FEHBlog

Yesterday, the U.S. Office of Personnel Management released the 2018 pay tables and calculators for federal employees.

The FEHBlog trusts that his loyal readers are enjoying the holidays.

Last Friday, the Internal Revenue Service (“IRS”) announced that “Insurers, self-insuring employers, other coverage providers, and applicable large employers now have until March 2, 2018, to provide Forms 1095-B or 1095-C to individuals, which is a 30-day extension from the original due date of Jan. 31.” These are the forms that confirm for IRS purposes compliance with the ACA’s individual and employer shared responsibility mandates. The IRS is not extending the deadline for submission of those forms to the agency itself.  Because Congress has zeroed out the ACA individual mandate for tax years beginning after 2018, there will be one more round of full 1095 reporting after this one.

The Wall Street Journal reports today that “Since 2013, the price of a 40-year-old, off-patent cancer drug in the U.S. has risen 1,400%, putting the life-extending medicine out of reach for some patients. Introduced in 1976 to treat brain tumors and Hodgkin lymphoma, lomustine has no generic competition, giving seller NextSource Biotechnology LLC significant pricing power.” Of course, this is nothing new and the Food and Drug Administration is trying to encourage competition in these situations. However, this is not a widely prescribed drug. The Wall Street Journal explains that

In 2015, the most-recent year for which data were available, Medicare Part D prescription-benefit plans paid for 1,694 prescriptions in the U.S., according to the Centers for Medicare and Medicaid Services. But because of the price increase, Part D spending on the drug jumped to about $608,000 in 2015 from $163,000 the year before.

That’s a drop in the proverbial bucket but as the article further explains the Medicare Part D cost sharing on this drug is stiff. The FEHBlog does not believe that price controls are the answer. The federal government already imposes price controls on drugs sold to the Defense Department, the Veterans’ Administration, and the Indian Health Service. There also is a pricing floor for Medicaid sales that other purchasers except for Part D plans can’t drop below. These federal price controls shifts costs to other purchasers such as the FEHB plans.

Waiving cost sharing for the unfortunate members would reward the buccaneer drug company. It’s shameful that those companies cannot find a way to exercise self-control over their pricing. Before long we may see the federal government engaged in the drug manufacturing business, just like in olden times when the federal government ran the arsenals that manufactured weapons.

Finally, the Wall Street Journal tells us about six health stories that readers should follow next year –.targeted breast cancer treatments, advances in genetic-based medicine (via Crispr gene editing),  the conclusion of a five year long trial of the expensive PCSK9 inhibitor drugs to lower cholesterol,  continuing concern about antibiotic overuse and resistance, a new class of injectable drugs under development which has shown promise in preventing migraine headaches, and a focus on flu and measles.  

Federal News Radio reports that on Friday “The president signed a memo authorizing an average raise of 1.4 percent, with an additional 0.5 percent adjusted in locality pay for a total of a 1.9 percent for federal civilian employees, and the 2.4 percent pay raise for uniformed service members.”  The Washington Post adds

The Washington-Baltimore area is to receive the largest of the raises, 2.29 percent. The sprawling “locality” encompasses not only the two cities but also much of Maryland and Northern Virginia, and it reaches into West Virginia and south-central Pennsylvania.  Raises are to be effective with the first full pay period of the new year, which in most cases begins Jan. 7.

FEHBP Open Season changes for federal annuitants take effect on January 1 and at the start of the first full pay period of the new year which the Post tells us is January 7.

Here’s a link to the Week in Congress’s report on last week’s actions on Capitol Hill.  Congress is out of town until January 8.

Happy winter solstice. Congress is going home for the holidays because as the FEHBlog predicted our national legislative body just passed a bill continuing federal government funding through January 19. The Hill reports that

The funding bill also includes a short-term extension of the Children’s Health Insurance Program (CHIP), some spending “anomalies” for defense, a waiver for the pay-as-you-go (PAYGO) budgetary rules so the GOP tax bill doesn’t trigger Medicare cuts and an extension of a controversial surveillance program.

The FEHBlog expects that Congress will pass an omnibus appropriations bill for the current federal fiscal year before January 19.

