Weekend update

Weekend update

Congress is on a State / district work period this week. The Health Affairs blog discusses the health coverage provisions in the CARES ACT. In addition to broadening coverage of COVID-19 testing [Section 3201] and any future FDA-approved vaccine [Section 3203] , the new law permits high deductible health plans with health savings account to pay for telehealth care before the deductible [Section 3701] and repeals the Affordable Care Act provision requiring a doctor’s prescription for over the counter medicines as a prerequisite to reimbursement from a health savings account or a healthcare flexible spending account [Section 3702].

The high deductible health plan telehealth provision took effect last Friday and the over the counter drug coverage change was made retroactively effective January 1, 2020.

Health Affairs blog adds that

Under [Section 3202 of] the CARES Act, all comprehensive private health insurance plans would reimburse a test provider based on the rate negotiated between the plan and the provider (i.e., the in-network rate) that was put in place prior to this emergency. If there is no negotiated rate between the plan and provider (i.e., the provider is out-of-network), the plan would fully reimburse the provider based on the provider’s own “cash price” (or a lower price if the plan can negotiate one). This “cash price” must be publicly available (listed on a public website) while there is a declared public health emergency. Providers that fail to make their price public could face a civil monetary penalty of up to $300/day. This provision essentially allows out-of-network labs to set their own price and expect full reimbursement from the plan, potentially leading to dramatic price increases for testing.

Fierce Healthcare reports that that healthcare actuarial consulting firm TowersWillisWatson has released a projection of healthcare spending associated with the COVID-19 emergency.

On the low end of the spectrum, should the outbreak infect just 10% of the population and prove to have low morbidity, costs will increase by under 1%. However, if the virus infected 50% of the population with high morbidity, costs could increase by 6.8%, the study found. The scenario with the highest cost increases is if the virus 30% of people with high morbidity—a combination that could lead to 7.2% in cost increases, Willis Towers Watson found.

A major federal agency and two other health plan accrediting bodies have centralized their COVID-19 emergency guidance:

Apple in partnership with the Centers for Disease Control has posted a COVID-19 screening tool for consumers.

Monday Musings

Today is the tenth anniversary of President Obama signing the Patient Protection and Affordable Care Act into law. The FEHBlog is tempted to muse on the law but since he has been writing in this space since 2006, he concluded no need exists for another such musing.

Be sure to check out at least the transcript for this week’s Econtalk interview with Dr. Azra Raza, a veteran oncologist who wrote a book on the human cost of cancer treatment. She explained that the benefit of early detection of cancer lies in the fact that at that point the body has fewer cancer cells that must be killed. She also touted tobacco cessation. She further explained that the new fangled CAR-T drug therapy has a weakness. CAR-T activates the body’s T cells which wind up killing healthy and cancerous tissue in a particular organ. Consequently CAR-T therapy is not used for example on liver cancer because the cure would kill the liver. Cancer is a very complicated disease.

On the COVID-19 front —

  • The Hill reports on continuing Senate negotiations over the third COVID-19 emergency relief bill. The American Hospital Association helpfully lists the healthcare provisions in the draft legislation which includes adjustments to the Families First relief bill’s COVID-19 testing coverage mandate and allow high deductible health plans with health savings accounts to waive their deductible for telehealth services.
  • “Today the U.S. Treasury Department, Internal Revenue Service and the U.S. Department of Labor announced that small and midsize employers [under 500 employees] can begin taking advantage of two new refundable payroll tax credits, designed to immediately and fully reimburse them, dollar-for-dollar, for the cost of providing Coronavirus-related leave to their employees.”
  • The Wall Street Journal offers an illuminating story about its investigation into the COVID-19 deaths at a Washington State nursing home. On February 26 the nursing home order closure of its dining rooms and an institutional scrub down due to a high number of respiratory illnesses among patients. Nevertheless the staff went ahead with a schedule party for patients, their family members and staff and ka-boom. This is why the social distancing guidance is so important right.

