The New York Times reports that the Internal Revenue Service denied an income tax exemption to an accountable care organization (“ACO”) — owned by a non-profit health system — because the ACO provides care to commercially insured patients – yet Medicare patients would be OK.  ACO’s are blooming in the commercial insurance market because commercial insurers offer more contracting flexibility than the Centers for Medicare and Medicaid Services.  HHS is promoting ACO’s as a favored alternative payment method.  The ACO cost curve is bound to go up if the ACO is a taxable entity.

The IRS also released a general counsel opinion throwing cold water on wellness rewards paid to employees in cash — the great incentor. Taxable wages says the Service.  That’s a proper outcome under the current tax law in the FEHBlog’s opinion. It begs the question why doesn’t Congress change the tax law to exclude low dollar cash wellness rewards from taxation?  What’s wrong with saying it in green?  An alternative is to position the wellness rewards as premium or deductible reductions. The latter approach is available to FEHB plans, but the former is not according to OPM.

The Delaware Business Times tells us the Blue Cross licensee Highmark is offering their members the opportunity to use internet-based tricks to “nudge” family members and friends to undergo cancer screening tests.  (No doubt due to HEDIS quality measure requirements.)  “The nudges, available at www.allforhealth.com, include notes, coupons, bribes, social nudges and nudge-o-grams that can be customized with personal video, photos and special effects.” Tax consequences of nudging are unknown.

The Labor Department is offering a cheat sheet to help health plan members (and their lawyers) sniff out health plan violations of the complex rule implementing the federal mental health parity law.  Simplifying the rule would be preferable in the FEHBlog’s view.

The Washington Post offered a follow-up report on the antiobiotic-resistant e. coli superbug that first appeared in the U.S last week last Friday’s post].  Significantly the infectious disease doctor who is interviewed in the story concludes that

Q: How likely is it for someone to pick up this antibiotic-resistant strain of E. coli from food?
A: Even if you ingest some resistant E. coli, most of it would be dead as it goes through the stomach because the stomach is highly acidic and designed to sterilize what we ingest. Most of it is gone by the time it comes out of the stomach. Even if some of it makes it through, it can hang out in your gut for a while and disappear. Only a very small portion of those people may become sick. So to summarize, you are starting at a very low risk in food, and then it goes through the stomach, and most will disappear in the digestive tract. I don’t think there is anything to be super worried about.

He advises cooking meat thoroughly and washing your hands when you cook.  This is the same maternal advice that everyone receives.  The point remains that doctors and hospitals need to curb utilization of antibiotics. As the expert explains

Q: Should doctors and hospitals be doing anything differently now that we know this resistance gene has been found in the United States?
A: It’s always prudent for doctors, when treating a bacterial infection with colistin, to make sure it works against the bacteria in a test tube when they need to give this antibiotic to their patients, instead of assuming that it should work. Many hospitals already do this, including ours [the University of Pittsburgh Hospital].

Last week, HHS’s Office for Civil Rights clarified its recent rule on maximum charges for providing copies of health records to individuals under HIPAA.  Health IT Security reports that “as the healthcare industry becomes more digitized, more patients are requesting electronic copies of PHI [(“ePHI”)]. For  [HIPAA] covered entities that do not wish to calculate the labor and supply costs for providing ePHI, organizations can charge a flat fee of $6.50 or lower, which includes labor, supplies, and postage fees.”

The New York Times reports today that the number of opioid prescriptions is finally dropping nationwide.

For much of the past two decades, doctors were writing so many prescriptions for the powerful opioid painkillers that, in recent years, there have been enough for every American adult to have a bottle. But for each of the past three years — 2013, 2014 and 2015 — prescriptions have declined, a review of several sources of data shows.
Experts say the drop is an important early signal that the long-running prescription opioid epidemic may be peaking, that doctors have begun heeding a drumbeat of warnings about the highly addictive nature of the drugs and that federal and state efforts to curb them are having an effect.

