FEHBlog

Ah, the beginning of the first weekend of the NFL playoffs. Although my Redskins are not in the hunt, it still will be fun to watch so let’s get to it.

Following up on Wednesday’s post, the House did pass the REINS Act (HR 26). Reuters reports that the Democrats plan to fight the anti-administrative state bills in the Senate.

To the FEHBlog’s surprise, he noticed that U.S. District Judge Berman proceeded with the second / regional competition phase of the trial over the government’s effort to block the Anthem / Cigna merger. The FEHBlog expected a decision between the first / national competition phase and the second phase but that didn’t happen. Indeed the second phase of the trial, according to Healthcare Finance, ended on Wednesday. So both of the anti-trust cases involving health insurer mergers, the Aetna/Humana merger and this one, are in the hands of their respective judges for a decision which should be annnounced this month.

All of the federal agencies this week issued exit reports to assist the incoming Trump administration. OPM’s report can be found here.  The FEHBP is briefly discussed on the last page of the report.

The 115th Congress took the reins yesterday, and efforts to repeal the Affordable Care Act are underway.  The FEHBlog finds interesting the House of Representative’s efforts to strengthen Congress’s authority over the rulemaking authority of the regulatory agencies. This makes sense to the FEHBlog because the Constitution does give the legislative authority to Congress.  The House already has sent to the Senate a bill that would facilitate the Congressional override of Obama Administration regulations finalized over the past year (the Midnight Rules Act). The House also is actively considering a bill that would require Congressional and Presidential approval of major rules which by definition have an economic impact of $100 million or more on the national economy (the REINS Act). These laws supplement the in force Congressional Review Act.

 Happy New Year!  The 115th Congress goes to work tomorrow. This gives Congress a two and half week long head start on the executive branch before the clock starts to run on the Trump Administration’s first 100 days.

On Saturday afternoon, at the 11th hour, a federal judge from the Northern District of Texas ruled  that the government “Defendants are hereby ENJOINED from enforcing the [HHS PHSA 1557] Rule’s prohibition against discrimination on the basis of gender identity or termination of pregnancy.” A copy of the preliminary injunction decision is available here.  The FEHBlog was pleased for the plaintiffs but he erroneously thought that the lawsuit also encompassed other onerous provisions of the rule, such as the document translation requirements.

An injunction against provisions of the rule not found in the statute, such as the document translation requirements, would have nullified those requirements. The issue of whether PHSA Section 1557 reaches the two issues that the court addressed can be fought out in private litigation, even if the government cannot enforce the rule. So the decision is a half loaf, which of course is better than none.

Healthcare Dive had an useful report on the optimism and challenges for putting value in value-based care.

The FEHBlog also ran across two interesting studies:

• UPI reported on “A new [Journal of the American Medical Association] study of health care costs found that just 20 conditions make up more than half of all spending on health care in the United States. The study, which covered 155 conditions, showed the most expensive health condition was diabetes, which totaled $101 billion between diagnoses and treatment costs, and spending increased 36 times faster than the cost of heart disease.” Heart disease was ranked number 2 in the study.  Back and neck pain ranked third.  “Aside from the top three conditions, hypertension and injuries from falls made up 18 percent of all personal health spending and totaled $437 billion in 2013. Other conditions among the top 20 included musculoskeletal disorders, such as tendinitis, carpal tunnel syndrome and rheumatoid arthritis.”

• Physicians’ Briefing reports that 

[JAMA Pediatrics] researchers observed an increase in health care spending on children from 1996 to 2013, from $149.6 billion to $233.5 billion. The largest health condition leading to health care spending for children was inpatient well-newborn care in 2013. The second and third largest conditions were attention-deficit/hyperactivity disorder and well-dental care. In 2013, infants younger than 1 year had the greatest spending per child at $11,741. There was an increase in health care spending per child from $1,915 in 1996 to $2,777 in 2013. In absolute terms, the greatest area of growth in spending was ambulatory care among all types of care; among all conditions, the greatest areas of growth were in inpatient well-newborn care, attention-deficit/hyperactivity disorder, and asthma.

The FEHBlog presumes that it’s no coincidence that the federal government’s State Children’s Health Insurance Program law was enacted in August 1997.  Not a knock on health care spending for children; just an observation. 

It’s the FEHBlog’s final post of 2016.  Thanks to the readers who inspire the FEHBlog to keep going after 10 years. 2017 is bound to be an interesting year for the health sector of the economy, and the FEHBlog will be following it.