Tuesday Tidbits

Fierce Healthcare reports on how health insurers are communicating with their members and the public about COVID-19. This is a good idea.

The U.S. Preventive Services Task Force has decided to expand its Hepatitis C screening B level recommendation to all asymptomatic people aged 18 to 79. “This recommendation incorporates new evidence and replaces the 2013 USPSTF recommendation, which recommended screening for HCV infection in persons at high risk for infection and 1-time screening in adults born between 1945 and 1965.” The Task Force took this action because among other factors “Since 2013, the prevalence of HCV infection has increased in younger persons aged 20 to 39 years.” “The USPSTF concluded that broadening the age for HCV screening beyond its previous recommendation will identify infected patients at earlier stages of disease who could greatly benefit from effective treatment before developing complications.” The ACA requires health plans to cover the expansion of this service with no patient cost-sharing when provided in-network beginning January 1, 2022. It occurs to the FEHBlog that there may be practical difficulties distinguishing claims from the original and expanded group members.

Forbes reports that Anthem, a Blue Cross licensee, has closed on its acquisition of behavioral health services provider Beacon Health Options.

Beacon manages mental health, substance abuse and other behavioral health services for more than 36 million people across the U.S. Anthem, which owns Blue Cross and Blue Shield plans in 14 states, didn’t disclose a price it is paying Bain Capital Private Equity and Diamond Castle Holdings for Beacon Health, which is privately held. 

The AP informs us that “The Justice Department said Monday [March 2] that pharmaceutical company Sandoz Inc. will pay a $195 million penalty to resolve criminal charges of conspiring to fix prices and rig bids to stifle competition for generic drugs.” “The price-fixing affected more than $500 million in Sandoz’s generic drug sales, the Justice Department said. It involved drugs used to treat a range of chronic problems and pain conditions including arthritis, hypertension, seizures, various skin conditions and blood clots, according to officials.”

The Department of Health and Human Services announced that its Office for Civl Rights has reached a HIPAA Security Rule settlement with an Ogden Utah medical practice.

“All health care providers, large and small, need to take their HIPAA obligations seriously,” said OCR Director Roger Severino. “The failure to implement basic HIPAA requirements, such as an accurate and thorough risk analysis and risk management plan, continues to be an unacceptable and disturbing trend within the health care industry.” 

Tuesday Tidbits

Earlier today, the House Education and Labor Committee advanced its bipartisan surprise billing proposal (H.R. 5800) today by a 32-13 vote. As the FEHBlog mentioned last Friday, the House Ways and Means Committee has released the legislative text of its bipartisan surprise billing proposal (H.R. 5826). While these proposals seek to protect consumers, which is a good thing, they also will impose new administrative burdens on the health system but won’t encourage out-of-network providers to go in-network. The FEHBlog anticipates that if bipartisanship on this issue continues in the House, then it’s likely that the House bill will wind up in the Senate’s bill to lower healthcare costs (S. 1895) and eventually become law.

The Association of Community Health Plans has proposed

a certification framework for digital health care pricing tools that makes quality and pricing information accessible, understandable and actionable for consumers. Outlined in a new issue brief, ACHP offers a core set of standards for meaningful price transparency and lays out a roadmap for independent certification of these tools.

Smart move given the federal government’s push for price transparency tools.

The Wuhan or novel coronavirus has an official name. Forbes reports that

Today, the World Health Organization (WHO) announced the official new name of nCoV2019 (2019 novel coronavirus), the strain of coronavirus that has infected over 43,000 people worldwide, resulting in 1017 deaths.

COVID-19, as the virus will now be known, was decided on by the WHO, with the organization giving a number of reasons as to why it was chosen.

Evidently the FEHBlog was violating WHO guidelines by referring to this disease as the Wuhan virus. Lo siento.