The Wall Street Journal observed yesterday that the recent deals between healthcare companies, e.g., CVS / Aetna, United Health/ DaVita Humana / Kindred, reflect a continuing push in care away from the inpatient to the outpatient setting.  Meanwhile, as we have seen hospital chains have been merging and  “rapidly expanding outside their facilities, investing in outpatient surgery centers, occupational-health clinics, and urgent-care centers.” Health plans have been nudging members away from hospitals for years, and as the article explains, the nudging has been working. “Michael F. Neidorff, chief executive of Centene Corp., a major Medicaid managed-care company [, adds that] ‘ Using data analysis and other tools, his company aims to “prospectively identify disease states before they become an issue.’” That’s a relatively new development.

Healthcare Dive reports on a recent study that found while 80% of consumers are unfamiliar with telehealth / virtual visit services, those who do try it out like it and plan to continue using it. That’s encouraging.  Telehealth services will be widely available in the FEHBP for 2018.

Since 2010, OPM has required FEHB carriers to offer generous assistance to members who want to quit tobacco use. Medical Marketing and Media reports that the Food and Drug Administration will unveil a new public service message campaign called Every Try Counts that encourages adults who have failed one or more quit attempts to keep trying. FEHB plans don’t place limits on quit attempts.

CMS announced improvements to its Hospital Compare website today.

Hospital Compare (https://www.medicare.gov/hospitalcompare/search.html) reports information on quality measures for over 4,000 hospitals nationwide, including Veterans Administration (VA) Medical Centers and military hospitals. The website provides information for patients and caregivers on how well hospitals deliver care and encourages hospitals to improve the quality of care they provide. Users can compare performance across many common conditions. 

For this update, CMS will respond to stakeholder concerns by updating several existing measures and the Overall Star Rating. The Overall Star Rating has been revised to use an enhanced methodology to assign ratings to hospitals, based on Technical Expert Panel recommendations and public input “We continue to refine the Star Ratings and look forward to an ongoing dialogue with hospitals and patients and their families on how we can provide beneficiaries useful information,” [CMS Administrator Seema] Verma said.

Finally, USA Today reports that the National Center for Health Statistics reported this week that life expectancy for newborns in the U.S. has dropped slightly for the second year in a row due to the fact that thousands of younger adults have been dying prematurely due to drug abuse.  No bueno.

Congress passed the tax reform bill, H.R. 1, today. Next step before they go back to their districts is to extend the continuing appropriations bill funding the federal government until next month.

The Health Care Payment Learning and Action Network posted the slide decks from presentations made at its conference earlier this month.  Check them out.

Health IT Security reports that the HHS Office for Civil Rights which enforces the HIPAA Privacy and Security Rules has entered into a settlement agreement with  Florida based 21st Century Oncology.  The agreement stems from a 2015 hacking incident which affected over two million patients. The provider agreed to pay OCR $2.3 million and comply with a corrective action plan.

Congress is moving forward with enacting the conference report for H.R. 1, the Tax Cuts and Jobs Act. Here’s a link to a two pager highlighting the bill’s policy changes.

The U.S. Office of Personnel Management (OPM) proposed a rule today that would allow the government- wide plans, Blue Cross and the long vacant indemnity benefit plan carrier, to offer three options. The FEHB Act, 5 U.S.C. Sec. 8903 requires those plans to offer two options. OPM currently permits the other plan types — employee organization plans and comprehensive medical plans — to offer three plan types. OPM describes this proposal as illustrating FEHBP’s flexibilities. The FEHBlog hopes that this will be the first of many FEHB flexibilities offered to carriers over the coming year in an effort to create a more hospitable environment for competition. The comment deadline on this rule is February 20, 2018.

HHS’s Office for Civil Rights has created two new websites — one for professionals and the other for consumers — “providing specific guidance addressing HIPAA protections, the obligations of covered health care providers, and the circumstances in which covered providers can share information related to mental health and substance use disorder treatment [specifically with family members].”  Here’s a link to the HHS press release about these worthy actions.

