FEHBlog

The House and the Senate will be in session this coming week. On Wednesday at 11 am the Financial Services Subcommittee of the House Appropriations Committee will mark up its appropriations bill which includes FEHBP funding. The meeting will not be webcast. According to a Hill report, the House also is expected to consider and pass H.R. 436, one of the bills that cleared the Ways and Means Committee last week. This bill would repeal the medical devices tax and the prescription prerequisite  for any OTC drug coverage created by the ACA.

Reuters reports that Express Scripts and Walgreen’s have decided to dismiss their lawsuit between them,but [both parties] said the dismissals did not mean they were any closer to reaching a new deal.” The FEHBlog knows how expensive litigation can be so it’s possible that the dismissial is completely independent of a new contract between the parties, but it has to be considered a step in the right direction.

The Washington Post reports on recent major data breaches at Howard University Hospital in Washington, DC, the University of Utah health care system, and TRICARE. Deven McGraw from the Center for Democracy and Technology  comments that

While the benefits of electronic health records far outweigh the risks, she [Deven McGraw] said, those risks can only be mitigated — not eliminated.
“No matter how good you make the technology,” McGraw said, “we’ll never get the risk down to zero. But we can do a lot better than we have been doing.”

All three cases involved criminal activity against the health care providers which means that at least you have to stay one step ahead of the crooks.

Several years ago, the FEHBlog learned from medical experts that there are not that many preventive services that are worth performing annually on healthy people. The New York Times has a report this morning in which a doctor makes the same point.

As of today, only a few screening tests are recommended as useful for healthy, asymptomatic people by the Preventive Services Task Force and some of those — like blood pressure checks — don’t require a doctor visit and could be performed in a pharmacy. “If you follow their recommendations you hardly do anything to patients,” said Dr. Brett, adding that the most important intervention doctors perform on healthy patients may be counseling about habits. For new patients, he still does the full head-to-toe medical exam — though he does not routinely order blood work — and regards some parts as more or less playacting.

Doctors have become accustomed to performing this ritual in years of training, and “patients come to expect it,” Dr. Cassel said.

“Patients say, ‘hey, why didn’t I get my CXR?’ So many docs say O.K., and order one. You don’t really need all those tests and probably most of the physical exam.”

And of course the ACA generally mandates coverage without cost sharing on the theory that all preventive care bends the cost curve down.

Yesterday, the U.S. Court of Appeals for the First Circuit, sitting in Boston, ruled that the Defense of Marriage Act (“DOMA”) is unconstitutional. DOMA requires that the word spouse be interpreted to mean a person of the opposite sex whenever the word is used in a federal statute or regulation. The FEHB Act defines family member to include the enrollee’s spouse. Pursuant to DOMA, therefore, same sex spouses cannot be enrolled for FEHBP self and family coverage. The courts generally have reacted negatively to this law in recent years as six states and the District of Columbia now will issue marriage licenses to same sex couples. The courts see DOMA as infringing on the state’s rights to regulate family law matters, among other issues.

The issue will now proceed to the Supreme Court for a decision, likely in the first half of 2013. In the meantime, the Court of Appeals has continued in place the stay of the unconstitutionality decision. The FEHBlog expects that the Supreme Court will rule DOMA unconstitutional and then the Program will be opened up to same sex spouses. These court proceedings do not have the potential to moot Sen. Lieberman’s same sex domestic partner legislation (S. 1910) because the vast majority of states do not recognize same sex marriage.

Following up on Wednesday’s post, the House Ways and Means Committee did clear four health care related bills yesterday “on a bipartisan basis.” One bill (H.R. 436) would repeal the Affordable Care Act’s medical device tax, which has been under a lot of fire lately, as its 2013 effective date nears.  The law will require manufacturers of most medical devices to pay 2.3% of their U.S. sales in taxes. Another (H.R. 5842) would repeal the ACA’s provision limiting any health plans, HSA, HRA or FSA coverage to prescribed over the counter drugs, which is a non-sequiter. The other two bills (HR 1004 and HR 5858) concern flexible spending account plans as discussed in this Business Insurance article. 

