FEHBlog

The Senate Homeland Security and Governmental Affairs Committee’s website is no longer listing a confirmation hearing for OPM Inspector General nominee John DuPuy on Thursday. The Committee continues to plan to hold a hearing for an Office of Management and Budget Deputy Director nominee on Thursday at 10 am. The FEHBlog plans to check in on the hearing Thursday to find out if Chairman Ron Johnson (R Wisc.) explains when Mr. DuPuy’s confirmation hearing will be held.  The FEHBlog is on record here that he would prefer that Sen. Johnson permit his Committee and the Senate to vote on the OPM Director and Deputy Director nominations soon.

The House Ways and Means Committee announced today that several of its Republican members have introduced a series of bills concerning ACA taxes.

The following bills were introduced today:
H.R. 4617, introduced by Reps. Erik Paulsen (R-MN) and Jackie Walorski (R-IN), provides relief from the job and innovation-killing Medical Device Tax for 5 years.
H.R. 4618, introduced by Rep. Lynn Jenkins (R-KS), provides relief for two years from the tax on over-the-counter medications, expanding access and reducing health are costs by once again allowing for reimbursement under consumer-directed accounts.
H.R. 4620, introduced by Rep. Kristi Noem (R-SD), provides relief in 2018 from the Health Insurance Tax that drives up health care costs, if the insurer provides the plan holder with a premium rebate and delays the tax in 2019 for all insurers.
H.R. 4619, introduced by Rep. Carlos Curbelo (R-FL), provides needed relief from the Health Insurance Tax, for 2 years for health care plans regulated by Puerto Rico.
H.R. 4616, introduced by Reps. Devin Nunes (R-CA) and Mike Kelly (R-PA), delivers three years of retroactive relief and one year of prospective relief from the harmful employer mandate paired with a one-year delay of the Cadillac Tax [from 2020 to 2021].

H.R. 4620 puzzles the FEHBlog because if Congress repeals the health insurer tax for 2018 and the taxes were built into the rate, the ACA’s medical loss ratio requirements should create a refund. If the plans set rates in the reasonable expectation that Congress would further suspend or delay the tax, those insurers would take in the chops. This tax, which adversely impacts the FEHBP, should be repealed now.

The Federal Benefits Open Season ends tomorrow December 11 at 11:59 pm. Joe Davidson from the Washington Post provides some closing observations for interested federal and postal employees and annuitants.

Congress remains in session this coming week. Here’s a link to the Week in Congress’s report on last week’s actions on Capitol Hill. The FEHBlog notes that on Thursday, December 14, at 10 am ET, the Senate Homeland Security and Government Operations Committee will hold a hearing on the President’s nomination of John E. Dupuy to be Inspector General, Office of Personnel Management.

Healthcare Dive reports that two Catholic hospital chains Catholic Health Initiatives and Dignity Health signed a merger agreement last week. “The deal would create a system with $28.4 billion in combined revenue across 139 hospitals operating in 28 states.” The Wall Street Journal reports today that two larger Catholic hospital chains

Ascension and Providence St. Joseph Health are talking about combining, according to people familiar with the discussions. A deal would create an entity of unprecedented reach, with 191 hospitals in 27 states and annual revenue of $44.8 billion, based on the most recent fiscal year. That would dethrone the nation’s largest pure hospital operator, HCA Healthcare Inc., which owns 177 hospitals and ended 2016 with $41.5 billion in revenue.

And so it goes.

The New York Times today had a front page story that began as follows– “Having health insurance is supposed to save you money on your prescriptions. But increasingly, consumers are finding that isn’t the case.”  Insurance is intended to protect you against unexpected risks. Requiring health insurance cover low dollar, common expenses, as the ACA does, adds to the price paid by the consumer.

A related article explains how it is possible to get a better deal on prescription drug costs by paying cash. That reflects good consumerism, no poor insurance coverage. The best piece of advice in the article for those in high deductible plans like the FEHBlog reads as follows:

Several large retailers, like Walmart and Costco, sell generics at discounted prices, like $4 a prescription, which may be less than your insurance is asking you to pay. Some grocery stores, like Publix and Meijer, even give away certain medications — like antibiotics — for free. Pharmacy chains like Rite Aid also offer discounted prices to people who sign up for savings clubs. 

