FEHBlog

The FEHBlog trusts that his readers had an enjoyable Independence Day holiday. The FEHBlog certainly did.

The Wall Street Journal reports tonight that the Senate Majority Leader Mitch McConnell has asked the Congressional Budget Office to evaluate a BRCA amendment from Sen. Ted Cruz (R Tex.) that would allow insurers that offer ACA-compliant coverage to also offer non-ACA compliant coverage, most likely lower cost catastrophic protection against illness or injury.  “The action unfolded as Mr. McConnell continued to reach out to various senators while Congress is on recess. Mr. McConnell was forced to delay a vote before the recess amid defections from both conservatives and centrists. He is working to assemble a revised version the Senate can consider shortly after it returns to Washington.”  This amendment meets the FEHBlog’s criteria of allowing greater consumer choice. The FEHBlog thinks that allowing more choice will encourage people to pay more attention the exchanges.  The Journal adds that “Tweaks to the original Senate bill are likely to include more funding for opioid addiction treatment and possibly beefed-up funding for tax credits that help low-income people buy insurance.”

Speaking of opioid addiction, the Boston Globe’s STAT service offers an interesting perspective on the importance of crime lab and public heath official cooperation to stay on top of the massive problem.

Healthcare Dive reports that a new tranche of data has been added to the federal government’s Open Payments website. “Open Payments is a federal program, required by the Affordable Care Act, that collects information about the payments drug and device companies make to physicians and teaching hospitals for things like travel, research, gifts, speaking fees, and meals. It also includes ownership interests that physicians or their immediate family members have in these companies.” The payments totalled over $8 billion in both 2015 and 2016. You can look at gross data or individual provider data. The FEHBlog’s own internist reported $62 in payments which is about $3200 below the national mean. Be reassured. Have some fun!

On the bright side of pharmceuticals,  genomeweb tells us about small clinical studies “pointing to the potential of personalized anti-cancer vaccine strategies in individuals with advanced melanoma,” which is a very deadly disease.

Congress is out of town for the Independence Day holiday this week. Here’s a link to the Week in Congress’s report on last week’s actions on Capitol Hill.

Fierce Healthcare is offering a series of articles on a worthy topic — provider / payer cooperation.  For example,

Payers can monitor patients’ adherence rate by how often they fill their medications. But just because the patient fills a prescription doesn’t mean they’ll take it.
“That’s where your care management programs help to fill in the gaps,” one attendee said. “Collaboration is about how you create the right incentives so everyone is moving in the right direction. It’s easy to agree to in theory—it’s hard to do.”

Here are a few quick hits on prescription drug costs:

• Fierce Healthcare tells us about two recent studies on opioid use. 
• The Wall Street Journal reports on unexpected shortages of “simple” prescription drugs. 
• The Food and Drug Administration last week announced ‘two new, important steps to increase competition in the market for prescription drugs and facilitate entry of lower-cost alternatives. The agency published a list of off-patent, off-exclusivity branded drugs without approved generics, and also implemented, for the first time, a new policy to expedite the review of generic drug applications where competition is limited.”

The House Appropriations Financial Services and General Government Subcommittee passed its 2018 appropriations bill through a voice vote Thursday afternoon. The draft does not offer an alternative to the president’s proposal of 1.9 percent raise.
Trump proposed a 2.1 percent pay raise for members of the military. The Senate agrees with the president’s proposal, but the House Armed Services Committee suggested a 2.4 percent raise for troops next year.

The bill contains the three traditional FEHBP-related appropriations provisions — an abortion coverage restriction (which is noted in the Committee announcement), a female contraception coverage mandate, and a prohibition on applying full Cost Accounting Standards coverage to the FEHBP.  This is only the start of the formal legislative process.

Following up on yesterday’s Drug Store News, the Drug Channels blog offers its observations on the modified Walgreen’s deal with Rite Aid.

Modern Healthcare reports that while significant gains were made to reduce in-patient readmissions in the first three years of the government motivated reduction program, little further progress has been made since 2013.  Gathering the low hanging fruit was useful. The second stage is usually more challenging.

As recently as 2011, all-cause readmissions cost the nation $41 billion, according to a 2014 Agency for Healthcare Research and Quality report. Medicare’s tab alone was $26 billion annually, $17 billion of which was attributable to avoidable rehospitalizations. By 2014, Medicare spending on readmissions fell by $9 billion.
While improvements were made during the first three years of the readmissions program, concern is mounting that momentum has stalled. There’s been no more than 0.1% reduction on average between 2013 to mid-2016, according to a December 2016 JAMA study.

That publication also is reporting that hospitals are struggling with collecting patient bills. The FEHBlog was struck by this statistic:

In the past five years, health insurers went from paying 90% of patient-care costs to only about 70% and that’s causing massive headaches for providers.

The FEHBlog doubts this is an issue with FEHB coverage.

