FEHBlog

The FEHBlog was pleased to read in Fierce Healthcare that there’s at least one other consultant who is optimistic about healthcare re-reform.

Rita Numerof, president of healthcare management consulting firm Numerof & Associates, who describes herself as a longtime proponent for healthcare reform, isn’t convinced that the fear, angst and worst-case scenarios bandied about in the last few days are based on facts. She suggests Americans take a deep breath and see what unfolds. “We didn’t get here overnight,” Numerof told FierceHealthcare in an exclusive interview, “and it won’t be gone overnight. No one has said you are going to lose coverage. The fear-mongering is not helpful.” * * * 

Instead of the individual mandate to buy a “particular kind of insurance with particular provisions at a narrow price range,” she believes Trump’s action will set in motion an opportunity for real consumer choice. The limits of the insurance coverage within the current exchanges don’t mesh with society’s view that “people should not be forced to buy things they don’t want and don’t need.”

The FEHBlog heartily agrees with Ms. Numerof. One size does not fit all.

Federal News Radio reports that

After years of pressuring from the Postal Service and a series of stalled bipartisan bills, the House Oversight and Government Reform Committee has made postal reform a top priority for this Congress. Rep. Jason Chaffetz (R-Utah), the committee’s chairman, told lawmakers Tuesday at a goal-setting organizational meeting that last year’s efforts served as a “good starting point” for getting a postal reform bill on President Donald Trump’s desk within the next two years.

The FEHBlog will be following this effort, which includes a Postal Service Health Program within the FEHBP.  Here’s a link to a video recording of the meeting. Earlier this week, Chairman Chaffetz announced that Rep. Mark Meadows (NC) will chair the government operations subcommittee whose jurisdiction includes our beloved FEHBP.

And ruh roh, the American Medical Association and the American Hospital Association have joined forces in an effort to reform health plan pre-authorization practices according to this Modern Healthcare report.  The groups have created 21 pre-authorization principles which seek to place the focus on clinical care rather than cost.  (Here’s a link to the AMA’s announcement.) The FEHBlog didn’t realize that those factors could be separated in this case. As the FEHBlog understands it, prior authorization exists to make sure that clinical evidence supports a more expensive treatment.

This morning, the federal judge who heard the Aetna-Humana merger case, John Bates, issued a 160 page opinion blocking the merger based on federal antitrust law.  Aetna and Humana are major players in the Medicare Advantage program.  Aetna and Humana argued that Medicare is a unified market. The judge disagreed finding that traditional Medicare and Medicare Advantage markets are separate markets for antitrust law purposes. That appears to be the linchpin in the decision. 

Following up on Friday’s post about the new executive order, here are links to that order and a related Wall Street Journal article attempting to read the tea leaves.  Also on Friday, the President’s chief of staff issued a regulatory freeze memorandum.  The Washington Post explains that

The memo states that federal agencies cannot send new regulations to the Office of the Federal Register — a key step in the finalization of new rules — until Trump’s administration has leaders in place to approve what these agencies are doing. Moreover, it also states that regulations that have been sent to the office but have not yet made it into the published register need to be withdrawn. The Obama administration issued a similar memorandum right after the president took office in 2009.

There are no FEHBP related rules that fall into this category.

Congress continues in session this week on Capitol Hill.  Both Houses are getting organized.  The Senate is busy with Presidential nominations and several pieces of legislation that the House already has sent over for consideration.

Several press organizations including Fierce Healthcare report that U.S. District Judge Amy Berman Jackson is expected to issue her final ruling in the government’s anti-trust case to block the Anthem-Cigna merger.  The prognosticators predict a government victory.  Anthem is already engaged in contingency planning for an appeal.  U.S. District Judge John Bates also is expected to rule this month in the government’s anti-trust case to block the Aetna-Humana merger.

Last week, HHS’s Office for Civil Rights announced its last HIPAA compliance scalp for the Obama Administration era.  The change in administration’s is not expected to affect this agency’s HIPAA enforcement approach.

