FEHBlog

Here’s a link to the Week in Congress’s report on Capitol Hill activities this past week. Yesterday, the Senate did confirm Mick Mulvaney to be director of Office of Management and Budget (per NPR) and the President nominated a law school dean Alexander Acosta to serve as Labor Secretary (per Reuters).

The Wall Street Journal posted on You Tube a video interview of Aetna CEO Mark Bertolini, an impressive guy, as part of its Future of Health Series. It’s 50 minutes long and worth a listen.

Mr. Bertolini compliments Medicare Advantage for its practice of compensation insurers for risk. The FEHBP in contrast does not have a risk adjustment practice. Features like risk adjustment do carry legal risk as the Minnesota Star Tribune evidences today in a story about a whistleblower initiated and federal government supported False Claims Act lawsuit against United Healthcare’s Ingenix (now called Optum) unit for allegedly falsifying risk adjustment reports for Medicare Advantage plans in the last decade. Health care business risks go way beyond insurance.

And in that regard, HHS’s Office for Civil Rights thumped Memorial Health Systems with a $5.5 million negotiated penalty for HIPAA Privacy and Security Rule violations according to this HHS News release:

MHS reported to the HHS Office for Civil Rights (OCR) that the protected health information (PHI) of 115,143 individuals had been impermissibly accessed by its employees and impermissibly disclosed to affiliated physician office staff. This information consisted of the affected individuals’ names, dates of birth, and social security numbers. The login credentials of a former employee of an affiliated physician’s office had been used to access the ePHI maintained by MHS on a daily basis without detection from April 2011 to April 2012, affecting 80,000 individuals. Although it had workforce access policies and procedures in place, MHS failed to implement procedures with respect to reviewing, modifying and/or terminating users’ right of access, as required by the HIPAA Rules. Further, MHS failed to regularly review records of information system activity on applications that maintain electronic protected health information by workforce users and users at affiliated physician practices, despite having identified this risk on several risk analyses conducted by MHS from 2007 to 2012.

“Access to ePHI must be provided only to authorized users, including affiliated physician office staff” said Robinsue Frohboese, Acting Director, HHS Office for Civil Rights. “Further, organizations must implement audit controls and review audit logs regularly. As this case shows, a lack of access controls and regular review of audit logs helps hackers or malevolent insiders to cover their electronic tracks, making it difficult for covered entities and business associates to not only recover from breaches, but to prevent them before they happen.”

Finally, falling into the truth may be stranger than fiction category is this Benefits Pro report that  the IRS does not question any taxpayer who fails to check the yes or no box on the federal tax return’s question about compliance with individual health mandate.  The Obama Administration first took this loose approach and as Mr. Obama was headed out the door late last year, the IRS announced a change in enforcement policy. The Service now is returning to its silence is golden approach based on President Trump’s Executive Order to use a light touch on ACA enforcement.

Yesterday the Senate confirmed Steven Mnuchin to be Secretary of the Treasury, and today the Labor Department nominee Andrew Puzder withdrew from Senate consideration.  So one seat on the ACA triumerate remains open.

Also today, in Tom Price’s first major action as HHS Secretary, the Centers for Medicare and Medicaid Services issued a proposed to rule to help rationalize the ACA marketplace.  It’s a good first step in the FEHBlog’s view.

Employee Benefits News reports on employer sponsored benefit groups efforts to have the ACA regulators take some steps to relieve the heavy ACA burden on group health plans in keeping with the President’s executive orders.  Good luck with that.

Also today, CMS’s actuaries released a report projecting national healthcare expenditures over the next decade.

National health expenditure growth is expected to average 5.6 percent annually over 2016-2025, according to a report published today as a ‘Web First’ by Health Affairs and authored by the Centers for Medicare & Medicaid Services’ (CMS) Office of the Actuary (OACT). These projections are constructed using a current-law framework and do not assume potential legislative changes over the projection period. 

