FEHBlog

Congress is out of town for two more weeks. The President returns from his working vacation today.

The FEHBlog noticed on Friday or Saturday that Modern Healthcare had issued its annual list of top 100 healthcare influencers. For several years running, the President has been the number one influencer. This year, however, the new President is ranked seventh just after the House Speaker and the top three, as the FEHBlog expected because Modern Healthcare is vocally pro-ACA, are the Republican Senators with their fingers in the dike to block the repeal and replace effort. The list is interesting but a mish mosh at the end.

FedSmith.com features an article about temporary continuation of coverage under FEHBP.

If you depart from Federal Service, you could be eligible for Temporary Continuation of Coverage (TCC) for up to 18 months under the Federal Employee Health Benefits (FEHB). Temporary Continuation of Coverage exists as a feature of the FEHB Program. It lets certain former employees temporarily continue their FEHB coverage after regular coverage ends. However, they must exhaust TCC eligibility as one condition for guaranteed access to individual health coverage. This is according to the Health Insurance Portability and Accountability Act of 1996 (HIPAA). 

Temporary Continuation of Coverage enrollees are required to pay the full premium for any plan they select. In other words, a former employee will have to pay both the employee and the government shares of the premium. In addition, they must pay a 2% administrative charge.

The article omits an important fact. If you lose your FEHB coverage, you can bypass TCC pick up coverage in the ACA healthcare marketplace. Indeed particularly if you are not high earner, it’s in your best interest to find out whether you can get a better deal than TCC in the ACA marketplace — healthcare.gov. The catch is that FEHB coverage typically ends 31 days after the date on which coverage otherwise would terminate (except in the case of a cancellation).  TCC coverage can begin on that date.  ACA marketplace coverage begins on the first day of the following month if you select a plan in the first 15 days of the month; if you make your selection in the second half of the month then your ACA coverage begins on the first day of the next following month.

What’s more with TCC you don’t have to stay with your last FEHB plan as an employee, you can switch to a lower premium plan if you like because you have the rights of an FEHB enrollee.

The article was valuable to the FEHBlog because it includes a list of folks who are not eligible for TCC, which is somewhat narrower in scope than it’s private sector analog, COBRA. Those people are eligible for ACA marketplace coverage. For more details on TCC, check out this OPM website.

Federal News Radio reports that Senator Ron Johnson (R Wisc), who chairs the Senate’s Homeland Security and Governmental Affairs Committee, “has renewed his effort to find out from the Office of Personnel Management why members of Congress and their staff continue to receive an employer contribution toward their health coverage.”  Back in 2013, the FEHBlog was quoted in the New York Times as doubting that OPM had the authority to do what it wound up doing — issuing “an agency rule that has let members of Congress and their staff buy health insurance on the Small Business Health Options Plan (SHOP) exchange since 2014” with the FEHBP government contribution. In the FEHBlog’s view in 2013 and now, the straightforward approach would be for Congress to appropriate funding for the required coverage. The ACA is a whacky law.

In the no good deed goes unpunished department, the American Medical Association is criticizing the prescription benefit manager Express Scripts for putting tighter controls on dispensing opioids, according to the Washington Examiner.

Under the new [Express Scripts] plan, first-time opioid users will not be able to receive more than seven days of prescription painkillers, even if the doctor requests a longer prescription. Snezana Mahon, Express Script’s vice president of clinical product development, told the Associated Press that a study the company conducted showed opioid prescriptions are written for an average of 22 days.
Most doctors also prescribe long-acting opioids, but the new plan will limit prescriptions to short-acting drugs and limit the dosage. Express Scripts plans to monitor prescribing data to see if patients are “pill shopping,” meaning going to different doctors’ offices to stock up on the same medication.
The program is similar to one by its competitor CVS Caremark, which limits opioids to a 10-day supply and restricts the dosage.

Makes sense to me but the FEHBlog is a JD, not an MD.

The Boston Globe’s STAT reports on a federal government settlement with Mylan over an Epipen pricing issue. The key point is that it’s a Medicaid settlement which does not directly benefit the FEHBP.

