The Hill is reporting this afternoon that the White House and Congressional leaders are making progress on a two year budget deal (FY 2016 which began October 1 and FY 2017) that also would lift the debt ceiling and solve the Medicare Part B premium problem.
Congress remains in session this week. Here is a link to the Week in Congress’s account of last week’s activities on Capitol Hill. In the coming week, the House of Representatives is expected to elect Paul Ryan (R Wisc) as its new Speaker. Bloomberg reports that the House is expected to take up the issue of raising the federal debt ceiling this coming week.
The Federal Benefits Open Season starts two weeks from tomorrow on November 9. Tammy Flanagan writes about the new self plus one enrollment type here. Ms. Flannagan notes that
The big surprise for many people is that there isn’t much difference in the premium between self-and-family and the new self-plus-one enrollment because of the number of older retirees who will be the prime candidates for the new option. You can find the complete list of 2016 premiums on the OPM website [or the FEHBlog]. Even more surprising is that in some cases, it is less expensive to continue enrollment in Self and Family.
In the FEHBlog’s view the fact that there isn’t much difference between the premiums of the two enrollment types is due to the fact that the average family size in the FEHBP is roughly 2.3 to 2.4 members. Some plans have somewhat larger family sizes and others have smaller. That’s the nature of averages. A larger family size would tend to produce a larger difference in premiums. The Government contribution for self plus one is less than the Government contribution for self and family. This fact that can cause the self plus family premium to be less than the self plus one. Just remember that a federal employee or annuitant with one eligible family member can elect self plus family. Federal employees and annnuitants are not obligated to elect self plus one.
The FEHBlog mentioned last Friday that he had learned that the FDA has a large backlog of generic drug maunfacturing license applications. A Wall Street Journal editorial on Saturday noted that “FDA approval to manufacture any given generic takes 50 months on average and the backlog for permission has climbed in recent years to about 4,000 applications.” The FDA is on top of new drug applications because the prescription drug manufacturers support the FDA’s cost of that regulatory process.
The FDA’s delay in generic drug licenses permits entrepreneurs to purchase the manufacturing rights to single source generic drugs and then ramp up the price without fear of competition. This Wall Street Journal editorial and this San Diego Union Tribune article discuss how in San Diego compounding pharmacy “Imprimis Pharmaceuticals, plans to compete against other manufacturers who sell generic drugs far above their cost ” The Union Tribune article explains that
The formulation is not FDA-approved, and can legally only be sold through a doctor’s prescription to a specific individual. The specific ingredients are FDA-approved, Baum said, and its compounding operations are FDA-inspected.
The Washington Post provides an interview with the CEO of 23andme a company that sells DNA testing services directly to consumers. “After the FDA slapped the company with a warning letter in 2013, it stopped marketing its health tests and began working with regulators to come up with a product that would meet its rigorous standards for consumer testing, validation and analysis.” The company released its new product last week. It costs 100% more than the original product ($199 vs. $99).
The ACA regulators issued FAQ XXIX this afternoon with more consumer / preventive services goodies / impositions on health plans. This is a basic problem with the law. The forces plans to cover a broad and ever increasing array relatively low cost items that consumers should be paying for themselves. Those reimbursable items wind costing the economy more and push the premiums ever closer to the high cost plan excise tax threshold.
The FEHBlog attended an excellent federal pharmacy symposium put on by the large pharmacy benefit manager Express Scripts. It is worth relating that prescription drug manufacturers have a record number of new drugs in the research pipeline and that in 2014 the Food and Drug Administration approved a record number of new drugs for marketing. The FDA, however, is slow to approve generic drug manufacturing licenses which allows predatory companies to make a ton of money on single source generic drugs just by raising prices.
The FEHBlog has criticized the ACA-created and insurer funded Patient Centered Outcomes Research Institute as a white elephant. Here is a link to the PCORI’s annual meeting report. Judge for yourself,
Earlier this week, the American Cancer Society issued its updated recommendations on routine mammographies for breast cancer screening. Kaiser Health News reports that these guidelines “are unlikely to” impact insurance coverage for routine mammographies. The FEHBlog agrees.
Health Data Management reports on what’s coming in 2016 — another round of government audits on compliance with the HIPAA privacy and security rules. HIPAA covered entities and business associates be advised!
