FEHBlog

Welcome back Congress from your Presidents’ Day holiday. It appears, according to a Washington Post report, that Congress will push back the continuing resolution showdown from March 4 to March 14. Govexec.com confirms that in the event of a shutdown

Government workers will not see a break in health or life insurance coverage during a furlough. According to the Office of Personnel Management, Federal Employees Health Benefits Program participants are covered while in nonpay status for up to one year. The government will continue its contributions to the program during a furlough and also is responsible for advancing the employee’s share. Participants then can choose between paying the agency directly on a current basis, or having the premiums accumulate and be withheld from their pay upon returning to work. Coverage continues even if agencies do not make premium payments on time.

The FEHBlog discovered last week that a California law firm has filed a lawsuit in the San Francisco federal court against the Department of Health and Human challenging the validity of the Medicare Part B fee schedule used to compensate doctors, which is officially known as the resource based relative value schedule (“RBRVS”). Here’s a link to the first amended complaint.

The lawsuit charges that due to a faulty geographic adjustment formula in the RBRVS, Medicare has underpaid doctors in certain U.S. counties for many years to the tune of $3.2 billion. Of course,  if the allegations are true then doctors in other counties have been overpaid by the same amount. What insanity.
This problem should be resolved administratively or legislatively, not in the court.

The lawsuit tangentially could affect the FEHB Program because fee for service FEHB plans use the RBRVS to pay doctor claims for services rendered to FEHBP annuitants without Medicare Part B coverage. The FEHB Act, 5 U.S.C. Section 8904(b), calls for this payment arrangement (just as Congress called for HHS to use the RBRVS for Medicare Part B pricing).

URAC has released new certification standards for HIPAA Privacy and Security Rule compliance. It’s good timing on URAC’s part because last week HHS Office for Civil Rights imposed its first two HITECH ACT enahanced penalties for HIPAA violations — $4.3 million against Cignet Healthcare as previously noted in the FEHBlog and $1 million against Massachusetts General Hospital based on an employee’s negligent loss of patient records likely on the Boston subway according to a Fierce Healthcare report.

NCQA announced last week that it is seeking public comment until March 22 on changes to its HEDIS quality measures. NCQA is considering to add two new asthma care measures and two new child health measures, plus make changes to five existing measures. FEHB plans report on various HEDIS measures in accordance with OPM’s direction.

 

It’s the end of the week but the FEHBlog would be remiss if it failed to note that a federal judge in San Franciso has issued a show cause order to OPM in the wake of the Administration’s decision to stop defending the constitutionality of the Defense of Marriage Act in court.  The court issued this decision in a case brought by a federal employee seeking to require OPM to provide self and family FEHB coverage to her same sex spouse.

The order reads in pertinent part as follows:

Based on the Executive Branch’s determination that the legislation is affirmatively unconstitutional, the Court requires responses to the following questions: (1) does the Office of Personnel Management (“OPM”) intend to reassess its position on its original instruction to Plaintiff’s insurer to decline to extend benefits to her same-sex spouse? (2) How does the Executive reconcile the position that it intends to enforce a statute that it has affirmatively declared to be unconstitutional and deemed inappropriate to defend? (3) Should the Court remand this matter to the Ninth Circuit’s administrative process for proper adjudication ofPlaintiff’s access to benefits for her wife? (4) On what basis can OPM defend its position to decline to extend benefits in a case in which such declination was based on the defense of unconstitutional legislation?

The Court requires a written response to this Order indicating the parties’ positions in response to the Statement and its potential effect on the outcome of this matter. A response shall be filed by Defendants by no later than February 28, 2011. Plaintiff may respond thereafter, by no later than March 7, 2011.

