FEHBlog

Earlier today, the Senate Homeland Security and Governmental Affairs Committee cleared for full Senate approval the President’s nominations of Dr. Jeff T.H. Pon to be OPM Director and Michael Rigas to be OPM Deputy Director and Chairman Ron Johnson’s bill (S. 2221) to repeal the Affordable Care Act’s multi-state program.  That program already is dying on the vine. Federal News Radio provides background on the story.

The Centers for Medicare and Medicaid actuary issued a projection of health care spending from 2017 to 2026. Cost curve up.  Here’s the Healthcare Dive story on the report.

There’s a lot of press reports on an Aetna case in California where the Aetna medical director, who since has left Aetna’s employ, admitted in a deposition that he had relied on the Aetna nurse’s review of the medical records when he requested additional testing before granting necessary pre-authorization for a medical service. Here’s Healthcare Dive report. 

The medical profession is expressing outrage because it hates the practice insurer pre-authorization. The press accounts are equally overheated. The Affordable Care Act was supposed to avoid these disputes by requiring that all insurer decisions on medical necessity, etc., be referred to an independent medical review organization. This case arose in 2011 when that part of the law was in effect. In other words, the medical director did not have the final say. Yet, the FEHBlog does not see any mention of IRO review in the articles. IRO review is much more cost effective than litigation.

On the bright side, the Wall Street Journal reported yesterday that

In a bag of backyard dirt, scientists have discovered a powerful new
group of antibiotics they say can wipe out many infections in lab and
animal tests, including some microbes that are resistant to most traditional antibiotics.
Researchers
at Rockefeller University in New York reported the discovery of the new
antibiotics, called malacidins, on Monday in the journal Nature
Microbiology.
It is the latest in a series of promising antibiotics found
through innovative genetic sequencing techniques that allow researchers
to screen thousands of soil bacteria
that previously could not be grown or studied in the laboratory. To
identify the new compounds, the Rockefeller researchers sifted through
genetic material culled from 1,500 soil samples.
“We extract DNA
directly out of soil samples,” said biochemist

Sean Brady

at Rockefeller’s Laboratory for Genetically Encoded Small
Molecules, a senior author on the new study. “We put it into a bug we
can grow easily in the laboratory and see if it can make new
molecules—the basis of new antibiotics.”

Bravo. 

Yesterday, the Trump Administration issued its Fiscal Year 2019 budget proposal.  The Washington Post this morning discusses the impact of the budget on federal employees and annuitants. The budget includes a proposed statutory change to the government contribution for FEHBP coverage which is detailed in this budget document at page 182:

This proposal would revise the government contribution rate to base it on a plan’s score from the Federal Employees Health Benefits (FEHB) Program Plan Performance Assessment. Currently all FEHB carriers participate in the assessment, which includes 19 measures of health outcomes, quality, and efficiency. Under this proposal, the Government contribution would range between 65-75 percent depending on a plan’s performance.

As it stands the government contribution ranges from approximately 65% – 75% of the selected plan’s premium due to the impact of the statutory cap on the government contribution. The current government contribution formula is 72% of the enrollment weighted average capped at 75% of the selected plan’s premium. The FEHBlog is not suggesting that this is nothing burger but it also is not going to attract new plans. Too much emphasis on metrics for the FEHBlog’s taste.

OPM also released its new strategic plan. The plan is much shorter than it’s immediate predecessor. The predecessor plan had a chapter on the FEHBP. The new plan has a section (1.4) that fits in under one page. Brevity is a virtue.

Congress continues to be in session this coming week. Here is a link to the Week in Congress’s report on last week’s actions on Capitol Hill.

The Senate Homeland Security and Governmental Affairs Committee is holding a business meeting on Wednesday morning. The first orders of business are to consider the President’s nominee’s for OPM’s Director, Dr. Jeff T.H. Pon, and Deputy Director, Michael Rigas. The Chairman, Sen. Ron Johnson (R Wisc) has lifted the hold on their nominations which he had placed as leverage to obtain OPM’s cooperation in his investigation of OPM’s 2013 decision to provide an FEHBP level government contribution toward coverage of members of Congress and their staffs in the DC small business exchange. This makes the FEHBlog quite happy.

The Committee also will consider Chairman Johnson’s bill (S. 2221) to repeal the ACA’s multi-state program which OPM administers and has only one participating plan operating in one state, Arkansas Blue Cross, for 2018.

The President will release his FY 2019 budget tomorrow. Of course, Congress has already passed and the President has signed an FY 2019 budget agreement but the devil is in the details.

Federal News Radio reports that OPM has released its Quadrennial Federal Workforce Priorities Report, the first of its kind, details the steps agencies should consider when reshaping the government workforce and improving employee engagement. The report does not discuss the FEHBP.