National health spending growth is projected to outpace projected growth in Gross Domestic Product (GDP) by 1.2 percentage points. As a result, the report also projects the health share of GDP to rise from 17.8 percent in 2015 to 19.9 percent by 2025. Growth in national health expenditures over this period is largely influenced by projected faster growth in medical prices compared to recent historically low growth. This faster expected growth in prices is projected to be partially offset by slowing growth in the use and intensity of medical goods and services.

Ouch.

Healthcare Dive reviews the denouements of the two block health insurance company mergers.  Yesterday, Aetna and Humana parted ways amicably, while Anthem and Cigna took the less than amicable I’ll see you in court approach. You would have thought the two companies would have seen enough of courtrooms over the past year.

Drug Channels blog dissects the Express Scripts’ annual report which the FEHBlog recently mentioned herein. Note bene —

On page 4 of the report’s Executive Summary, Express Scripts highlighted an uncomfortable fact about managing healthcare costs. As its chart shows, drug spending growth was much lower when plans were “tightly managed.” Express Scripts states that one-third of the most aggressive plan sponsors actually experienced a drug spending decline from 2015 to 2016.

Finally, the U.S. Justice Department issued a press release concerning

Dr. Paul B. Tartell, an ENT physician practicing in Plantation, Florida and his practice Paul B. Tartell, M.D., P.L., have agreed to pay $750,000 to resolve allegations that he violated the False Claims Act by billing for surgical endoscopies with debridement and laryngeal stroboscopies that were not provided or not medically necessary.

In addition to the allegations regarding surgical debridements, the settlement also resolves the United States’ allegations that Dr. Tartell systematically billed federal health benefit programs, in particular, Medicare and the Federal Employment Health Benefits Program, for claims arising from laryngeal video stroboscopies that were not performed or were not medically necessary.

O, what a tangled web, etc.

Today we celebrate the 208th anniversary of the birth of one of our greatest, if not the greatest, President Abraham Lincoln.  The FEHBlog is old enough to remember when Lincoln’s birthday and Washington’s birthday were separate holidays. Then in 1968, Congress dropped Lincoln’s birthday as a federal holiday but created a Monday holiday for Washington, who is a close competitor for greatest President in the FEHBlog’s view. Wikipedia explains that advertisers pushed in the 1980s for renaming Washington’s Birthday as Presidents’ Day.  Fascinating. The FEHBlog views President’s Day as the beginning of the great holiday drought which does not end until Memorial Day at the end of May when FEHB benefit and rate proposals are due.)

When the FEHBlog certainly digressed. Congress remains in session on Capitol Hill this week. The Senate is expected to confirm Steve Mnuchin as Treasury Secretary tomorrow. That will mean that two members of the ACA triumvirate will be set. The third, Labor Secretary nominee Andrew Puzder “will appear Feb. 16 before the Senate Health, Education, Labor and Pensions Committee” according to a USA Today report. Here is a link to the Week in Congress’s report on last week’s activities on Capitol Hill.

Kim Strassel, the Wall Street Journal columnist, had a fascinating story in last Friday’s paper about

One Nation Health [which] is a clearinghouse, a place for conservatives to meet, share notes, craft messages for the public, and unite on talking points. It will facilitate progress between Congress and the White House. The model was used successfully in 1993-94 by former Sens. Phil Gramm and Paul Coverdell in the fight against HillaryCare, leading to moments, like the Harry and Louise ads, that tipped the scale.

One Nation Health does not appear to have a website, but according to Ms. Strassel

The coalition includes everyone from health policy gurus like the American Enterprise Institute’s James Capretta and the Heritage Foundation’s Bob Moffit to advocacy groups like the American Action Network, which is already running $1 million worth of TV ads, in 15 House districts, arguing for an ObamaCare replacement. Congressional leadership is on board. Rep. Kevin Brady, chairman of the Ways and Means Committee, addressed the group’s inaugural session. Mr. Hoppe says people are joining so fast that his biweekly conference calls are ballooning.  What they all understand: “We’ve got to explain to Americans that the end of ObamaCare doesn’t mean going back to the old system,” Mr. Hoppe says. “It’s about creating a whole new, better system.” That message might help buy Republicans some time to get a reform in place.

