FEHBlog

Fedsmith.com reports on a recent OPM Benefits Administration Letter containing initial tidbits of information about the 2018 Federal Benefits Open Season which will run from November 13 through December 11, 2017.

The Senate went home yesterday after working a week longer than the House of Representatives. The Washington Post reports that that Senate by unanimous consent approved 65 Presidential nominees yesterday.  A list of the approved nominees can be found under Executive Business heading on this Senate webpage.

The Senate also passed along to the President a necessary Food and Drug Administration users fee renewal bill (H.R. 2430) as the Hill reports. The Washington Post informs us that

The legislation directs the FDA to accelerate generic drug applications for products that have little or no competition. It also includes a provision designed to sharply increase the number of approved cancer treatments for children by giving the agency authority to direct drugmakers working on oncology therapies for adults to test them in children, as well.

The Post article also report that the Senate also passed a federal “right to try” bill (S. 204).

The “right-to-try” legislation has been championed by the libertarian Goldwater Institute, which has worked to pass similar legislation in 37 states. The federal version, now headed to the House, would bar the government from blocking patients from getting access to medications that have undergone only preliminary testing in humans. Patients first would have to try all other available treatments and be ineligible for clinical trials.  The bill would provide drug companies some legal protection if a treatment results in harm.

This bill now head over to House of Representatives.

The FEHBlog ran across an excellent Blue Cross report on opioid use in our  country and a Health Affairs blog article suggesting that the opioid crisis will not end until the U.S. medical community changes the way it treats pain. The article discusses how health professionals in the U.S. military are addressing this issue.

In the same vein, Health Payer Intelligence reports on how health insurers are collaborating with social service organizations and local community leaders to address the social determinants of sucessful health care.  The article draws from a new AHIP report on this topic.  Bravo.

Hey, there’s more going on than the OPM Director news. The Wall Street Journal reports this afternoon that

An international group of researchers reported they have edited the genes of a viable human embryo to correct a disease-causing defect, renewing concern that public discussion about the ethics of gene editing is lagging behind advances in the lab.

Using the gene-editing tool Crispr-Cas9, the researchers said they overcame key issues in previous experiments to successfully correct a mutation that can cause a heart condition called hypertrophic cardiomyopathy, or HCM. The condition, which is estimated to affect 1 in 500 people, is best known as a common cause of sudden cardiac death in young athletes.

The collaboration, led by researchers at Oregon Health & Science University, the Salk Institute for Biological Studies and Korea’s Institute for Basic Science, used embryos created from sperm donated by an adult male with a family history of HCM and healthy egg donors. The embryos were created for research and not implanted in a woman, according to the researchers, who reported their findings Wednesday in the journal Nature.

Holy smokes.

The actuarial consulting firm Willis Towers Watson released its 22nd annual Best Practices in Health Care Employer Survey. According to the press release,

Employers expect health care costs to increase by 5.5% in 2018, up from a 4.6% increase in 2017, according to the 22nd annual Best Practices in Health Care Employer Survey by Willis Towers Watson. In the face of these continued cost pressures, including employee affordability, employers plan to step up cost management strategies over the next three years, including evaluation of emerging health care delivery solutions and improved patient navigation and health engagement.

The survey also showed that despite uncertainty about the future of health care legislation, employer confidence in offering employee health care benefits has reached its highest level since the passage of the Affordable Care Act in 2010. Ninety-two percent of employers said they are “very confident” their organization will continue to sponsor health benefits in five years. 

We will soon see how the FEHBP lines up with these projections.

Finally, CMS today announced a final Medicare Part A pricing rule that takes effect at the beginning of the federal fiscal year on October 1, 2017.

Due to the combination of payment rate increases and other policies and payment adjustments, particularly in changes in uncompensated care payments, acute care hospitals will see a total increase in Medicare spending on inpatient hospital payments of $2.4 billion in fiscal year 2018. Based in part on the changes included in the final rule, overall payments to long-term care hospitals will decrease by $110 million in fiscal year 2018.

Medicare pricing impacts FEHB plans because a large cadre of FEHB enrollees have primary Medicare Part A coverage.

CMS also projected Medicare Part D premiums for 2018. “the average basic premium for a Medicare Part D prescription drug plan in 2018 is projected to decline to an estimated $33.50 per month. This represents a decrease of approximately $1.20 below the actual average premium of $34.70 in 2017.”

Govexec.com has posted George Nesterczuk’s letter to the President withdrawing his name for consideration has OPM Director.

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.