Monday Musings

Monday Musings

Federal News Network offers a useful report on the President’s Fiscal Year 2021 budget priorities for the federal workforce. Particularly in an election year, the President’s budget proposal is principally a political document. Now let Congress do its job.

Coordinating benefits when group health plan members have coverage under more than one plan is complicated. Nothing is more complicated than coordinating group health plan benefits with Medicare, and FEHB plans have to do a lot of this work due to the large number of Medicare eligible annuitant members, some of whom remain employed while most are retired. The FEHBlog could go on and on. See Section 9 of your plan brochure.

About ten years ago, Congress passed a law colloquially known as Section 111 which requires group health plans, among others, to report demographic information to the Centers for Medicare and Medicaid Services (“CMS”) in order to facilitate coordination of benefits. Now in its infinite wisdom CMS has decided to move forward with a proposed rule to impose civil monetary penalties on Section 111 reporting entities, including FEHB plans, for certain Section 111 errors. More details are available in this CMS fact sheet.

Bear in mind that larger FEHB plans in particular are under OPM Inspector General scrutiny for the accuracy of their Medicare coordination of benefits efforts. Moreover, the carriers, not the federal government, are on the risk for the FEHBP coverage. In short, Medicare coordination of benefits creates enough headaches for FEHBP carriers without the added risk of civil monetary penalties. How about a little comity between CMS and OPM? (E.g. Because OPM does not seek to penalize CMS for its COB goofs, CMS should not penalize FEHBP for their COB goofs.) The public comment deadline on the proposed CMS rule is April 20.

In a bit of hopeful news, Health Payer Intelligence discusses a successful Horizon New Jersey Blue Cross initiative to apply value based pricing to pediatricians. “If value-based care in pediatric healthcare truly is the future of value-based care, payers need to leverage strong provider relationships to establish effective pediatric quality measures in order to improve their pediatric value-based care performance, Horizon’s executive vice president for healthcare management and transformation Allen Karp illuminated.” Yes indeed.

Finally, on the disease front, HHS reports that

U.S. hospitals saw a 40 percent increase in the rate of Medicare beneficiaries hospitalized with sepsis [an extremely dangerous infection] over the past seven years, and in just 2018 had an estimated cost to Medicare of more than $41.5 billion according to an unprecedented study by researchers from the U.S. Department of Health and Human Services.

Researchers determined that the increase in sepsis was not due to the growing number of American seniors enrolling in Medicare. From 2012 through 2018, the U.S. saw a 22 percent increase in the Medicare enrollment rates but a 40 percent increase in the rate of sepsis-related hospital admissions among beneficiaries.

Most patients with sepsis arrived at the hospital with the condition, rather than developing sepsis in the hospital, a possible indicator of success for CMS efforts to reduce hospital-based cases of sepsis. However, two-thirds of these sepsis patients had a medical encounter in the week prior to hospitalization. This finding represents an opportunity for improved education and awareness among patients and healthcare providers, as well as the need for diagnostics to detect sepsis early.

Let’s get going with those efforts.

Also the FEHBlog learned that the Centers for Disease Control has issued interim guidance on COVID-19 for businesses and employers which also is probably good advice for controlling the flu. The FEHBlog appreciates the CDC’s work as should we all.

Thursday Miscellany

The FEHBlog visited a large radiology practice in Washington DC today for a routine test. The desk attendant asked the FEHBlog to fill out a brief novel coronavirus questionnaire, e.g., have you travelled to China recently etc. The FEHBlog wondered why they weren’t asking about the flu. It occurred to the FEHBlog that the practice’s employees are vaccinated against the flu but not the coronavirus. In any event, Stat News, a Boston Globe service offers an interview with the Centers for Disease Control and Prevention about efforts to avoid the novel coronavirus spreading in the U.S.

Healthcare Dive offers a simple side by side analysis of the three bipartisan surprise billing proposals under House of Representatives consideration. Thanks.

Health Payer Intelligence discusses four Social Determinant of Health barriers that health plans are seeking to remove in order to improve access to care. The publications deems those barriers to be

the lack of behavioral and mental healthcare, difficulty in obtaining transportation to healthcare appointments, cost barriers to medication adherence, and access to medical care sites—both physical and virtual.

