FEHBlog

Federal News Radio is reporting this morning that the President’s nominee for OPM Director George Nesterczuk has withdrawn his name from consideration.

Multiple sources confirm that Nesterczuk, who was nominated in May, is no longer in the running to head OPM. A White House spokesman would neither confirm nor deny Nesterczuk’s decision, saying only the administration doesn’t comment on personnel issues.

Assuming that the news plays out, the President still would have an OPM Deputy Director nomination before the Senate, Michael Rigas.  In the meantime, Kathleen McGettigan remains acting OPM Director.

The House has left town until September 5th for its August recess. The Senate is scheduled to remain in town for the next two weeks. Avik Roy has a worthwhile post-mortem or as he puts it autopsy of the health care bill’s course, and the New York Times Upshot reflects on why healthcare policy is so hard. Here’s a link to the Week in Congress’s report on last week’s other action on Capitol Hill.

This week we move into August which is the month that FEHB plan carriers complete their 2018 contract negotiations with OPM.  In September OPM announces the 2018 premiums.  That can’t occur until Congress comes back to town so OPM can brief members of Congress. Historically that press release happened shortly after Labor Day in other words right after Congress returned from its August recess. Lately the press release has come out in late September almost October.

The timing of announcing 2018 rate is complicated by the fact that we don’t know whether Congress will further delay or repeal the onerous health insurer tax. Absent a change in the law, that tax revives for 2018 which will materially impact most FEHB plan premiums.

The Senate voted down the skinny repeal approach early this morning 48-51 after House Speaker Paul Ryan had confirmed that the House would go to a conference committee over the limited bill, which really was  a weak cup of tea. The deciding vote was Sen. John McCain (R AZ).  Last week while on vacation, the FEHBlog read the Senator’s 1999 memoir Faith of My Fathers which is a very good book. It’s back to the drawing board for the Republican majority in Congress as Axios illustrates.  Congress needs to decide quickly whether or not to continue the current one year suspension of the health insurer tax which is a burden on the FEHBP.

On the M&A front,

• Healthcare Dive tells us about PriceWaterhouseCoopers most recent report on health system mergers & acquisitions. 
• Employee Benefit News muses about what Jeff Bezos may do with Whole Foods, e.g., add Amazon pharmacies to the 369 stores.
• KKR & Company, private equity firm, announced the purchase of Web MD earlier this week according to Reuters. 
• Drug Channels blog discusses the future of Rite Aid’s struggling prescription benefit manager, Envision Rx, after the major revisions to the Walgreen’s / Rite Aid deal. 

Cancer biology is a wily foe.
For all the recent treatment breakthroughs using drugs that leverage the immune system, tumors still find ways to avoid being killed. The failure Thursday of an AstraZeneca combination immunotherapy in lung cancer is a humbling setback for the field — and a reminder that many questions remain unanswered.
“Fundamentally, this is still imprecision medicine,” said Dr. George Demetri, an oncologist and professor at the Dana-Farber Cancer Institute in Boston, referring to cancer immunotherapy. “We have great targets, but we still don’t know how to identify the right patients.”

The Senate will continue debating health-care and voting on amendments, with a marathon all-night session of amendment votes expected to begin later this week. If Republicans can’t agree on any other plans for repealing and possibly replacing the ACA, GOP leaders are hoping they can pass a “lowest common denominator” proposal just cobbling together the elements that they all agree on, including repealing the individual and employer mandates and a tax on medical devices.

Any adopted Senate bill would have to go back to the House of Representatives, and the two Houses of Congress could form a conference committee. What we are see is politics in action.

Yesterday, the Department of Health and Human Services unveiled  an improved website for disclosing large reported breaches of unsecured protected health information. A large breach under the law affects 500 or more individuals.

Also on the HIPAA front, Healthcare IT News reports that the AHIMA trade association

has released a model Patient Request for Health Information form, which can be used as a modifiable template and given to patients when they request access to their EHR data.
The form is meant to help the process for providers, and ensure they’re compliant with the right of access rules outlined by the HHS Office for Civil Rights under HIPAA. It also dovetails with a recent report from the Office of the National Coordinator for Health IT that called for a more transparent patient records request process to reduce the burden on consumers, according to AHIMA.

