FEHBlog

The FEHBlog listened to the House Oversight and Government Reform Committee hearing on postal reform this morning.  The stars certainly aligning for passage of H.R. 756 which would create a separate Postal Service Health Benefits Program within the FEHBP. The PSHBP would be fully integrated with Medicare, and because all enrollees will be placed in a single risk pool like any sensible health insurance plan the PSHBP premiums should be lower than traditional FEHBP premiums. That’s the Postal Service’s objective as Congress in its infinite wisdom decided a decade ago to require the Postal Service to pre-fund the costs of its retiree coverage. It was pleasant to listen to a hearing where people were willing to compromise for a good cause.

Express Scripts, one of the big prescription benefit managers, issued its annual prescription drug trend report yesterday.  Medscape has a good summary of the report here.

Healthcare IT News reports on a new IBM study on cyberattacks on healthcare entities.

Fierce Healthcare reports on a trip to Capitol Hill by leaders of five large provider groups.

In the meetings with senators and their staff members, the organizations outlined five priorities:

• Do not increase the number of uninsured patients

• Protect the healthcare safety net

• Ensure patients are protected from excessive insurance costs

• Maintain premium subsidies

• Protect small insurance markets

Healers try healing yourself.  

The FEHBlog was interested in reading a Wall Street Journal article about a new device called MarginProbe that improves the efficacy of breast cancer surgery.  The article explains that

The cost of the device, which is being used in about 100 medical centers around the U.S., remains a stumbling block. Each breast surgery requires a new MarginProbe, at $1,000 each, which isn’t typically covered by insurance.

Now let’s clarify this point. Health plans cover the surgeon’s and the surgicenter’s bill but the providers are supposed to cover the cost of these devices under their price.  The bottom line is again according to the article that

Second surgeries cost a lot more—$9,000 to $16,000 and up—but hospitals and surgery centers are reimbursed for them. Dr. [Alice] Police [a cancer surgeon who uses the device in her practice]  says health-care economics have created a strange incentive favoring re-excisions, no matter the costs to the health system. She credits the device for lowering her re-excision rate to 3% from 15%. But she worries about hospitals balking: “You have to tell a hospital, it is going to cost you $1,000 and we are going to take away your second operation.”

You’re telling the FEHBlog that the hospital can’t find savings to offset the cost of MarginProbe?  That my friend is a problem that should be addressed.  The provider groups should add this issue to their list.

Congress remains in session this week. The Hill reports that the Senate majority leadership plans votes on four Trump cabinet members this week, including HHS Secretary nominee Rep. Tom Price. Federal New Radio futher reports that Office of Management and Budget director nominee Rep. Michael Mulvaney was approved by the Senate Budget and Homeland Security and Governmental Affairs Committee’s last Thursday. The next stop for that important nomination is the Senate floor.

The Office of Management Budget is obligated to provide a final review of federal regulations before they can be published in the Federal Register, either as proposed or final. The review process is made public on the reginfo.gov website.  Mark the tape because due to the regulatory freeze there are only two rules over at OMB right now, and one of them is an interim final rule to stabilize the ACA marketplace.  Modern healthcare reports that

Edmund Haislmaier, a senior fellow at the Heritage Foundation who worked on President Donald Trump’s transition team on health policy matters, has not seen the rule but believes it aims to tighten eligibility standards for marketplace coverage and would make it harder for people to get coverage during a special enrollment period. Insurers say both issues are key to discouraging people from signing up when they realize they need costly medical services and then dropping coverage after they receive care.

The Wall Street Journal tells us that “A powerful House lawmaker [Rep. Greg Walden (R Ore.), the chairman of the House Energy and Commerce Committee] said he would push for [bipartisan] legislation to stymie drug price-gouging by encouraging development of generic copies, after attending a meeting at the White House Tuesday with drug-company executives.”  The article explains that

The bill seeks to encourage companies to introduce generic copies of drugs with high prices, because of shortages or lack of competition, by speeding up the copy’s review by the Food and Drug Administration. The agency is working through a backlog of generic-drug applications.  As an additional incentive for companies to bring to market a generic rival for a high-priced drug, drugmakers would be eligible for a speedier review of another generic in their pipeline.

It makes sense to the FEHBlog.

Well, it’s finally Super Bowl weekend, the great American holiday. It should be a good game.

