FEHBlog

The Washington Post reports tonight that the government funding issue has not been resolved and signs point toward another extension of the continuing resolution, perhaps into the new Congress. The witching hour occurs at the end of Saturday December 18.

The AMA News published an interesting report analyzing why diagnostic errors happen. The article concludes with the appearance of our old friend Common Sense.

While research continues into figuring out how to track and ultimately prevent diagnostic errors, experts said physicians could benefit from the simple step of opening clear lines of communication with their patients.

“This problem is going to require a partnership with the patient,” said Dr. Schiff, noting that doctors should tell patients if they are uncertain about a diagnosis and ask them to report symptoms that could signal a misdiagnosis. “Diagnosis is not just something that doctors make and patients consume. Diagnosis is something that they produce together.”

HHS Secretary Sebelius and Attorney General Holder announced today that

CMS will issue a solicitation for state-of-the-art fraud fighting analytic tools to help the agency predict and prevent potentially wasteful, abusive or fraudulent payments before they occur.  These tools will integrate many of the Agency’s pilot programs into the National Fraud Prevention Program and complement the work of the joint HHS and Department of Justice Health Care Fraud Prevention and Enforcement Action Team (HEAT).

Good luck with that effort.

It’s worth keeping an eye on the AHIP Research Center for useful studies and reports. Recently that Center released a “comprehensive study of financial activity in health savings accounts (HSAs). Data collected from three large banks contain detailed account information of more than 1.2 million HSA accounts open as of December 31, 2009.” The report shows that consumers use HSAs primarily to pay their medical expenses, not as a tax advantaged savings vehicle.

U.S. District Judge Henry Hudson ruled yesterday in Virginia v. Sebelius that Congress has no Constitutional authority to impose a mandate on individuals to purchase health insurance as the Affordable Care Act requires beginning in 2014.  This is the first court (of three) to rule against the legislation’s constitutionality. Other lower federal court decisions are expected. Business Insurance reports on Judge Hudson’s opinion and on the Government’s unsurprising decision to take an appeal to the U.S. Court of Appeals for the Fourth Circuit. Thus the wheels are set in motion for the Supreme Court to consider this issue. A Supreme Court decision might arrive in the 2012 Presidential election year.

The AMA News reflects on one of the goofier provisions of the Affordable Care Act — beginning next year group health plans, flexible spending accounts, health reimbursement accounts, and health savings account can only reimburse members for over the counter drugs (excluding insulin) that have been prescribed by a doctor. However, by definition, an over the counter drug is safe enough that a consumer can use it without physician oversight. Doctors and pharmacists understandably are freaking out over the additional time burden that the law creates. FEHB plan members, for example, will need a prescription next year to purchase over the counter smoking cessation drugs at a pharmacy. The article reports that an effort is underway to repeal this provision.

OPM is announcing in the Federal Register tomorrow that it will be issuing a revised Privacy Act system of records notice for the FEHBP claims data warehouse that it plans to create for Program management purposes. “The revised notice will provide more detailed information regarding OPM authorities for maintaining the system, systems security measures that will be taken to protect the records, and the circumstances under which records will be released from the system.” OPM will permit another public comment period on the revised notice before that notice takes effect.

OPM is requiring fee for service plans to adopt transparent or pass through contracting methods with prescription benefit managers. The Society for Human Resource Management discusses a report,The Value of Alternative Pharmacy Networks and Pass-Through Pricing, researched and written by the actuarial and consulting firm of Milliman Inc.

Milliman’s findings show that, depending on the benefit design, an employer’s overall costs could be reduced by up to 13 percent by using a limited, preferred pharmacy benefit design and pass-through pricing model rather than a traditional model that includes most retail pharmacies. For example, the study showed that by adopting a closed network, where coverage is only through network pharmacies, an employer with approximately 10,000 members could save up to $845,000 annually. Additional savings could be earned with plan changes that encourage member use of generic drugs over branded drugs.

An American Bar Association committee annually asks various government agencies questions about employee benefit issues. EBIA reports back on the Qs and As with HHS’s Office for Civil Rights, the agency responsible for enforcing the HIPAA Privacy and Security Rules. For example, “the officials indicated that OCR expects to issue updated sample language for business associate agreements when final HITECH regulations are issued.”

HHS issued yesterday a “new Strategic Framework on Multiple Chronic Conditions ― an innovative private-public sector collaboration to coordinate responses to a growing challenge. More than a quarter of all Americans ― and two out of three older Americans ― have multiple chronic conditions, and treatment for these individuals accounts for 66 percent of the country’s health care budget. These numbers are expected to rise as the number of older Americans increases.”