The Hill reports that the House of Representatives approved its own bi-partisan Food and Drug Administration reauthorization act (HR 5651) by a wide 387-5 margin. The House and Senate will now form a conference committee to reconcile the difference in their similar bills. Both bills “would extend the FDA’s user-fee program for generic drugs and biosimilars.” That’s a development that could bring down the health care cost curve.

Business Insurance reports that the House Ways and Means Committee is expected to clear at a business meeting tomorrow legislation (HR 5842) that would repeal the Affordable Care Act provision that requires a doctors prescription in order for a health plan, a health savings account, or a flexible savings account to reimburse an over the counter drug.  This is a truly goofy law. If Congress does not want over the counter drugs to be reimbursed just say so, but don’t add unnecessary administrative burdens on doctors. This bill would reinstate previous law that permits reimbursement of over the counter drugs when coverage is available.

On a related note Accounting Today reports that the IRS released guidance on the $2500 limitation on health care savings accounts that takes effect next year.

AHIP issued its annual Health Savings Account census report today.

Key findings from the census include:

• The number of people with HSA coverage rose to more than 13.5 in
  January 2012, up from 11.4 million in January 2011, 10.0 million in
  January 2010, 8.0 million in January 2009, and 6.1 million in January
  2008.

• Between January 2011 and January 2012, the fastest growing market
  for HSA plans was for large-group coverage, which rose by 26 percent,
  followed by small-group coverage, which grew by 9 percent.

• In the individual market, 2.5 million people are enrolled in HSA
  plans, while approximately 3 million people were enrolled in HSA
  coverage in the small-group market and nearly 8 million were covered in
  the large-group market.

• States with the highest levels of HSA enrollment were California
  (1,001,943 enrollees), Texas (755,432 enrollees), Illinois (717,384
  enrollees), Ohio (662,999 enrollees) and Florida (539,778 enrollees).

The FEHBlog guesses that you can file this one under No good deed goes unpunished. The Federal Times reports that “An Office of Personnel Management contractor last October
accidentally mailed postcards to about 3,000 federal retirees on which
their Social Security numbers were printed, according to an inspector
general report released Wednesday. Vangent Inc. [NOT an FEHB plan] sent the postcards
to retirees who had suspended their Federal Employees Health Benefits
Program enrollment to inform them of their eligibility to re-enroll
during the upcoming open season.” Here’s a link to the IG report.

The House returns to work this week after tomorrow’s holiday while the Senate takes this week off. According to the Hill’s Floor Watch blog, the House will consider the FDA user fee legislation on Wednesday.

Also following up on Friday’s TGIF post, the FEHBlog teceived a timely Google Alert with an announcement that the Blue Cross Federal Employees Plan now has its own Apple Ipod or Iphone / Android application.

The Office of Personnel Management on Friday posted its 2012 customer service plan on opm.gov.  The plan announces that OPM plans to refresh the OPM.gov website this summer.

The FEHBlog ran across a couple of interesting articles about the Express Scripts – Medco merger and the Express Scripts – Walgreeens rift.  The first is a Reuters article about the unanticipated benefits of the merger for Express Scripts.

One important hoped-for benefit that has materialized, [Express Scripts Chief Medical Officer Steven] Miller said, is that Medco has lower-priced deals from manufacturers on certain medicines that Express Scripts lacked.

“That means we have better purchasing,” Miller said. “We knew we would have more scale for sure. We thought these opportunities were there but you couldn’t confirm it until the deal closed.”

Miller also pointed to Medco’s methods for encouraging increased use of mail order by doctors through electronic prescribing as another surprising benefit.

The benefits, large and small, could help Express Scripts reach its target of $1 billion in cost savings and other synergies from the deal.

The other article is an El Paso Times piece about how Walgreen;s vows to rebound the termination of the Express Scripts contract at the end of last year. However, Walgreens does more business with Medco than it did with Express Scripts.