GoodRx and Blink Health are two companies that offer discounted rates on generic drugs. GoodRx allows consumers to compare what local pharmacies are charging for a drug (it includes prices from discount stores like Walmart), while Blink Health quotes a single price that it has negotiated. GoodRx offers coupons that consumers bring to participating pharmacies, while Blink Health requires users to pay upfront, then collect their prescription at a nearby pharmacy

House Republican tax writers are considering delaying Obamacare’s health insurance tax for only limited markets next year, leaving out small businesses and possibly private Medicaid plans, according to sources on and off Capitol Hill. They would suspend it for all markets in 2019. ***

The fate of the health insurance tax is being decided in negotiations over a year-end bill. Also in the mix is a two-year delay of Obamacare’s medical device tax, loosening the restrictions on health savings accounts, and [further] delay of the Cadillac tax. ***

On the Senate side, the tax bill has pushed the Obamacare tax delays to the back burner. Senate Finance Chairman Orrin Hatch (R-Utah) said the panel hasn’t considered delay legislation yet. “But we’ll have to get into it, there’s no question,” he said.

The health insurance tax has a big adverse impact on the FEHBP and so would the Cadillac tax (now set for 2020) as the FEHBlog has discussed.

The end of the current Federal Benefits Open Season is three days and change away, December 11.  OPM posted about its FEHB Quality Perspective on Wednesday.  Benefits expert Tammy Flanagan offers advice in Govexec.com on how to navigate Open Season when it’s crunch time.

As the FEHBlog anticipated, Congress did extend federal government funding for two additional weeks until December 22, 2017. The Wall Street Journal reports today that

Congressional leaders are working on a two-year budget agreement with President Donald Trump that would raise both military and nonmilitary spending above the levels, known as the sequester, established in a 2011 budget and debt limit fight. Those lower spending levels kicked in in 2013, but lawmakers have since then passed two budget deals bumping spending higher. The last budget deal ended in September, but lawmakers have kept the government running at that level, as of Thursday evening through Dec. 22.

House Minority Leader Nancy Pelosi (D., Calif.), Senate Minority Leader Chuck Schumer (D., N.Y.) and Senate Majority Leader Mitch McConnell (R., Ky.) met with Mr. Ryan and Mr. Trump Thursday afternoon and spent most of the time working on where to set spending levels for the next two-year deal, an aide said. Republicans are pushing for $54 billion more in defense funding a year. Democrats want to ensure a comparable increase for nondefense spending, according to aides. 

“Nothing specific has been agreed to, but discussions continue,” Mr. Schumer and Mrs. Pelosi said in a joint statement after the meeting. 

Once that budget deal has been reached, lawmakers can write the detailed spending bill that would fund the government through the rest of the fiscal year, which ends Sept. 30.

It looks like any deal won’t be finalized until next month, but funding will continue through extensions of the continuing resolution.

In other Hill news, the Wall Street Journal reported yesterday that he tax-bill conference committee hasn’t formally met yet, but it could be done by the end of next week, said Sen. Rob Portman (R., Ohio). Mr. Portman, who is on the 29-member committee, spoke to reporters after leaving a meeting with some other Senate Republican committee members Thursday afternoon.

In other items that caught the FEHBlog’s fancy:

• The Health Affairs blog offers includes an opinion piece on why we need a serious conversation about health care spending. Agreed. 
• Forbes Magazine provides a link to Avik Roy’s recent interview with CMS Administrator Seema Verma at the annual Forbes Healthcare Summit.  It’s worth watching. The FEHBlog also watched on YouTube another summit session outlining “five fixes for healthcare.” 
• The FEHBlog’s alma mater, UConn, has a non-technical reader-friendly post about the state of human genetics research. 

There are only five more days in this year’s Federal Benefits Open Season.

Follow up on Sunday’s post about CVS Health’s acquisition of Aetna (subject to government review and shareholder approval) here are links to CVS’s press release which explains the company’s plans behind the acquisition and the Drug Channel blog’s observations on those plans.

In other mergers and acquisitions news, United Healthcare’s Optum unit announced its acquisition of the Davita Medical Group for $4.9 billion.  Davita is the nation’s leading provider of kidney dialysis services. Shortly after Medicare was enacted in 1965, Congress decided to extend Medicare coverage to people suffering from end stage renal disease. Congress expected that this would be the first extension of Medicare to a several chronic illness. This act turned out to be the first and the last because the extension cost much, much more than anticipated. After all if you build it they will come.

The Harvard Health blog has a useful comment concerning celebrity endorsement of medical procedures. The writer’s upshot is “For any medical test or treatment, ask [your personal doctor] whether it’s likely to be helpful.” Good advice.

Last but not least, the CMS actuaries today released a report on 2016 National Health Expenditures.

