FEHBlog

OPM’s Federal Benefits Open Season, which encompasses the Federal Employees Health Benefits Program, the Federal Employees Dental and Vision Insurance Program, and the Flexible Spending Accounts for Federal Employees (FSAFEDS) starts tomorrow and runs through December 13. The FEHBlog discovered today that OPM has an extensive set of frequently asked questions about federal employment and federal employee benefits.

OPM offers a health benefits plan comparison tool on its web site, and Asparity Decision Solutions offers its own web based tool that considers your estimated health care expenses.

Govexec.com offers a timely report on the wide range of plan choices available to federal employees, and
Tammy Flanagan of the National Institute for Transition offers her advice on coordinating FEHBP and Medicare coverage.  Ms. Flanagan will be interviewing FEHB plan executives on upcoming episodes of  the radio program “For Your Benefit” on Monday mornings at 10 a.m. ET on federalnewsradio.com (listen online) or on WFED AM 1500 in the Washington metro area.

• Nov. 8: Jane Overton, GEHA Federal Health Plan (Fee-for-service plan and HDHP)
• Nov. 15: John Patrick, Kaiser Federal Health Plan (HMO)
• Nov 22: Tom Bernatavitz, Aetna Federal Health Plan (HMO/consumer-driven plan and HDHP).
• Nov 29: Walt Wilson, SAMBA Federal Employee Benefit Association (Fee-for-service plan)

Of course, in the mid-term elections held on Tuesday the Republicans gained control of the House of Representatives and increased their number in the Senate but falling short of a majority there. Before that change occurs in January the current Democratically controlled Congress will hold a lame duck session. (The FEHBlog likes Daffy Duck who is not lame.)  The AMA News explains that

Daffy Duck

Physicians are slated to get hit with a 25% reduction in Medicare payments over two months, according to the final 2011 physician fee schedule released Nov. 2 by the Centers for Medicare & Medicaid Services. CMS revised that downward from its original estimate of a 29.5% cut. Pay is still slated to go down 23% on Dec. 1 but would go down 2% — rather than 6.5% — on Jan. 1, 2011, assuming Congress takes no action.

The medical community is pushing for the lame duck Congress to pass a 13 month patch to allow for negotiations with the new Congress. That should be really interesting, given the new budget cutting environment on Capitol Hill.

Reuters reports on the third quarter results of the other two leading prescription benefits managers — CVS Caremark (bearish outlook) and Express Scripts (bullish) outlook).

 Finally, Computerworld reports that the Center for Democracy and Technology and fourteen other privacy advocacy groups submitted comments to OPM on the October 5, 2010, Federal Register notice announcing a new system of records under the Privacy Act in connection with a FEHBP health claims data warehouse. The CDT’s press release explains that

OPM has launched its 2010 Federal Benefits Open Season website. The Open Season begins next Monday November 8.

Modern Healthcare reports that the journal Health Affairs in its November issue addresses the topic of value based insurance design — “the strategy of lowering copayments for services relative to their costs.”  

At a briefing about the articles, Karen Ignagni, president and CEO of America’s Health Insurance Plans, referred to the articles as “very, very thoughtful papers” and talked about the importance of aligning incentives with medication adherence. Ignagni also said more information is needed about comparative-effectiveness research with regard to drugs and procedures; that cost should be a consideration; and that groups should work collaboratively in this effort.

The Health Affairs blog provides a helpful summary of these articles.