Walgreens CEO Wasson told analysts the company has a good relationship with Medco and a contract in place “that we intend to honor.” However, Walgreens reported in its second-quarter financial report that the Medco contract can be ended by either side on “relatively short notice.”

Henry, the Express Scripts spokesman, said the company is reviewing Medco’s contracts. After those reviews are done, decisions about the next moves will be made, he said.

Matthew Coffina, an analyst for Morningstar, a Chicago-based investment research company, said in an email that the companies aren’t disclosing when the Medco-Walgreens contract will expire.

It’s hard to believe that the unofficial start of summer, Memorial Day weekend, starts tomorrow. The FEHBlog wishes everyone a pleasant weekend.

The FEHBlog is always interested in insurer initiatives to control health cares costs. That’s what he was attracted this morning to a Washington Post Wonkblog article about creating tiered copayments for medical services. For many years, health plans have offered tiered cost sharing for prescription drugs. Now Blue Cross Blue Shield of Massachusetts is offering a 90% lower co-payment ($50 vs. $500) when a member receives an MRI test at a lower cost provider (e.g., a community hospital rather than a teaching hospital). “Blue Cross is currently at work on a more rigorous evaluation of the insurance product to see whether subscribers are actually choosing the lower-cost product” which was introduced in February 2011.

Yesterday. the Senate passed a bipartisan Food and Drug Administration user fee bill which funds the FDA’s drug approval process. Of interest to the FEHBlog is the fact that the bill creates user fees for both traditional or small molecule generics and generic biologics. Medpage Today reports that

The user fee agreement with manufacturers of generic biologics, or biosimilars, is less defined, because the pathway for approving biosimilars is still being worked out. That section of the bill — known as the Biosimilar User Fee Act — would at first be funded with $20 million annually from the federal government to hire new FDA staff and set assist in setting up a process to review and approve generic versions of biologics.

The House of Representatives may take up this bill next week when it returns after its Memorial Day recess. The Senate’s Memorial Day recess started yesterday.

Healthcare IT News reports that “The White House on Wednesday unveiled what it called a “sweeping shift to mobile,” an initiative aimed at accelerating efforts to make new and useful services available to consumers on their mobile devices.” That tidbit prompted the FEHBlog to search his Iphone apps store for health insurance apps and by golly there are quite a few out there, including Aetna, Coventry, Humana, and the FEHBlog’s insurer Carefirst. In that regard, Market Watch reports that “A new study published in the May issue of Clinical Therapeutics shows that
patients who participate in a text message prescription reminder program have
significantly higher adherence to chronic oral medications than those in a
control group.” Good news.

One week from tomorrow, May 31, FEHB plan carriers must submit their 2013 benefit and rate proposals to OPM.

In its recent benefit and rate proposal call letter, OPM encouraged carriers to engage in efforts to control spending on specialty or biologic drugs. Last month, the Center for Studying Health System Change (CSHSC) issued a report bluntly titled “Limited Options to Manage Specialty Drug Spending.” The report finds that health plan options are limited because there currently are no FDA approved bio-equivalent or bio-generic drugs and physicians, principally oncologists, often dispense the drugs, rather than PBM network or mail order pharmacies. This rubric will be tough to change, particularly while the FDA continues to twiddle its thumbs on bio-generic drugs. The European Union regulators been approving biogenerics for over five years.  Congress gave the FDA the green light to create a regulatory path for bio-equivalent approval over two years ago in the Affordable Care Act.

In Monday’s post, the FEHBlog discussed a Health Care Cost Institute report finding that rising health care prices play a greater role than utilization in driving up the overall cost of health care for privately insured Americans. The CSHSC reached the same conclusion in a Health Affairs study. CSHSC believes that insurers believe that certain providers must be in their network which gives the provider a lot of leverage plus insurers don’t really care because they can pass along the costs to employers. (The FEHBlog does not buy that cynicism.) The CSHSC reports that states are now considering re-entering the world of rate setting which most of them except for the FEHBlog’s home state of Maryland left in the 1990s. The FEHBlog is not a rate setting proponent given the problems that Medicare’s rate setting creates for the entire health care system as illustrated by the monthly S&P reports that the FEHBlog tracks.