On the drug cost front, Modern Health reports that

Health systems can expect drug prices to increase by 7.61% next year, largely due to the surging prices of branded, specialty medications, a group purchasing organization said Tuesday. Vizient said in its drug pricing forecast that it’s seen a spike in purchases for products not offered on its contract, most of which are patented, branded pharmaceuticals. Those specialty drugs also see sharper price increases, which force providers to find alternatives to optimal treatments and cause patients to avoid taking costly medication.

Of course, the hospitals hope to mark up those prices when they are charged to patients and their health plans so the impact  could be larger, which depends on the negotiations between the hospitals and the health plans. But the cost curve remains up.

Medcity News tells us that hospitals are teaming up with major pharmacy chains, like CVS and Walgreeens, to control their prescription drug dispensing costs and provide for close to patient outpatient care in the pharmacy urgent care centers.

It comes as no surprise the medical specialists make more money than primary care doctors but according to a recent Modern Healthcare study that gap is showing evidence of closing somewhat due to increased demand for primary care services.

Finally it’s worth pointing out that a National Bureau of Economic Research report using insurance claims data finds that

[I]n 22% of emergency episodes, patients attended in-network hospitals, but were treated by out-of-network physicians. Out-of-network billing allows physicians to significantly increase their payment rates relative to what they would be paid for treating in-network patients. Because patients cannot avoid out-of-network physicians during an emergency, physicians have an incentive to remain out-of-network and receive higher payment rates. Hospitals incur costs when out-of-network billing occurs within their facilities. We illustrate in a model and confirm empirically via analysis of two leading physician-outsourcing firms that physicians offer transfers to hospitals to offset the costs of out-of-network billing and allow the practice to continue. We find that a New York State law that introduced binding arbitration between physicians and insurers to settle surprise bills reduced out-of-network billing rates.

Earlier this afternoon, the Senate voted to proceed to debate on H.R. 1628 which is the Better Care Reconciliation Act in the Senate.  The tie vote was broken in favor of debate by Vice President Pence who of course is the President of the Senate under the U.S. Constitution. The Wall Street Journal explains that the “The 51-50 vote sets the stage for hours of politically tricky debate, and numerous complex amendments [potentially from both parties], on Republicans’ seven-year quest to topple most of the current health law and possibly replace it with a GOP plan.” This should be interesting.

In a new twist Tuesday morning, Senate Republican leadership is pursuing a new and smaller repeal of the Affordable Care Act in an effort to secure votes that would allow for debate on a GOP health-overhaul bill, according to multiple Senate GOP aides.
If the Senate votes to begin debate, and other versions of the GOP health-care bill [e.g., the Better Care Reconciliation Act] fail in amendment votes, then Mr. McConnell would move to bring up what’s being called the “lowest-common denominator” plan.

This scaled-down measure would repeal ACA requirements that many employers provide health coverage and a mandate that most people without health coverage must pay a penalty, Senate GOP aides said Tuesday. The bill would also repeal a medical device tax, they said. If that passes, then it would set up negotiations to secure a compromise between the “skinny repeal” plan passed by the Senate and the broader bill passed by the House in May.

The motion to proceed on a reconciliation bill like this would require 51 votes and there are 52 Republican Senators in the Senate (plus Vice President Trump in the event of a tie). The vote is expected to occur this afternoon.

The FEHBlog is back inside the Beltway after a relaxing week on the outer banks of North Carolina.

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

We may see a vote on the Better Care Reconciliation Act in the Senate. Check out Avik Roy’s interesting take on the CBO reports on the ACA repeal and replace law.  He explains that the CBO large losses in coverage represent an expectation that people won’t buy coverage unless they are forced to do so. Personal responsibility is such an important aspect of healthcare.  Give people more consumer choice in the health insurance market.

The FEHBlog was saddened to read about the unexpected death of Wall Street Joural editorial writer Joseph Rago. He was only 34 years old. He had won a Pulitizer Prize in 2011 for his editorials on the Affordable Care Act. The FEHBlog, in addition to reading the WSJ, frequently listened to him on podcasts and the weekly WSJ editors show on Fox News. Mr. Rago wrote on March 20, 2010, at the time Congress passed the ACA that

In our world of infinite wants but finite resources, there are only two ways to allocate any good or service: either through prices and the choices of millions of individuals, or through central government planning and political discretion. This choice is inexorable. Stripped of its romantic illusions, ObamaCare is really about who commands the country’s medical resources. . . .