Walgreens Boots Alliance, Inc. (Nasdaq: WBA) announced today a new definitive agreement with Rite Aid Corporation under which Walgreens Boots Alliance will purchase 2,186 stores, three distribution centers and related inventory from Rite Aid.

The consideration for the transaction will be $5.175 billion in cash, the assumption by Walgreens Boots Alliance of the related real estate leases and the grant of an option to Rite Aid, exercisable through May 2019 and subject to certain conditions, to become a member of Walgreens Boots Alliance’s group purchasing organization, Walgreens Boots Alliance Development GmbH. Walgreens Boots Alliance will also assume certain limited store-related liabilities as part of the new transaction.

This new agreement replaces the previous merger agreement with Rite Aid, announced in October 2015 and amended in January 2017, and the agreement to divest certain Rite Aid stores to Fred’s, Inc. announced in December 2016. Both of these agreements have been terminated, and Walgreens Boots Alliance will pay Rite Aid the $325 million termination fee with respect to their merger agreement.

The new transaction is subject to the expiration or termination of applicable waiting periods under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and other customary closing conditions. The initial closing of the new transaction is expected to occur within the next six months.

Upon the initial closing of the new transaction, Walgreens Boots Alliance will begin acquiring the stores and related assets on a phased basis over a period of approximately six months, and intends to convert acquired stores to the Walgreens brand over time.

According to a chart in the Journal article, Walgreens currently has 13,020 stores in the US; CVS Health has 9676, and Rite Aid has 4,523.  

Postal reform: After many years of trying, the committee under Chaffetz approved legislation to stabilize faltering Postal Service finances. The bipartisan bill was supported by postal management, unions and industry mailers. This major accomplishment, however, turned to frustration when the Republican leadership did not schedule the bill for a House vote.
That leaves him the “most frustrated and just flat-out disappointed … I’m fairly critical of my own leadership because I see no good reason not to move it. It saves money, it’s bipartisan and it’s desperately needed … I’m dumbfounded as to why it hasn’t been brought up.”
Asked why, the offices of House Speaker Paul D. Ryan (R-Wis.) and Republican Majority Leader Kevin McCarthy (Calif.) had no comment.

The FEHBlog also spotted this helpful American Hospital Association cybersecurity page.  The resource leads with information about the sources of the latest ransomware attacks — the Petya and WannaCry viruses.

The Wall Street Journal reports that the Senate Majority Leader Mitch McConnell has postponed a Senate vote on the Better Care Reconciliation Act until sometime after the Senate returns from its Independence Day recess on July 10.  The House of Representatives leadership overcame a similar roadblock to a successful healthcare vote in the Spring.

The Congressional Budget Office issued a report on the Senate bill on Monday. The FEHBlog suggests reading the commentary on that report from Diana Furchgott-Roth of the Manhattan Institute on that report.

Healthcare Dive informs us that the CBO issued a couple of other reports on Monday which confirm that the Medicare program shift massive amounts of cost onto private section insurance programs, including the FEHBP.

Let’s wrap up with a few tidbits:

• U.S. News and World Report issued its children’s hospital rankings which is noteworthy because a DC hospital made the top ten. 
• MedCity News provided a useful analysis of 2017 FDA prescription drug approvals as we approach the mid-point of the year. 
• The Washington Post reports on cell phone apps, like Heal which provide doctors on demand, particularly in urban areas. 

The chief executive of Heal, Nick Desai, co-founded the start-up with his wife, Renee Dua, a physician. Their own parental trip to the emergency room inspired the service, after the couple, unable to contact their regular pediatrician, sat in an emergency room for seven hours with their feverish 3-month-old son.
“My wife turned to me and said, ‘There’s got to be a better way,’ ” Desai recalled. So Heal was born — a service that can work with patients’ insurance. For those without insurance, a visit costs up to $99. “Our number one, main goal is that, five years from now, you won’t have to go to the doctor’s office,” Desai said.

The FEHBlog is not sure how this type of app differs from telehealth app like those offered by American Well and Teladoc.

Congress is in session again this week on Capitol Hill. Here’s link to the Week in Congress’s account of last week’s actions there. The Week in Congress included a link that the FEHBlog has been trying to find – a Senate Budget Committee summary of the Better Care Reconciliation Act.

Tomorrow is the closing day of the U.S. Supreme Court’s curent term. Six decisions are anticipated. The Court already gave the FEHBP its victory in the Nevils case earluer this year.

On Friday, plaintiffs’ counsel in the massive multi-district class action arising out of Anthem’s 2015  data breach, which impacted FEHBP members, announced a proposed settlement of the lawsuits.  (Multi-district means that an assortment of related lawsuits filed across the country were consolidated before one court — here the U.S. District Court for the Northern District of California.)

The proposed settlement provides [among other things]for Anthem to establish a $115 million settlement fund, which will be used to 1) provide victims of the data breach at least two years of credit monitoring; 2) cover out-of-pocket expenses incurred by consumers as a result of the data breach; and 3) provide cash compensation for those consumers who are already enrolled in credit monitoring.

