FEHBlog

The Centers for Medicare and Medicaid Services actuary issued his annual report on national health care spending. To no one’s surprise, the health care spending ruler continues to bend up. The Wall Street Journal explains that “health spending took a greater share of the economy— up one percentage point from 16.6% in 2008—because gross domestic product shrank 1.7% in 2009.” America’s Health Insurance Plans’ President Karen Ignani commented that “health insurance premiums continue to grow at a slower rate than spending on medical benefits.”

In a puzzling development, Department of Health and Human Services Secretary Sebelius moved the Office of Consumer Information and Insurance Oversight (“OCIIO”) from her office over to CMS. OCIIO was established early last year to implement the Affordable Care Act.   National Underwriter reports that the first OCIIO Director Jay Anhoff (previously Missouri insurance commissioner and a plaintiffs’ lawyer) has become a special assistant to the HHS Secretary.  OCIIO’s name will be changed to the Center for Consumer Information and Insurance Oversight (CCIIO), which us a much less catch acronym. The CCIIO will be led by CMS Principal Deputy Administrator Marilyn Tavenner. The Hill reports that Ms Tavenner was Virginia’s Secretary of Health and Human Services in the Governor Tim Kaine administration from 2006 through early last year.

Modern Healthcare reports that “Health insurers’ outlook continues to be negative as the sector faces new regulations [created by the Affordable Care Act and CCIIO), heightened political pressure and a weak economy, which are expected to squeeze earnings, one major ratings agency [Moody’s] said.  Insurance Networking News describes theses circumstances as a “perfect storm” confronting insurers.””Overall, we expect that these challenges will exert negative pressure on the credit fundamentals and ratings of health insurers into the foreseeable future,” [Moody’s Sr. Vice President Stephen] Zaharuk says, “however, our view continues to be that the larger and more diversified companies will be better positioned to meet the challenges the industry faces.” Fun times.

Healthleaders Media published a list of top 10 health care quality issues for 2010. Topping the list is imaging scan radiation over-exposure and over-utilization. That issue also tops of OPM’s list of quality concerns according to reports made at the annual FEHBP conference the most recent call letter for benefit and rate proposals, and the Inspector General’s recommendations in OPM’s most recent performance report as discussed in previous FEHBlog entries.

The AMA News reports that the Affordable Care Act and the Medicare Program is boosting the number of house calls made by doctors. The Affordable Care Act creates an Independence at Home program which will be launched in March 2012.  “The Medicare program paid for more than 2.3 million house calls in 2009, compared with more than 1.5 million in 1995.”

URAC has released revisions to its independent review organization accreditation standards. Independent review organizations will play a leading role in the claim review process for non-grandfathered group health plans outside the FEHBP as a result of the Affordable Care Act. Inside the FEHBP OPM continues to serve as the external review in accordance with the FEHB Act.

The Centers for Medicare and Medicaid Services has launched two new websites:

The first phase of the Physician Compare website mandated by the Affordable Care Act. This website is basically a doctor finder but it does show whether or not participates in Medicare and whether the doctor is involved with Medicare’s physician quality initiative (PQRI). Fierce Healthcare IT reports that

A second phase of the site, scheduled to launch later this year, will show whether or not listed doctors are volunteering to prescribe medicine electronically. Data about the quality of care received by Medicare patients from medical providers is scheduled to be available by 2013. 

and

A website designed to help health care providers and health insurers prepare for next year’s major technological change — introduction of the ANSI X 5010 electronic health care transaction standards. Get Ready 5010 will hold a series of free webinars on January 11 through 13, 2011.  The webinars will feature speakers from CMS, provider and payer organizations, and will discuss:

• The current level of readiness and plans for testing

• How to prepare for testing

• Version 5010 basics for newcomers

The FEHBlog wishes all of its readers a happy and prosperous 2011. There are several Affordable Care Act related changes to the Program that take effect this year — in particular the extension of dependent child coverage from age 22 to age 26 and expanded coverage of in-network preventive care services with no enrollee cost sharing. What’s more, OPM has implemented an enhanced anti-smoking program for FEHB Program enrollees and dependents.