Experts have been worried about over-prescription of antibiotics for years.  Modern Healthcare reports that

A little more than one-third of acute care hospitals in the U.S. adhere to best practices to promote appropriate use of antibiotics, according to a new report. An analysis of more than 4,100 U.S. acute-care hospitals recently published in the journal Clinical Infectious Diseases found that 39% had an antibiotics stewardship program that met all seven of the core elements recommended by the Centers for Disease Control and Prevention.   

This is not a tsk tsk situation.  We have reached a true “ruh-roh” moment on the antibiotic over-usage front.  According to Reuters

U.S. health officials on Thursday reported the first case in the country of a patient with an infection resistant to a last-resort antibiotic, and expressed grave concern that the superbug could pose serious danger for routine infections if it spreads.
“We risk being in a post-antibiotic world,” said Thomas Frieden, director of the U.S. Centers for Disease Control and Prevention, referring to the urinary tract infection of a 49-year-old Pennsylvania woman who had not traveled within the prior five months.
Frieden, speaking at a National Press Club luncheon in Washington, D.C., said the bacteria was resistant to colistin, an antibiotic that is reserved for use against “nightmare bacteria.

Let’s wrap up this post with a few tidbits on topics that the FEHBlog has been following —

• Drug Channels digs into the CALPers PBM contract recently awarded to OptumRx. 
• The OPM Inspector General issued another report on OPM’s efforts to better secure its computer systems. Here’s a link to the Washington Post’s report thereon. 
• Beckers Hospital Review reports that Ohio’s health insurance co-op, Coordinated Health Mutual, has failed. The Hill adds that “Just 10 of the original 23 [ACA creations] will now remain.

This morning, a House appropriations subcommittee approved the committee’s leadership’s version of the financial services and general government appropriations bill by voice vote along party lines. No FEHBP surprises. The next step is the full committee.

The FEHBlog realized today that he should have provided links to Prof. Tim Jost’s accounts of the HHS final rule implementing PHSA Sec. 1557 and the EEOC’s final rules concerning application of Americans with Disabilities Act and the Genetic Information Non-Discrimination Act, assuming readers what more information.  HHS’s PHSA Sec. 1557 rule is a particularly complex and burdensome rule which the FEHBlog has heard described as “catnip to the plaintiff’s bar.”  The FEHBlog looks forward to reading OPM’s take on the extent to which this rule applies to the FEHBP. The underlying law applies to the FEHBP and HHS encourage its fellow agencies to promulgate implementing rules for their own health programs and activities.

Beckers Hospital Review reports on a Centers for Disease Control population survey of health information technology use.  The survey highlight is that” the gap between how much the over 65 crowd uses health IT compared to younger generations isn’t so large — 33 percent, compared to 54.8 percent.”

The consulting firm Milliman issued its 2016 Medical Index which concludes that in 2016, the cost of healthcare for a typical American family of four covered by an average employer-sponsored preferred provider organization (PPO) plan is $25,826.” There always are many interesting tidbits to be found in the report. In that regard, it’s worth noting that FEHB plan carriers are putting the finishing touches on their 2017 benefit and rate proposals which must be submitted to OPM by next Tuesday May 31.

Following up on Sunday’s FEHBlog post, Fierce Healthpayer reports that Anthem’s CEO Joseph Swedish, [s]peaking at the UBS Global Healthcare Conference on Tuesday, acknowledged [that his company and its merger partner Cigna] have experienced an expected degree of ‘dynamic tension,’ noting that ‘quite frankly, along the way you hit these bumps, but we’re going to overcome this.’ Swedish said the companies are collaborating closely as they go through the regulatory process, which he described as having ‘a very, very long tail to it.'”

Last week, the Obama Administration posted its semi-annual regulatory agenda for Spring 2016. Here is a link to OPM’s agenda.  Several FEHBP tweaks  are found therein. Bear in mind that the preamble advises that “This publication does not impose a binding obligation on OPM with regard to any specific item on the agenda. Regulatory action in addition to the items listed is not precluded.”