The FEHBlog thought that the Gill case now pending in the U.S. Court of Appeals for the First Circuit would bring this issue to a head but instead attention now must shared with the other coast.  There is activity in the First Circuit. Yesterday, the government sent a letter to the Court discussing its decision and today the Court entered the following order in that case:

On or before March 18, 2011, the parties are to confer and file a joint proposal as to how these cases should proceed in light of the government’s letter of February 24, 2011. The proposal shall address, among other things, whether the government needs to clarify its litigation stance by filing a new brief. The government shall also inform us, at that time, when we should expect to learn that Congress will or will not seek to intervene or otherwise participate, as well as whether in its view this matter should be held in abeyance pending that Congressional decision. The government shall also address whether, in its view, the government appeals should be dismissed in light of the government’s position. Appellant Dean Hara shall also address whether the government’s letter affects whether his own appeal should proceed. The present briefing schedule is vacated pending consideration of the further filings.

 Stay tuned and enjoy the weekend.

The Administration announced today, according to the Washington Post, that it will no longer defend the Defense of Marriage Act in court. The FEHB Act extends self and family coverage to the enrollee’s spouse. The Defense of Marriage Act, which was enacted in 1996, requires the word “spouse” when found in a federal statute to mean an a person of the opposite sex.

Last year, a federal court in Massachusetts, one of the small number of states where same sex marriages currently may be performed, held the Defense of Marriage Act to be unconstitutional in the context of FEHB Program self and family coverage. The court stayed the enforcement of its decision pending an appeal. Both sides appealed but now the federal government presumably will dismiss its appeal. The FEHBlog expects that OPM will be issuing guidance soon.

Bear in mind that the FEHBlog expects that this action will lead to coverage of same sex spouses, but not same sex domestic partners who are not legally married. Senator Joe Lieberman (I Conn.) sponsored a bill in the last Congress to extend FEHB Program coverage to those folks.

Health Data Management reports that HHS soon will be issuing as a package final changes to the HIPAA Privacy Rule, the HIPAA Security Rule and the nationwide unsecured protected health information breach rule in accordance with the HITECH Act of 2009.

Some of the key changes the Office for Civil Rights is seeking:
* If patients ask for their treatment information, and it’s not in a readily available format they requested, the default will be to provide them direct electronic access to that information.
* If patients want restrictions how what data is shared among health care entities (Greene used an example of a patient who didn’t want treatment information he paid for out-of-pocket to be sent to a health insurer) then EHRs must be able to handle those restrictions.
 * Business associates can be held directly liable for privacy and security rules (240 days after the final rules are issued). Business associates already can be found directly liable under the breach notification rule. In addition, subcontractors will be held to the same liability as business associates.
* In accounts of disclosures of patient information, treatment, payment and health care operations information must be tracked and disclosed.

Ihealthbeat reports on a super sized $4.3 million civil penalty — authorized under the HITECH Act — that HHS imposed on Cignet Health, a Maryland healthcare provider, which had failed to comply with the record disclosure requests of 41 patients. (That’s an individual rights violation under the HIPAA Privacy Rule, not a privacy or security breach.) According to the Washington Post, This is the first civil penalty levied under the HITECH Act but it certainly won’t be the last.

Finally, the Chicago Tribune reports on a drug shortage that U.S. hospitals are experiencing.  “Part of the shortage is being caused by manufacturing issues and quality-control problems at a number of companies that include Lake Forest-based Hospira Inc., one of the primary makers of generic injectable prescription medicines, as they respond to the federal government’s crackdown on drug safety.”

It’s Presidents’ Day, and Congress is on recess until next week. Before leaving on recess, the Senate passed an Federal Aviation Administration reauthorization bill (S. 223) which according to Business Insurance includes a repeal of the expanded IRS Form 1099 reporting requirements created by the Affordable Care Act. The House of Representatives passed on a party line vote a new full year continuing resolution (H.R. 1) that would cut current appropriations by $61 billion. Govexec.com reports on the House bill’s potential impact. The Senate majority leadership is opposed to the House measure, and the President has formally threatened to veto it.