Prof. Tim Jost’s ACA blog on Health Affairs tell us the latest on the federal court lawsuit over the ACA’s non-discrimination rule, PHSA Sec. 1557:

On August 16, 2017, Judge Reed O’Connor entered an order in the Franciscan Alliance case requiring the government to file a status report on or before October 16, 2017 and every 60 days thereafter. The Franciscan Alliance and several other plaintiffs, including several states, have sued challenging a HHS regulation promulgated under section 1557 of the Affordable Care Act prohibiting discrimination on the basis of gender identity or termination of pregnancy.
Late in 2016, Judge O’Connor, a federal district court judge in Texas, entered a preliminary injunction against the enforcement of the rule. On July 10, 2017, Judge O’Connor remanded the issue to HHS to reconsider its rule. HHS stated in an August 4 status report that it has submitted a draft proposed rule amendment to the Justice Department for review. Following that review, the rule will be submitted to the Office of Management and Budget for interagency clearance, after which it will be published for comment as a proposed rule. Until then, HHS will continue to comply with the injunction against enforcement of the challenged provisions of the rule. The court will continue to monitor the rulemaking process.

Finally, the Wall Street Journal’s Numbers columnist weighs in on the government’s new computer password guidance, which the FEHBlog noted a few weeks ago.

The new guidelines issued in June by the National Institute of Standards and Technology suggest that a string of random words—warning: song lyrics and the like aren’t random—will be harder to guess than “princess” and easier to remember than “fKB%397x^tyM0dc.”

“The advantage to a passphrase is it’s longer,” said Matt Bishop, co-director of the Computer Security Laboratory at the University of California, Davis, who advised thinking of a passphrase, then sprinkling it with special characters, as in “correct=horse+battery&staple!”

“That’s by no means unguessable,” he said, “but it increases the number of guesses an attacker would have to make.” To make it even harder to guess (but also harder to remember) he said he might misspell or alter the words.

Interesting article.

For the past couple of days, the FEHBlog has been visiting St. Michael’s MD on the Eastern Shore. Lovely place. The town’s website recounts

During the War of 1812, St. Michaels gained its name as “the town that fooled the British”. The residents of St. Michaels, having been forewarned that British barges were positioned on the waters to attack with cannon fire, hoisted lanterns into the trees above the city. This first successful “blackout” fooled the British into overshooting the town’s houses and shipyards. Only one house, forever since known as Cannonball House, was struck. 

Ah, American ingenuity. But time marches on.

Yesterday, the Centers for Medicare and Medicaid Services announced, no doubt to the relief of hospitals and doctors, that it is proposing to roll back the Obama Administration’s mandatory joint reduction payment pilot and cancelling two other pilots scheduled to begin next year — the Episode Payment Models (EPMs) and the Cardiac Rehabilitation (CR) incentive payment model.  The CMS press release explains

Changing the scope of these models allows CMS to test and evaluate improvements in care processes that will improve quality, reduce costs, and ease burdens on hospitals,” said CMS Administrator Seema Verma. “Stakeholders have asked for more input on the design of these models. These changes make this possible and give CMS maximum flexibility to test other episode-based models that will bring about innovation and provide better care for Medicare beneficiaries.”
Moving forward, CMS expects to increase opportunities for providers to participate in voluntary initiatives rather than large mandatory episode payment model efforts. The changes in the proposed rule would allow the agency to engage providers in future voluntary efforts, including additional voluntary episode-based payment models.  

Today CMS announced the launch of its Hospice Compare website.  “The Hospice Compare site allows patients, family members, caregivers, and healthcare providers to compare hospice providers based on important quality metrics, such as the percentage of patients that were screened for pain or difficult or uncomfortable breathing, or whether patients’ preferences are being met. Currently, the data on Hospice Compare is based on information submitted by approximately 3,876 hospices.”

Finally, the Minneapolis Star Tribune reports that earlier today United Healthcare announced that its CEO, Stephen Hemsley, “is leaving the job next month and will be succeeded by Dave Wichmann, the company’s president.”

During Hemsley’s tenure, [which began in 2006] UnitedHealth’s workforce grew from 58,000 to more than 260,000, including 17,000 in Minnesota. Revenue grew from $71.5 billion to an estimated $200 billion this year. At the end of June, more than 49 million people had health insurance coverage from UnitedHealth Group.
Before taking the top job, Hemsley was chief operating officer and guided the company’s reorganization into the two key businesses it operates today — the legacy health insurance business called UnitedHealthcare and the fast-growing health services business called Optum.