U.S. District Judge Lucy Koh will hold a hearing on the fairness of the settlement on August 17. More details are available here.

A similar multi-district case arising out of OPM’s 2015 data breach is pending in the U.S. District Court for the District of Columbia. The court heard several dispositive motions late last year. Here’s a link to the lead plaintiffs’ counsel website for that case.

Also last week, the Centers for Medicare and Medicaid Services issued a proposed 2018 rule for the Medicare Part D MACRA quality payment program for clinicians. The fact sheet is available here. Healthcare Dive explains that

MACRA will eliminate the sustainable growth formula and replace it with a .5% annual rate increase through 2019, after which physicians are encouraged to shift to one of two Quality Payment Programs: 1) Merit-Based Incentive Payment System (MIPS) or 2): Alternative Payment Model (APM). It is believed most physicians will enter into the MIPS program in the first year.

The article further notes that

The proposal allows for the exemption of small providers participating in the program by increasing the low-volume threshold to $90,000 or less in Medicare Part B charges or 200 or less Medicare patients annually. The original threshold was $30,000 in Medicare Part B charges or 100 Medicare patients. The agency believes the move will exclude about 134,000 clinicians from MIPS. 

The bill keeps all the provisions from the House of Representatives’ healthcare bill that increases the benefits of health savings accounts, which is good news for employers and employees. Under the plan, individuals can put $6,550, up from $3,400, and families can put $13,100, up from $6,550, into a tax-free HSA.
It also makes the accounts more flexible by: allowing both spouses to make catch-up contributions to one HSA beginning in 2018, letting people use their HSAs to pay for over-the-counter medications, which was restricted under the ACA and lowering the tax penalty if you use an HSA to pay for unqualified medical expenses to 10%, from 20%.

We may have reached the beginning of the end of this legislative process. (The FEHBlog is not betting the ranch on this statement though.)

Govexec.com reports that the President has nominated Michael Rigas to be deputy director at OPM. That’s currently a vacant position.

Rigas is chief of staff at the Massachusetts Department of Veterans’ Services. Before joining that agency, he worked in Republican politics and advocacy, at the Massachusetts Republican Party and conservative think tank The Heritage Foundation.
During the George W. Bush administration, he was associate administrator of the General Services Administration, where he worked on efforts to increase the amount of government contracting to woman- and veteran-owned businesses.

The Senate Homeland Security and Governmental Affairs Committee has not yet scheduled a confirmation hearing for George Nesterczuk, the President’s nominee for OPM Director.

Healthcare Dive provides its perspective on Cigna, which is a network provider in the FEHBP.

The Washington Post reports that Democrats on the House Oversight and Government Reform Committee sent a letter to OPM  inquiring about the Federal Long Term Care Insurance Program which experienced premium spikes last year. “An agency spokesperson declined to say what, if anything, has been done to stabilize the program since the November hearing [before that Committee]. Even basic questions related to the number of people in the program were deferred.”

The text of Senate bill which is described as the Better Care Reconciliation Act is available here.

The Senate leadership is expected to release its version of the American Health Care Act tomorrow. Stay tuned.

The FEHBlog recently mentioned the HCP/LAN spring forum. HCP/LAN is a public / private partnership to promote alternative payment methods for healthcare.  HCP/LAN has provided a link that allows you to view the forum webcast and the presentations.

Teladoc, one of the large telehealth vendors, announced a deal to acquire a medical consultancy known as Best Doctors.  The Teladoc press release explains that

Teladoc will marry its award-winning technology, industry-leading engagement capabilities, and robust, scalable platform with Best Doctors’ world-renowned network of medical experts, analytics expertise, patient decision-support, and regional expertise on a global scale. The newly combined company offers a highly differentiated suite of virtual care delivery solutions for a broad range of market segments, spanning the full spectrum of employers to health plans and health systems. Furthermore, Teladoc will now develop and deploy global expansion plans, meeting a broader spectrum of care needs outside the U.S.

Healthcare Dive reports that hospitals and other health care providers are filling vacant spaces in shopping malls across the country.  The FEHBlog noted that the Wall Street Journal which first reported the foregoing phenomenon reported today that TJX, the owner of TJ Maxx and Marshalls, is doing well by sticking to the retail store model.

TJX gets almost all its sales from its roughly 3,800 physical locations and plans to open 250 stores this year. Its revenue and profits are climbing and it envisions expanding to 5,600 stores worldwide over time.
The Framingham, Mass., company isn’t shifting business online or using big data to figure out what shoppers want. Instead, it has become one of the country’s fastest-growing retailers by sticking with a playbook from a vanishing era. It relies heavily on the instincts of its merchandise buyers, many of whom have been with the company for decades. TJX stores rapidly turn over limited quantities of products that are all sold at bargain prices. The result is a rarity in retail—a constant treasure hunt.

One size does not fit all.