Here’s the Week in Congress’s report on this week’s activities on Capitol Hill.  As the FEHBlog mentioned the House Oversight and Government Reform Committee hearing on IT security practices, here are links to the Committee’s and FedScoop’s accounts of that hearing.  

The FEHBlog noticed this afternoon that the House Oversight and Government Reform Committee has scheduled a hearing on its bipartisan Postal reform bill (H.R. 756) for next Tuesday February 7 at 10 am. The FEHBlog will check out that hearing.

Prof. Timothy Jost reports in the Health Affairs blog that “Congressman Darrell Issa (R-CA) threw another health reform plan into the mix, his “Access to Insurance for All Americans Act.” His plan would allow anyone to enroll in Federal Employee Health Benefit Program (FEHB) health plans.”  Prof. Jost pooh poohs the intiative because

The multi-state plan has not been a success. At this point it is not yet nationwide and includes only Blue plans which offer products pretty much indistinguishable from the products they otherwise offer in the marketplace. None of the FEHB insurers other than the Blue plans signed on.  Conscripting FEHB plans to enroll the uninsured continues to be a theoretical option for health care reform, but an attempt to do so would have to overcome the political and practical obstacles that undermined the ACA multi-state plan program.

The multi state plan has not been a success because like the ACA as a whole it is needlessly complicated. In contrast to the FEHBP which permits nationwide and regional plans, the MSP’s participants must operate as qualified health plans in the ACA marketplace.  The multi state plans are subject to both OPM / federal  and state regulation. That’s no picnic. In contrast, FEHB plans are only subject to federal regulation. Simplify it for heaven sake.

Forbes Magazine reports that United Health, Aetna, and other large health insurance carriers are tremendous progress in shifting their networks from fee for service to value based reimbursement. Bravo.

The Trump Administration took its first HIPAA scalp this week.  Children’s Hospital of Dallas agreed to pay a $3.2 million civil penalty based on the government’s allegations that the provider violated numerous HIPAA Security Rule provisions.

The Drug Channels blog provides a 2016 list of top U.S. pharmacies. Speaking of pharmacies, earlier this week, the New York Times reported that “Concerns about regulatory approval have weighed on Walgreens Boots Alliance’s bid to buy a top drugstore rival, Rite Aid, as the two cut the price of the deal while pushing back the expected closing date by six months.”

The FEHBlog is ecstatic about the President’s January 30 executive order requiring a significant reduction on the burden that federal regulations impose on the private sector, particularly small business.  In the FEHBlog’s view, which he believe that he has document in this blog, the healthcare sector among others has been strangled by regulations in the wake of the Affordable Care Act.  Those regulations tended to drive up benefits and administrative costs.  Here’s the nub of the January 30 order:

(b)  For fiscal year 2017, which is in progress, the heads of all agencies are directed that the total incremental cost of all new regulations, including repealed regulations, to be finalized this year shall be no greater than zero, unless otherwise required by law or consistent with advice provided in writing by the Director of the Office of Management and Budget (Director).
(c)  In furtherance of the requirement of subsection (a) of this section, any new incremental costs associated with new regulations shall, to the extent permitted by law, be offset by the elimination of existing costs associated with at least two prior regulations.  Any agency eliminating existing costs associated with prior regulations under this subsection shall do so in accordance with the Administrative Procedure Act and other applicable law.

The salutary effect of the order will be felt once the Senate confirms the President’s domestic appointees, such as Rep. Tom Price for HHS Secretary.

In this regard, take a look at this Congressional Research Service legal side bar report on the President’s January 20 executive order encouraging the administrative reduction of Affordable Care Act administrative burdens. Senate approval of Rep. Price’s nomination will lead to actions taken under the January 20 executive order because the HHS Secretary has so much authority over the ACA.

Tomorrow the House Oversight and Government Reform Committee will hold a hearing to review the state of IT security at the Office of Personnel Management (OPM) and receive updates on reforms and challenges with the security clearance process.

