Majority Leader Mitch McConnell (R KY) expects to hold a vote on the bill later in the week.

The bill is an interesting policy play because it would devolve healthcare policymaking from Washington, D.C. to the states and do away with the unpopular ACA individual and employer mandates. The bill would not impact the FEHBP.

Although the Graham-Cassidy bill would not repeal the health insurer tax, the FEHBlog expects that Congress will not allow this currently resurrected tax return to life for 2018. However, this action likely will not occur until after the 2018 government contribution is finalized. Nothing is simple.

Bloomberg has an interesting report on the problems in successfully bringing lower priced FDA approved bio-similar drugs to market.  “Because of their complexity, biologic drugs can have more than 100 patents — which can be used to fend off competition.”  For example, as Market Watch reports

When Pfizer Inc. began selling a cheaper [bio-similar] version of Johnson & Johnson’s rheumatoid arthritis therapy Remicade, investors worried about the impact on sales of the blockbuster drug.
But new competition turned out to be more of a nibble. Pfizer PFE, -0.06%  now says there’s a reason for that, alleging that Johnson & Johnson JNJ, -1.10%  negotiated contracts that left Pfizer’s Inflectra biosimilar out in the cold.
In an antitrust lawsuit filed Wednesday, Pfizer alleged that Johnson & Johnson set up “a web of exclusionary contracts” on hospitals and clinics to keep a “stranglehold” on Remicade’s market share.

This lawsuit could have broader ramifications for the drug supply chain over time.

CVS Health announced additional steps to combat the opioid epidemic yesterday. For example

CVS Caremark will roll out an enhanced opioid utilization management approach for all commercial, health plan, employer and Medicaid clients as of February 1, 2018 unless the client chooses to opt out. This program will include limiting to seven days the supply of opioids dispensed for certain acute prescriptions for patients who are new to therapy; limiting the daily dosage of opioids dispensed based on the strength of the opioid; and requiring the use of immediate-release formulations of opioids before extended-release opioids are dispensed.

CVS’s Chief Medical Officer also was the lead author of a Health Affairs article on the PBMs’ role in helping resolve this crisis.

A federal district judge has dismissed the two lawsuits that were filed in reaction to the OPM data breach. In a 74 page long decision, which the FEHBlog has perused, the Court held that the plaintiff federal employee unions and affected federal employees had not demonstrated constitutional standing to bring a lawsuit over the data breaches. The Court explained that

“The judiciary does not operate as a freestanding advisory board that can opine about the conduct of the executive branch as a general matter or oversee how it manages its internal operations. The Court’s authority is derived from Article III of the U.S. Constitution, and a federal court may only consider live cases or controversies based on events that caused actual injuries or created real threats of imminent harm to the particular individuals who brought the case. In other words, before a court may proceed to the merits of any claim, the plaintiffs must demonstrate that they have constitutional “standing” to sue. Also, a court may not entertain an action against the United States if the government has not expressly waived its sovereign immunity, that is, unless it has given its consent to be sued in that particular situation. And once a plaintiff overcomes those hurdles, he or she must state a valid legal claim.”

The Court declined to recognize that a data breach standing alone is a cognizable injury for standing purposes. The Court required that the breach be coupled with an injury in fact, e.g., an unreimbursed financial loss. Although two out of 38 plaintiffs showed a loss, those plaintiffs could not, in the Court’s opinion, demonstrates a connection between the data breach and that injury as the OPM breach did not extend to credit card numbers for example and the apparent thief was a state actor, China, not Tony Soprano. In sum, case dismissed for lack of standing. The Court also threw cold water on the claims that plaintiffs asserted.

The Court was sympathetic to the plaintiffs but the law is not grounded in sympathy. Perhaps the plaintiffs should look to Congress. No doubt the plaintiffs will appeal to the U.S. Court of Appeals for the D.C. Circuit.

Speaking of Congress, the Hill reports that Senate Health Education Labor and Pensions Chairman Lamar Alexander (R Tenn) has called off his effort to craft a bipartisan ACA fix with Sen. Patty Murray (D Wash.).  Sen Lindsay Graham is predicting, again according to the Hill, that the Graham- Cassidy ACA repeal and replace bill will receive 50 votes in the Senate which together with Vice President Pence’s vote would lead to Senate passage of the bill which must occur before October 1 under the budget reconciliation rules. The House is expected to pass the bill if it passes the Senate and the President has signalled that he will sign it.