It’s an encouraging article.

The FEHBlog listened yesterday to an interesting discussion of the President’s executive order placing a cap on regulatory costs on the economy. It’s known as the one rule in, two rules out order.  A George Washington University professor and the former head of the Britain’s regulatory office spoke. The British guy spoke because Britain has had a one in, two rule for many years and the rule is so appreciated that it’s been upped to a one in, three out rule.  The professor noted that the Office of Management and Budget had issued guidance on the order last week. The order applies to significant regulatory actions, meaning that the action has an impact of $100 million or more on the national economy. The professor explained that while agencies must engage in cost-benefit analysis before issuing such a significant rule, they rarely go back to verify the analysis.  Every President since Jimmy Carter has asked agencies to engage in this exercise. This order will force agencies to take a look back.  In other words, the order at least taps the breaks on regulatory actions.  Te British guy explained that the one in two out approach encouraged agencies to work more closely with the regulated community.

There are not many regulatory actions that OPM takes which have a significant effect on the national economy in the FEHBlog’s recollection. But there are many Affordable Care Act rules which fall into that category. Earlier this morning, the Senate confirmed Dr. Tom Price as Health and Human Services Department Secretary. HHS is top dog for ACA, Medicare, and Medicaid regulations so it will be interesting to see what happens next.

It was no surprise to the FEHBlog that U.S. District Court Judge Amy Berman Jackson issued an order Tuesday blocking the Anthem – Cigna merger.  The Wall Street Journal explains that

The decision said the proposed $48 billion deal violated federal antitrust law because it would create an unacceptable reduction in the number of companies able to serve large multistate employers that insure their workers.

The article further observes that

While Aetna is considering a possible appeal in its case, Wednesday’s ruling almost certainly kills the Anthem-Cigna transaction, as discord between the companies has grown considerably since they announced their deal in July 2015.

The FEHBlog has thought that there was a bit of Lucy yanking the football away from Charlie Brown’s kick quality in these two antitrust cases.  The Affordable Care Act implicitly encouraged health care entity integration — hospitals buying up doctor groups and other facilities and insurers buying other businesses — to better integrate patient care.    The article points out that

Health insurers found themselves swept up in the fever of the recent merger boom. In 2015, the industry’s major players engaged in a deal dance that ended up with four of its biggest companies paired off in ambitious bids to create a pair of behemoths with more than $100 billion in annual revenue. Both proposed new companies would still have been smaller than UnitedHealth Group Inc., however.
The Justice Department had serious concerns about the rumored insurance mergers before they were even officially announced. The insurers were aware of these concerns but hoped they could overcome them.
With Wednesday’s ruling, it was clear the gamble didn’t pay off.
Now the insurers face a landscape transformed by the recent Republican sweep into power. The Affordable Care Act could be repealed and reshaped, while the Trump administration’s antitrust approach may prove different from that of Obama officials. Analysts are already speculating that new managed-care deals may arise, perhaps even involving new configurations among the four would-be merger partners.

The FEHBlog recalls a Chinese curse — may you live in interesting times.

The FEHBlog listened to the House Oversight and Government Reform Committee hearing on postal reform this morning.  The stars certainly aligning for passage of H.R. 756 which would create a separate Postal Service Health Benefits Program within the FEHBP. The PSHBP would be fully integrated with Medicare, and because all enrollees will be placed in a single risk pool like any sensible health insurance plan the PSHBP premiums should be lower than traditional FEHBP premiums. That’s the Postal Service’s objective as Congress in its infinite wisdom decided a decade ago to require the Postal Service to pre-fund the costs of its retiree coverage. It was pleasant to listen to a hearing where people were willing to compromise for a good cause.

Express Scripts, one of the big prescription benefit managers, issued its annual prescription drug trend report yesterday.  Medscape has a good summary of the report here.

Healthcare IT News reports on a new IBM study on cyberattacks on healthcare entities.

Fierce Healthcare reports on a trip to Capitol Hill by leaders of five large provider groups.