Impressive.

Congress remains out of town this week. Yesterday, the President signed into law a bipartisan bill which according to the Washington Examiner

provides funding for veterans who seek treatment from a private doctor in certain cases. It also allows the Veterans Affairs department to lease 28 new facilities around the country, in an attempt to expand access to government-provided care. That makes it a compromise in the larger debate between conservative and liberal proponents of VA reform.

Speaking of bipartisan legislation, Avik Roy shares his observations here on what Congress should do to stabilize the ACA health insurance marketplace.

With the failure of Republicans’ health care effort, some Senate moderates are looking to prop Obamacare up with additional taxpayer funds. There’s a case to be made for a short-term bailout of Obamacare—but only if it’s accompanied by serious reforms that liberate consumers from the law’s rising health insurance premiums.

The FEHBlog heartily agrees. It’s a good piece.

Meanwhile, medical groups are complaining about rising regulatory burdens (amen to that).

• Modern Healthcare reports that “The benefits coming from the CMS’ [punitive] Hospital Readmissions Reduction Program [created by the ACA] have slowed enough that some industry experts and hospital leaders say it may be time to retire the program.  Also, “[a] major complaint about the program has been that readmissions rates aren’t easy for a hospital to control.” That’s just common sense.
• Healthcare Data Management reports that “The vast majority of physician practices are finding it difficult to comply with the [Medicare’s new but Obama era] Merit-Based Incentive Payment System and are facing several other critical health information technology challenges that are making it difficult to provide timely, quality patient care.  That’s the main finding of a new survey by the Medical Group Management Association, which found that 82 percent of practices see MIPS as very or extremely burdensome, 74 percent view the lack of national electronic attachment standards as similarly detrimental, while 68 percent likewise perceive the lack of EHR interoperability as debilitating.”  CMS has been struggling to create a HIPAA electronic attachment standard for over a decade. For a handy update on HIPAA implementation, check out this May 1, 2017, NCVHS annual report to Congress. HHS and Congress messed up by not providing for electronic health record interoperability when Congress funded $32 billion to provide hospitals and doctors with those systems. 

Finally, Kaiser Health News discusses the relationship between obesity and depression. It’s an important issue because many people are faced with both health problems. According to the article 43% of people with depression are obese.

While on the surface the two conditions appear very different, they share important similarities. Both are chronic diseases that are tricky to treat, requiring long-term physical and mental health interventions.
In cases in which depression and obesity coincide, those interventions can be even more complex, with research often showing the best results when care involves not only doctors and nurses but also other health professionals such as dietitians, behavioral health specialists and physical therapists.
“We need to find synergistic therapies — or it’s going to be the same kind of messy system in which we spend a lot of money and don’t get any return,” said William Dietz, the director of George Washington University’s Sumner M. Redstone Global Center for Prevention and Wellness, who researches obesity interventions.

The Hill reports that President Trump plans to declare the opioid crisis a national emergency, which will open up additional sources of funding. “So far, six states [including the FEHBAR’s state Maryland] have declared statewide emergencies for the opioid epidemic and used the declaration to help increase access to the opioid overdose reversal medication, naloxone.” More details on the federal declaration should become public next week.

On the ACA front, the American Journal of Managed Care warns that “With ACA Repeal on Hold, Return of Health Insurance Tax Worries Business Groups.” Well, it worries the FEHBlog too because this ACA tax, which Congress held in abeyance for 2017 only, slams the FEHBP. “The new report by Oliver Wyman estimates that the tax will increase premiums by 2.6% in 2018, and between 2.5% and 2.7% in later years when amounts collected are tied by law to premium trends.”  While this tax is one of the whackiest aspect of the ACA, the skinny repeal and replace bill which got shot down did not repeal it. The only ACA tax which that bill would have eliminated was the medical device tax, which even Sen. Elizabeth Warren opposes. In contrast the House bill would have eliminate or delayed all of the ACA’s multitude of taxes.  The Health Affairs blog posted the suggestions of two American Enterprise Institute scholars for a bi-partisan resolution of the health care mess.