The Graham-Cassidy bill would devolve ACA authority and funding from the federal to the state governments; it would make high deductible plans with health savings accounts more appealing; it would repeal the ACA’s individual and employer mandates as of last year, and it would repeal the medical device tax. Here are a link to FAQs and a link to the section by section analysis.

In other news:

• Walgreen’s received modified regulatory approval of certain Rite Aid assets. The Wall Street Journal reports that 

“Walgreens will now buy 1,932 Rite Aid stores for $4.38 billion, a far cry from the original $9.4 billion deal for about 4,600 stores struck in 2015.  Rite Aid will continue as a stand-alone company, operating about 2,600 stores, six distribution centers and its pharmacy-benefit manager, EnvisionRx. Its chief executive, John Standley, said on Tuesday the sale provides the company with a “more profitable store footprint” and stronger balance sheet as it engineers a turnaround.
The Federal Trade Commission spent roughly 18 months investigating the companies’ broader plan to merge and harbored an array of concerns about the effect on competition. In the face of continued FTC objections, the two companies scrapped their merger plans in June, agreeing instead that Walgreens would settle for acquiring about 2,200 Rite Aid stores.
After further discussions with the FTC, the companies dropped about 250 more stores from the transaction, Rite Aid said Tuesday. Walgreens will gain stores located primarily in northeastern and southern U.S.”

The transition of the 1,932 Rite Aid stores to Walgreen’s stores will begin next month.

• The Journal also reported that 

“Annual premiums [sum of employer and employee contributions] rose 3% to $18,764 for an employer plan in 2017, from $18,142 last year, the same rate of increase as in 2016, according to an annual poll of employers performed by the nonprofit Kaiser Family Foundation along with the Health Research & Educational Trust, a nonprofit affiliated with the American Hospital Association.

The trend of relatively gradual premium increases has continued for several years, with the growth of premiums damped by a shift toward bigger out-of-pocket costs for employees in the form of high deductibles—a move that slowed this year, as average deductibles were roughly flat compared with 2016.”

This reminds the FEHBlog that if history is a guide, OPM will announce 2018 FEHB plan premiums next week!

Yesterday, the FEHBlog said that Congress is out of town this week. My bad. The House is out of town this week but the Senate is here for a few days. The Washington Examiner reports that the Senate passed an FY 2018 defense authorization bill which will now go to a conference committee with the House. It’s interesting to watch the Graham – Cassidy ACA replacement bill gather steam. Fortune reports that the bill may be one vote away from Senate passage. It’s unfortunate that this bill does not include a repeal of the health insurer tax which punishes the FEHBP. The Washington Examiner reports that

[House Speaker Paul] Ryan, who had previously spoken positively about the legislation, noted that the House would not have time to amend the bill if the Senate did clear it. Instead, it would face having to simply approve the Senate measure.
“A conference committee is probably not possible,” he noted.
Republicans in the House “acknowledge and understand” that they wouldn’t have time before the end of the month for anything other than a vote to approve the Senate legislation, he added.

Congress is out of town this week. Here’s a link to the Week in Congress report on last week’s activities there.  Of note is the fact that the House of Representatives completed passing all twelve appropriations bills for fiscal year 2018. Here are links to the Federal Times and Federal News Radio reports on this action. Federal News Raadio explains that

The Senate is much further behind the House in its appropriations and budget process. The chamber hasn’t passed any of the 12 appropriations bills, and Senate appropriators have yet to move all spending packages out of committee. Lawmakers have until Dec. 8 now to pass some sort of spending bill before the current continuing resolution expires.

Modern Healthcare has a very upbeat article about a CMS’s Comprehensive Primary Care initiative.

Unlike most of the CMS’ models, CPC had the agency team up with commercial payers and managed-care plans to lower healthcare costs for all patient populations in a particular region. 

Each payer doled out a monthly fee to practices of around $20 in order to encourage better care coordination by primary-care providers. Each practice on average received $175,775 from the CMS and other payers—equaling $51,286 per clinician or 12.5% of practice revenue—for CPC participants by the third year of the experiment in 2015, which is the last year full data are available. 

By the end of 2015, payers invested over $370 million to transform primary care and 445 practice sites in seven regions participated in the program. In all, about 327,000 Medicare beneficiaries and nearly 3 million patients nationwide saw their care affected by the CPC model.

The vast majority of healthcare providers who participated in the CPC have transitioned over to the current stage known as CPC Plus. Intriguing. A non fee for service payment model that providers appreciate.

Speaking of CMS,  the agency unveiled the new SSN free Medicare beneficary card on Friday.