A new benefit plan year starts for annuitants on Sunday January 1, and according to this chart it starts on January  8 for employees (the first day of the first payperiod that begins in 2017).  That’s because annuitants make their contributions on a monthly basis, and employees do so on a bi-weekly basis.

The major FEHBP wide benefit change for 2017 is the addition of applied behavioral analysis coverage for autistic children.

Members will note that many plans are covering telehealth services. To get the most out of that benefit, register for it with the telehealth vendor before you need to use it.  Look into it.

Miscellaneous and perhaps inexplicable changes likely result from the Health and Human Service Department’s rule implementing Public Health Service Act Section 1557, which in the FEHBlog’s view was a bone thrown to the plaintiffs’ bar and other interest groups.  The FEHBlog had expected that rule to be enjoined by the U.S. District Court for the Northern District of Texas this week, but the FEHBlog checked online docket late this afternoon and no decision had been posted. The FEHBlog will keep watching.

Happy New Year!

Oh by gosh by golly does the FEHBlog love commuting during the week between Christmas and New Years. What a joy.

Time does march on. OPM issued a final rule a final rule on the Indian tribal employee coverage program within the FEHBP in today’s Federal Register.  The rule formalizes the processes for this program which was created by the ACA and has been running for a few years.

The Health Affairs blog provides an update on the bench trial where the federal government seeks to enjoin the proposed merger of health insurers Anthem and Cigna on antitrust grounds.

With the first phase of the trial in the government’s challenge to the merger of Anthem and Cigna wrapping up last Tuesday [December 20], several things seem to be coming into focus. The government has put on a strong case that the merger will produce significant market concentration in the sale of insurance plan services to large national employers. The merging parties’ best hope relies on potential large cost savings resulting from their ability to extract price concessions from hospitals and physicians. Less clear, however, is whether those savings are either legally cognizable or sufficient to offset the harms resulting from increased market power.

More detail is available in the article.  U.S. District Judge Amy Berman Jackson’s  decision on the first phase is expected early next month. If the government prevails on the first phase, then there won’t be a second phase. Anthem and Cigna would have the right to an immediate appeal.

Last week, the FEHBlog noted news about progress in developing certain vaccines and treatments. Over the holiday weekend, he noticed this article from Science Explorer reporting that

An experimental Ebola vaccine was highly protective against the deadly virus in a major trial in Guinea, according to results published in The Lancet. The vaccine is the first to prevent infection from one of the most lethal known pathogens, and the findings add weight to early trial results published last year.

Bravo!

Last week, the President signed into law the National Defense Authorization Act for the current federal government fiscal year. Modern Healthcare notes that

A provision in the defense bill calls for a program that will reduce or eliminate co-pays and other cost sharing for certain drugs and services considered high quality because they offer proven results.
Providers considered high-value would be reimbursed at higher rates as well.
The Secretary of Defense must submit a report within the next six months detailing which providers, services and medications will be considered high value. The Secretary must also identify the co-pays or cost share amounts that will be reduced or eliminated when Tricare patients opt for high-value care.
If the pilot results in people with certain conditions, such as heart disease and diabetes, having better outcomes, reduced emergency room visits or hospitalizations, and enhanced care, it may be rolled out to the entire Tricare population, according to a press release.

Tricare is leading from behind so to speak.  CMS is implementing the approach in Medicare Advantage. The article adds that “Private insurers that use value-based plans with their under-65 population have reported reduced overall costs on chronic-disease patients as early as three years after implementation.”  OPM also has supported the use of value-based coverage in the FEHBP.

Also on the idea front, Health Payer Intelligence discusses four ways payers could improve transparency for consumers. Interesting ideas.

The FEHBlog has enjoyed a great Christmas holiday with his family. He hopes that his readers had the same experience.

The House of Representatives and the Senate have posted their 2017 legislative calendars. The party split favors the Republicans in both Houses of Congress — in the Senate 52 Republicans to 46 Democrats plus 2 Independents who caucus with the Democrats and in the House 241 Republicans to 194 Democrats.  Both Houses convene next Tuesday January 3, 2017.