The Wall Street Journal reports today that

Since the start of the [21st] century, it has become more dangerous to have a baby in rural America. Pregnancy-related complications are rising across the U.S., and many require specialized care. For some women, the time and distance from hospitals with the resources and specialists to handle an obstetric emergency can be fatal. The rate at which women died of pregnancy-related complications was 64% higher in rural areas than in large U.S. cities in 2015. That is a switch from 2000, when the rate in the cities was higher, according to Centers for Disease Control and Prevention data analyzed by The Wall Street Journal.

The reasons reflect shrinking resources, worsening health and social ills. Most rural hospitals don’t have high-risk pregnancy specialists who can treat sudden complications. Many don’t have cardiologists or anesthesiologists on staff. Making matters worse, rates of obesity, a major risk factor for pregnancy complications, are higher in rural than urban areas.

Many rural hospitals have eliminated labor and delivery services, creating maternity deserts where women must travel, sometimes hours, for prenatal care and to give birth.
The number of rural hospitals that offered such services fell by 15% from 2004 to 2014, the Journal found in an analysis of Centers for Medicare and Medicaid Services data. That compared with a 5% decline among urban and suburban hospitals. Driving the changes are factors including closing of medical facilities, a decline in birthrates and the difficulties of getting malpractice insurance.

There are reported cases of pregnancy-related deaths that might have been avoided if the women were closer to hospitals with a higher level of care, said William Callaghan, chief of the maternal and infant health branch at the CDC.

The maternal death rate is 2.02 per 100,000 in small towns and rural areas vs. 1.23 deaths per 100,000 in urban and suburban areas.

On the bright side, Health Care Dive tells us that

• During its second-quarter earnings call on Tuesday, CVS Health said it plans to expand its MinuteClinic program to help people with chronic diseases.
• CVS is extending a test program that targets diabetes patients to help them monitor glucose levels, medication adherence and lifestyle habits.
• The company also wants to add programs to manage asthma, hypertension, high cholesterol and depression over the next two years.

The FEHBlog nearly launched out of his breakfast nook yesterday when he read in the Wall Street Journal that the government has changed the computer protection password rules in NIST Special Publication 800-63-3, issued June 22.  Of course, we are all familiar with the existing requirements — 8-20 characters, at least one capital letter, one number, one special character and revise it frequently. Under the new rules,

Long, easy-to-remember phrases now get the nod over crazy characters, and users should be forced to change passwords only if there is a sign they may have been stolen, says NIST, the federal agency that helps set industrial standards in the U.S.

Academics who have studied passwords say using a series of four words can be harder for hackers to crack than a shorter hodgepodge of strange characters—since having a large number of letters makes things harder than a smaller number of letters, characters and numbers. 

In a widely circulated piece, cartoonist Randall Munroe calculated it would take 550 years to crack the password “correct horse battery staple,” all written as one word. The password Tr0ub4dor&3—a typical example of a password using Mr. Burr’s old rules—could be cracked in three days, according to Mr. Munroe’s calculations, which have been verified by computer-security specialists.

Live and learn.

The International Foundation of Employee Benefit Plans reports that the IRS has posted for public comments draft Forms 1095B and C that are used to report employee compliance with the individual mandate and employer compliance with  the employer mandate on employers with 50 full time employees or more.  The FEHBlog thought that we would be done with this by now.

The National Business Group on Health yesterday released its annual survey of large employers on health care costs.  Those employers are expecting a 5% bump in costs in 2018.  The FEHBlog notice the following tidbit in the press release:

Telehealth utilization surging:  Virtually all employers (96%) will make telehealth services available in states where it is allowed next year. More than half (56%) plan to offer telehealth for behavioral health services, more than double the percentage this year. Telehealth utilization is on the rise, with nearly 20% of employers experiencing employee utilization rates of 8% or higher.

Employee utilization still seems low.

Med City News informs us that U.S. News and World Report has issued its annual hospital survey.   “Unsurprisingly, this year’s Honor Roll is practically a recycling of last year’s major players.”