CMS will begin mailing the new cards to people with Medicare benefits in April 2018 to meet the statutory deadline for replacing all existing Medicare cards by April 2019. In addition to today’s announcement, people with Medicare will also be able to see the design of the new Medicare card in the 2018 Medicare & You Handbook. The handbooks are being mailed and will arrive throughout September.

This is also a big transition for FEHB carriers whose enrollment includes a large cadre of Medicare beneficiaries.

Sen. Bill Cassidy (R Lousiana) according to the Hill, “is predicting he will win enough votes to pass his last ditch ObamaCare repeal-and-replace bill [discussed in last Wednesday’s FEHBlog] through the Senate, despite the long odds he seems to be facing.”

In 1993, the FEHBlog nearly fell out of breakfast nook when he read that Hillary Clinton’s health care plan would end the FEHBP. The FEHBlog was much more chill when he read on the Health Affairs Blog that Sen. Bernie Sanders’ (D Vermont) Medicare for All bill will end the FEHBP as well as all other employer sponsored healthcare. Needless to say, AHIP is upset, but this bill is not going anywhere for the time being.

The single payer issue boils down to this – Medicare survives by cost shifting onto employer sponsored healthcare. If employer sponsored healthcare disappears, Medicare spending, which already is high, would go through the roof.  If the medical community supports this initiative, it will be killing the golden goose. There is no such thing as a free lunch.

End of the week tidbits —

• The large Blue Cross health insurer, Anthem, is helping to control medical costs by sharing population health data with healthcare providers and vice versa according to Healthcare Finance. 
• The AMA brings us up to date on litigation and regulatory doings relating to the zany and complex PHSA § 1557 non-discrimination rule added by the ACA.  Now there’s a rule that could be simplified.
• The FEHBlog found a useful, detailed bio of Jeff T. H. Pon, the President’s nominee for OPM Director, on allgov.com

The Washington Post reports that  four Republican Senators (Lindsey Graham (SC), Ron Johnson (WI), Bill Cassidy (LA) and Dean Heller (NV) have introduced an ACA reform bill that “would leave in place most of the financial props that support the ACA, eliminating only a tax on medical devices. At the same time, it does not attempt to replace the current law’s policies with more conservative federal approaches, instead allowing each state to define its own rules for health plans that may be sold to residents and the help consumers should receive to afford that insurance.” The bill would repeal the ACA’s individual and employer mandates, but not the ACA’s taxes, other than the medical device tax. Here’s a link to the gang of four’s explanation of the bill, including its text.

The Chattanoogan reports on its Senator Lamar Alexander’s effort to craft a bipartisan ACA reform bill. Sen. Alexander who chairs the Senate Health Education Labor and Pensions Committee will hear from a state insurance commissioner, doctors, and patient advocates tomorrow.  He expects to release legislative language next week. Time is running short on both bills for a variety of reasons.

The Senate Finance Committee held a hearing on the individual health insurance market yesterday which featured the FEHBlog’s go to guy, Avik Roy’s testimony. It’s worth reading.

Here a few tidbits:

• Healthcare Dive reports on a recent study concluding that “77% of healthcare consumers say it’s important or very important to know costs before treatment and 53% want to discuss financing options before care.”

The survey results show a gap in what patients expect and what hospitals, medical groups and healthcare providers are delivering to patients, said KaLynn Gates, president and corporate counsel of HealthFirst Financial.

Gates suggested providers that offer financial guidance, as well as meet clinical needs of their patients, are “much more likely to thrive in this era of rising out-of-pocket costs and growing competition for patients among traditional and non-traditional providers.”

• McKnight’s Long Term Care News tells us that according to a MedPAC and common sense directing hospital patients to higher quality nursing homes can reduce unnecessary readmissions. 

But discharge planners currently are limited by rule as to how they can educate or steer patients on their post-acute options, critics complain. MedPAC recommended modifying discharge planning rules to allow hospitals to recommend specific nursing home and home health providers — a practice that’s already allowed in the Comprehensive Care for Joint Replacement program. The group also discussed the possibility of having discharge planners openly consider post-acute providers’ quality ratings when developing discharge plans, and offering quality data to patients prior to discharge.

Perhaps in the meantime health plan case managers can fill the gap.

•  Epic, which is the largest electronic health records vendor, announced new software that “will allow patients to grant access to their data to any providers who have internet access, even if they don’t have EHRs. In addition, using Share Everywhere, a provider granted access can send a progress note back to the patient’s healthcare organization for improved continuity of care.” The software will be embedded in Epic’s EHR and also will be available to patients as a cell phone app later this year.