Finally here are some innovation tidbits:

• TechCrunch reports on a high tech approach to concierge medicine recently opened in San Francisco under the trade name Forward.   According to the article, 

One might be tempted to compare Forward to something like One Medical, a startup with a series of well-branded medical offices popular in the Bay Area. But Forward goes far and above with a state-of-the-art 3,500 square foot office equipped with six exam rooms, the latest medical instruments and an onsite lab for testing within minutes.

• Health Payer Intelligence reports about “UnitedHealthcare’s bundled payment model for hip, knee and back surgery [which] is called The Spine and Joint Solution. The health plan under this bundled payment model is now available to employers around the country. UnitedHealthcare has partnered with hospitals and post-acute care facilities that have experience with spine and joint replacement surgeries and show few complications.

• Finally, Minnesota Public Radio News reports that 

A big Minnesota hospital system is joining forces with a major health insurance company — Allina Health on Wednesday announced a joint venture with Aetna.

CEO Penny Wheeler said the partnership with Aetna is meant to reduce the financial burden on patients, mainly by keeping them from getting sick in the first place. She said coordinating patient data with the insurer is the key.

“For example, you have a frail elderly patient with diabetes who’s unable to get a prescription filled. And by combining information with our side of the organization — the clinical information — with the claims information from the insurance side, we can intervene and help support them in getting the medication they have so they avoid trouble,” she said.

Wheeler said Allina will remain a nonprofit system, and the combined venture is not a merger, but rather a separate for-profit company.

The Hill reports tonight that

President Trump on Friday signed an executive order directing federal agencies to “ease the burden of ObamaCare.”

Trump signed the order in front of reporters at the Resolute Desk in the Oval Office, one of his first official acts as president.

The order did not direct any specific actions, but instead gave broad authority to the Department of Health and Human Services and other agencies to take actions available to them under the law to ease regulatory requirements from ObamaCare.

It pushes agencies to target provisions that impose a “fiscal burden” on a state or a “cost” or “regulatory burden” on individuals or businesses. 

(The FEHBlog has not yet been able to find a copy of the executive order online.)  The entire law imposes a regulatory burden on individuals and states.  It will be interesting to see how quickly this executive order is implemented at OPM.  

With little fanfare, OPM today switched the acting Director bio from Beth Cobert, who as a political appointee rode into the sunset, to Kathleen McGettigan. Ms. McGettigan’s bio on opm.gov explains that

Kathleen McGettigan was named Acting Director of the Office of Personnel Management (OPM) on January 19, 2017. She has an extensive understanding of both the private and public sector, having spent over 25 years dedicated to the Federal service at OPM and 20 years in private sector financial management.

Most recently Ms. McGettigan served as the Chief Management Officer (CMO) at OPM, providing overall organizational insight, analysis and strategic planning to effectively meet programmatic and financial goals of the agency.

 (Of course, OPM has not had a deputy director for an Ice Age.)  Best wishes, Ms. Cobert, and good luck, Ms. McGettigan.

The FEHBlog was visiting a client for most of the day today, and he returned to his office near 14th and K St around 3 pm.  It was pandemonium with pro-Trump and anti-Trump agitators. (A small anti-Trum rally marched down the middle of K Street during rush hour.)  The FEHBlog is glad that he is staying home in Bethesda on Friday.

The FEHBlog has been reflecting over the press-created uproar over impending changes to the Affordable Care Act. Let me share some thinking.

The FEHB Program is part of the large group market.  In 2010 when the ACA was enacted there were no serious problems with that market.  The small group market in which the FEHBlog participates was a little messy and the individual market was a mess.

Note of course that health insurance premiums in the large group market are 100% exempt to the managers and employees; those premiums are 50% taxable to owners in the small group market and are 100% taxable to people in the individal market (if they fall outside the ACA’s income limits (four times the poverty line).  This fundamental problem, which dates back to the World War II price control regime, never has been fixed.  Congress should level the tax playing field for all Americans.