The Washington Post reports that

OxyContin maker Purdue Pharma said on Saturday that it has cut its sales force in half and will stop promoting opioids to physicians, following widespread criticism of the ways drugmakers market addictive painkillers.
The drugmaker said it will inform doctors Monday [February 12] that its sales representatives will no longer visit physicians’ offices to discuss the company’s opioid products. It will now have about 200 sales representatives, Purdue said.
“We have restructured and significantly reduced our commercial operation and will no longer be promoting opioids to prescribers,” the company, based in Stamford, Conn., said in a statement.

Sometimes better late than never is not good enough.

That’s the headline of a weekend Wall Street Journal article that disturbed the FEHBlog. The article discusses two women who caught the flu last month and died. Both women were in the late 30s, were married with young children, and had health insurance. One of the women was a teacher and the other was an administrator. Their deaths shouldn’t have happened but they did.

Bloomberg reports that the flu and its big brother pneumonia currently are the cause of 1 in 10 deaths in America.

The death toll in future weeks is expected to grow even higher because flu activity is still rising—and the number of deaths follow the flu activity. Hospitalization rates are already approaching total numbers seen at the end of the flu season, which may not be for months.
“Unfortunately, more deaths are likely to happen,” [Centers for Disease Control acting director Anne] Schuchat said. “Over the next few weeks, we do expect and it would make sense to see more pneumonia and influenza-related deaths. The people who are likely to die are already in the hospital.”

In a sidebar, the Wall Street Journal discusses why this disease can be so deadly.

People over age 65, young children [particular those five and under], pregnant women and adults with chronic medical conditions such as heart disease or chronic lung disease are at high risk of serious complications. It is uncommon, but otherwise healthy people can develop them too.
Complications occur when the body’s immune system overreacts, triggering an exaggerated inflammatory response. Or flu infection can make it easier for bacteria to invade the bloodstream, causing a secondary infection. 

The article encourages people or caregivers in those categories to contact their doctor right away. Tamiflu, according to the article (and the FDA), can reduce flu symptoms particularly if taken within the first two days of getting sick.  The article also discusses when you need to head to the emergency room.

The bottom line is that people need to have a primary care provider in place before they get sick. Similarly, it’s important if you have a telemedicine service to register for that service before you need it. Even if you prepared as the two unfortunate women in the article mentioned at the outset were, tragic things can happen.

The Wall Street Journal also reports this morning that

As Americans suffer through the worst influenza outbreak in almost a decade, a Japanese drugmaker says it has developed a pill that can kill the virus within a day. But even if the experimental drug lives up to the claim, it likely won’t be available in the U.S. until next year at the earliest.
A late-stage trial on Japanese and American flu patients found that for the people who took the Shionogi 4507 -3.04% & Co. compound, the median time taken to wipe out the virus was 24 hours. That is much quicker than any other flu drug on the market, including Roche AG’s RHHBY -0.07% Tamiflu, which the trial showed took three times longer to achieve the same result. Quickly killing the virus could reduce its contagious effects, Shionogi said.
Also, Shionogi’s experimental drug requires only a single dose, while patients need to take two doses of Tamiflu a day, for five days.
Both Shionogi’s compound and Tamiflu take roughly the same amount of time to entirely contain flu symptoms, but Shionogi says its compound provides immediate relief faster.

Over night, as the Wall Street Journal reports, Congress approved a two year budget deal (October 1, 2017, to September 30, 2019) and extended the continuing resolution funding the federal government though March 23.   The Senate leadership struck the bipartisan deal in which the House Republican leadership and the President joined.

This means no more government shutdown nonsense at least through the mid-term elections. Of course, there will be other issues for legislative combat.

Becker’s Hospital Review lists the five takeaways from the budget deal for healthcare leaders here.

While we wait to see whether Congress can reach a budget agreement overnight, here are two AHIP PowerPoints and two earning reports to ponder:

• AHIP’s uplifting presentation on the value of employer sponsored health care
• AHIP’s helpful presentation on its initiative to address the opioid crisis.
• Healthcare Dive’s report on CVS Health’s 4th Quarter 2017 earnings. “CEO Larry Merlo said on the company’s Q4 earnings call that ‘nothing that has surfaced’ has come as a surprise, adding that he still expects the deal to close in the second half of 2018,” and
• CNBC’s report on Gilead’s 4th Quarter 2017 earnings. Gilead is the company that first brought the Hepatitis C cures to market at an astoundingly high price. Those glory days are over due to competition and the success of the drug. 

The acting OPM Inspector General has posted on the internet his semi-annual report to Congress for the period ended September 30, 2017. The report, which has a flashy cover, leads with a lousy recommendation in the FEHBlog’s view.