The current continuing resolution funding the federal government expires on March 4. There’s still time to reach a compromise. However, if no compromise is reached, then a government shutdown will occur by operation of the Anti-Deficiency Act. The Washington Post reports today on that prospect. Here’s the key consideration from the FEHBlog’s perspective — which is drawn from a 1998 Congressional Research Service report following the government shutdowns that occurred in 1995 and 1996:

Effects on Federal Staffing. An immediate and critical shutdown effect is the furloughing (placing in a temporary, non-duty, non-pay status) of federal employees. Exempted from furloughs are 
presidential appointees, Members of Congress, uniformed military personnel, and federal employees rated “essential.” “Essential” employees, required to work during a shutdown, are those performing duties vital to national defense, public health and safety, or other crucial operations. Shutdown furloughs are not considered a break in service and are generally creditable for retaining benefits and seniority.

Federal Employee Health Benefit Program (FEHBP) benefits continue for a year in a non-pay status, and the government continues to be obligated for its share of their health plan premium. Employees may continue to pay their share while on furlough, or they may elect to have their premium costs accumulate and have them deducted from their pay in a lump-sum when they return to work.

The AMA News reports that at a recent AMA meeting, the CMS Administrator Donald Berwick MD urged doctors to embrace the Administration’s health care quality and electronic medical record initiatives in order to avoid being left in the competitive dust. Here’s an interesting excerpt from the Q&A session at that meeting:

Payment methods should reward physicians and hospitals for keeping patients healthy, said Harold Miller, executive director at the nonprofit Center for Healthcare Quality and Payment Reform. “Nobody gets paid at all when patients stay well.”

Such payments could be possible under accountable care organizations, as mandated by the health reform law. At this article’s deadline, CMS was preparing to unveil a proposed rule on ACOs, which will allow physicians and hospitals to work together on coordinating care and sharing some of the savings that they generate for federal health programs.

But Miller said the public could turn against ACOs if people feel they are another way to ration care. [Federation of American Hospitals President Chip] Kahn questioned how ACOs will effectively coordinate care for patients who don’t stay in the care network.

Welcome, Mr. Kahn to the wonderful world of health insurers.

The Wall Street Journal reported at length on the problem that erroneous medical bills create for patients. According to the article,

There are no comprehensive statistics on medical-billing mistakes, but Stephen Parente, a professor of health finance at the University of Minnesota who has studied medical billing extensively, estimates that 30% to 40% of bills contain errors. The Access Project, a Boston-based health-care advocacy group, says it’s closer to 80%. 

I have a daughter who attends college out of state. I have had problems with her health care bills which are sent to the wrong health insurer. (These types of errors are included in the error percentage according to the article.) When I get the bills, I call the provider’s billing office which is quite willing to re-bill the correct insurer. Hopefully some of the CORE Operating Rules will help eliminate these types of mistakes over time. e.g., with improved real time eligibility records.

The AP reports that the Justice Department yesterday filed a motion asking U.S. District Judge Vinson to clarify his ruling the the Affordable Care Act is unconstitutional. The Government wants the Judge to state that States should continue to implement the law while the case is on appeal. The plaintiffs reported will file a response today.

There’s a lot going on up on Capital Hill but the FEHBlog will review that on Sunday.

The AMA News reports on a new study with another take on the correlation between hospital costs and mortality. This new study of California admissions suggests the existence of a correlation between more intensive /expensive care and lower mortality which is music to the ears of the hospital industry. Other studies disclaimed such a correlation. Another researcher cautions that

Part of this research riddle could be explained by looking at what happens to patients when they leave the hospital, said Amber Barnato, MD, MPH, associate professor of medicine at the University of Pittsburgh School of Medicine.

Dr. Barnato wrote a study published in the February 2010 Medical Care that examined the intensity of end-of-life care among more than 1 million patients at Pennsylvania hospitals from 2001 to 2005. She found that hospitals with high “treatment intensity” had better survival rates than those that deployed fewer interventions near the end of life. However, the mortality gap waned after six months and disappeared after one year.“Perhaps patients going to high-intensity areas are getting some more days or months of life, but they’re not on average living 15 more years,” Dr. Barnato said.