In a bit of related good news, the CDC reports that

The percentage of all persons who were in families having problems paying medical bills in the past 12 months decreased 4.5 percentage points from 19.7% in 2011 to 15.2% in 2015 and then decreased 1.0 percentage point from 2015 through 2018 (14.2%). discusses the bipartisan effort underway in Congress to correct some oversights in the new paid family leave law for federal employees. The bill is HR 5885. That program takes effect October 1, 2020.

Midweek update

Today the House Ways and Means Committee passed its surprise billing proposal (H.R. 5826) by voice vote. This bipartisan bill is strongly by hospital and other healthcare provider organizations. Enough said.

The Hill reports on the state of efforts in the Senate to lower prescription drug prices. The efforts currently are up in the air according to the Majority Leader Mitch McConnell.

Speaking of prescription drugs, Bioworld informs us that a

New analysis from Clarivate Analytics’ Cortellis Forecast Team predicts 11 medicines set to enter the market in 2020 will reach more than $1 billion in sales by 2024. Drugs for central nervous system indications and cancer dominate the list, almost universally accelerated in their development by orphan drug status or other designation intended to speed their path to market. Most medicines are for indications in markets already crowded with competitors, meaning they’ll face substantial pressures to differentiate from existing products.

The Office of National Coordinator of Health Information Technology discusses last week’s 10th annual ONC conference in a blog post.

We heard about standards for clinical data and financial transactions, technology for matching you with your (snail) mail, and how leading innovators are using application programming interfaces and the HL7® FHIR® standard to advance access. And yet, these technologies are not always working in sync. Several new and proposed policies from HHS – including ONC’s and CMS’s proposed interoperability rules and the Trusted Exchange Framework and Common Agreement – are set to move the nation one step closer to making these technologies work for the patient.

It can’t happen too soon, in the FEHBlog’s view.

Also this week Healthgrades issued its best U.S. hospitals list. Healthgrades explains that its ratings are “based solely on clinical quality outcomes for 32 conditions and procedures. This premier distinction rewards hospitals that consistently exhibit exceptional, comprehensive quality care.” Although none of the D.C. located hospitals are included on the list, there are several in the D.C. suburbs of Maryland and Virginia.

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.

Big Monday

The U.S. Office of Personnel Management (“OPM”) released its call letter for 2021 FEHBP benefit and rate proposals today. The carrier proposals are due on Sunday May 31, 2020. To prepare the proposals carriers also need OPM’s technical guidance, which is a separate Carrier letter, and to submit their proposals, carriers also must complete OPM’s extensive “ADC” information request. OPM expects a lot from its FEHBP carriers.

The President did transmit his FY 2021 budget proposal to Congress today. The Administration intends to propose to statutory change to the FEHBP government contribution formula (5 USC Sec. 8906):

to base it on a plan’s score from the FEHB Plan Performance Assessment would improve healthcare quality and affordability within the program. The enactment of the proposals in 2021 will not begin to impact program financials until 2023. [Page 1168]✦

This appears to be a retread from the last budget cycle. However, the FEHBlog does not recall reviewing the proposed legislative language for the 2019 proposal. This proposal assuming its the same one didn’t get very far then, and it’s unlikely to get further this year in the FEHBlog’s view. Federal News Network discusses other federal employee compensation found issues in the budget proposal.

Russ Roberts the host of the Econtalk podcast held a fascinating conversation with “physician and author Marty Makary of Johns Hopkins University talks about his book The Price We Pay.” The book concerns fixing our healthcare system. Dr. Makary made a lot of sense to the FEHBlog. He encourages readers to listen to this podcast or read the transcript.

Weekend update

Congress remains in session this coming week on Capitol Hill. Tomorrow the President will deliver his proposed FY 2021 budget to Congress. The Wall Street Journal reports that the

$4.8 trillion budget [proposal] charts a path for the start of a potential second term, proposing steep reductions in social-safety-net programs and foreign aid and higher outlays for defense and veterans.

[The safety net program savings include] $130 billion from changes to Medicare prescription-drug pricing.

Federal News Network advises that

Signs indicate the Trump administration is still pursuing the merger of the Office of Personnel Management with the General Services Administration, despite recent congressional language prohibiting the transfer of OPM statutory functions to other agencies.