The acting Inspector General wants Congress to apply a horribly complicated Medicare, Medicaid and TRICARE law, known as the federal healthcare programs anti-kickback act, to the FEHBP.  This law places restrictions on discount arrangements between healthcare providers and health plans. This law makes some sense with Medicare, Medicaid and TRICARE where the government dictates the pricing for the most part. The law makes no sense with the FEHBP where the discount arrangements are contractually negotiated. If the OIG’s recommendation is accepted, FEHB plans would be required to re-negotiate thousands of contracts and providers may be unwilling to play ball under the new rules. This type of chaos will not lead to better, more affordable healthcare.

The FEHBlog had hoped that OPM management would push back on this request but the management response does not oppose the recommendation, notwithstanding the President’s call for de-regulation.  This is a big bowl of wrong.

And it’s time to get in a post before the big game begins.

Congress is in session this week. Here’s a link to the Week in Congress’s account of last week’s actions on Capitol Hill.  Congress is expected to approve a further continuing resolution funding the federal government past February 8. Meanwhile, on Tuesday, the Senate Homeland Security and Governmental Affairs Committee will hold a hearing on the obvious problems with governing through continuing resolutions. Healer, heal thyself because the House of Representatives did pass a spending bill before September 30. The hold up has been in the Senate.

While on the topic of complaints,

• Health Data Management discusses why healthcare interoperability moves at a snail’s pace. 
• Medpage Today documents the mediocre progress in implementing value based medicine (but don’t give up hope yet), and 
• Modern Healthcare reports that doctors are concerned that new Medicare quality measures ding them for cost out their control.  “‘Physicians are questioning what the patient’s part in all these is going to be,” [surgeon Brad] Johnson [M.D.] said. “Are they going to sign a contract that requires them to do follow ups or to quit smoking?” 

This brings us back to the announcement that Amazon, J.P. Morgan Chase, and Berkshire Hathaway plan to team up to bring health care to their employees. This consortium, which this helpful Fortune Magazine article discusses, is not ground breaking. More importantly, the consortium is not writing on a blank slate. It’s unfortunate that the companies (and doctors) were not more involved when the Obama Administration designed the electronic medical record giveaway. The Obama Administration’s disregard for electronic medical record interoperability gave birth to the current mess. The Affordable Care Act multitude of consumer protections also restricts independent development although the law allows the most flexibility to the large group market. Nevertheless, even the large group market is subject to ACA requirements, like the prohibition of annual dollar limits, that have caused the number of million dollar health plan claims to escalate. Furthermore, the consortium will have to deal with the significant cost shifting from Medicare and Medicare to private sector plans. These headwinds caused the FEHBlog to quip that the consortium leaders exhibited hubris. But good luck to them.

The FEHBlog always seeks to make readers aware of innovations. For example, MedPage Today explains why Americans need to learn more about genetic sequencing. Good luck to all innovators.

Six more weeks of winter and continuing resolutions! Roll Call reports that the Republican Congressional leadership is confident that Congress will timely extend the current continuing resolution funding the federal government beyond next Thursday, February 8. The FEHBlog have seen other articles suggesting an extension through March 22.

“The program results far exceeded our expectations,” the study said. “Throughout the 3-month program, the response rate was around 37%, and the 3-month average refill request rate was 18%. We had also expected that since this was an older patient population the response time span might be stretched out a little longer, but this was not the case with over 80% of refill requests received within 8 hours of the initial reminder.”

Yesterday, as the Chicago Tribune reports, Alex Azar was sworn in as Health and Human Services Secretary.

Modern Healthcare tells us that the 3700 physicians out of Medicare in 2017 as compared to 7400 in 2016 and 3500 in 2015. Very little FEHBP coverage is available if you are an annuitant over 65 whose doctor has opted out of Medicare. See Section 9 of your FEHBP brochure.  The Modern Healthcare article lead me to this useful CMS website which tells you whether your doctor has opted out of Medicare.  Opt out doctors are required to have to their Medicare Part B patients sign an opt out agreement.

The New York Times Upshot column has an interesting column with the following lede —

The idea that spending more on preventive care will reduce overall health care spending is widely believed and often promoted as a reason to support reform. It’s thought that too many people with chronic illnesses wait until they are truly ill before seeking care, often in emergency rooms, where it costs more. It should follow then that treating diseases earlier, or screening for them before they become more serious, would wind up saving money in the long run.  Unfortunately, almost none of this is true.

No kidding.

Healthcare Dive reports that Amazon, Berkshire Hathaway, and JP Morgan Chase are forming a not-for-profit company to reduce healthcare costs for their employees and presumably employees from other large employers. Here’s a link to their announcement.  The FEHBlog sees this as a quite a display of hubris but yesterday’s post illustrates the fact that the FEHBlog can make mistakes.