Yesterday, the Justice Department announced a large number of arrests and indictments for health care fraud. Among those indicted in Miami were

Victor Ramon Castillo [who] was charged with five counts of health care fraud, in connection withVida Group Services, Inc., in Miami, Florida. The indictment alleges that Castillo incorporated Vida Group, submitted an application to Blue Cross on behalf of Vida Group, opened a bank account, and submitted approximately $1,118,854 in fraudulent claims to Blue Cross, of which Blue Cross paid $298,038. The indictment alleges that many of the fraudulent claims were for Federal employees receiving health benefits under the Federal Employees Health Benefits Program. This case is being prosecuted by Assistant U.S. Attorney Robert Luck.

President Obama released his Fiscal Year 2012 budget yesterday. In the reductions and savings section, you will find the following proposal under the heading Reductions: Health Care (Pharmaceutical Proposals):

FEHB Program Pharmacy Benefit Contracting.  Under current law, health plans participating in
the Federal Employee Health Benefits (FEHB) program contract with pharmacy benefits managers who negotiate prices with drug manufacturers and pharmacies on behalf of their enrollees.  Under the current contracting arrangement, prescription drug costs have risen significantly and now consume roughly 30 percent of total FEHB program expenditures.  Under the Administration proposal, the Office of Personnel Management would be given authority to streamline pharmacy benefit contracting within the FEHB program and leverage enrollees’ purchasing power to reduce costs and obtain greater value for enrollees.

With all due respect to the Government, the FEHBlog notes that drug costs are a significant percentage of all health plan costs. In particular, the FEHB Program sees a particularly high percentage because 1/2 of FEHBP enrollees are annuitants and a large percentage of those annuitants are over age 65 and have primary health insurance coverage under Medicare Part A (hospital care) or Medicare Part A and B (physician and other health care provider services). FEHB Program annuitants typically do not opt for Medicare Part D prescription drug coverage. For these people, perhaps 25% of the total enrollment (the FEHBlog needs to track down that figure), Medicare pays the lion’s share of their hospital bills while the FEHB plans pay the lions share, if not all, of their pharmacy bills. It’s the demographics. The FEHBlog thinks that the plans are doing a good job providing prescription drug coverage to enrollees at a reasonable cost considering the demographics.

Here’s a link to the Administration’s discussion of OPM’s proposed FY 2012 budget.

The FEHBlog recently noticed that the OPM Inspector General has posted its semi-annual report to Congress for the period ended September 30, 2010.

Business Insurance discusses an interesting bounce of the Affordable Care Act ball. While the ACA amended the Internal Revenue Code to exclude from an employee’s income the cost of covering children up to age 27, that tax exemption does not automatically find its way into all tax codes. The FEHBlog found this Arlen Group report identifying the states, including California, with a disconnect. The Business Insurance report concludes

Employers with employees in nonconforming states will have to decide what approaches to take, consultants say. Some may wait and hope their states take action to bring state law into line with federal law on the issue.
“There is still sufficient time for states to act for 2011,” Aon Hewitt’s Mr. Piro said.

One such employer is the U.S. Government. Federal employees are not exempt from state income taxes on their federal salaries.

This AMA News article is fun reading, at least to the FEHBlog.

Physicians who are outside big insurers’ networks in several states can expect health plans to pay even less of the cost of their services as Medicare rates replace fee schedules based on “usual, customary and reasonable” rates, doctors organizations say.

The AMA danced on the grace that it dug for the Ingenix usual reasonable and customary databases. Be careful what you wish for. In the FEHBlog’s view, insurer reliance on the Medicare resource based relative value fee schedules make perfect sense. What’s more, doctors offices are familiar with those schedules which have been around since the early 1990s. That’s bending the cost curve down.