The Wall Street Journal’s Health Blog points out that the Food and Drug Administration (“FDA”) is holding today and tomorrow a public hearing on biosimilar drugs. According to the FDA’s website, the hearing’s purpose is to obtain public input on “issues and challenges associated with the implementation of the Biologics Price Competition and Innovation Act of 2009 (BPCI Act). The BPCI Act establishes an abbreviated approval pathway for biological products that are demonstrated to be “highly similar” (biosimilar) to, or “interchangeable” with, an FDA-licensed biological product.”  Generic drugs are the small molecule drug analog to biosimilars. (Small molecule drugs are the pills in your medicine cabinet while biologic drugs are typically administered at a facility or doctor’s office.) The WSJ Health Blog concludes with the observation that  “Biosimilars have waited a long time to make their debut in this country.  If the disagreement between the pro and con speakers at the 2-day FDA event is any indication, biogenerics have some more time to get ready for their close-up.” That’s not good news for those interested in lowering health care costs.

Business Insurance reports on prescription benefit manager Medco Health System’s latest earnings report. “Medco CEO David Snow said [traditional, small molecule] generics would contribute to profits consistently through 2020, perhaps surprising some investors who thought the generic benefits would die down around 2015.”

Happy Halloween!  We are now a week away from the 2010 Federal Benefits Open Season . OPM has fired up its Open Season page on Facebook for the second year. Govexec.com predicts a “robust” open season. The Federal Times has a column with Open Season background.

The regulatory agencies implementing the Affordable Care Act (Labor Department, Health and Human Services Department, and the IRS) issued three new frequently asked questions and answers on Friday. The FAQs while noteworthy are not particularly relevant to the FEHB Program.

HHS’s Agency for Healthcare Research and Quality solicited public comment on the development of a National Health Care Quality Strategy and Plan (“National Quality Strategy”). BNA provided links to the comments submitted by the Blue Cross Blue Shield Association, America’s Health Insurance Plans, the American Medical Association, and the American Hospital Association, which are worth reading.

The Brookings Institution recently held a conference about the Center for Medicare and Medicaid Innovation created by the Affordable Care Act.  According to BNA, CMS Administrator Donald Berwick referred to the CMI as the “jewel in the crown” of the new law “because projects launched by the center hold the promise of lowering health care costs while increasing quality.” Hope springs eternal.

Healthcare IT News reports that  “Anthem Blue Cross has announced the launch of a new website in California designed to provide reliable, up-to-the-minute information to women about health issues specific to them.” Here’s a link to the new site.

It’s so much easier to find FEHBlog worthy material when Congress is in session. There’s still a few more weeks until November 15 when the lame duck session starts. Of course, the Congressional election is Tuesday. Healthcare IT News reports on a speech by AHIP President Karen Ignani to the Nashville Healthcare Leadership Council. Her speech emphasized the importance of quality, productivity, and cost to successful healthcare reform. 

In [Ms Ignani’s] view, it’s futile to worry about the political identity of the next Congress.

“We need all stakeholders to get out of their comfort zone and participate in finding solutions,” Ignagni said. “Healthcare costs are still crushing the country. We have to go beyond the mindset of ‘my cost containment is somebody else’s revenue deprivation.’

Amen to that.

Meanwhile, Leavitt Partners, which is headed by the former HHS Secretary and former Utah Governor Mike Leavitt, is making predictions about how the new and as yet unelected Congress might change the Affordable Care Act according to this Hill article. The Leavitt firm describes their predictions as healthcare reform bracketology.

Health Leaders Media is reporting that the final HHS rules implementing the HITECH Act, which were proposed this past summer, are likely to be finalized by the end of this year or early next year. This includes the unsecured protected health information breach notification rule and the business associate rule.

AIS published a useful report on the difficulties that insurers are facing in applying the new preventive care guidelines applicable to non-grandfathered plans (effective 2011 for non-grandfathered FEHB plans). Non-grandfathered plans must provide certain in-network preventive care services with no cost sharing. The government regulations identify those services by reference to treatment guidance to providers which doesn’t necessarily translate to claims payment rules. Hopefully, the regulators will straighten this problem out over time.

The Wall Street Journal reported  on the problems that outpatient surgery patients face in managing their own rehabilitation process.