The IRS today published a notice about inflation adjustments to various federal tax provisions for 2016. We learned that there will no change in the maximum annual contribution to health care flexible spending accounts which currently is $2550 (see page 14). The employer sets the limit which cannot exceed $2550.
Healthcare Dive updates us on where we stand with the Medicare Part B premium issue now percolating on Capitol Hill. Nothing definitive yet.
The Harvard Business Review offers hospitals advice on how to reduce the number of never events / preventable errors. The Mayo Clinic takes a full look at the quality of care in addition to investigating identified problems
To look for opportunities to improve care, we examine all aspects of care rendered for every patient who dies in our facility — even those whose death was anticipated due to grave illness. We look for trends in opportunities in order to prioritize improvement work across our hospitals. * * * When we started this mortality-review process, we found care issues or opportunities for improvement approximately 23% of the time. More recently, that figure has declined to around 13% of the time. This is a reliable sign of progress in patient safety.
This Health Day article discusses the “time honored” tradition of the annual physical.
Some [doctors] want the once-a-year physical abandoned, based on a growing body of research that these exams don’t reduce your overall risk of disease or death. But yearly checkups help build the relationship between doctor and patient, leaving both better prepared when illness does strike, other doctors respond.
The FEHBlog thinks that the “aye” side of the argument has the better side of the argument as the patient ages. The article notes that the nay sides prefers seeing the patient every two to three years and relying on the electronic medical record to nudge the patient toward necessary preventive care in the outyears.
Following up on Sunday’s post knocking the ICD-10 as a waste of money, the FEHBlog wishes to clarify that some aspects of the ICD-10 make sense, such as identifying whether the affected body part is on the left or the right side. However, the ICD-10 is the complete public health statisticians’ wish list and as a result it is way too complicated. Coders never will use all of the codes. As AMA President Steven Stack said last year at a WEDI conference that the FEHBlog attended, the coding community missed an opportunity to work with the medical profession to create an improved code set that works. Instead we are likely to wind up with more confusion, rather than more clarity.
The FEHBlog and OPM independently have advocated the medical profession’s Choosing Wisely campaign which relies on specialists to identify relatively common procedures which are past their sell date. Fierce Health Payer reports on a study published in JAMA Internal Medicine suggesting additional steps that need to be taken in order to make the campaign effective.
The FEHBlog also has advocated health plan use of reference pricing to control benefit costs. The New York Times Upshot column lauds Europe for its prevalent use of reference pricing with prescription drug benefits. For your ease of reference (get it?) here’s the Times’ explanation of this technique:
Drugs are grouped into classes in which all drugs have identical or similar therapeutic effects. For example, all brands of ibuprofen would be in the same class because they contain the same active agent. The class could include other nonsteroidal anti-inflammatory agents like aspirin and naproxen because they are therapeutically similar. The insurer pays only one amount, called the reference price, for any drug in a class. A drug company can set the price of its drug higher, and if a consumer wants that one, he or she pays the difference.
Of course, our friendly ACA regulators weighed in on the technique last year.
Yesterday, according to this Fierce Health Payer article, Aetna and Humana stockholders “overwhelmingly” approved the merger agreement reached earlier this year. The regulators continue to evaluate the deal, which is expected to close next year.
Congress is back in town this week. The Hill reports that “hopes are dimming” for an expansion of the law that holds Medicare beneficiaries harmless against Medicare Part B premium and deductible increases when as will be the case next year there is no Social Security COLA. NARFE, among other organizations, is advocating for an expansion of the hold harmless protection because federal annuitants whose Medicare premiums are withheld from the CSRS benefit checks fall outside of it. The protection only applies to Medicare beneficiaries whose premiums are withheld from Social Security checks. Goofy, but it’s the law.
Healthcare Data Management is taking a “so far so good” approach to ICD-10 implementation. The ICD-10 coding set went into effect on October 1. Given billing cycles, it may be premature for ICD-10 advocates to take a victory lap yet. The FEHBlog thinks that the ICD-10 effort has been a waste of money but fortunately at this point no train wreck has occurred. The FEHBlog is attending a WEDI conference next week in lovely Reston Virginia. He will keep an ear open on this issue.