The Federal Benefits Open Season is scheduled to end tomorrow, December 13, and we will wish good bye to OPM’s Federal Benefits Open Season Facebook page for another 11 months.

Congress continues its lame duck session this week, and while national attention is focused on the Congressional debate over the Bush tax cut issues, the FEHBlog focuses its attention on what Congress will do with the continuing resolution funding the federal government which runs through Saturday December 18.

The New York Times featured an interesting interview with Aetna’s retiring CEO Ronald A. Williams.

One of Mr. William’s major concerns is that many of the newly insured will still have a hard time finding a doctor to treat them. “I don’t see the system creating an adequate supply of primary care doctors in that amount of time,” he said.

Instead, he said, states and the federal government need to be creative about allowing the expanded use of other health care professionals like nurses and physician assistants.

Still, Mr. Williams is also a staunch defender of his company and the industry. “Health care would cost a lot more if we did not exist,” he said, “and the quality of health care is a lot better than it would be.”

During the debate, Mr. Williams frequently emphasized the need to control the underlying costs of medical care that he said were fueling the increase in insurance premiums. “He was very important in capturing the importance of cost,” said Karen Ignagni, the chief executive of America’s Health Insurance Plans, a trade association.

Mr. Williams makes excellent points in the FEHBlog’s view. AHIP now has a useful website “intended to share information about health care costs – what’s contributing to them and what can be done to put them back on a sustainable path.”

Mr. Williams expresses concern about Congress repealing the Affordable Care Act’s individual mandate. Insurers understandably concerned that the Affordable Care Act’s elimination of pre-existing condition limitations in 2014 will wreak financial havoc on insurers without the individual mandate. The Washington Post reports that a federal district judge in Alexandria VA is expected to rule tomorrow on Commonwealth of Virginia’s Constitutional challenge to the Affordable Care Act’s individual mandate. Of course, even if the Judge strikes down the mandate, nothing will happen until the Supreme Court hears the case which is bound to happen. There are about two dozen cases raising a constitutional challenge to the Affordable Care Act. The key cases are in the ones brought by State attorney generals pending in Virginia and Florida.

Earlier this year, OPM announced a proposed rule advancing the Federal Benefits Open Season time frame from from (a) the Monday of the second full workweek in November through the Monday of the second full workweek in December to (b) November 1st through November 30th of each year. Today, after considering public comments, OPM revealed its decision not to change the Open Season time frame which ends this year next Monday December 13.

In today’s announcement, OPM also finalized a rule change permitting FEHB plans, with the exception of the government wide service benefit plan (Blue Cross FEP), to offer three options beginning in 2012.  Currently, FEHB plans may offer a third option only if the third option is a high deductible health plan with a health savings account. That limitation will be removed for 2012, except for the government wide service benefit plan.

The American Medical News reports that Congress today passed a law extending the Medicare Part B physician reimbursement patch through the end of 2011.  The new law keeps Medicare physician pay at its present level, including the 2.2% increase that physicians received when Congress overrode an SGR-mandated pay cut in June 2010. Absent this change, doctors would have seen a 25% cut on January 1, 2011. Congress will have to revisit this issue next year.

iHealthBeat features an article by Center for Democracy and Technology policy counsel Harley Geiger comparing and contrasting OPM’s plan for a centralized FEHB Program claims data warehouse with the distributed approach to data analysis that the Food and Drug Administation uses to monitor the safety of FDA approved drugs and medical devices.

Last month, the Congressional Research Service published a report on available options under the FEHB Program.The report is a good overview of the Program.

Tonight, the Senate leadership and Senate Finance Committee ranking member Chuck Grassley (R Iowa) introduced a year long extension of the Medicare Part B physician patch.  The patch would freeze Medicare Part B physician payments for 2011 rather than allow a 25% cut to occur. A very jolly American Medical News report explains that

The delay in Medicare cuts was expected to cost $19.2 billion. This would be paid for by expanding Internal Revenue Service recoveries under the national health reform law.

The law offers subsidies based on income to people who sign up for coverage through the health insurance exchanges spelled out by the legislation. If a person earns more than they projected that year, the IRS can collect a limited amount of the subsidies paid. The bipartisan agreement would raise that limit, increasing the subsidies the IRS can recover.

The Senate could vote on the proposal as soon as Dec. 8. A similar bill is under consideration in the House.

The American Medical News also joyfully reports that Congress yesterday passed an exemption from the Federal Trade Commission’s red flags rule for physicians and other professionals, including lawyers. “The red flags rule requires any creditor who held financial data on clients to install identity theft detection and monitoring programs.” The FEHBlog can attest that this is a complex rule, and the exemption for doctors should simplify life for insurers and patients.