In the latest mergers and acquisitions news, Humana has joined with two private venture firms to purchase Kindred Healthcare for $9 per share or $4.1 billion. USA Today explains that “The goal is for Humana, the Louisville-based health insurance company, to acquire full ownership of Kindred’s home care business in three to five years at a price to be determined later.”

Following up on Friday afternoon’s post, here’s a link to the House-Senate conference report on the Tax Cuts and Jobs Act, H.R. 1, which was released late Friday afternoon. The report starts out with the final statutory language which is followed by an explanation which breaks down each provision into current law, House version, Senate version, and Conference agreement.

In terms of healthcare, the noteworthy change is that the law will zero out the Affordable Care Act’s individual shared responsibility mandate effective January 1, 2019.  See Conference Report at 153. The Washington Post has a fair analysis of this change here.

As the Washington Post report explains the ACA’s tax penalty for failing to carry minimum essential coverage falls principally on lower income people who are eligible for ACA premium and cost sharing subsidies or perhaps even Medicaid. When this change takes effect in 2019, the ACA marketplace will work like the FEHBP did from 1960 to 2013 — no pre-existing condition limitations, annual open season, and eligible people who fail to enroll during the Open Season cannot enroll until the next Open Season except in the event of a special enrollment event. No mandate.

A tax law change that marginally affects the FEHBP is Congress’s decision to base tax law inflation adjustments, such as health saving account maximum annual deposits, on the Bureau of Labor Statistic’s chained consumer price index for urban consumers instead of the regular CPI-U.  Bloomberg provides background on the chained CPI-U here.

The House and Senate are expected to approve H.R. 1 this week and to extend the current continuing resolution funding the federal government into January. Then Congress will take a break until the new year which is only two weeks or so away. Here’s a link the The Week in Congress’s report on other Capitol Hill actions that occurred last week.

On Thursday, the Office of Management and Budget (“OMB”) issued its Fall 2017 unified federal regulatory agenda. The unified agenda provides an update on each federal department and agency’s regulatory plans. Here’s a link to OPM’s plans.  OMB reports that

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

• Better than 2:1 – Agencies plan to finalize three deregulatory actions for every new regulatory action in FY2018.
• 1579 Withdrawn or Delayed Actions – Agencies continue to eliminate, delay, or streamline regulatory actions in the pipeline. In this Administration, agencies withdrew or delayed 1579 planned regulatory actions, reflecting all such changes from Fall 2016 to Fall 2017.

Unfortunately, the FEHBP, in the FEHBlog’s view, has not seen any reduction in regulatory burden this year. The FEHBlog attributes this to the problems encountered in installing new political leadership at the agency.

In other news,

• Healthcare Finance News reports that Cigna has purchased a digital health startup called Brighter.
• The United Health Foundation, which United Healthcare created, updated for 2017 it annual report on America’s health rankings.  The report ranks the states based on the health of their populations. 
• The Blue Cross Blue Shield Association released a Moody’s Analytics report on understanding health conditions across the U.S.   

The report [which is based on the BCBS Health Index] shows that social determinants of health drive larger differences in the impacts for common chronic conditions such as hypertension, diabetes and coronary artery disease. In addition, the analysis shows these determinants drive smaller differences in the impact of other conditions such as cancer, substance use disorder and mental health, which are influenced more by individual factors such as family health history and personal lifestyle choices. The analysis also shows that relative to broader social determinants, differences in local health care system characteristics have a more modest association with the health impact of disease on a community’s commercially insured population.

FedWeek reports that

There is a common misconception that the Federal Employees Health Benefits program covers long-term care needs. In fact, long-term care is primarily not medical care and the benefits for such care under FEHB (or Medicare) are limited, covering only short periods and only certain types of care in some situations.

FEHB plans don’t cover custodial care, a stay in an assisted living facility, or a continuing need for a home health aide to help you with other activities of daily living. Limited stays in skilled nursing facilities can be covered in some circumstances. Specifics are in sections 5(a) and 5(c) of FEHB plan brochures.

Why would you need the Federal Long Term Care Insurance Program if the FEHBP already covered those services? The author’s conclusion is correct though.

The Centers for Medicare and Medicaid Services has added more quality information to its Physician Compare website. Oh, boy!