But rather than playing small ball with the small group and individual markets, the Democratic Congress with the support of President Obama supported an unnecessary and massive across the board fix. As a result, the large group market, including the FEHBP, is overburdened with regulation, subjected to price regulation, and  forced, with OPM’s support in the case of the FEHBP, to provide one size fits all coverage including 100% reimbursement of many otherwise low priced items (which in turn significantly raises the cost of those items.  Health insurance should not be treated as a price support for health care services and products.).

The ACA’s changes such as the creation of the marketplace did not lower premiums in the small group and individual markets.  Consequently, in the FEHBlog’s view, give the Republican Congress, hopefully in consultation with the Democrat minority in Congress and of course the new President, a chance to fix the small group and individual markets. But leave the FEHBP and other large group plans out of that legal fix.

With respect to the individual and small group markets, the FEHBlog supports the idea of the subsidized marketplace but with more consumer choice in benefit design, much less price regulation, and as much frill removal as possible (e.g, kill the patient centered outcomes research institute).  He also supports expansion of government supported community health centers which can provide direct primary care in lower and even middle income communities.

It’s worth adding that the FEHBP is a group insurance market which in its over 55 year history has never imposed pre-existing conditions or late enrollment penalties like Medicare Part B.  Perhaps the newly designed individual marketplace should use a late enrollment penalty instead of the individual mandate. The bottom line though is that the marketplace needs more time to mature.

Happy King Day Weekend!

It’s the last week of the Obama administration.  President-elect Trump will be sworn in at noon on Friday January 20. Congress will be in session briefly this week. Here is a link to The Week in Congress’s report on last week’s activities on Capitol Hill.

No news yet on the President-elect’s choice for OPM Director in his administration.  President Obama nominated his first OPM director,  John Berry on March 23, 2009. So if precedent is any guide, it may be a few weeks yet before we learn who will be the next OPM leader.  Govexec.com reports on OPM guidance issued last week to allow the Trump administration “to place nominees into agency positions while they await [Senate] confirmation.”

Yesterday’s Wall Street Journal (the “FEHBlog’s favorite newspaper) published an essay on a structured approach to treating the Nation’s opioid epidemic, which is worth reading.

Ah, the second week of the NFL playoffs. Hopefully this week’s games will be better than last week’s. Of course, the stakes are higher.

Govexec.com published an article on OPM’s 2018 call letter.  It would be interesting if OPM just issued a one paragraph call letter telling plans to submit proposals by May 31 and then see how creative the carriers can be thanks to a pretty vibrant market.

Yesterday the ACA regulators proved me wrong by issuing ACA FAQ 37 which principally concerns arcane aspects of health reimbursement accounts.  Perhaps they can reach FAQ 40 by next Thursday.

In that regard, the Wall Street Journal reports that this afternoon the House of Representatives

took its first procedural step toward repealing the Affordable Care Act, passing a budget that directs lawmakers to start drafting legislation to dismantle much of the 2010 health care law.  Already approved by the Senate, the budget resolution passed the House on a 227-198 vote. Nine Republicans voted with 189 Democrats to oppose the budget. No Democrats voted for it.  The measure will start the substantive work on measures to repeal portions of the health law, instructing two House and two Senate committees to come up with proposals by Jan. 27.

The Senate committees named in the resolution are Finance and Health, Education, Labor and Pensions, and the named House committees are Ways and Means and Energy and Commerce. The full resolution text is available here if you are interested.

Govexec.com interviewed House Oversight and Government Reform Committee Chairman Jason Chaffetz in Monday’s edition.  Mr. Chaffetz explained that his focus of attention will shift from oversight to reform in this session of Congress as he has an opportunity to enact some legislation with  both the Executive and Legislative Branches in the hands of his party for at least the next two years. The FEHBlog was interested to read that “Chaffetz will meet with the cosponsors of his bill to reform the U.S. Postal Service, including [Rep.] Connolly, this week and expects to reintroduce a bill very similar to the one that cleared the committee last year.” The FEHBlog was surprised to read that “The main point of contention is a provision to require all postal retirees to enroll in Medicare as their primary health insurance provider.”