In the meetings with senators and their staff members, the organizations outlined five priorities:

• Do not increase the number of uninsured patients

• Protect the healthcare safety net

• Ensure patients are protected from excessive insurance costs

• Maintain premium subsidies

• Protect small insurance markets

Healers try healing yourself.  

The FEHBlog was interested in reading a Wall Street Journal article about a new device called MarginProbe that improves the efficacy of breast cancer surgery.  The article explains that

The cost of the device, which is being used in about 100 medical centers around the U.S., remains a stumbling block. Each breast surgery requires a new MarginProbe, at $1,000 each, which isn’t typically covered by insurance.

Now let’s clarify this point. Health plans cover the surgeon’s and the surgicenter’s bill but the providers are supposed to cover the cost of these devices under their price.  The bottom line is again according to the article that

Second surgeries cost a lot more—$9,000 to $16,000 and up—but hospitals and surgery centers are reimbursed for them. Dr. [Alice] Police [a cancer surgeon who uses the device in her practice]  says health-care economics have created a strange incentive favoring re-excisions, no matter the costs to the health system. She credits the device for lowering her re-excision rate to 3% from 15%. But she worries about hospitals balking: “You have to tell a hospital, it is going to cost you $1,000 and we are going to take away your second operation.”

You’re telling the FEHBlog that the hospital can’t find savings to offset the cost of MarginProbe?  That my friend is a problem that should be addressed.  The provider groups should add this issue to their list.

Congress remains in session this week. The Hill reports that the Senate majority leadership plans votes on four Trump cabinet members this week, including HHS Secretary nominee Rep. Tom Price. Federal New Radio futher reports that Office of Management and Budget director nominee Rep. Michael Mulvaney was approved by the Senate Budget and Homeland Security and Governmental Affairs Committee’s last Thursday. The next stop for that important nomination is the Senate floor.

The Office of Management Budget is obligated to provide a final review of federal regulations before they can be published in the Federal Register, either as proposed or final. The review process is made public on the reginfo.gov website.  Mark the tape because due to the regulatory freeze there are only two rules over at OMB right now, and one of them is an interim final rule to stabilize the ACA marketplace.  Modern healthcare reports that

Edmund Haislmaier, a senior fellow at the Heritage Foundation who worked on President Donald Trump’s transition team on health policy matters, has not seen the rule but believes it aims to tighten eligibility standards for marketplace coverage and would make it harder for people to get coverage during a special enrollment period. Insurers say both issues are key to discouraging people from signing up when they realize they need costly medical services and then dropping coverage after they receive care.

The Wall Street Journal tells us that “A powerful House lawmaker [Rep. Greg Walden (R Ore.), the chairman of the House Energy and Commerce Committee] said he would push for [bipartisan] legislation to stymie drug price-gouging by encouraging development of generic copies, after attending a meeting at the White House Tuesday with drug-company executives.”  The article explains that

The bill seeks to encourage companies to introduce generic copies of drugs with high prices, because of shortages or lack of competition, by speeding up the copy’s review by the Food and Drug Administration. The agency is working through a backlog of generic-drug applications.  As an additional incentive for companies to bring to market a generic rival for a high-priced drug, drugmakers would be eligible for a speedier review of another generic in their pipeline.

It makes sense to the FEHBlog.

Well, it’s finally Super Bowl weekend, the great American holiday. It should be a good game.

Here’s the Week in Congress’s report on this week’s activities on Capitol Hill.  As the FEHBlog mentioned the House Oversight and Government Reform Committee hearing on IT security practices, here are links to the Committee’s and FedScoop’s accounts of that hearing.  

The FEHBlog noticed this afternoon that the House Oversight and Government Reform Committee has scheduled a hearing on its bipartisan Postal reform bill (H.R. 756) for next Tuesday February 7 at 10 am. The FEHBlog will check out that hearing.