If Congress does pass a repeal and replace law, Mr. Rago deserve credit for that action.

Finally, here’s a link to an insightful Politico article about the connection between tax exempt hospitals, which group represents the majority of U.S. hospitals, and the ACA.

The Senate Budget Committee posted a July 20 discussion draft of the Better Care Reconciliation Act today. CBO announced that it would be updating its projections for the new draft.

The federal government posted its 2017 updated semi-annual regulatory agenda today.

The Agenda represents ongoing progress toward the goals of more effective and less burdensome regulation and includes the following developments:

• Agencies withdrew 469 actions proposed in the Fall 2016 Agenda;

• Agencies reconsidered 391 active actions by reclassifying them as long-term (282) and inactive (109), allowing for further careful review;

• Economically significant regulations fell to 58, or about 50 percent less than Fall 2016;

• For the first time, agencies will post and make public their list of “inactive” rules-providing notice to the public of regulations still being reviewed or considered.

Here’s a link to OPM’s agenda which includes several FEHBP items.

Axios has an interesting report on where the current state of healthcare re-reform after four Senators came out against the Better Care Reconciliation Act on Monday thereby causing Senate Majority Leader McConnell to fall short on the vote count.

All of the Republican senators who oppose the Senate health care bill are meeting tonight to work out their differences — after being told by President Trump this afternoon that they need to work late into the night to get a deal. The holdouts, including moderates and conservatives, are scheduled to meet in Sen. John Barrasso’s office at 7:30 pm Eastern with the goal of getting a deal to revive the shelved Affordable Care Act repeal and replacement bill, according to sources with direct knowledge of the discussions.

The Congressional Budget Office reported as the FEHBlog has been typing this out that “Later today, CBO and the Joint Committee on Taxation (JCT) will release estimates of the effects of the [Senate’s] Obamacare Repeal Reconciliation Act of 2017.

Meanwhile, the House Budget Committee is working on an FY 2018 budget resolution. A markup hearing was held today.  Federal News Radio reports on the budget resolution’s impact on federal employees and annuitants. Modern Healthcare further informs us that

The House Budget Committee on Wednesday agreed [at its markup hearing] to bake in hundreds of billions in Medicaid cuts from its ACA repeal bill to the budget resolution, plus an additional $114 billion in cuts over 10 years.
The committee’s Republicans’ unanimously approved the decision with no Democrats on board. The budget resolution, which is the foundation for passing tax reform in the Senate without Democratic votes, also assumes Medicare will reduce spending by $487 million from 2018 to 2027.
Some of the additional savings would come from imposing a work requirement on Medicaid adult beneficiaries who are younger than 65 and are not on Social Security disability as a condition of eligibility.

 The resolution now heads to the House floor.

On the disease front, the American Hospital Association tells us that

An estimated 12.2% of U.S. adults had diabetes in 2015, including one in four aged 65 and older, according to the latest national estimates released by the Centers for Disease Control and Prevention. Nearly one-quarter of the 30.2 million adults with diabetes were not aware they had it, based on data from the National Health and Nutrition Examination Survey and Census Bureau. Fasting glucose and hemoglobin A1C levels were used to derive estimates for undiagnosed diabetes and prediabetes. About one-third of adults (84.1 million) had prediabetes, blood glucose levels at risk of progressing to diabetes, including nearly half of adults aged 65 and older. “Consistent with previous trends, our research shows that diabetes cases are still increasing, although not as quickly as in previous years,” said Ann Albright, director of CDC’s Division of Diabetes Translation. “Diabetes is a contributing factor to so many other serious health conditions. By addressing diabetes, we limit other health problems such as heart disease, stroke, nerve and kidney diseases, and vision loss.”

Those are startling numbers.  Meanwhile that Washington Post reports on an ongoing study that is suggesting that the use of PET scans can significantly improve of the accuracy of Alzheimer Disease diagnoses.

The FEHBlog forgot to link to the BNA article about the missing in action Spring 2017 federal semi-annual regulatory agenda. The article notes that the agenda will be posted on reginfo.gov this week and it will reflect the impact of the 2 out in 1 in executive order.  Currently that website will not pull up so the government may be adding the new agenda now. The FEHBlog will check back tomorrow as duty calls.