In 2016, overall national health spending increased 4.3 percent following 5.8 percent growth in 2015, according to a study by the Office of the Actuary at the Centers for Medicare & Medicaid Services (CMS) published today as a Web First by Health Affairs. Following Affordable Care Act (ACA) coverage expansion and significant retail prescription drug spending growth in 2014 and 2015, health care spending growth decelerated in 2016. The report concludes that the 2016 expenditure slowdown was broadly based as growth for all major payers (private health insurance, Medicare, and Medicaid) and goods and service categories (hospitals, physician and clinical services, and retail prescription drugs) slowed in 2016. 

During 2014 and 2015, the health spending share of the economy increased 0.5 percentage point from 17.2 percent in 2013 to 17.7 percent in 2015. The increases in the health spending share of the economy in 2014 and 2015 were largely due to coverage expansion that contributed to 8.7 million individuals gaining private health insurance coverage and 10.2 million gaining Medicaid coverage over the period and to significant growth in retail prescription drug spending. Health care spending grew 1.5 percentage points faster than the overall economy in 2016, resulting in a 0.2 percentage-point increase in the health spending share of the economy – from 17.7 percent in 2015 to 17.9 percent in 2016. 

That’s a lot of boxes of ziti as Tony Soprano would say.

10 days are left in the current Federal Benefits Open Season which ends on December 11.

Congress is in session this coming week. Here’s a link to the Week in Congress’s report on last week’s activities on Capitol Hill.  The report does not reflect the approval of the Senate’s tax reform bill which occurred overnight on Friday. The leadership in the House of Representatives and the Senate now will appoint members of Conference Committee that we seek to reconcile the House and Senate tax reform bills. If successful, the Conference Committee will produce a report that will be sent to the House and Senate for their approval.

The Senate Health Education Labor and Pensions Committee will hold two hearings this week on the implementation of the 21st Century Cures Act which was voted into law last December.

The current continuing resolution funding the federal government expires on this coming Friday December 8. The FEHBlog has every expectation that Congress will extend the resolution for two weeks or into January. There will be no government shutdown.

In an encouraging development,

The U.S. Food and Drug Administration [on Friday November 30] approved the FoundationOne CDx (F1CDx), the first breakthrough-designated, next generation sequencing (NGS)-based in vitro diagnostic (IVD) test that can detect genetic mutations in 324 genes and two genomic signatures in any solid tumor type. The Centers for Medicare & Medicaid Services (CMS) at the same time proposed coverage of the F1CDx. The test is the second IVD to be approved and covered after overlapping review by the FDA and CMS under the Parallel Review Program, which facilitates earlier access to innovative medical technologies for Medicare beneficiaries. 

“By leveraging two policy efforts aimed at expediting access to promising new technologies, we’ve been able to bring patients faster access to a breakthrough diagnostic that can help doctors tailor cancer treatments to improve medical outcomes and potentially reduce health care costs,” said FDA Commissioner Scott Gottlieb, M.D. “The FDA’s Breakthrough Device Program and Parallel Review with CMS allowed the sponsor to win approval for this novel diagnostic and secure an immediate proposed Medicare coverage determination within six months of the FDA receiving the product application.” 

Compared to other companion diagnostics previously approved by the FDA that match one test to one drug, the F1CDx is a more extensive test that provides information on a number of different genetic mutations that may help in the clinical management of patients with cancer. Additionally, based on individual test results, the new diagnostic can identify which patients with any of five tumor types may benefit from 15 different FDA-approved targeted treatment options. Its results provide patients and health care professionals access to all of this information in one test report, avoiding duplicative biopsies.

The Wall Street Journal just reported that

CVS Health Corp. has agreed to buy Aetna Inc. for about $69 billion in cash and stock, a landmark deal that would change the health care landscape in the country by bringing a large [health] insurer and a big provider of pharmacy services under one roof. 

In an agreement that has been months in the making and is likely to be announced later Sunday, Aetna stockholders are to receive $207 per share, $145 in cash and $62 in stock, according to people familiar with the matter.  As part of the deal, CVS plans to use its nearly 10,000 pharmacy locations to provide consumers with more local care options.

 More details to follow.

The FEHBlog is up in Manhattan with Mrs. FEHBlog watching their grandson for the weekend. The FEHBlog has found something more enjoyable than this blog!

There are 10 days left in the Federal Benefits Open Season.

The Washington Post reports that the CVS / Aetna merger agreement may be inked on Monday.  Bloomberg offers some interesting observations on financial aspects of the anticipated merger, which of course must clear government anti-trust scrutiny. Also the Chicago Tribune reports that Express Scripts CEO Tim Wentworth noted at a Forbes conference yesterday that while his company would be open to health insurer merger or partnering with Amazon, his company is not actively pursuing such a deal.