Today, in another post-PPACA play, the health insurer Aetna announced the purchased of a company called Medicity which is engaged in wiring up hospitals and other health care providers in health information exchanges. According to Aetna’s press release

Medicity’s connected network provides collaboration and coordination of care delivered through a variety of communications tools, which helps physicians and other health care providers get timely clinical information about patients using the platform of their choice. Medicity’s health information exchange (HIE) technology reaches more than 760 hospitals, 125,000 physician users and 250,000 end users.

We are heading into the final week of the Federal Benefits Open Season which ends a week from tomorrow on December 13. OPM has proposed a rule, which is not yet finalized, to move the Open Season so that it spans the month of November. This change likely is to occur next year. The change will help plans get new members their identification cards before their coverage takes effect in the following January.

Congress is continuing its lame duck session. Last week, it extended the Medicare Part B physician reimbursement patch until the end of this month. Absent Congressional action before then, Medicare Part B reimbursement to doctors will be cut by 25% based on a statutory formula known as the sustainable rate of growth formula. NPR reports that according to a MedPAC survey,

Medicare beneficiaries had fewer problems finding doctors and getting appointments than people with private coverage [in the age 50-64 age range].

Of those seeking a new primary care doctor, the vast majority of Medicare beneficiaries — 79 percent — still said they had no problem. And while 12 percent said they had a big problem finding a new physician, that was substantially less then the 19 percent of those with private insurance who reported a big problem finding a new caregiver.

The story with getting appointments was much the same: 75 percent of Medicare patients said they never had trouble getting a routine appointment, and 83 percent said they could always get in to see the doctor for an illness or injury, compared to 72 percent and 80 percent, respectively, for those with private coverage.

Congress passed an extension of the continuing resolution funding the federal government until Saturday December 18 (one week before Santa Claus passes through), according to CNN Money.

Govexec.com reports that while a majority of the Presidential deficit reduction commission approved the report discussed in last Wednesday’s FEHBlog, the vote was short of the supermajority which would have required Congress to vote on the commission’s recommendations. Nevertheless, according to this report, the commission’s recommendations will set the stage for next year’s budget debate.

The Washington Post reports about privacy advocate and consumer group concerns over a new electronic database of FEHB Program claims that the Office of Personnel Management is creating. OPM is accepting public comments on this new system of records until December 15.

HHS announced last week its Health People 2020 initiative last week. This initiative, which began 30 years ago, sets “the Nation’s new 10-year goals and objectives for health promotion and disease prevention,” and for the current decade includes “myHealthyPeople,” a new challenge for technology application developers.”

The President’s Deficit Reduction Commission released its report today. One of the recommendations is to cap the exclusion on employer contributions toward health care coverage and reduce the Affordable Care Act’s high cost plan excise tax (a/k/a the Cadillac Tax) from 40% to 12%. Another recommendation is to use federal employees as guinea pigs to test a premium support system for the FEHB Program. As it stands the FEHB Program is a defined contribution program. The government contribution is the lesser of 72% of the enrollment weighted average premium or 75% of the selected plan’s premium. The Federal Times explains that “Under this [recommended premium support system], federal employees would receive a fixed subsidy from the government they can use to purchase health insurance from competing insurers. The subsidy would grow by no more than the gross domestic product, plus one percentage point, each year. This could save $2 billion in 2015 and $18 billion through 2020.”  This recommendation, like most others in the report, require Congressional and Presidential approval via a change in current federal law.

Last week, the Mercer benefits consulting company announced that “Growth in the average total health benefit cost per employee, which had slowed last year to 5.5%, picked up steam, rising 6.9% to $9,562, the biggest increase since 2004, according to the latest National Survey of Employer-Sponsored Health Plans, conducted annually by Mercer (for more information, visit http://www.mercer.com/2010-health-plan-survey). Health benefit cost rose three times faster than the CPI in 2010.”  This increase (plus the FEHB Program’s demographics) helps explain the average FEHB Program premium increase of 7.2% for 2011.

OPM released its financial statements and performance reports for fiscal year 2010 (which ended on September 30, 2010) yesterday.  FEHBP junkies will find interesting reading beginning at page 101. An improper payments report begins on page 123. FEHBP’s improper payments for FY 2010 are put at $91.1 million or 0.2% of the total spend.  The FEHBP’s improper payments rate is dramatically lower than the government-wide improper payments average of 5.49%, Medicare’s 10.5% ($34.3 billion), Medicaid’s 9.4% ($22.5), and Medicare Advantage’s 14.1%.