Healthcare Dive reports on Change Healthcare survey of healthcare provider and payer executives. The article describes differences of opinion between payer and provider executives. Here’s one —

Their positions on social determinants of health seem to reflect one of the widest splits. Providers appear to have the edge in terms of gathering information on substance abuse among patients (71.4% of provider executives versus 52.5% of payers). However, payers are much more effective at pinning down the income data of their enrollees (45.9% versus 26.5%). They also had a 10-point advantage in focusing on health literacy (39.3% vs. 29.6%), although the numbers suggest both factions did not consider it a major issue.

Thursday Miscellany

The Wall Street Journal reports that a Wuhan physician Dr. Li who had issued public warnings about the Wuhan or novel coronavirus has died from the disease. Not the first nor the last physician to sacrifice his or her life in the interest of public health and patient care. RIP

Last March, the FEHBlog heard Dr. Amy Tuter, a retired obstetrician, speak on Econtalk about the need for maternal ICUs. Consequently, the FEHBlog was pleased to read this American Hospital Association news article about

Titus Regional Medical Center, Mount Pleasant, Texas

Since implementing best practices related to maternal hemorrhaging, Titus Regional Medical Center’s maternal morbidity rate related to blood loss has been reduced significantly. The hospital employs a stage-based approach to maternal hemorrhage, simulates for staff emergent hemorrhage situations and provides intense education regarding the physiology of a hemorrhage.


Finally Healthcare Dive reports that

  • With the release of their fourth quarter earnings, Cigna executives touted the company’s ability to contain medical cost growth at 4% over 2019, continuing a streak.
  • The payer’s medical loss ratio of 82.3% for the fourth quarter of 2019 beat Wall Street expectations even though it increased from the prior-year period. It’s still “an encouraging sign” given several misses from other payers, David Windley of Jefferies said in a recent note.

Cigna did pay a significant amount in Affordable Care Act driven rebates for 2018 according to an HHS report. (When looking at the chart remember that insurers pay rebates based on state level MLRs over a rolling three year period. Consequently there are several CIGNA entries.)

Midweek update

OPM and AHIP which co-sponsor the annual FEHBP Carrier Conference have posted the Conference agenda. The FEHBlog welcomes the half day of break out sessions has been added to the agenda. The conference which is held in Arlington Virginia will run from early Wednesday afternoon April 1 through late Friday morning April 3.

Earlier today, the House of Representatives, as expected, passed a bill to repeal the 2006 law obligating the Postal Service to pre-fund healthcare coverage for their annuitants. Businesses generally have to account for this type of cost as a liability, but don’t have to put the money aside as the Postal Service must (although the Postal Service has not been able to fund the cost since 2012).

The FEHBlog expects the Senate to adopt this bill which reflects reality. The FEHBlog wonders whether this action will deflate the long running effort to create a lower cost Postal Service program within the FEHBP. The next edition of a general postal reform bill will be telling on this point.

The Centers for Medicare and Medicaid Services today proposed changes to the Medicare Advantage and Part D prescription drug programs. Health Payer Intelligence explains that the proposals

will increase plans’ revenues by 0.93 percent. The proposed rule would extend Medicare Advantage eligibility to those diagnosed with end-stage renal disease (ESRD), lower cost-sharing on prescription drugs, and enforce greater transparency and comparability of out-of-pocket healthcare spending for different drugs. CMS also introduced measures to promote using generics and biosimilar

CMS explains that the agency “will accept comments on all proposals in the Advance Notice through Friday, March 6, 2020, before publishing the final Rate Announcement by April 6, 2020.”

Speaking of Medicare, Healthcare Dive discusses an intriguing Humana initiative to develop primary care centers for their Medicare Advantage members. “The new venture is likely to double the number of centers [Humana subsidiary} Partners in Primary Care operates. It currently runs 47 locations throughout Kansas, Missouri, North Carolina, South Carolina, Texas and Florida.”