Prof. Timothy Jost reports in the Health Affairs blog that “Congressman Darrell Issa (R-CA) threw another health reform plan into the mix, his “Access to Insurance for All Americans Act.” His plan would allow anyone to enroll in Federal Employee Health Benefit Program (FEHB) health plans.”  Prof. Jost pooh poohs the intiative because

The multi-state plan has not been a success. At this point it is not yet nationwide and includes only Blue plans which offer products pretty much indistinguishable from the products they otherwise offer in the marketplace. None of the FEHB insurers other than the Blue plans signed on.  Conscripting FEHB plans to enroll the uninsured continues to be a theoretical option for health care reform, but an attempt to do so would have to overcome the political and practical obstacles that undermined the ACA multi-state plan program.

The multi state plan has not been a success because like the ACA as a whole it is needlessly complicated. In contrast to the FEHBP which permits nationwide and regional plans, the MSP’s participants must operate as qualified health plans in the ACA marketplace.  The multi state plans are subject to both OPM / federal  and state regulation. That’s no picnic. In contrast, FEHB plans are only subject to federal regulation. Simplify it for heaven sake.

Forbes Magazine reports that United Health, Aetna, and other large health insurance carriers are tremendous progress in shifting their networks from fee for service to value based reimbursement. Bravo.

The Trump Administration took its first HIPAA scalp this week.  Children’s Hospital of Dallas agreed to pay a $3.2 million civil penalty based on the government’s allegations that the provider violated numerous HIPAA Security Rule provisions.

The Drug Channels blog provides a 2016 list of top U.S. pharmacies. Speaking of pharmacies, earlier this week, the New York Times reported that “Concerns about regulatory approval have weighed on Walgreens Boots Alliance’s bid to buy a top drugstore rival, Rite Aid, as the two cut the price of the deal while pushing back the expected closing date by six months.”

The FEHBlog is ecstatic about the President’s January 30 executive order requiring a significant reduction on the burden that federal regulations impose on the private sector, particularly small business.  In the FEHBlog’s view, which he believe that he has document in this blog, the healthcare sector among others has been strangled by regulations in the wake of the Affordable Care Act.  Those regulations tended to drive up benefits and administrative costs.  Here’s the nub of the January 30 order:

(b)  For fiscal year 2017, which is in progress, the heads of all agencies are directed that the total incremental cost of all new regulations, including repealed regulations, to be finalized this year shall be no greater than zero, unless otherwise required by law or consistent with advice provided in writing by the Director of the Office of Management and Budget (Director).
(c)  In furtherance of the requirement of subsection (a) of this section, any new incremental costs associated with new regulations shall, to the extent permitted by law, be offset by the elimination of existing costs associated with at least two prior regulations.  Any agency eliminating existing costs associated with prior regulations under this subsection shall do so in accordance with the Administrative Procedure Act and other applicable law.

The salutary effect of the order will be felt once the Senate confirms the President’s domestic appointees, such as Rep. Tom Price for HHS Secretary.

In this regard, take a look at this Congressional Research Service legal side bar report on the President’s January 20 executive order encouraging the administrative reduction of Affordable Care Act administrative burdens. Senate approval of Rep. Price’s nomination will lead to actions taken under the January 20 executive order because the HHS Secretary has so much authority over the ACA.

Tomorrow the House Oversight and Government Reform Committee will hold a hearing to review the state of IT security at the Office of Personnel Management (OPM) and receive updates on reforms and challenges with the security clearance process.

Yesterday the Chair and ranking minority member of that Committee introduced a 2017 postal reform bill (HR 756).  Here’s a link to a Committee memorandum identifying the differences between the 2016 and 2017 bills.  The FEHBlog recalls a Govexec interview with the Committee’s chair Jason Chaffetz (R UT) suggesting that Medicare integration had become a fly in the ointment of this bipartisan bill. But to the contrary the 2017 bill continues to call for a separate Postal Service Health Benefits Program within the  FEHBP.  Postal Service annuitants over age 65 who enroll in PSHBP plans will be subject to full Medicare integration, e.g, auto enrollment in Part B and participation in prescription benefit plans coordinated with Medicare Part D known as EGWPs.  The Postal Service has been demanding this outcome because the law requires the Postal Service to prefund its retiree health care costs. The Postal Service wants to receive the full value of the Medicare taxes which the Service has paid.