It’s about three weeks until the current continuing resolution (“CR”) funding the federal government, including the FEHB Program, expires on March 4.  The current CR is based on the appropriations approved for the previous FY 2010 fiscal year. On Friday, according to this Govexec.com report, the House majority leadership introduced a new CR that would cut $100 billion in funding (as compared to the President’s Fiscal Year 2011 budget proposal) for the remainder of the current fiscal year which ends September 30, 2011. OPM’s appropriations would be cut by $5.2 million according to this House Appropriations Committee chart. (OPM’s FEHB program operations are funded from the FEHB trust fund in the U.S. Treasury rather than general government appropriations. There is a 1% surcharge on FEHB premiums to fund OPM’s administration operations. However, Congress typically appropriates one-quarter of that surcharge for OPM use. The balance winds up being allocated to plan reserves.)  The House is expected to approve the Appropriations Committee’s bill. Then the Senate, where the Democrats have a 57-43 seat majority (including the two independents who caucus with them) will begin work on the CR. That’s when the fun begins.

Tomorrow, the President sends his FY 2012 budget proposal up to Capitol Hill. The House Ways and Means and Budget Committees will be holding hearings on the proposal later this week. So it’s a two front battle. 

Business Insurance reports that House and Senate Republicans have introduced a bill to eliminate the $2500 cap on health care flexible spending accounts which the Affordable Care Act (“ACA”) imposed effective in 2013 and the ACA’s restrictions on reimbursement of over the counter drugs that took effect this year. However, as FSA funding counts toward the ACA’s Cadillac or high cost health plan tax, I expect a sharp reduction in FSA offerings in 2018 even if this bill is enacted.

On Friday, the Department of Health and Human Services launched “a new web portal providing important health and health care indicator data to support innovations in information technology.”

The Health Indicators Warehouse is a collection of health indicators from a wide array of HHS data sources that are maintained to support researchers, technology developers and policymakers. Health indicators are measurable characteristics that describe the health of a population (e.g., life expectancy, mortality, disease incidence or prevalence, or other health states); determinants of health (e.g., health behaviors, health risk factors, physical environments, and socioeconomic environments); and health care access, cost, quality, and use. Depending on the measure, a health indicator may be defined for a specific population, place, political jurisdiction, or geographic area. Currently, the Health Indicators Warehouse includes nearly 1200 health indicators derived from over 170 different data sources, with all being downloadable via APIs.

Pretty cool.

The Kaiser Health News reports about a newly published book by a true contrarian — “Overdiagnosed: Making People Sick in the Pursuit of Health,” authored by Dartmouth researchers and physicians H. Gilbert Welch, Lisa Schwartz and Steven Woloshin.  Check out this excerpt from the Q&A with Dr. Welch:

Q. Many health care experts today say it’s important that everyone have a “medical home“: a primary care physician who’s their regular go-to person for routine and preventive care, and who coordinates their care with specialists and other health care providers when necessary. If you’re healthy, do you need a medical home?A. The patients that most need a medical home are those with multiple chronic conditions and who are on many medications.
For people who are well, the virtue of having a regular primary care physician is to establish a relationship and to establish the set of values that will guide your care. You can talk about where you are on the spectrum between aggressively looking for early signs of disease and waiting until you have symptoms to seek out treatment. The first may have the potential benefit of early diagnosis, but the potential harm of being diagnosed and treated for problems that will never become relevant.
Q. What’s on your wellness wish list?A. Let’s help people learn how to ask good questions of their doctors. How to understand risk and health statistics so they can make better decisions. Wellness programs could educate and inform people about how to be a critical consumer of health care. Wouldn’t that be something?

Speaking of medical homes, the AMA News reports on the NCQA’s recently revised accreditation standards for medical home providers. According to the report, the revised standards “place greater emphasis on patient feedback, access to physicians and care coordination.”  Here’s a physician’s perspective from the article:

Peter McDougall, MD, a solo family physician in Fort Worth, Texas, has been recognized as a level 3 NCQA medical home since March 2010. He was in a good position to receive recognition because he’s had an EMR system since 1997. Staff members enter data during patient visits and follow up with patients.
Dr. McDougall spent about $8,000 and several months in 2010 to receive the certification. He said his patients gave him a lot of positive feedback about the achievement. Most NCQA standards make a lot of sense, he said.
Dr. McDougall said doctors should look at NCQA recognition as a reward in itself, not a fast track to better payment. “If your goal is to increase payment by recognition, I think that’s way in the future and very cloudy,” he said. “I know the payers quite well. They really don’t have a good feel at all for what this process is.”