Beckers Hospital Review informs us about a Protenus survey of health care data breaches. Here are few tidbits from that survey:

• The two most common causes of breaches were hacking (53 percent) and insider wrongdoing or error (41 percent).
• Eighty percent of data breaches in the first and second quarters were reported by healthcare providers, as opposed to health plans (11 percent) or third-party vendors (6 percent).
• It took organizations an average of 325.6 days to discover a breach.

Finally, Highmark, a Pennsylvania based Blue Cross licensee, announced today that

Centerbridge Partners, L.P. (Centerbridge) and HVHC Inc. (HVHC), a wholly-owned subsidiary of Highmark Inc. (Highmark), today announced that they reached a definitive agreement, whereby Centerbridge will purchase Davis Vision, Inc. (Davis Vision), HVHC’s managed vision care subsidiary. As part of the agreement, Davis Vision will be combined with Centerbridge’s existing managed vision care portfolio company, Superior Vision, and Highmark will acquire a minority ownership interest in the combined Davis Vision-Superior Vision company.
In a separate transaction, Centerbridge will acquire a minority equity stake in Visionworks, HVHC’s optical retail subsidiary. Highmark will retain a controlling ownership interest in Visionworks.
The transactions are expected to close in the fourth quarter of 2017, subject to regulatory approval.

As previously noted, Congress is out of town until September 5.

Becker’s Hospital Review updates us on the five largest publicly traded health insurance carriers’ second quarter 2017 financial reports. Here’s a link to not-for-profit Kaiser Permanente’s report on its second quarter earnings.

Drug Channels tells us about the large prescription benefit managers recent announcements of their 2018 formulary changes.

The Wall Street Journal had three illuminating articles on the prescription drug market over the past couple of days:

• On Friday, the Journal reported that 

AbbVie announced Thursday [August 2] it has received Food and Drug Administration approval to sell its next generation hepatitis C drug, Mavyret.  AbbVie said in a statement that up to 95% of hepatitis C patients in the U.S. will be eligible to take Mavyret. The drug will cost $26,400 for a standard course of treatment before rebates and discounts. That’s well below the list price of older drugs from AbbVie, Merck & Co. and Gilead Sciences .   Most treatments currently on the market require 12 weeks of treatment, but AbbVie expects most patients will be able to finish treatment with Mavyret in eight weeks.

• Also on Friday, the Journal reported that 

U.S. generic-drug prices are falling at the fastest rate in years, eating into the profits of pharmaceutical wholesalers and manufacturers alike and erasing billions of dollars of their market value in recent days.
The three largest U.S. drug wholesalers, which warehouse and distribute some $400 billion of pharmaceuticals annually, have been competing aggressively to win business among independently owned pharmacies, largely by agreeing to cut prices on generics. In turn, the wholesalers are squeezing drugmakers for better prices.
The trend has been good for the employers and government programs that ultimately pay for drugs, and for independently owned pharmacies, the mom-and-pop operators that compete with national chains. But it is taking a hard toll on wholesalers and generic-drug makers.

•  Today, the Journal reported that the Epipen remains dominant in a now competitive market. 

[M]ore than seven months after the introduction of the generic, the more expensive brand-name EpiPen still accounts for more than one-quarter of the market, according to Bernstein Research, even though a brand-name drug’s sales usually shrink significantly after low-cost competition arrives.
One reason, according to multiple people familiar with the drug industry, is that a middleman can profit from the sale of pricier medicines, such as EpiPen. In the murky world of the U.S. drug-supply chain, higher prices can mean a bigger piece of the pie for middlemen such as pharmacy-benefit managers. There is no way to know exactly how much, however, because the amount a PBM makes is laid out in confidential contracts.

The articles illustrate that a competitive presciption drug market exists in the U.S.  Bear in mind that most prescriptions are for generic drugs and that OPM requires that the nationwide FEHB plans and other experience rated plans use fully transparent pricing — all of the rebates go back to the plan’s reserves held in the U.S. Treasury. So the Epipen problem does not impact the FEHBP by and large.

Fedsmith.com reports on a recent OPM Benefits Administration Letter containing initial tidbits of information about the 2018 Federal Benefits Open Season which will run from November 13 through December 11, 2017.