New York Presbyterian, a New York City based health system, announced earlier this week that

NewYork-Presbyterian and Walgreens are collaborating to bring convenient access to NewYork-Presbyterian’s world-class care through new telemedicine services, now available through Walgreens digital properties and at self-service kiosks at select Duane Reade drugstores in New York. NewYork-Presbyterian, New York’s No. 1 hospital, is offering the telemedicine services as part of its NYP OnDemand suite of digital health services.

Healthcare Dive added that

Speaking at an Axios event in Washington, D.C., last week, NYP President and CEO Steven Corwin underscored telehealth’s potential to disrupt healthcare.
This year alone, NYP has performed about 10,000 telehealth visits, Corwin noted. One area that has surpassed expectations is telepsychiatry. “I thought that was going to be something patient’s wouldn’t accept,” Corwin said. “Quite the contrary. The Net Promoter Score of the telepsychiatry consult is 95. The Net Promoter Score of Netflix is 75. We are talking about a sea change in the way that we’re delivering care.”

 Interesting.

The Politico offers an article today on OPM’s Healthcare Claims Data Warehouse, a project that began in 2010.  OPM has been planning to use this warehouse to hold longitudinal health histories of federal and postal employees.  FEHB plan carriers are covered entities for HIPAA Privacy and Security purposes and must accept the financial risk of coverage. As the article explains, carriers are willing to contribute claims data that is de-identified for HIPAA purposes and protects proprietary information. De-identified means that the contributed data cannot be linked back to any particular federal/postal employee, annuitant, or family member.

The article quotes the former OPM policy and planning director Jonathan Foley. The warehouse is his baby.  He gets the last word in the article as follows:

Foley called that [/the FEHBlog’s] argument a “smokescreen” because the data is not governed by HIPAA in the same way as health plans. The warehouse’s security is extremely stringent and it is federally authorized to handle sensitive health data, he said.

Section 8910(b) of the FEHB Act reads in pertinent part as follows

(b) Each contract entered into under section 8902 of this title shall contain provisions requiring carriers to-
(1) furnish such reasonable reports as the Office determines to be necessary to enable it to carry out its functions under this chapter; and
(2) permit the Office and representatives of the Government Accountability Office to examine records of the carriers as may be necessary to carry out the purposes of this chapter.

In short, the FEHBA authorizes OPM to collect, not receive copies of, carrier records. The 1959 FEHBA does not contemplate this data warehouse. If OPM wants the full-blown warehouse, then the agency should have asked Congress to amend the FEHB Act.

In any event, as the article explains, and the FEHBlog confirms, carriers cooperatively are working with OPM to create a warehouse that serves the agency’s purposes and protects the interests of carriers and FEHBP members. As the article explains,

An OPM spokesperson said the agency and its carriers were still negotiating release of the data, in de-identified form to ensure protection from breaches. In fact, OPM has convened a meeting with insurers next month on the topic, the spokesperson said. The agency did not explain how it could use de-identified data to create files with long-term information about patients, which is a key benefit of data warehousing to data analysts.

Believe the FEHBlog, carriers and OPM are working on creating a secure approach that will address the data analysts’ concern.

The FEHBlog noticed in Govexec.com this morning that yesterday Sen. Ron Johnson (R Wisc) and Rep. Mark Meadows (R NC) have proposed a bill to end OPM’s Multi-State Program (“MSP”). The Affordable Care Act created the MSP to encourage ACA marketplace competition. OPM explains on its website that

A Multi-State Plan (MSP) option is a high-quality plan offered on the Marketplace, under contract with the U.S. Office of Personnel Management (OPM), the agency that also administers health insurance for Federal employees. OPM negotiates plan benefits, monitors plan performance, and oversees plan compliance with the Affordable Care Act (ACA).

OPM started contracting with Blue Cross and several ACA co-op plans to offer these plans. The OPM webpage also indicates that only one State — Arkansas — will offer an MSP option for 2018.

Govexec.com notes

Johnson said in a statement that the program costs taxpayers $10 million a year, including expenses and the salaries of the program’s administrative staff. That money could be better spent on other initiatives, like OPM’s efforts to reduce retirement and security clearance backlogs, he argued.