The FEHBlog has been tracking the course of the Texas v. U.S. case through the U.S. Supreme Court (Consolidated Nos. 19-840, 19-841). A group of States and the House of Representatives have petitioned the Supreme Court to review a December 2019 Fifth Circuit opinion holding the ACA’s individual mandate unconstitutional and directing the lower court to reconsider the extent to which the remainder of this massive law is severable from the unconstitutional part.

The parties’ and amici (friends of the Court) briefing on the petition for review will be competed on February 12, 2020. The Court’s docket sheet revealed today that the briefs will be distributed to the Court for the February 21, 2020 conference.

The Court needs four votes to take the case for review. If the Court decides to grant review (or certiorari), the decision would be announced late afternoon on February 12. Otherwise, a decision to decline review would be announced the following Monday February 15. The Court may punt the case to later conference in which event the cases will not be referenced in the February 15 order. All of the briefs are available by searching the Court’s docket for one of the case numbers — 19-840 or 19-841.

Medcity News provides a useful list of prescription drugs that are going off patent in 2020. The list also projects the availability of generic competitors.

Tuesday Tidbits

The Affordable Care Act (“ACA”) regulators issued a new ACA frequently asked questions (number 41) yesterday. Number 41 discusses the 2019 revised summary of benefits and coverage template and related documents intended for use in the 2021 plan year.

OPM Director Dale Cabaniss sent a letter yesterday to the federal government’s Chief Human Capital Officers about the Wuhan or novel coronavirus.

Although the risk of contracting 2019-nCoV remains very low, agencies should remind employees to use good health habits such as hand washing and encourage sick employees to seek medical treatment and use sick leave or other appropriate workplace flexibilities.  Where necessary, agencies should consider implementing social distancing, including the use of telework. 

That strikes the FEHBlog as good advice for the flu too.

The FEHBlog ran across today this Healio article which takes a deeper dive into last week’s CDC findings that drug overdose deaths dropped by 4% when comparing 2017 and 2018 statistics.

Other data published in Morbidity and Mortality Weekly Report show that opioid prescribing rates dropped in 11 states — California, Delaware, Florida, Idaho, Kentucky, Louisiana, Maine, Ohio, Texas, Virginia and West Virginia — during 2010 to 2016. These states represent about 38% of the U.S. population, according to researchers.

Finally Beckers Hospital Review discusses a disturbing study published in the Annals of Internal Medicine finding that

Visits to primary care physicians fell by 24.2 percent over the study period [2008-2016]. The proportion of adults who did not visit a primary care physician in a given year increased from 38.1 percent in 2008 to 46.4 percent in 2016.

Young adults, people without a chronic disease and individuals living in low-income areas demonstrated the largest drop in primary care visits, although the trend was visible across all age groups and income levels, according to NPR.

The study blames the unfortunate situation on rising out of pocket costs. However, the Affordable Care Act made in-network preventive care visits free. So that’s at best a partial answer. Health plans should strive to encourage strong relationships between members and their primary care physicians. The FEHBlog certainly appreciates his

Monday Musings

The Wall Street Journal reports today that

There have been at least 19 million U.S. cases of the flu this season, 180,000 hospitalizations, and 10,000 deaths, according to preliminary estimates from the CDC. There were 61,000 flu-related deaths in 2017-18 and 34,200 deaths in 2018-19. Public health experts say the levels of hospitalization are similar to recent seasons, but deaths are lower than usual and outpatient reports of influenza-like illness remain elevated.

The article adds that

More than half of the positive influenza test results from public health laboratories this flu season have been in children and adults under the age of 25, according to the Centers for Disease Control and Prevention’s most recent weekly influenza report. That’s a higher portion than in the past few years, when less than half the cases were in kids and young adults. 

The reason: The predominant strain circulating early this season was influenza B, which causes more significant illness in children than in adults. 

It makes one wonder why the Wuhan or novel coronavirus was named as a public health emergency but evidently not the flu. The FEHBlog realizes that the public health emergency declaration was intended to free up funding for an unexpected illness but even more government and press focus should be placed on the flu in the FEHBlog’s opinion.