The Postal Service has been pushing for full Medicare integration for at least five years in order to significantly reduce the burden of pre-funding post-retirement coverage for its retirees. The FEHBlog looks forward to reading the new version of the bill which was HR 5714 in the last Congress.

Also on Monday, the OPM Inspector General made public a December 2016 management report on the Multi-State Plan Program.  This program, which OPM administers, was intended to add more plans to the ACA marketplace.  The Inspector General explains why that effort has run into roadblocks. He overlooks perhaps the key roadblock — the difficulty of making a profit in the ACA marketplaces.

Yesterday, the Obama Administration’s ACA regulators issued perhaps their final ACA FAQ which is no. 35 — well less than the number of Super Bowls.  This FAQ responds to a U.S. Supreme Court for a regulatory compromise that would resolve religious institution objections to the Administration’s birth control coverage mandate. The ACA regulators kicked the can down the road to the new Administration by refusing to compromise.

The Labor Department’s Employee Benefits Security Administration which enforces ERISA issued an FY 2016 Fact Sheet on enforcement of the mental health parity law.  Also the ACA regulators posted public comments on a series of related mental health parity questions raised by ACA FAQ 34 last year. Those questions concerned how to educate consumers and health plans about the mental health parity rule’s complex non-quantitative treatment limitation requirements.  Title XIII of the recent 21st Century Cures Act addresses the same issue with a requirement that the regulators issue guidance on NQTL requirements.

Modern Healthcare reported earlier this week that

In an effort to fulfill its mission to expand its provider footprint to serve about two-thirds of the U.S. population, OptumCare has agreed to acquire Surgical Care Affiliates for about $2.3 billion in a cash and stock deal.  Deerfield, Ill.-based SCA owns or operates 190 ambulatory surgery centers and surgical hospitals, most as joint ventures with physicians and health systems. The company says SCA and its affiliates serve approximately 1 million patients per year in more than 30 states. In 2015, it had operating revenue of around $1.1 billion.

OptumCare is an arm of the largest health insurer in the U.S., United Health. The article explains

UnitedHealth has said Optum aims to provide primary care and ambulatory services in 75 markets, representing about two-thirds of the U.S. population. Over the past year, Optum has purchased physician practices around the country. It also acquired urgent-care provider, MedExpress. In 2014, Optum agreed to acquire MedSynergies, a physician practice consulting firm, and care-monitoring company Alere Health for $600 million.

Interesting.

On the HIPAA privacy and security front, the HHS Office for Civil Rights announced another scalp resulting from a health plan’s failure to give prompt notice of a protected health information data breach. $475,000 was required to settle the matter.  OCR also created a new FAQ which clarifies the circumstances under which doctors, hospitals, and health plans can share information with a person who is not married to the patient or is not one of the patient’s relatives.

Finally, an op-ed in the Wall Street Journal this week provided some background on the continuing problem of lack of interoperable electronic medical records, which of course the FEHBlog’s major pet peeve. The Obama Administration missed the boat by failing to include interoperability requirements in the EMR standards that were created as part of the government’s $30 billion investment.  The op-ed writer explains that the largest EMR vendor is refusing to ally with the smaller vendors to resolve the problem. The op-ed writer suggests.

The real incentive is insurers paying for this data, and they are figuring out that early detection is worth it. It’s a lot cheaper to find a disease before it turns into expensive chronic care for heart disease or cancer. The machine learning output might be: “You may have pre-Stage 1 cancer in your pancreas, but no worries—we can zap it out for you.”

The article is worth reading.

OPM issued this afternoon its call letter for 2018 FEHB benefit and rate proposals which are due at the end of May. Here’s a link to that letter.

Last year, the call letter came out in February which now holds the World’s record for second speediest call letter issuance.  Interestingly, in 2009, the outgoing George W. Bush administration’s OPM did not preempt the incoming Obama administration’s OPM by issuing the call letter before January 20, 2009. The 2010 call letter came out rather late on April 20, 2009.