The FEHBlog, which likes to follow the Big Data trend, noted last year that Aetna, Humana, and United Healthcare had agreed to establish a health care claims databank managed by the Health Care Cost Institute.  (Kaiser Permanente more recently came on board with HCCI.) HCCI issued its first report today which reflected health care provided to 33 million privately insured Americans in 2010. The conclusion came as no surprise to the FEHBlog.

Rising health care prices were the chief cost driver for this demographic group. “HCCI confirmed 2010 prices for the privately insured grew more than utilization after accounting for changes in the mix of medical services provided in hospitals (0.7%) and outpatient facilities (4.6%).”  The Kaiser Health News reports that

As part of the federal health law, all states last year began reviewing premium increases of 10 percent or more, requiring insurers to justify the increases.  There are no similar national efforts to examine price increases by hospitals or other medical providers.

Insurers argue they are just passing along rising costs to consumers, keeping only a narrow profit margin and are often outgunned in contract negotiations by hospitals, many of which are “must-have” facilities in an insurer’s network.

“This is an important study that clearly demonstrates that rising prices for medical services are driving health care cost growth,” said Karen Ignagni, president and CEO of America’s Health Insurance Plans, the industry lobby. “Reducing medical costs is essential to making health care coverage more affordable for individuals, families, and employers.”

 The prescription benefits management company Express Scripts issued a report last week titled “Nine Trends in Rx Plan Management.” The report notes that

Concerns with member health behaviors have rekindled an interest in wellness programs. While only 58 percent of respondents report that they currently use a wellness plan, 81 percent say they intend to offer one in the next two years.

Integrated pharmacy/medical data is likely to play an increasing role in identifying members at risk, and coordinating efforts with disease management and wellness vendors.

Unfortunately, the Obama Administration’s legislative proposal to shift FEHBP prescription drug management from the FEHB plan carriers to OPM, if adopted, would disrupt such ongoing care coordination efforts

Health Data Management reports that the Medical Group Management Association weighed in with 27 pages of comments on the proposed HHS rule to create a standard health plan identifier. The MGMA wants a lot more numbers that HHS.

The proposed rule permits a health plan to enumerate itself with just one identification number, but insurers often have multiple plans with different benefit levels and fee schedules. “Without knowing which entity performs each role in the revenue cycle, physician practices experience difficulties in processing transactions, reconciling claims and posting payments, all contributing to patient dissatisfaction and confusion,” according to the letter.

The MGMA’s comments don’t make a lot of sense to the FEHBlog because the details about the member’s coverage already can be drawn from the member’s identification number.  Hopefully common sense will prevail.

It’s the end of the week for the FEHBlog who is flying out to Madison Wisconsin for his younger daughter’s college graduation from UW.  Go Badgers.

At yesterday’s Senate Homeland Security and Governmental Affairs Committee hearing, the Committee approved by voice vote a bill (S. 1910) that would extend FEHBP and FEGLI coverage to the same sex domestic partners of Federal employees. The cost of the expansion would covered by an overdue amendment to the FEHB Act that would confirm the right of FEHBP carriers to be reimbursed for medical expense payments when the FEHB participant has also received reimbursement from a third party for the same medical expenses, e.g, through an auto insurance claim or a lawsuit. In other words, the provision would avoid a double recovery by the participant. That’s just common sense.

On Tuesday, the Department of Health and Human Services unveiled a new web-based tool  known as the Health System Measurement Project “that will make it easier for all Americans to
monitor and measure how the nation’s health care system is performing.” However, when the FEHBlog visited the site, he found a hearty endorsement for the Affordable Care Act’s increase of the child eligibility age to 26.

Today Standard and Poors announced 

The S&P Healthcare Economic Composite Index indicates that the average per capita cost of healthcare services covered by commercial insurance and Medicare programs increased by 5.68% over the 12-months ending March 2012. This is a modest deceleration from the +5.72% rate posted for February 2012. [However,] healthcare costs covered by commercial insurance plans increased by 7.84% over the year ending March

So the moderation apparently was produced by Medicare’s price controls.