Surgery is easier and faster than ever before: Nearly 65% of all surgeries don’t require an overnight hospital stay, compared to 16% in 1980. Hospitals that once kept patients for three weeks after some major operations now discharge them within a matter of days. But the body still heals at its own pace, and reduced time in hospital care means patients are assuming more responsibility for their own recovery—and more risks.

Patients not only have to perform rehabilitation regimens at home, but they are more often caring for their own incision wounds and dressings and having to watch for signs of infections and blood clots. They also may be managing drains, implanted IV ports and pumps, all of which can be difficult and stressful.

The move to speedier surgeries is largely the result of new minimally invasive techniques, improvements in anesthesia and cost-cutting by insurance companies and hospitals. Surgical procedures now often use smaller incisions, cut less muscle, and result in less blood loss. Newer anesthetics allow patients to regain consciousness quickly or not go to sleep at all. Pain medications are more effective.

At the same time, concern about rising health care costs has led to changes in Medicare and insurance plans that have encouraged the development of outpatient surgical centers and created financial incentives for hospitals to shift less complex surgery to their own outpatient facilities. So, many types of surgeries previously performed in hospitals with overnight stays are now being done on an outpatient basis: The number of freestanding surgery centers grew from about 240 in 1983 to more than 5,000 now.

Business Insurance reports that ‘Walgreen Co., the largest U.S. drug- store chain, is looking to sell its pharmacy-benefits management business [which is the ninth largest in the U.S.] and has hired an adviser to run an auction, said three people with knowledge of the matter.”

The AMA News offers a report on the medical community’s perspective on “‘physician payment reform'” [which the AMA News describes as] “a catch phrase that refers to paying physicians based on quality measures and episodes of care, rather than a fee-for-service system.”

This AMA News article discusses the “National Committee on Quality Assurance’s annual State of Health Care Quality report. The 162-page report [available here], which looked at claims data from more than 1,000 health plans representing 118 million Americans, declared that spending more money on health care did not automatically lead to better health.”   Actually, the NCQA press release explains

Health plans that spend the most on care don’t always deliver the best quality

News that high-spending health plans don’t always deliver the best care comes from findings on relative resource use (RRU) – documented for the first time in the report across five common, costly and chronic diseases.

RRU indicates how intensively health plans use health care resources (such as physician visits and hospital stays), compared with other plans in the same region, serving similar members. When used alongside quality measures, RRU makes it possible to talk about quality and cost simultaneously.

Given the definition of value as the intersection of health plans’ spending (resource use) and their results, RRU reveals the value that plans offer.

RRU analysis shows that many plans that deliver below-average quality use above-average levels of resources. More care is not always linked to better results, confirming that the saying “you get what you pay for” does not apply to health care.

Last week, HealthGrades issued its 13th annual report on U.S. hospital quality.  The report finds a large quality gap between the hospitals awarded five stars by HealthGrades versus the hospitals awarded one HealthGrades star. This blurb from the press release caught the FEHBlog’s attention: “On average, one in nine patients developed a hospital-acquired complication, across the nine procedures evaluated for inhospital complications, from 2007 to 2009.”

The Affordable Care Act will require health plans, including FEHB plans, to provide enrollees with a four page standard benefit summary beginning in 2013. This four pager will supplement the FEHB plan brochure or the ERISA summary plan description. The National Association of Insurance Commissioners (NAIC) is responsible for providing the HHS Secretary with a template. The Politico offers a report on the NAIC’s work. According to the article, the NAIC is aiming to send its template to HHS in November.

The National Association of Insurance Commissioners approved a draft minimum medical loss ratio regulation today and sent it along to the Health and Human Services secretary for her consideration. The Secretary issued a press release thanking the NAIC and promising to issue the actual regulation soon. Forbes reports on the adverse impact that the rule is expected to have on HMOs and insurance brokers. The Forbes reporter writes

One person I spoke to recently, Evan Falchuk at Best Doctors, pointed out that the MLR caps take away the incentive for HMOs to keep costs down. Under the current rules if you are adept at either containing costs or pricing well, your MLR falls and it translates into profitability. With government-mandated MLRs, and forced rebates to consumers if you push the MLR down too far, what will be the incentive to keep costs in check?