The Wall Street Journal reported this morning that

Quarrels have broken out behind the scenes of Anthem Inc.’s $48 billion proposed acquisition of Cigna Corp. as the health insurers seek regulatory approval for their landmark deal, according to a series of letters reviewed by The Wall Street Journal.
People on both sides say the squabbles could delay or derail antitrust approvals, which are typically harder to obtain if both parties aren’t in sync. While neither company has sought to terminate the merger, the people say, and it doesn’t appear in danger of imminent collapse, Anthem and Cigna are bickering on several fronts.

It’s not a good sign when sensitive information like this leaks out to the press.

The FEHBlog has been out of town this week.  He wants to fit in the end of week message before heading back to DC tomorrow.  Here’s a link to the Week in Congress’s report on this week’s activities on Capitol Hill.

A commenter asked the FEHBlog for details about the Inovalon study mentioned in the Wall Street Journal article about rural health care costs.  The FEHBlog did discover that Inovalon had acquired the health care consulting firm Avalere but he couldn’t find the study in question.  He has written to the article’s author. In the meantime, the National Rural Health Care Association offers a litany of rural health care problems.   On the bright side, Health Day reports that

Having a commonplace surgery — such as a gallbladder removal — may be safer when done in a rural hospital compared to a suburban or city hospital, a new study finds. “This study gives credence to what rural surgeons long suspected — that well-done rural surgery is safe and cost-effective,” study author Dr. Tyler Hughes said in a University of Michigan news release. Hughes is one of only two surgeons at McPherson Hospital in rural McPherson, Kan., and a director of the American Board of Surgery.

Go figure.

Forbes reports on a new Blue Cross study finding that  “the high cost of specialty drugs like the new hepatitis C pills, saying they contributed another $87 annually in [2013 – 2014] costs per enrollee whether they used the expensive medicines or not.” That adds up to a lot of money.

Also on the Rx front, the Minneapolis Star Tribune reports that United Healthcare’s PBM OptumRx beat out CVS Caremark and Express Scripts for the enormous CALPers prescription drug benefits contact.  The five year long contract is worth $4.9 billion. That is a lot of money.  It also indicates that OptumRx has formed a big three of PBMs with CVS and Express Scripts.

Stat reports on efforts by naturopaths to get reimbursed by health insurers.  Their efforts are spurred on by the ACA’s Public Health Service Act Section 2706(a) and vitamin manufacturers. Everyone wants a piece of the pies.

Finally Health Day reports about health care pricing transparency problems.  

The out-of-pocket price for a standard chest X-ray, CT scan or ultrasound can vary by hundreds of dollars, depending on where the imaging is done, new research reveals.
“The lack of price transparency is certainly not isolated to the field of radiology alone,” said study co-author Dr. Mindy Licurse, a diagnostic radiology resident with the University of Pennsylvania Health System. For example, a 2014 analysis by the Health Care Incentives Improvement Institute in Connecticut and Catalyst for Payment Reform in California revealed that most states lack laws making health cost information available to consumers.
“Our study certainly contributes to the underlying hypothesis that pricing information within health care, specifically imaging in this case, may be difficult to obtain depending on the setting, and therefore comparison-shopping by patients is limited,” she added.

This is a problem that healthcare providers can and should fix in cooperation with insurers.

The FEHBlog noticed studies on

• Rural health care — from the Wall Street Journal — 

Using a health-insurance claims database that includes about two million exchange enrollees, Inovalon found that rural residents racked up significantly higher medical costs than urban enrollees in 2015.  “Individuals in less populated areas tend to be sicker” according to the data, said April Todd, an executive at a consulting unit of Inovalon. But the cost gap was also driven by higher expenses at rural health-care providers, she said.

• Children’s health care — from the Health Care Cost Institute —  

Per capita spending on health care for children covered by employer-sponsored insurance (ESI) grew an annual average of 5.1 percent per year between 2010 and 2014, reaching $2,660 in 2014. At the same time, there was a general decline in the use of health care services between 2012 and 2014. Out-of-pocket spending on children increased an average annual 5.5 percent, to $472 in 2014. This growth was due in part to higher out-of-pocket spending on ER visits, which increased an average annual 11.7 percent or $21 per capita.