The actuarial consulting firm Milliman released its annual Milliman Medical Index report yesterday.

The annual Milliman Medical Index (MMI) measures the total cost of
healthcare for a typical family of four covered by a preferred provider
plan (PPO). The 2012 MMI cost is $20,728, an increase of $1,335, or 6.9%
over 2011. The rate of increase is not as high as in the past, but the
total dollar increase was still a record. This is the first year the
average cost of healthcare for the typical American family of four has
surpassed $20,000.

The employee’s share including premiums and out of pocket costs is about 42% of the total cost.

Kaiser Health News reports about the activities of the State of Colorado, which is implementing an all payer claims database similar to what OPM is doing for the FEHBP. Colorado is one of 14 states that is using such a database to create an online application for  consumers.

[When the database is operational later this year, p]atients will be able to go online and see how much something is
actually going to cost them, and compare prices across hospitals and
doctors. They’ll be able to see how much variation there is in terms of
charges and costs. It will cover essentially all procedures, anything
that is billed and being paid for by an insurance company. 

OPM has expressed a concern in recent benefit and rate proposal call letters about rising prescription drug costs in the FEHBP. The AMA News reports that the cost curve could be brought down and patient safety could be increased if doctors adopted more conservative prescription habits. An article in the June 13 Annals of Internal Medicine  “makes several recommendations on how physicians can revamp
their prescribing habits, including considering other treatment options,
being more strategic about the prescriptions they write, being educated
about and aware of possible adverse effects, and being cautious of
prescribing new drugs.” Kudos to the authors.

Happy Mothers’ Day!!  Congress is in session this week. On Wednesday morning, the Senate Homeland Security and Governmental Affairs Committee will a hold a business meeting to consider among other items a bill (S 1910) that would extend FEHBP coverage to the same sex domestic partners of federal employees.

The Department of Health and Human Services trumpeted the announcement that it is “reduc[ing] unnecessary, obsolete, or burdensome regulations on American
hospitals and health care providers. These steps will help achieve the
key goal of President Obama’s regulatory reform initiative to reduce
unnecessary burdens on business and save nearly $1.1 billion across the
health care system in the first year and more than $5 billion over five
years.” Mind you these changes come on top of the recent announcement that the federal government has shelled out over $5 billion so far to fund the cost of electronic medical records systems for health care providers.

The FEHBlog has no problem with cutting red tape. What is notable, however, is that HHS contemporaneously heaped more red tape on health insurers by requiring them to their notify insureds that they are not required to  pay them a minimum loss ratio rebate for 2011.  Because the FEHBlog has been around for a while, he remembers when FEHB plans rebated reserves to insureds with OPM’s approval in the 1980s. They were rewarded with class action lawsuits over the rebate calculation methodology. No good deed, etc.

Speaking of electronic transactions, Thursday May 17 is the public comment deadline for the proposed rule that establishes a health plan identifier for those transactions (after 15 years) and extends the ICD-10 code set compliance date by one year to October 1, 2014. Modern Healthcare reports that the American Medical Association, whose complaints lead to the one year delay, wants a two year extension at a minimum. CMIO reports that two large medical information trade associations, AHIMA and CHIME, have also weighed in. AHIMA wants no extension, and CHIME is ok with the one year extension.

Following up on last week’s post about the IOM conference on the Nation’s obesity problem, Kaiser Health News reports that doctors and insurers are the key to fighting obesity.  Body Mass Index tracking already is included in the NCQA HEDIS measures and the Affordable Care Act made obesity counselling a free service. It strikes the FEHBlog that personal responsibility should be the first line of defense against this problem.

Finally, the Affordable Care Act regulators issued another round of FAQs on Friday (Part. IX (numbered like the Super Bowls)). This one focuses like FAQ Part VIII on the summary of benefits and coverage.