In subsequent years (2012-2013 time frame), health plans, including FEHB plans, must begin to use a standard benefits summary of four or five pages and a standard glossary of health insurance terms. Last week, the National Association of Insurance Commissioners sent the Health and Human Services Secretary model documents for the Affordable Care Act regulators’s consideration according to Kaiser Health News. These documents will supplement the existing FEHB plan brochures which were put into plain language about ten years ago. The next step likely will be a proposed rule from HHS implementing the requirement.

The Federal Times reports that the Office of Management and Budget will be delaying release of the Administration’s FY 2012 budget proposal until mid-February 2011 — a delay of about a week.

This is the last FEHBlog post of 2010. Oy vey, it has been a hectic year with the enactment of the Affordable Care Act.  The FEHBlog wishes all of our readers a happy and prosperous 2011, and our one resolution is to keep this puppy rolling for another year.

You know it’s a slow news week when the Washington Post runs a story on the problems with the title of the healthcare reform law.  The FEHBlog started out calling the Patient Protection and Affordable Care Act “Pea – Packa” but now the FEHBlog defers to the Government’s preferred shorthand “Affordable Care Act” or ACA.  Shortening the name, however, does not reduce the length of the statute.

The ACA regulators issued in today’s Federal Register a “request for information on how group health plans and health insurance issuers can employ value-based insurance design in the coverage of  recommended preventive services.” The comment deadline is February 28, 2011. The Washington Post and Kaiser Health News published an article on value based insurance design “pros and cons” last month. OPM in the past has encouraged FEHB plans to adopt value based designs in its annual call letters for benefit and rate proposals.

The IRS on December 23 issued additional guidance on the new ACA restriction limiting health plan, health reimbursement account, health flexible savings account and health savings account reimbursement of over the counter drug costs to purchases supported by a doctor’s prescription (except for insulin). The new guidance concerns the use of a health plan issued debit card. “The new guidance modifies previous guidance to permit taxpayers to continue using FSA and HRA debit cards to purchase over-the-counter medications for which the taxpayer has a prescription. Effective after Jan. 15, 2011, in accordance with the new guidance, this use of debit cards must comply with procedures reflecting those that pharmacies currently follow when selling prescribed medicines or drugs.” This new requirement creates more work for doctors and pharmacists, but where’s the offsetting benefit??

Another one of the ACA regulators, the Labor Department’s Employee Benefits Security Administration is inviting folks to join them for a live web chat on January 4, 2011, at 2 pm. The topic of discussion will be EBSA’s regulatory agenda.

Health Leaders Media reflects  on the impact of the HITECH Act — enacted in February 2009 — on enforcement of  the health information privacy and security rules issued under the Health Insurance Portability and Accountability Act of 1996 — another mouthful of a title but folks quickly became accustomed to calling it HIPAA (hip – aah).

The FEHBlog hopes that all of our readers are enjoying the holidays. The FEHBlog certainly enjoyed the Redskins win today.

In contrast, AHIP President Karen Ignagni was not pleased with HHS’s proposed rule implementing the Affordable Care Act’s “unreasonable” premium rate review process, and the FEHBlog can’t blame her notwithstanding the FEHBlog’s holiday giddiness over the regulation’s exemption for FEHB plans and other large group insured plans. As Ms. Ignagni points out,

“The public policy discussion on health care costs has focused on health insurance premiums, while ignoring the root causes that are driving up the cost of coverage, including soaring medical prices, new benefit mandates and changes to health plans’ risk pools. At a time when health care costs are a crushing burden on families and employers, the American people deserve to know the facts.

“For example, data from the state of Oregon show that prices of many medical services have increased at an average annual rate exceeding 10 percent. California data show that prices for a hospital stay increased by more than 150 percent between 2000 and 2009—an average annual growth rate of 11 percent. Trends likes these are being seen across the country.

* * *

“It is also important to remember that the new federal law already caps health plans’ administrative costs and profits.”

Well put.

Last week, URAC released new pharmacy management accreditation standards. According to URAC’s press release,

In addition to revisions to several key standards, URAC has introduced new performance measures including dispensing accuracy, medication adherence, generic dispensing rates, prescription turnaround time, and overall consumer satisfaction.  The revisions are specifically designed to collect data on Mail Service and Specialty Pharmacy processes and outcomes considered critical for the evolution of professional practices in these areas.