Recently the FEHBlog mentioned a U.S. District Court for the District of Columbia decision holding that the government mandated “patient rates” applicable to individual requests for their own medical records cannot be applied to requests that direct the records to third parties. HHS’s Office for Civil Rights issued an important notice last week advising compliance with the court’s order. The FEHBlog would not be surprised to see an appellate challenge to the decision.

Last week, the Trump Administration made available to State governments a new Medicaid Healthy Adult Opportunity block grant program. The program reminds the FEHBlog of the block grant approach in the Republican’s 2017 bill to repeal and replace the Affordable Care Act. Healthcare Dive reports

Analysts with Cantor Fitzgerald said they maintain a positive view on the manged care sector following the block grant news last week. “It remains to be seen if/when/how many states will opt into the initiative,” the analysts said in a recent note. “We continue to view Medicaid as a compelling growth area.”

The nation’s health insurance lobby didn’t take a position on the measure, but stressed the importance of having flexibility in the program and the need to cover everyone​.

“We support offering state policymakers flexibility to design their Medicaid programs to best meet the needs of their citizens. At the same time, funding mechanisms for Medicaid should not undermine Americans’ access to the care they need and deserve,” America’s Health Insurance Plans said in a statement Friday.

Even if states were interested in implementing the policy, legal experts told Healthcare Dive the demonstration is unlikely to get off the ground — as a fight in the courts is all but certain.

That’s unfortunate, in the FEHBlog’s opinion.


Today, the Department of Health and Human Services released the proposed 2021 Affordable Care Act notice of benefit and payment parameters. The Department issued a fact sheet on the 245 page notice. The notice is of principal relevance to qualified health plans in the ACA marketplaces. Two items in the notice are relevant to the FEHBP generally:

  • “The proposed 2021 maximum annual limitation on cost sharing is $8,550 for self-only coverage and $17,100 for other than self-only coverage. This represents an approximately 4.9 percent increase above the 2020 parameters of $8,150 for self-only coverage and $16,300 for other than self-only coverage.”
  • We propose changes to the policy regarding how drug manufacturer coupons accrue towards the annual limitation on cost sharing i n response to stakeholder feedback indicating confusion about the current regulatory requirement. We propose to revise the regulation finalized in the 2020 Payment Notice to provide that issuers would be permitted, but not required, to count toward the annual limitation on cost sharing amounts paid toward reducing out-of-pocket costs using any form of direct support offered by drug manufacturers to enrollees for specific prescription drugs. 

Of interest to insured FEHB plans,

We propose to amend current [medical loss ratio] MLR regulations to require issuers to deduct from incurred claims the prescription drug rebates and other price concessions attributable to the issuer’s enrollees and received and retained by an entity providing pharmacy benefit management services to the issuer. We further propose to clarify more generally that issuers must report expenses for services outsourced to or provided by other entities in the same manner as issuers’ expenses for non-outsourced services. These changes would help lower premiums by helping ensure that consumers’ premiums reflect the full benefit of prescription drug rebates and are not artificially inflated by outsourcing expenses. We also propose to clarify that expenditures related to certain wellness incentives in the individual market qualify as quality improvement activity expenses in the MLR calculation.

The Department is allowing thirty days for public comment. The final notice should be issued well before the 2021 FEHB benefit and rate proposal must be submitted on May 31, 2020.

In other news

  • HHS Secretary Alex Azar announced that the Wuhan coronavirus represents a public health emergency in our country. This declaration, among other things, makes special funding available to state, tribal, and local health departments as the government collectively works to keep the risk of the disease low.
  • Healthcare Dive reports that in their public comments health insurers and employers reacted negatively to the Administration’s cost sharing transparency proposed rule.
  • The Hill reports that the Food and Drug Adminstration has approved the first prescription drug to treat peanut allergies. “Aimmune Therapeutics is behind the drug, called Palforzia, which exposes patients to small amounts of peanuts and helps build up their resistance. “
  • The Wall Street Journal reported earlier this week that

Screening for lung cancer reduces deaths among current and former heavy smokers, according to a new study published Wednesday that adds to the evidence supporting wider testing.