The New York Times had an interesting story on a troubled accountable care organization (“ACO”), Cornerstone Health Care, in Sunday’s business section.   The physician lead bought into the Affordable Care Act initiative to base Medicare reimbursement on quality of care rather than number of services.  Cornerstone’s effort initially bore fruit but the effort stumbled as a result of competition for doctors, lawsuits, and a heavy debt burden caused by a technology investment. Cornerstone was purchased by a hospital, Wake Forest Baptist Health, last year.  The article concludes

It may be that * * * the Cornerstone accountable care model were simply ahead of their time. Dr. Brian Caveney, the chief medical officer for the Blue Cross plan in North Carolina, said being out front came at a cost. “It’s more complicated than flipping a switch,” Dr. Caveney said.

Speaking of Medicare, Modern Healthcare reports

While Medicare Advantage plans added nearly 900,000 members in 2016, enrollment is growing at a slower pace. Still, experts say the future of Medicare Advantage will be lucrative for insurers. “It’s the only safe game in town, in all of health insurance,” said John Gorman, a former CMS official who is now a healthcare consultant in Washington.
Enrollment in Medicare Advantage, the private, managed care version of the federal health program for seniors, reached nearly 18.7 million as of Dec. 1, according to the latest federal data.

Here’s the FEHBlog’s letter to Santa Claus.  Please bring the FEHBlog a new healthcare law in 2017 that continues to provide health insurance marketplaces but in a simpler, more flexible manner that allows health insurers and providers to serve the public without overbearing government involvement.  The FEHBlog hopes that we can look forward to the day when the press trumpets the success of the health insurance marketplace as a result of consumer choice and not a legal mandate.

In other holiday season developments

• The Connecticut Mirror gives us the latest news on the federal court bench trials over the Justice Department’s efforts to block the Anthem – Cigna and Aetna – Humana mergers.  The cases appear headed toward decisions next month. 
• Fierce Healthcare reports on notable healthcare payer / provider partnerships in 2016.  The FEHBlog would like to see more of these in the future. 
• Health Dive tells us how payors are responding to the opioid crisis.  Not surprisingly the common theme among the effort is collaboration with providers. 

The ACA regulators issued their 35th FAQ on the ACA yesterday.  Most of the FAQ concerns the new flexibility that the 21st Century Cures Act offers small employers in their efforts to offer reasonably priced health care coverage to their employees.

Also yesterday the HHS Office of the National Coordinator for Health Care Technology issued its 2017 electronic medical record interoperability advisory. Good luck with that effort.  The federal government missed the boat by not building interoperability into the electronic medical records which the government design and gave away to doctors. We should not have to be playing catch up ball but we are.

A week or two the Centers for Medicare and Medicaid Service, perhaps recognizing the election results, backed off on their hotly opposed Medicare Part B drug pricing initiative. The FEHBlog consequently was surprised to read that this week CMS announced its decision to move forward with its involuntary program “that would make hospitals in 98 markets financially accountable for the cost and quality of all care associated with bypass surgery and heart attacks.” Modern Healthcare reports that

The final regulations issued Tuesday came just days after the agency announced it was junking a proposed mandatory demonstration that would have tested new ways of paying for outpatient drugs under Medicare Part B in an effort to bring those prices down. 

Both models have drawn criticism that the Center for Medicare & Medicaid Innovation is overreaching its mandate by compelling participation, including from President-elect Donald Trump’s nominee for HHS secretary, Rep. Tom Price (R-Ga.). Price is likely to pull the plug on the five-year demonstration, which is now scheduled to take effect July 1, 2017, in 98 randomly selected metropolitan areas.

Because it’s the holiday season let’s wrap up this post with some up beat news:

•  The Wall Street Journal reports that “GlaxoSmithKline PLC’s ViiV Healthcare announced positive phase-three trial results for its new HIV drug in a dual-drug regimen, supporting the company’s audacious bet that it can shift the treatment orthodoxy away from three-drug combinations.”
• Reuters reports that “Inovio’s Zika vaccine generates robust immune responses in first human study and that the “vaccine was well tolerated, no significant safety concerns noted in any of 40 subjects out to 14 weeks from initiation of dosing.”
• Finally, Sci-Tech Today reports that 

New research demonstrates that, in mice whose brains are under attack by Alzheimer’s dementia, exposure to lights that flicker at a precise frequency can right the brain’s faulty signaling and energize its immune cells to fight off the disease. Light therapy for Alzheimer’s is miles from being ready to treat patients — even those with the earliest signs of the disease. But the new research has already prompted creation of a start-up company — Cognito Therapeutics Inc. — to approach the Food and Drug Administration about clinical trials, and to explore ways to deliver precisely calibrated flickers of light to human research subjects. Even if the new research does not yield a treatment for Alzheimer’s, it is expected to deepen understanding of a key player in the disease — the brain’s dedicated immune system — and point to ways it can be used to fight the disease. In 2016, 5.4 million Americans are believed to have Alzheimer’s, which causes progressive loss of memory and cognitive function.