The administration will, for example, issue a joint budget request for OPM and GSA for 2021 [just like the FY 2020 budget], Federal News Network has learned

Of course, rather than prohibiting the transfer, Congress more accurately put the merger on hold pending an independent study of the transfer by the National Academy for Public Administration. The report on the study is expected to be submitted in June 2020.

OPM released additional guidance on the Wuhan or novel coronavirus to Chief Human Capitol Officers on Friday February 7. Here’s a link to the Centers for Disease Control’s website about reports of the disease in our country.

Healthcare Dive reports that

Telehealth and remote monitoring are becoming significant forces in healthcare delivery, according to a new survey of 1,300 primary care and specialty physicians released Thursday by the American Medical Association.

The number of physicians who use telehealth for visiting with patients has doubled between 2016 and 2019, although the overall number remains relatively low with 28% of surveyed physicians reporting they have adopted telehealth technology. Remote patient monitoring has also grown, from just 13% of physicians using it in 2016 to 22% in 2019.

That’s encouraging news.


The American Hospital Association reports today that

House Ways and Means Committee Chairman Richard Neal, D-Mass., and Ranking Member Kevin Brady, R-Texas, this morning released legislative text of the Consumer Protections Against Surprise Medical Bills Act of 2020, the committee’s proposal to address surprise medical bills. The legislation prohibits providers from balance billing patients for emergency services or medical care the patient reasonably could have expected to be in-network, and does not allow patients to be charged more than the in-network cost-sharing amount. The proposal does not rely on a benchmark payment rate to determine out-of-network reimbursement, but instead includes a period for health plans and providers to negotiate reimbursement, to be followed by a mediated dispute resolution process should it be necessary. The proposal also includes several other consumer protection and transparency provisions. The committee is expected to mark up the legislation on Wednesday, Feb. 12. 

In addition, House Committee on Education and Labor Chairman Robert “Bobby” Scott, D-Va., and Ranking Member Virginia Foxx, R-N.C., this morning unveiled the Ban Surprise Billing Act. The legislation is similar to the bills passed last year by the House Energy and Commerce Committee and Senate Health, Education, Labor and Pensions Committee in that it relies on a median in-network rate to resolve out-of-network payments. For amounts paid above $750 (or $25,000 for air ambulance services), the legislation allows for an independent dispute resolution process to determine the final payment. A summary of the legislation is here, and legislative text was released late this afternoon. The committee is scheduled to mark up the legislation on Tuesday, Feb. 11.

If the arbitration approach becomes law, you can be sure that health plans will restrict out of network coverage as far as they can unless Congress repeals that option. In other words, it appears that the out-of-network providers are looking to squeeze the last golden egg out of the strangled goose. The FEHBlog appreciates in-network providers for helping to control health care spending.

Bloomberg News reports that

AHIP President and CEO Matt Eyles said health insurers should be allowed to classify efforts to address social determinants of health as quality improvements or patient care instead of as administrative costs. Health insurers are uniquely positioned to tackle SDOH, according to Eyles, who said changing how the initiatives are classified “would allow for greater measurement over time to understand how we might we might be impacting cost trends.”

Good recommendation. OPM should take this approach with all FEHB plans.

Modern Healthcare informs us

The novel [or Wuhan] coronavirus that threatens to hobble the global economy, causing travel restrictions and the closure of some U.S. retail stores in China, is expected to stabilize in April, according to a projection from S&P Global Ratings. 

S&P’s analysts said a worst-case scenario would involve the virus spreading into late May, with an optimistic prediction calling for an end to transmissions in March. The firm said the impact on economic activity in Asia could peak around the middle of the year before an economic rebound in 2021.

Hope springs eternal.

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.

Weekend update

Happy Groundhog Day! USA Today reports that “On Groundhog Day 2020, Punxsutawney Phil could not find his shadow. And as the legend goes, this means we’re in for an early spring.” Oh, there’s also a big pro football game this evening in Miami. Go Chiefs.

Congress is in session this week on Capitol Hill. Federal News Network reports

The House will vote [this coming] week on a bill to repeal the Postal Service’s mandate to pre-fund health benefits for future retirees. The USPS Fairness Act (HR 2382) if passed, would undo one of the central provisions in the 2006 Postal Accountability and Enhancement Act. The bill, introduced by Congressman Peter DeFazio (D-Ore.), now has more than 300 co-sponsors and the support of the postal unions.