Yesterday the Chair and ranking minority member of that Committee introduced a 2017 postal reform bill (HR 756).  Here’s a link to a Committee memorandum identifying the differences between the 2016 and 2017 bills.  The FEHBlog recalls a Govexec interview with the Committee’s chair Jason Chaffetz (R UT) suggesting that Medicare integration had become a fly in the ointment of this bipartisan bill. But to the contrary the 2017 bill continues to call for a separate Postal Service Health Benefits Program within the  FEHBP.  Postal Service annuitants over age 65 who enroll in PSHBP plans will be subject to full Medicare integration, e.g, auto enrollment in Part B and participation in prescription benefit plans coordinated with Medicare Part D known as EGWPs.  The Postal Service has been demanding this outcome because the law requires the Postal Service to prefund its retiree health care costs. The Postal Service wants to receive the full value of the Medicare taxes which the Service has paid.

PhRMA, the lobbying organization for prescription drug manufacturers, has posted a report on yesterday’s meeting with the President.  The report is encouraging.

Congress remains in session this week. Both of the Committees with responsibility for OPM and FEHBP oversight will be holding business meetings. The House Oversight and Government Reform Committee will meet on Tuesday, and the Senate Homeland Security and Governmental Affairs Committee will meet the following day.

The Senate Committee in the course of its meeting will consider the President’s nomination of Michael Mulvaney to be director of the Office of Management and Budget, a key position in the federal bureaucracy. Mr. Mulvaney is a Republican Congressman from South Carolina.

In a bit of good news, the Wall Street Journal reports that big prescription drug manufacturers like Merck have begun to publicize their pricing.

Merck & Co. published a list of average price increases across its drug portfolio on Friday. Merck raised its gross price an average of 9.6%. After rebates, discounts, and product returns, however, Merck realized an increase of just 5.5% on a net basis.
Other drugmakers plan to follow suit. Johnson & Johnson said it would publish a similar list next month. Executives at AbbVie and Allergan, meanwhile, have pledged to limit both the number and the magnitude of gross price increases going forward this year. 

[While Merck’s net increase is above the rate of inflation,] the Merck report is a meaningful step forward in improving pricing transparency. Drug companies have long argued that gross prices don’t reflect the revenue that actually accrues to the manufacturer. That statement has always been accurate. Other members of the pharmaceuticals supply chain, like pharmacy-benefit managers and drug wholesalers, also benefit from regular price hikes. The industry’s argument hasn’t clearly resonated with the general public or politicians. 

For what it’s worth, the point has resonated with the FEHBlog.

Speaking of prescription drugs, Fierce Healthcare reports on five steps that health plans can take to help control opioid abuse.  The study can be found here.  The report adds that

[I]nsurers have already taken steps to mitigate the opioid crisis. Cigna, for example, eliminated prior authorization rules that can lead to delays for patients receiving MAT. And last week, Anthem announced that it set a goal of reducing the amount of opioids dispensed among its members by 30% by the end of 2019.

Here’s a link to the Week in Congress’s report on this week’s activities on Capitol Hill.  The FEHBlog noticed on the House Rules Committee website that the House of Representatives is beginning the process of striking down certain recent Obama administration regulations, such as the Federal Acquisition Regulation’s Fair Pay and Safe Workplaces rule, under the Congressional Review Act.  (A federal judge struck down the more onerous parts of that rul  at the end of December.) Kim Strassel of the Wall Street wrote a column today discussing the intriguing features of this underutilized law.

The Wall Street Journal also reported today that “Rep. Diane Black (R., Tenn.), the interim chairwoman of the House Budget Committee, told reporters Wednesday she expected the legislation repealing [and replacing] the health-care law would come to the House floor by late February or early March.”  Reuters tells us about insurance company efforts to shape healthcare re-reform.

Healthcare Dive reports that according to an American Well survey 20% of us are willing to switch primary care doctors in order to visit their doctor on a telehealth service. Not surprisingly,

Most willing to switch doctors were parents of children under age 18 and 35 to 44 year olds, the survey shows. Moreover, 79% of consumers caring for an ill or aging family member felt video services would be helpful.

The FEHBlog is growing weary of the Chicken Littleism that abounds in the press over the impending ACA repeal. Modern Healthcare writes about how the repeal will bring an end to mental health care.  That’s ridiculous. To begin with, the federal mental health and substance abuse parity act was part of the Obama stimulus law enacted in early 2009, not the ACA which was enacted the following year. The 21st Century Cures Act which Congress passed in December 2016 supports the Obama Administration’s rule implementing the law.  Mental health coverage will not be reduced. In any event, I think that insurers and employers now understand the importance of mental health and substance abuse coverage. The ACA repeal will not occur in a vacuum.

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.