FEHBlog

The audio tape of the Nevils oral argument held before the U.S. Supreme Court on March 1 is now available here.  Yesterday a Columbia law professor wrote the most heartwarming conclusion in his analysis of the argument:

Given the delicacy of pre-emption doctrine in general, I would not expect this to be one of the first cases to come down from the February calendar. But I would be surprised if the justices fail to coalesce with near unanimity around some straightforward basis for reversing the Missouri court’s judgment.

Having now listened to the oral argument, the FEHBlog agrees with the good professor’s conclusion.

The FEHBlog discovered in PACER that yesterday Cigna submitted a short brief in Anthem’s appeal of last month’s decision to block the Anthem/Cigna merger. The case is pending before the U.S. Court of Appeals for the District of Columbia Circuit. The case is scheduled for oral argument on March 24 on an expedited basis (No. 17-5024). Cigna in its conclusion states that “Cigna defers to Anthem and to the conclusion in Anthem’s brief that this Court should reverse the district court’s February 8, 2017 Order in its entirety, vacate the injunction, and rule for Anthem and Cigna permitting the proposed merger of Anthem and Cigna to proceed.” So at this point Cigna is back to playing ball with Anthem following the Delaware Chancery Court’s decision blocking Cigna from terminating the merger agreement before April 30, 2017.

AHIP issued a report concluding that outpatient prescription drugs costs now take up the largest portion of the health benefits premium dollar, just eclipsing physicians services.

Finally, the FEHBlog is reading that the House of Representatives will begin committee consideration of a health care re-reform bill next week. The ACA can’t be replaced soon enough.  For example, Modern Healthcare reports that

The [ACA’s] 2.3% tax on medical device sales resulted in the loss of over 28,000 jobs among devicemakers and and related industries when it was in effect between 2013 and 2015, according to the American Action Forum, which describes itself as a “center-right policy institute.” Health economist Robert Book based his post on U.S. Census Data and tax data from the federal government.  

The tax, which is collected as a direct percentage of manufacturer sales, was suspended by Congress for 2016 and 2017. If Congress allows it to resume in 2018, AAF projects that an additional 25,000 additional jobs could be lost by 2021. AAF’s prediction is based on past job losses and lower-than-anticipated tax revenue, which would suggest a reduction in device sales. 

At 10 am this morning, an FEHBA-related oral argument will be held before U.S. Supreme Court.  This is the first time that the Supreme Court has heard an FEHBA case since 2006.   The Court will be considering the constitutionality of the FEHBA’s state law preemption provision. Without getting bogged down in detail (which the FEHBlog enjoys actually), the FEHBlog expects that the Court will uphold this important aspect of the FEHBA, which allows for uniform nationwide plan administration. A decision is expected before the end of June.

Healthcare Finance reports on last Monday’s meeting involving the President, the Vice President, the HHS Secretary and health insurance executives.  Last night, President Trump outlined his approach to repealing and replacing the Affordable Care Act. The Wall Street Journal explains that

Mr. Trump repeated his promise to overturn the 2010 health law, at a time when the party’s factions are threatening to withhold support for the effort if their demands aren’t met. He said a new health-care plan should ensure coverage for pre-existing conditions and minimize disruptions for people with coverage under Obamacare.  He backed the use of tax credits to help people buy coverage, expanding health savings accounts to pay for treatment and said governors needed the resources to continue to fund their Medicaid programs for the poor. 

We will see whether the President’s leadership can bring together the Republican members of Congress to enact this legislation.

OPM has stated that one of its plan performance goals is to improve the care provided to pregnant women, a worthy goal.  In that regard, the Leapfrog Group released its annual Maternity Care report yesterday.  Leapfrog explains

Having a baby is one of life’s most exciting experiences, but the type of care received in the hospital can vary greatly. Women and families should use Leapfrog’s hospital survey results to consider which hospital they’d like to use for their child’s delivery.This section of the survey examines five key areas of maternity care quality:

• Early elective delivery rate
• Rate of C-sections
• Rate of episiotomy
• Performance on standard processes of care
• Delivery outcomes for high-risk births

The majority of maternity care measures included on the Leapfrog Hospital Survey are endorsed by the National Quality Forum, including Early Elective Deliveries, Cesarean Sections, Episiotomy, as well as components of the Processes of Care and High-Risk Deliveries measures.  A selection of these maternity care measures are also utilized by The Joint Commission as part of their Perinatal Care measure set: Early Elective Deliveries, Cesarean Sections, and Antenatal Steroids (a component of the High-Risk Deliveries measure). Patients can search for how their hospital performs on these maternity care measures on the Compare Hospitals page.

Good work.

Congress returns to work on Capitol Hill following the Washington’s Birthday recess.  The Office of Management and Budget reportedly is expecting to send a first draft of the Fiscal Year 2018 budget to  Congress in mid-March.

Reuters reports that the President will meet with health insurance executives at the White House tomorrow. “Since taking office on Jan. 20, Trump has held a series of White House meetings with executives from different sectors including those from manufacturing companies, pharmaceutical makers, technology businesses and car makers.”

The Supreme Court will hear an FEHB case, Coventry Health Care v. Nevils, on March 1.  A Columbia Law School professor provides a preview of the oral argument on the Scotusblog.  Regrettably the FEHBlog’s schedule does not permit him to attend the oral argument in person.  Audio recordings of Supreme Court oral arguments are available on the Court’s website.