If Congress could get together to kill the three highly controversial Affordable Care Act taxes, Congress should be able to repeal this misguided mandate too.

Kaiser Health News reports on the Affordable Care Act penalties on Medicare payments that the Centers for Medicare and Medical has imposed on hospitals for certain adverse events affecting patients.

Now in their sixth year, the punishments, known as HAC penalties, remain awash in criticism from all sides. Hospitals say they are arbitrary and unfair, and some patient advocates believe they are too small to make a difference. Research has shown that while hospital infections are decreasing overall, it is hard to attribute that trend to the penalties.

This HAC penalty is in addition to the readmission penalty on Medicare payments that the ACA also created.

Fierce Healthcare warns

Payers better be prepared for orphan drugs.

The Food and Drug Administration (FDA) will evaluate more than 150 new approvals this year, OptumRx officials said in their latest quarterly report on the drug pipeline.

Already, there are 64 applications submitted to the agency with likely approval in 2020, the pharmacy benefit manager said. At least 11 of those drugs are set to be “blockbuster” products with over $1 billion in U.S. sales, Optum said in the report.

Optum has seen similar development activities over the past several years.

“It’s a little more than just an aberration—seeing three years in a row of high outputs is a trend, and something we think is going to continue at least for the foreseeable future,” Bill Dreitlein, senior director of pipeline and drug surveillance at OptumRx, told FierceHealthcare.

Weekend update

Both Houses of Congress are in session this week on Capitol Hill. The FEHBlog has signed up for alerts for S. 1895, Senator Lamar Alexander’s bipartisan bill to lower health care cost. The FEHBlog received his first alert this morning — the addition of a summary of key bill provisions:

Among other things, the bill

applies in-network cost-sharing requirements to certain emergency and related nonemergency services that are provided out-of-network, and prohibits health care facilities and practitioners from billing above the applicable in-network cost-sharing rate for such services; 

revises certain requirements in order to expedite the approval of generics and biosimilars, including requirements relating to citizen petitions, application effective dates, and labeling; 

requires health care facilities and practitioners to give patients a list of provided services upon discharge and to bill for such services within 45 days; 

limits prices that pharmacy benefit managers (PBMs) may charge health insurers or enrollees for prescription drugs, based on prices paid by PBMs to pharmacies; 

establishes grant programs to support vaccinations and data modernization; and 

requires health insurers to make certain information, including estimated out-of-pocket costs, accessible to enrollees through specified technology (e.g., mobile applications).

The Hill reports that the Centers for Disease Control will begin to publish Wuhan coronavirus updates on Mondays, Wednesdays and Fridays. There are now five confirmed cases in the U.S., all of whom are hospitalized. One hundred other people under being watched for the virus.

Chicago’s Crain Business informs us about the merger for four southside Chicago hospitals.

The combination [Advocate Trinity Hospital, Mercy Hospital & Medical Center, South Shore Hospital and St. Bernard Hospital] aims to bolster the precarious finances of the safety-net hospitals that treat large numbers of low-income patients on Medicaid, which pays less than Medicare and commercial insurance.

With an estimated $1.1 billion investment—including private donations and government dollars intended for hospital transformation—the plan is to build at least one new hospital and open up to six new community health centers that would expand access to preventive services and address social determinants of health, such as food insecurity, the four hospital leaders said today.

That’s a hopeful twist on such deals.

The Wall Street Journal reports today that

Hundreds of regional grocery stores in cities from Minneapolis to Seattle are closing or selling pharmacy counters, which have been struggling as consumers make fewer trips to fill prescriptions and big drugstore chains tighten their grip on the U.S. market. * * *

Grocery pharmacies are the latest casualty of industry consolidation that has for years been forcing mom-and-pop drugstores to close. Even some big players have rethought the market. Target Corp. sold off its pharmacy business to CVS Health Corp. five years ago. * * *

The tougher conditions come as the entire drugstore industry copes with a shift to online shopping and shrinking profits in prescription medicines, which often disproportionately affect smaller players.

And so it goes.