PhRMA, the lobbying organization for prescription drug manufacturers, has posted a report on yesterday’s meeting with the President.  The report is encouraging.

Congress remains in session this week. Both of the Committees with responsibility for OPM and FEHBP oversight will be holding business meetings. The House Oversight and Government Reform Committee will meet on Tuesday, and the Senate Homeland Security and Governmental Affairs Committee will meet the following day.

The Senate Committee in the course of its meeting will consider the President’s nomination of Michael Mulvaney to be director of the Office of Management and Budget, a key position in the federal bureaucracy. Mr. Mulvaney is a Republican Congressman from South Carolina.

In a bit of good news, the Wall Street Journal reports that big prescription drug manufacturers like Merck have begun to publicize their pricing.

Merck & Co. published a list of average price increases across its drug portfolio on Friday. Merck raised its gross price an average of 9.6%. After rebates, discounts, and product returns, however, Merck realized an increase of just 5.5% on a net basis.
Other drugmakers plan to follow suit. Johnson & Johnson said it would publish a similar list next month. Executives at AbbVie and Allergan, meanwhile, have pledged to limit both the number and the magnitude of gross price increases going forward this year. 

[While Merck’s net increase is above the rate of inflation,] the Merck report is a meaningful step forward in improving pricing transparency. Drug companies have long argued that gross prices don’t reflect the revenue that actually accrues to the manufacturer. That statement has always been accurate. Other members of the pharmaceuticals supply chain, like pharmacy-benefit managers and drug wholesalers, also benefit from regular price hikes. The industry’s argument hasn’t clearly resonated with the general public or politicians. 

For what it’s worth, the point has resonated with the FEHBlog.

Speaking of prescription drugs, Fierce Healthcare reports on five steps that health plans can take to help control opioid abuse.  The study can be found here.  The report adds that

[I]nsurers have already taken steps to mitigate the opioid crisis. Cigna, for example, eliminated prior authorization rules that can lead to delays for patients receiving MAT. And last week, Anthem announced that it set a goal of reducing the amount of opioids dispensed among its members by 30% by the end of 2019.

Here’s a link to the Week in Congress’s report on this week’s activities on Capitol Hill.  The FEHBlog noticed on the House Rules Committee website that the House of Representatives is beginning the process of striking down certain recent Obama administration regulations, such as the Federal Acquisition Regulation’s Fair Pay and Safe Workplaces rule, under the Congressional Review Act.  (A federal judge struck down the more onerous parts of that rul  at the end of December.) Kim Strassel of the Wall Street wrote a column today discussing the intriguing features of this underutilized law.

The Wall Street Journal also reported today that “Rep. Diane Black (R., Tenn.), the interim chairwoman of the House Budget Committee, told reporters Wednesday she expected the legislation repealing [and replacing] the health-care law would come to the House floor by late February or early March.”  Reuters tells us about insurance company efforts to shape healthcare re-reform.

Healthcare Dive reports that according to an American Well survey 20% of us are willing to switch primary care doctors in order to visit their doctor on a telehealth service. Not surprisingly,

Most willing to switch doctors were parents of children under age 18 and 35 to 44 year olds, the survey shows. Moreover, 79% of consumers caring for an ill or aging family member felt video services would be helpful.

The FEHBlog is growing weary of the Chicken Littleism that abounds in the press over the impending ACA repeal. Modern Healthcare writes about how the repeal will bring an end to mental health care.  That’s ridiculous. To begin with, the federal mental health and substance abuse parity act was part of the Obama stimulus law enacted in early 2009, not the ACA which was enacted the following year. The 21st Century Cures Act which Congress passed in December 2016 supports the Obama Administration’s rule implementing the law.  Mental health coverage will not be reduced. In any event, I think that insurers and employers now understand the importance of mental health and substance abuse coverage. The ACA repeal will not occur in a vacuum.