The Leapfrog Group issued its annual top hospitals list today, which includes 65 facilities across the country out of 1200 reviewed.

The AP reports that the House did pass by voice vote this afternoon the Senate approved measure (HR 5712) extending the Medicare Part B physician reimbursement patch through the end of December 2010. “Senate Finance Committee Chairman Max Baucus, D-Mont., and the panel’s top Republican, Charles Grassley of Iowa, say they are working on a 12-month postponement that would give them time to devise a new system for paying doctors. It is estimated that repeal of the current budget formula would cost $300 billion over 10 years that would have to be made up with other spending cuts or added to the deficit.”

The New York Times reports that renewed efforts to repeal the Affordable Care Act’s expanded IRS Form 1099 MISC reporting requirement failed in the Senate today. “Despite the inability to overturn the provision, Senate officials said they expected that another vote on repeal would come soon, given the support the idea has in both parties.”

The FEHBlog hopes that everyone enjoyed the Thanksgiving weekend.

As we head into the fourth week of the Federal Benefits Open Season, which ends on December 13, Govexec.com reports on the choices available to Medicare eligible annuitants who participate in the FEHB Program, a very large cadre.

Congress resumes its lame duck session this week. Congress is staring down the barrel of the expiration of the Medicare Part B physician reimbursement patch on Tuesday December 30 and the continuing resolution funding federal government operations on Friday December 3. The AMA News brings us up to date on the Medicare patch issues. It’s up to the House to adopt the month long extension that the Senate passed just before the Thanksgiving break. On the appropriations front, The Hill reports that

Democrats have not given up on moving an omnibus spending bill in the lame-duck session despite steep odds.

To keep the possibility alive, the House and Senate are expected to pass a short-term continuing resolution (CR) next week to keep the government running beyond Dec. 3, when the last continuing resolution expires, several staffers said. The shorter resolution would last either one or two weeks.

The idea is to give Democrats and Republicans time to negotiate an omnibus.

Modern Healthcare reports that “A new study examining safety practices at 10 hospitals found no reduction in patient harm attributable to medical care over a five-year period.”  Not good.

Modern Healthcare also reports that “As the National Committee for Quality Assurance ponders precisely how a well-run accountable care organization ought to function, the National Association of Chain Drug Stores is urging policymakers to remember the role of pharmacists in care coordination and cost control. * * * In comments (PDF) to the NCQA, the association said model ACOs should include pharmacists on its list of key stakeholders, governing body members and patient-care teams. The association also urged the organization to declare medication therapy management as a core element of cost savings in ACOs.” The FEHBlog recalls a PBM pharmacist telling him at least 10 years ago that health plans could generate cost saving by reimbursing retail pharmacists for advising customers and taking routine tests, such as blood pressure testing. She pointed out that plan members have the most day to day contact with their pharmacists.

OPM has released the Powerpoint presentation from its recent health care reform webinar as well as twelve pages of FAQs and Fast Facts mostly discussing the changes to child eligibility wrought by the Affordable Care Act. These changes take effect on January 1, 2011.

OPM also created a website about the expanded smoking cessation benefits that become available to FEHB plan participants on January 1, 2011.

Beginning plan year 2011, all FEHB program plans must cover:

Four tobacco cessation counseling sessions of at least 30 minutes for at least two quit attempts per year. This includes proactive telephone counseling, group counseling and individual counseling.

All 7 Food and Drug Administration (FDA) -approved tobacco cessation medications.

These benefits must be provided with no copayments or coinsurance and not subject to deductibles, annual or life time dollar limits.

HHS offers a very good stop smoking website with no cost help lines available to anyone.

Bloomberg by way of Business Insurance reports that

Diabetes or prediabetic conditions will strike half of all adult Americans by the end of the decade unless people drop extra weight, says UnitedHealth Group Inc., the largest U.S. health insurer by sales.

The disease will cost the nation almost $3.4 trillion, with more than 60% paid by the U.S. government, in the 10 years through 2020, according to a study released today by the Minnetonka, Minn.-based insurer. The number of Americans afflicted with high blood sugar will rise 44% to 135 million in 2020, from 93.8 million in 2010, researchers said. 

That’s a troubling prediction.

Fiercehealthcare.com reports that health insurer Humana is acquiring Concentra. “The acquisition will give Humana more than 300 medical centers in 42 states where Concentra delivers occupational medicine, urgent care, physical therapy and wellness services to workers. Nearly 3 million Humana customers live near a Concentra center. Concentra’s annual revenues are about $800 million.” That’s an interesting post Affordable Care Act business move for an insurer to make.