• Telemedicine — again from the Wall Street Journal – which suggests that insurers should give thought to the way in which members are steered toward or away from from telemedicine:

Researchers posing as patients with skin problems sought help from 16 online telemedicine companies—with unsettling results.  *  * * “The services failed to ask simple, relevant questions of patients about their symptoms, leading them to repeatedly miss important diagnoses,” said Jack Resneck, a dermatologist with the University of California, San Francisco, and lead author of the study, published online in JAMA Dermatology on Sunday. Ateev Mehrotra, an associate professor of health-care policy at Harvard Medical School who wasn’t involved with the current study, said it “identifies a number of egregious quality issues that raise significant concern.” 

And of course there are more rules. The Equal Employment Opportunity Commission released a final rule yesterday on employer sponsored wellness programs which will take effect next year.  USA Today indicates that reaction to the rule is mixed.  Professor Timothy Jost in his Health Affairs blog provides more details on the Public Health Service Act Section 1557 rule released last Friday.  He also discusses an HHS rule released a couple weeks ago that loosened the regulatory leash on health care co-ops.

Congress remains in session on Capitol Hill this coming week. Here is a link to the Week in Congress’s report on last week’s activities, which included the passage of 18 House bills concerning opioid abuse.

Last week, the Partnership for Public Service released its annual report on best places to work in the federal government. OPM ranked in the middle for medium sized agencies.

The FEHBlog ran across a Pharmalot post. Pharmalot is a blog that previously appeared on the Wall Street Journal site but now is now on the Boston Globe’s Stat site. In any event, Pharmalot reports that “a new study found that Americans spent an extra $73 billion between 2010 and 2012 on pricier brand-name drugs because physicians failed to sufficiently recommend these copycat treatments to their patients. And consumers paid nearly one-third of those additional costs through out-of-pocket payments.” Hopefully the implementation of electronic prescription tools is remediating this problem.

Also on the pharmacy front, Walgreen’s is adding telemental visits to its app and website and is providing mental health treatment training to its pharmacists. Walgreen’s mental health website also provides a link to these mental health screening tools provided by Mental Health America.

Sen. David Vitter (R Louisiana) continues to maintain a hold on Beth Cobert’s nomination to serve as permanent OPM Director according to this Federal News Radio report.  The Senator “isn’t satisfied with OPM’s response to his questions about a final rule that lets members of Congress and their staff buy health insurance on the Small Business Health Options Plan (SHOP) exchange. And he’s blaming OPM — as well as members of Congress — for being complicit to an exemption in the Affordable Care Act that members shouldn’t have.”  This ball properly should be in Congress’s court not OPM’s.

Speaking of OPM’s Nextgov.com offers an interview with OPM’s senior cybersecurity advisor Clifton Triplett. Mr. Triplett “used OPM’s upcoming “unfortunate [data breach announcement] anniversary” to discuss [in the article] the agency’s security posture in the year since the big breach was announced.”

HHS issued its final non-discrimination in health programs rule today. The rule applies Public Health Service Act Section 1557 added by the ACA to HHS funded and administered programs. While PHSA Sec. 1557 applies to the FEHBP, it’s not clear to what extent this HHS rule applies to the FEHBP. But in any event the rule deserves attention.

The HHS rule takes effect on July 18, 2016. HHS is allowing health plans to make benefit changes required by the rule in time for the next plan year beginning on or after January 1, 2017. The rule unquestionably applies to all ACA marketplace plans which like FEHB plans, are immersed in 2017 benefit design development now (and in some states the horse has left the barn). Here is a link to HHS’s related facts heets and the final rule itself.

Here are a few articles to give you a flavor for the Healthcare Datapalooza conference which ends today:

• Health Data Liberation Remains a Political Struggle from Healthcare Informatics. What isn’t a political struggle these days?
• HHS endorsed a AARP contest to design a new medical bill.  How about a piece of paper with the Cadusus symbol and the word “Free” written on it?  But seriously anything written for the patient specifically will lack the information that a health insurer needs to process the claim accurately so providers will be stuck with issuing two bills.  
• NPR’s story on What Feds Push to Share Data Means for Patients.  The FEHBlog is not sure because we will still need a doctor or other healthcare professional to interpret the data.  Is the level of professional trust really that low?