The Senate went home yesterday after working a week longer than the House of Representatives. The Washington Post reports that that Senate by unanimous consent approved 65 Presidential nominees yesterday.  A list of the approved nominees can be found under Executive Business heading on this Senate webpage.

The Senate also passed along to the President a necessary Food and Drug Administration users fee renewal bill (H.R. 2430) as the Hill reports. The Washington Post informs us that

The legislation directs the FDA to accelerate generic drug applications for products that have little or no competition. It also includes a provision designed to sharply increase the number of approved cancer treatments for children by giving the agency authority to direct drugmakers working on oncology therapies for adults to test them in children, as well.

The Post article also report that the Senate also passed a federal “right to try” bill (S. 204).

The “right-to-try” legislation has been championed by the libertarian Goldwater Institute, which has worked to pass similar legislation in 37 states. The federal version, now headed to the House, would bar the government from blocking patients from getting access to medications that have undergone only preliminary testing in humans. Patients first would have to try all other available treatments and be ineligible for clinical trials.  The bill would provide drug companies some legal protection if a treatment results in harm.

This bill now head over to House of Representatives.

The FEHBlog ran across an excellent Blue Cross report on opioid use in our  country and a Health Affairs blog article suggesting that the opioid crisis will not end until the U.S. medical community changes the way it treats pain. The article discusses how health professionals in the U.S. military are addressing this issue.

In the same vein, Health Payer Intelligence reports on how health insurers are collaborating with social service organizations and local community leaders to address the social determinants of sucessful health care.  The article draws from a new AHIP report on this topic.  Bravo.

Hey, there’s more going on than the OPM Director news. The Wall Street Journal reports this afternoon that

An international group of researchers reported they have edited the genes of a viable human embryo to correct a disease-causing defect, renewing concern that public discussion about the ethics of gene editing is lagging behind advances in the lab.

Using the gene-editing tool Crispr-Cas9, the researchers said they overcame key issues in previous experiments to successfully correct a mutation that can cause a heart condition called hypertrophic cardiomyopathy, or HCM. The condition, which is estimated to affect 1 in 500 people, is best known as a common cause of sudden cardiac death in young athletes.

The collaboration, led by researchers at Oregon Health & Science University, the Salk Institute for Biological Studies and Korea’s Institute for Basic Science, used embryos created from sperm donated by an adult male with a family history of HCM and healthy egg donors. The embryos were created for research and not implanted in a woman, according to the researchers, who reported their findings Wednesday in the journal Nature.

Holy smokes.

The actuarial consulting firm Willis Towers Watson released its 22nd annual Best Practices in Health Care Employer Survey. According to the press release,

Employers expect health care costs to increase by 5.5% in 2018, up from a 4.6% increase in 2017, according to the 22nd annual Best Practices in Health Care Employer Survey by Willis Towers Watson. In the face of these continued cost pressures, including employee affordability, employers plan to step up cost management strategies over the next three years, including evaluation of emerging health care delivery solutions and improved patient navigation and health engagement.

The survey also showed that despite uncertainty about the future of health care legislation, employer confidence in offering employee health care benefits has reached its highest level since the passage of the Affordable Care Act in 2010. Ninety-two percent of employers said they are “very confident” their organization will continue to sponsor health benefits in five years. 

We will soon see how the FEHBP lines up with these projections.

Finally, CMS today announced a final Medicare Part A pricing rule that takes effect at the beginning of the federal fiscal year on October 1, 2017.

Due to the combination of payment rate increases and other policies and payment adjustments, particularly in changes in uncompensated care payments, acute care hospitals will see a total increase in Medicare spending on inpatient hospital payments of $2.4 billion in fiscal year 2018. Based in part on the changes included in the final rule, overall payments to long-term care hospitals will decrease by $110 million in fiscal year 2018.

Medicare pricing impacts FEHB plans because a large cadre of FEHB enrollees have primary Medicare Part A coverage.

CMS also projected Medicare Part D premiums for 2018. “the average basic premium for a Medicare Part D prescription drug plan in 2018 is projected to decline to an estimated $33.50 per month. This represents a decrease of approximately $1.20 below the actual average premium of $34.70 in 2017.”

Govexec.com has posted George Nesterczuk’s letter to the President withdrawing his name for consideration has OPM Director.