Meanwhile at the Office of the National Coordinator for Healthcare Technology conference, the National Coordinator discussed next steps in achieving interoperability in healthcare technology according to the MedPage Today report.. Of course, the government missed the boat by approving free distribution of non-interoperable electronic medical records to providers earlier this decade to the tune of over $30 billion. But better late than never.

Fierce Healthcare reports on HHS Secretary nominee Alex Azar’s confirmation hearing before the Senate Health Education Labor and Pensions Committee earlier this week. The focus of the hearing was on controlling prescription drug costs.

Yesterday CMS cancelled the Obama Administrations mandatory hip fracture and cardiac bundled payment models created for Medicare patients.  The FEHBlog is not a fan of such mandatory programs.  The shift to value based reimbursement appears to remain on track.  Fierce Healthcare also reports on a Humana study concerning provider efforts to adapt to valued based reimbursement.

Finally, researchers at UConn, the FEHBlog’s alma mater, are reporting “new evidence suggest[ing] the fatty molecules [or lipids that clog arteries] might come not only from what you eat, but from the bacteria in your mouth. The research may explain why gum disease is associated with heart trouble.” So pay attention to your dental care.

Thirteen days left in the Federal Benefits Open Season.

Healthcare Dive tells us about five payer trends to watch in 2018.  The FEHBlog is encouraged by the fact that

Providers and payers have increasingly worked collaboratively. Payer-provider partnerships vary in type, size, location and model. There are 50/50 joint ventures with co-branding, and less intensive partnerships like pay for performance, accountable care organizations, patient-centered medical homes and bundled payments. Oliver Wyman found the partnerships can be broken down depending on providers’ appetite for risk.
They involve national payers like Aetna, Cigna and various Blues and new players in the payer space like Oscar Health and Bright Health.

In this regard, it’s noteworthy that according to a Forbes report, United Healthcare’s Optum unit has launched a $250 million incubator called Optum Ventures “to develop early-stage healthcare companies.” Optum is another leader in the payer – provider collaboration field.

Fierce Healthcare tries to read the tea leaves concerning Humana’s next M&A deal. Leerink Partners analyst Ana Gupte thinks that

Humana is a possible takeout target after the annual enrollment season for Medicare Advantage concludes. Should a transaction occur, Cigna would be the most likely buyer—though it would need to divest its Health Spring Medicare Advantage plans to satisfy antitrust regulators, Gupte wrote in a research note (PDF).  Other “dark horse acquirers” of Humana could include either Anthem, Walmart or Walgreens, Gupte wrote. While the two retailers might seem like odd candidates to purchase a health insurer, such a deal makes sense considering CVS Health is said to be in talks to acquire Aetna.

Interesting.

Kaiser Health News offers consumer tips on how to avoid surprise ambulance bills.  If you can plan an ambulance trip, e.g., from a hospital to another facility, then you can arrange for an in-network ambulance service. If you can’t plan the trip, it’s a crap shoot because the days of free municipal ambulance service is over.

The FEHBlog hopes that all of his readers enjoyed the Thanksgiving Holiday. Congress is back from its holiday break tomorrow. Federal News Radio discusses bills for federal employees to watch this coming week and The Hill reports on five health care issues that will receive Congressional attention before the Christmas holidays break.  None of bills / issues directly affect the FEHBP.

The Federal Benefits Open Season ends on December 11, which is 15 days away.

Health Payer Intelligence offers its views on how health plans can help high deductible plan enrollees  get the best value out of their coverage. High deductible plan enrollees can contribute to a health saving account that they own as long as they don’t have other health benefits coverage, such as Medicare.  A few years ago a group of federal annuitants demanded in federal court that they be allowed to waive Medicare Part A coverage in order to continue contribute into their health savings accounts.  The federal courts rejected their lawsuit.

The FEHBlog who is under age 65 is enrolled an ERISA governed high deductible plan with a health savings account. The FEHBlog’s birthday is in December which means that he will lose the ability to contribute to his HSA on the first day of December in which he turns 65. If he were enrolled in an FEHB plan he would be entitled to an individual Open Season under 5 CFR Section 890.301(k) at that time:

(k) On becoming eligible for Medicare. An employee may change the enrollment from one plan or option to another at any time beginning on the 30th day before becoming eligible for coverage under title XVIII of the Social Security Act (Medicare). A change of enrollment based on becoming eligible for Medicare may be made only once.

It probably doesn’t make sense to change plans for one month, but it’s the enrollee’s call. Nationwide FEHBP plans that offer a high deductible plan with a health savings account option typically include a health reimbursement account offering for annuitants who can’t contribute to a health savings account.