The study, conducted by researchers in the Netherlands and Belgium and published online by the New England Journal of Medicine, found that scanning the lungs of heavy smokers reduced lung-cancer deaths by 24% in men and 33% in women over the course of a decade.

Have a great Super Bowl weekend.

Tuesday Tidbits

Johns Hopkins University provides us with a Wuhan coronavirus dashboard that constantly updates the spread of the virus. AJMC.com offers coverage of HHS’s Secretary Alex Azar’s press conference on the topic held earlier today.

“Americans should know that this is a potentially very serious public health threat, but, at this point, Americans should not worry for their own safety,” Azar said. Of the 4500 cases confirmed in China, the country has reported more than 100 deaths. However, “the cases that have been identified skew severe, including patients who are older or have other illnesses. The mortality rate may drop over time as we identify a broader set of cases.”

The CDC recently announced it would begin screening travelers for the virus at 20 airports, up from an initial number of 5. “We are constantly preparing for the possibility that the situation could worsen, and your health and safety has been and will be our top priority,” Azar said.

AHRQ released a chart book on employer sponsored health coverage in our country in 2018.

Between 2017 and 2018, there was no significant change in the overall percentage of private-sector employees (47.8 percent in 2018) enrolled in a health insurance plan offered by their employers (“enrollment rate”). There was also no significant change in the enrollment rate in any firm-size category.

In 2018, average annual health insurance premiums per enrolled employee with private-sector employer coverage were $6,715 for single coverage, $13,425 for employee-plus-one coverage, and $19,565 for family coverage. These amounts represent increases of 5.4 percent for single coverage, 5.0 percent for employee-plus-one coverage, and 4.7 percent for family coverage over 2017 levels

In 2018, enrolled employees paid 21.3 percent of total premiums for single coverage, 27.1 percent for employee-plus-one coverage, and 27.8 percent for family coverage (Exhibit ES.14). The employee share of total premiums in 2018 for single coverage decreased by 0.9 percentage points from its 2017 level, while the employee shares for the other two coverage types were not significantly different from their 2017 levels.

The statutory minimum employee contribution for FEHB coverage is 25% (5 U.S.C. Sec. 8906).

Finally here’s a shocking Justice Department press release concerning an electronic health records vendor Practice Fusion Inc. which agreed to pay the Government $145 million to settle criminal and civil complaints.

The resolution announced today addresses allegations that Practice Fusion extracted unlawful kickbacks from pharmaceutical companies in exchange for implementing clinical decision support (CDS) alerts in its EHR software designed to increase prescriptions for their drug products.  Specifically, in exchange for “sponsorship” payments from pharmaceutical companies, Practice Fusion allowed the companies to influence the development and implementation of the CDS alerts in ways aimed at increasing sales of the companies’ products.  Practice Fusion allegedly permitted pharmaceutical companies to participate in designing the CDS alert, including selecting the guidelines used to develop the alerts, setting the criteria that would determine when a healthcare provider received an alert, and in some cases, even drafting the language used in the alert itself.  The CDS alerts that Practice Fusion agreed to implement did not always reflect accepted medical standards.  In discussions with pharmaceutical companies, Practice Fusion touted the anticipated financial benefit to the pharmaceutical companies from increased sales of pharmaceutical products that would result from the CDS alerts.  Between 2014 and 2019, health care providers using Practice Fusion’s EHR software wrote numerous prescriptions after receiving CDS alerts that pharmaceutical companies participated in designing

Our firm is closely monitoring the impacts of COVID-19. Effective 3/16/20, Ermer & Suter has implemented telework for all of our staff to encourage social distancing and help contain the virus. We remain fully operational and are readily available from our telework locations with no change in telephone numbers or email addresses.