OPM encourages FEHB plans to use processes and vendors, including prescription benefit managers, that are accredited by national accrediting services such as URAC and NCQA.

Finally, the Federal Times reports that “President Obama signed an executive order Wednesday December 22 implementing a two-year pay scale freeze in 2011 and 2012 for executive branch employees.”

The Affordable Care Act regulators released a boatload of FAQs yesterday concerning that law, the 2008 Mental Health Parity Act, and nondiscrimination based on health and wellness programs. The FAQs most relevant to the FEHB Program are the following


Automatic Enrollment in Health Plans

Q5: My group health plan normally charges a copayment for physician visits that do not constitute preventive services. The plan charges this copayment to individuals age 19 and over, including employees, spouses, and dependent children, but waives it for those under age 19. Is this permissible?

Yes. The Departments’ regulations implementing PHS Act section 2714 provide that the terms of a group health plan or health insurance coverage providing dependent coverage of children cannot vary based on age (except for children who are age 26 or older). While this generally prohibits distinctions based upon age in dependent coverage of children, it does not prohibit distinctions based upon age that apply to all coverage under the plan, including coverage for employees and spouses as well as dependent children. In this case, the copayments charged to dependent children are the same as those charged to employees and spouses. Accordingly, the Departments will not consider the arrangement described in this question (including waiver, for individuals under age 19, of the generally applicable copayment) to violate PHS Act section 2714 or its implementing regulations.

As predicted in Sunday’s FEHBlog, the Health and Human Services Department (“HHS”) released today a proposed rule implementing the Affordable Act provision authorizing HHS to review unreasonable health insurance premium increases (defined to be an increase of 10% or more). HHS is applying the requirement only to policies issued in the individual and small employer markets (1 to 50 employees). Consequently, the FEHB Program is exempt from this review requirement, which makes sense.

Govexec.com reports that Congress passed a continuing resolution funding the federal government through March 4, 2011. “The measure begins a two-year pay freeze for federal civilian employees that President Obama sought.”

The Centers for Medicare and Medicaid Services offers useful Hospital Compare and Nursing Home Compare websites. These sites allow you to compare the quality of care and pricing at facilities across the country. What’s more the quality information is based on all patient data, not just Medicare eligible patient data. The FEHBlog learned this week that the Affordable Care Act requires CMS to create a Physician Compare website effective January 1, 2011. Government Health IT reports that

Initially, CMS will post information about physicians enrolled in the Medicare program and those participating in the Physician Quality Reporting System (PQRS), through which CMS pays incentives for providers who meet various quality marks. CMS will add in January 2013 physician performance information based on 2012 quality reporting it receives. 

PwC, the consulting firm, released a report identifying the top health industry issues for 2011, including  health information technology, ACOs, and mergers and acquistions.

Federal News Radio reports Congress extended the continuing resolution funding the federal government through Tuesday December 21, which, according to NASA, also happens to be the first occasion that a lunar eclipse (shown at left) occurs on the winter solstice in 564 years.  CNN reports that the Congressional leaders from both parties have agreed upon a further extension of the continuing resolution into March so that the new Congress may consider the issue.

Last Friday, the Office of Management and Budget cleared for publication a Health and Human Services Department proposed rule governing the Affordable Care Act’s unreasonable health insurance premium review process. Logically, the rule should exclude the FEHB Program from this process because a government agency, the Office of Personnel Management, approves those FEHBP premiums. Based on recent experience, I expect that HHS will hold a press conference on Monday or Tuesday to announce the rule.

Speaking of HHS rules, the Congressional Research Service released a report on the Affordable Care Act rulemaking process. Since March 23, 2010, the Affordable Care Act regulators have issues eighteen final rules implementing the new law.

Modern Healthcare.com reports that “Blue Cross Blue Shield of Michigan asked a federal judge Friday to dismiss the U.S. Justice Department’s antitrust lawsuit accusing the state’s leading health insurer of discouraging competition by engaging in practices that result in higher hospital prices for other insurers and patients.”