Hope springs eternal.

Congress is out of town and the Supreme Court is out of session until the first week of January. The President is in Hawaii.  The Federal Benefits Open Season is over for another year.  In short, all is calm and hopefully all is bright.

Some good news from the hospital sector:

• Healthcare IT News tells us that an AHRQ report concludes that “a steep drop in hospital-acquired conditions has accompanied a decrease of 3 million adverse events in the past five years.”

• The Wall Street Journal reports that “U.S. hospitals, reeling from rapidly rising drug prices, are taking aggressive steps to cut pharmaceutical spending. Hospital pharmacy executives say they hope to slow fast-rising costs by pulling supplies from hospital floors, switching to cheaper alternatives and more meticulously dispensing medications.

“Higher drug prices accounted for most of last year’s roughly 11% increase in U.S. hospital pharmacy costs to $33.6 billion, researchers from four universities and Quintiles IMS Holdings Inc. reported in the American Journal of Health-System Pharmacy in July. The data doesn’t include federal hospitals.

Many hospitals buy the drugs they administer to patients from wholesalers, but they don’t usually bill health insurers directly for those drugs. Instead, insurers often pay hospitals a fixed rate to treat whatever ailment a patient is suffering. When drug prices soar unexpectedly, hospitals must absorb the extra cost, pharmacy executives say.”

Good luck with that effort. 

The Washington Post continued its series on the opioid crisis in today’s paper.  Today’s article focused on the orphaned children of middle aged people who died at an early age due to opioids and related addictive drugs.  The Wall Street Journal published an article on the same topic last Friday. The sub-headline reads “Left behind by addict parents, tens of thousands of youngsters flood the nation’s foster-care system; grandparents become moms and dads again.” No bueno. The medical profession needs to step it up.

The Department of Health and Human Services (“HHS”) perhaps offered its last regulatory hurrah for the Affordable Care Act today when it released the (very?) final notice of benefit and payment parameters rule for 2018.  Here’s a link to a summary of the massive rulemaking.  The fact sheet disclose the one aspect of the rule that impacts the FEHBP and other group health plans:

Annual Limitation on Cost Sharing: The maximum annual limitation on cost sharing is the product of the dollar limit for calendar year 2014 ($6,350 for self-only coverage) and the premium adjustment percentage for 2018, rounded down to the next lower $50. We are finalizing a maximum annual limitation on cost sharing for 2018 of $7,350 for individual coverage and $14,700 for family coverage.

The cost sharing limit applies only to essential health benefits.

In a piece of good news for the health sector, HHS also announced last night, according to Modern Healthcare, that

it was killing a five-year Medicare initiative that would test new ways of paying for outpatient drugs in an effort to bring those prices down.
Providers, drug makers and pharmaceutical companies immediately slammed the proposal when it was first unveiled in March..
Ted Okon, executive director of the Community Cancer Alliance, which represented one of the specialities that would be most negatively affected, immediately tweeted that the pilot was “the most contrived, absurd experiment on cancer care I have seen.” 

Unquestionably there are structural problems with the prescription drug market.  It would be encouraging if the sector could work out the problems without government intervention but time is growing short.

The FEHBlog was critical of Gilead Sciences for price gouging on its Hepatitis C drugs. Of course, once another manufacturer created competition for that class of drugs the price dropped. But that’s not the end of the story.  The Wall Street Journal reports today that

A federal jury in Delaware on Thursday ordered Gilead Sciences Inc. to pay $2.5 billion in damages to Merck & Co. for infringing its patents in developing hepatitis C drugs.
The patent-infringement decision, issued by a jury in a U.S. District Court in Delaware, involved two Gilead drugs that have rung up billions of dollars in sales, Sovaldi and Harvoni.
The jury decided that Gilead’s two drugs violated the patents held by Idenix Pharmaceuticals, a company bought by Merck for $3.9 billion in 2014.

Gilead plans an appeal.