The FEHBlog ran across useful observations on last week’s HIMSS conference from a Health Data Management editor Fred Bazzoli and a Harvard Medical School CIO John Halamka. Also last week CMS consolidated its ICD-10 website.

The FEHBlog is out of town so this post will be shorter than usual.  Today, according to a Wall Street Journal report, the President issued an executive order “requiring each federal agency to form a task force to review existing regulations and recommend whether to repeal or simplify those deemed to harm the economy and job creation.”  These task forces should be busy. The FEHBlog trusts that they will look at subregulatory guidance as well as regulations. 

Thanks to the American Hospital Association News, the FEHBlog learned that the federal district court in DC posted Judge Amy Berman Jackson’s opinion (slightly redacted) blocking the Anthem / Cigna merger.  Anthem has appealed Judge Jackson’s decision to the D.C. Circuit.  The D.C. Circuit granted Anthem’s motion to expedite the appeal. A three member panel of D.C. Circuit judges will hear the appeal on March 24 (the second day of the OPM / AHIP FEHBP carrier conference). That means that an appellate decision could breathe new life into the merger before the agreement lapses on April 30.  It’s an odd situation because Cigna has filed a lawsuit in the Delaware chancery court seeking to be released from the agreement and damages from Anthem.  The Delaware court is waiting for the D.C. Circuit’s decision at this point.

Here are a couple of articles on the HIMSS’s conference:

• Fierce Healthcare reports on a discussion among federal official about improving patient access to electronic medical records and interoperability of those records. Those officials should have put more thought into those issue before releasing over $30 billion of taxpayer funds to help doctors and hospitals “invest” in electronic medical records that lack these features.  
• Medpage reports that 

The office dealing with health privacy at the U.S. Department of Health and Human Services (HHS) expects to have proposed regulations by the end of the year on compensating people whose healthcare privacy has been breached, an official said here Monday.

A provision in HITECH (the Health Information Technology for Economic and Clinical Health Act) requires HHS to come up with a way to give people who are harmed by violations of HIPAA a percentage of any civil monetary penalties or settlements collected, explained Deven McGraw, JD, MPH, deputy director for health information privacy at HHS’s Office for Civil Rights, at the the Healthcare Information and Management Systems Society (HIMSS) annual meeting.

The article delves into the serious legal issues that have delay this rule.  This development is just another headache for HIPAA covered entities and business associates that advantages the plaintiff’s bar.

Healthcare Dive discusses Healthgrades latest list of top hospitals in the U.S.  The FEHBlog does not understand the methodology behind this list which excludes outstanding tertiary hospitals like the Washington Hospital Center in DC, Johns Hopkins Hospital in Baltimore, and Yale New Haven Hospital in Connecticut, among others.

Fedweek features an article by a former OPM official Reg Jones who identifies three key features of our beloved FEHBP.

The Federal Employees Health Benefits program is one of the best benefits offered by the government. And it’s open to almost all federal and postal service employees.Three key features include the flexibility of the annual open season, the opportunity to change enrollment due to certain life events and the opportunity to carry coverage into retirement.

These valuable aspects of the FEHBP were baked into the original legislation in 1959.  It’s too bad that Congress did not take the same approach with Medicare six years later.

Congress is out of town this week which features the Presidents’ Day holiday tomorrow.

This week also features the huge HIMSS healthcare IT conference which is being held in Orlando. A friend told me many years ago that there are only three U.S. cities with the hotel capacity to host a big conference — Orlando, Chicago, and Las Vegas.  The FEHBlog has never been to the HIMSS conference. Attendance is teetering on the edge of the FEHBlog’s career bucket list.

While the FEHBlog muses, he must admit that he cannot get over the fact the the Internal Revenue Service has let people off the individual mandate tax hook if they just don’t answer the relevant question on the federal income tax return.  The FEHBlog realized that the individual mandate would not be enforced for 2014 because the IRS had delayed large employer and health plan reporting until 2015. But last year large employers and health plans flooded the IRS with data on whether taxpayers had minimum essential coverage. That ongoing effort costs the large employers and health plans millions of dollars that could be better spent. And the IRS did not use the costly information evidently. The Affordable Care Act is one crazy law.

The FEHBlog has been following the Nation’s opioid crisis.  The Pain News Network reports that the American College of Physicians is now discouraging doctors from prescribing opioids for back pain. But this opioid crisis will not go away quietly. The Wall Street Journal is reporting that the federal government is urging China to crack down on exports of a dangerous elephant sedative to the U.S.

The drug, carfentanil, has been connected to at least 700 fatalities in states including Ohio, Michigan and Florida, according to data compiled by The Wall Street Journal from county medical examiners and NMS Labs, a private laboratory outside Philadelphia that performs toxicology testing for counties around the U.S.
As of early November, the Drug Enforcement Administration had received notice of 411 drug seizures containing carfentanil from around the U.S. that were analyzed by federal, state and local labs. The agency has confirmed seizures of the drug in at least 10 states, mainly in the Midwest, Appalachia and the South.
U.S. authorities have identified China as a major source for bootleg, laboratory-made versions of opioids including carfentanil that have made their way into the U.S., making China an important partner as law-enforcement authorities try to combat a worsening U.S. drug epidemic.    Carfentanil is particularly worrisome because of its extreme potency: It is up to 100 times more potent than fentanyl, the powerful narcotic blamed for worsening the opioid crisis in recent years. 

Apparently criminal gangs in Mexico are exporting fentanyl to the U.S.  What a tragic mess.  Health plans should and will do what they can (see, for example, OPM’s January 2017 call letter).

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.