AHIP expresses concern about the MLR reg here. It’s very unlikely in the FEHBlog’s view that HHS will make changes to this rule that favor HMOs.

The FEHBlog does not expect the rule to have an adverse impact on insured fee for service FEHB plans as explained briefly in Tuesday’s Tidbits. The MLR rule does not apply to self funded fee for service FEHB plans.

Fierce Healthcare reports that “Hospitals need to be on the hook for “higher leverage” safety measures if the Department of Health and Human Services’ wants its Hospital Compare website to ever be taken seriously. At present, the site–created to help patients pick the best facility for them based on various hospital statistics–is proving unhelpful for Medicare patients who need risky surgeries, according to a report published this week in the Archives of Surgery.”

CNN Money reports on the ongoing National Association of Insurance Commissioners meeting which is finalizing guidance to the Health and Human Services Secretary on implementation of the minimum medical loss ratio provisions of the Affordable Care Act. In the FEHBlog’s view, FEHB Program fee for service plans will have no problem satisfying the law’s 85% minimum loss ratio requirement for large group health plans. In any event, the ratio calculation and any resulting rebate will occur at the state level according to the guidance under consideration. The Politico Pulse is attending the conference and provides updates each morning. Once the NAIC finalizes its guidance, the HHS Secretary will prepare an interim final regulation.

The Federal Times reports about the federal government’s new anti-trust lawsuit filed against non-profit health insurer Blue Cross of Michigan. The lawsuit challenges the health insurer’s practice of negotiating so-called most favored nation pricing clauses in its hospital contracts. Blue Cross stated in a press release that 

Negotiated hospital discounts are a tool that Blue Cross uses to protect the affordability of health insurance for millions of Michiganders,” said Andrew Hetzel, BCBSM vice president for corporate communications. “Through this lawsuit, the federal government seeks to deny millions of Michigan residents the lowest cost possible when they visit the hospital.”

The American Medical Association has been pushing for this type of action.

Finally the FEHBlog wants to call to your attention the fact that OPM has refreshed its Federal Employees Group Life Insurance Program website. 

Last week, the Justice Department noticed an appeal from the recent Massachusetts federal district court decisions holding the Defense of Marriage Act unconstitutional. The Defense of Marriage Act currently prohibits coverage of same sex spouses under the Federal Employees Health Benefits Program. The Obama Administration wants Congress to enact the Domestic Partnership Benefits and Obligations Act, which will provide full benefits to same-sex partners of federal workers. The district court has stayed enforcement of its decisions pending the outcome of the appellate process. Unless the Court of Appeals accelerates the process, an appellate decision likely will be issued next year, following the upcoming federal benefits open season.

The Segal Company, a benefits consulting firm, issued its 2011 health plan trend cost survey. According to the press release, “[t]he report also discusses strategies for managing health care costs and notes that plan sponsors will need to address new rules and requirements as mandated under the Affordable Care Act. A brief summary of how plans are responding to certain provisions of the Affordable Care Act is provided.”

The Wall Street Journal reports on renewed health insurer efforts to control medical costs through wellness programs and devices such as medical homes, accountable care organizations that team up hospitals and doctors. Insurers have been at this for a while but the poor economy and the Affordable Care Act upheaval may create leverage with health care providers

NPR reports on insurers offering “high performance” provider networks to employers.  “They come in a few different flavors:

• Doctors or hospitals may be placed into different tiers based on the insurer’s evaluation of their cost and quality. You may have a lower copayment and deductible if you use one of the providers in the first tier that is deemed most efficient.
• Some providers in a health plan may be designated as the high-performance group, and you may get a lower premium if you choose them as your network.”