As FEHB plans are created by federal government contracts, it’s worth noting a Govexec.com report that “The Obama administration announced today [in the Federal Register] it was withdrawing a proposal that would have required federal agencies to post copies of contracts and task-and-delivery orders on a public website.”

The consulting group Milliman released its 2010 group health insurance survey which finds in pertinent part, as we lawyers like to say, that group health insurers plan to make greater use of

• pay for performance programs such as Bridges to Excellence
• risk sharing arrangements with health care providers
• price transparency tools for members, and
• tiered provider networks (PPO within a PPO)

Among the survey’s other key findings:
— 85% of respondents looked for health care information about symptoms [on the internet] before visiting a doctor while 71% of respondents said they brought a list of questions to ask their doctor during a visit. However, 41% indicated they were unsure how to discuss their concerns while 47% felt their doctors were rushed during the visit.
— Almost four in ten employees (39%) support incentives for using proven treatments versus 16% who support penalties for using treatments that research has shown work less effectively.

Yesterday, OPM issued a benefits administration letter to payroll offices on recent changes to its Federal Employees Group Life Insurance Program.

OPM is engaged in a major campaign to help employees and annuitants stop smoking — a campaign that enjoys the support of FEHB plans. The Washington Post reports that the top federal employee, President Obama, has quit smoking. The President deserves congratulations for that accomplishment.

Happy Super Sunday!

Govexec.com reports that Senate Appropriations Committee Chairman Daniel Inouye (D Hawaii) is predicting another short extension of the continuing resolution funding the federal government which now is scheduled to expire on March 4. The House was on recess last week, although the Budget Committee did issue a proposal for cuts to discretionary spending for the current Government fiscal year which the House Appropriations Committee will implement this week and the full House will take up during the week of February 14. That’s the same week that the Administration will issue its budget proposal for the federal fiscal year that begins October 1, 2011. The Senate will be on break the week of February 21 and is not expected to rubber stamp the House bill. That brings us to another short extension of the current continuing resolution. 

The FEHBlog ran across this interesting commentary about the looming U.S. doctor shortage in the AMA News. The commentary notes that “The number of Medicare-funded residency programs was capped at about 100,000 by the Balanced Budget Act of 1997.”  A Wall Street Journal op-ed in the Wall Street Journal seconds the point that “The doctor shortage was fostered in 1996 when Congress capped the number of new doctors Medicare would pay to train, a practice that continues to this day.” The Affordable Care Act funds 889 new primary care residencies according to the AMA commentary. That’s less than a 1% increase in the current cap. The shortage is expected to be 125,000 in 14 years. Puzzling.

Last week, the Centers for Medicare and Medicaid Services published a proposed rule which would require all Medicare participating providers to give Medicare beneficiaries written notice about their right to contact a Medicare Quality Improvement Organization (QIO) with concerns about the quality of care they receive under the Medicare program.  Currently, hospitals are subject to this obligation. The proposed rule would extend the requirement to doctors and other providers. This rule likely would not go into effect until 2012.

The Wall Street Journal published an article on the rapidly growing practice of employers offering wellness programs to their employees.

Employers spent an average $220 per worker on wellness incentive awards last year, up 35% from $163 in 2009, according to a survey of more than 1,200 employers from Buck Consultants, a benefits-consulting group based in New York. About 11% spent more than $500 per employee last year. Nearly three out of four North American employers have some sort of wellness program, according to the survey

OPM offers federal employees the healthierfeds program and it encourages FEHB plans to offer wellness programs. OPM’s principal focus this year is on its stop smoking program.