Health Care Dive identifies the top 13 healthcare CEOs drawn from a Harvard Business School study. Number 5 on the list is the CEO of Gilead Sciences, the piratical company that holds the patent on the miraculous Hepatitis C drug Harvoni. The Washington Post reports today that Medicare spending on Harvoni continues to skyrocket.
The Post also reports that two more health insurance co-ops bit the dust on Friday. “Nearly a third of the innovative health insurance plans created under the Affordable Care Act will be out of business at the end of 2015, following announcements Friday that plans in Oregon and Colorado are folding.” You cannot solve a problem by throwing money at it. In this case, money was being thrown a problem that did not exist.
Govexec and the Senior Journal report as expected that the federal government confirmed today that federal and postal annuitants and Social Security recipients will not receive a cost of living adjustment (“COLA”) in their retirement benefits for 2016.
Today also is the beginning of the Medicare open season. For the second year in a row, CMS has failed to specify the Medicare Part B premiums and deductibles in advance of the open season. Absent Congressional action, many CSRS annuitants will see a spike in the Medicare Part B premiums and deductibles as detailed in this Forbes article.
The absence of the COLA for 2016 is attributable to non-existent inflation. As someone who lived through the raging inflation of the 1970s, the FEHBlog does not see the absence of inflation as a bad thing. Nevertheless, the FEHBlog recognizes that no annuity bump for 2016 is a problem for folks on a fixed income. Perhaps Congress should consider changing the COLA measuring stick.
On the bright side, the addition of a self plus one enrollment type to the FEHBP should help married annuitants. Today, OPM issued a benefits administration letter about significant plan changes to the FEHBP and FEDVIP. There are no significant plan changes to FEDVIP for 2016. The significant plan changes in the FEHBP for 2016 are described in this OPM attachment and Fast Facts that accompanied the BAL. Take a look at these documents if you are an FEHBP enrollee.
Following up on Sunday’s post, here’s a link to an ehrintelligence.com article about a recent American Hospital Association report on the importance of electronic medical (or health) record interoperability. Specifically,
EHR use also provides the opportunity for enhanced public health reporting. Because patient data is aggregated on one, electronic system, healthcare professionals can track healthcare trends and analyze information about population health. But without adequately interoperable systems, that process is significantly hampered.
No kidding.
Before the exchanges launched in October 2013, the FEHBlog predicted and he was not going out on a limb that the ACA’s health insurance co-operatives would wind up being the ACA’s Solyndras. This Washington Post article proves that FEHBlog’s point.
Speaking of waste created by the ACA, the IRS this week announced that for plan years beginning on or after October 1, 2015 (e.g., FEHB plans) but before October 1, 2016, the Patient Centered Outcomes Research Institute (“PCORI”) Fee that the ACA imposed on health plans will be $2.17 per member. The PCORI is flinging around millions of health plan dollars but where are the results?
Additional tidbits —
Congress is out of town this week of Columbus Day. Here’s a link to The Week in Congress’s account of last week’s actions. Federal News Radio reports that a Republican member and a Democratic member of the House Oversight and Government Reform Committee sent a joint letter to the Office of Management and Budget recommending changes to the federal employee and contractor security clearance process, including a switch in responsibility for clearance record holding from OPM to an agency that is focused on national defense or intelligence.
Govexec reports that on Thursday October 15 the Bureau of Labor Statistics will release a report which will give us the final word on whether federal and postal annuitants will receive a cost of living adjustment for 2016. “The annual COLAs are based on the percentage increase (if any) in the average CPI-W for the third quarter of the current year over the average for the third quarter of the last year in which a COLA became effective.” Govexec expects that the decision will be no COLA for 2016. Federal employees will be receiving a 1.3% raise for 2016 plus increases in locality adjustments.
Last week, HHS issued its final roadmap of electronic medical record (“EMR”) interoperability. To recap, in return for “free” EMR software, health care providers must comply with meaningful use standards developed by HHS. The EMR developers relied on those standards which did not include interoperability among different systems. After issuing $32 billion in EMR payments, HHS has issued a final roadmap to EMR interoperability which it outlined as follows:
A colleague called the FEHBlog’s attention to this BNA article about the public comments that were submitted on the latest IRS notice (2015-52) on the 40% excise tax on high cost, employer sponsored coverage. The comment deadline passed last week. The FEHBlog nearly fell off his chair when he read in the article that OPM commented on the IRS notice. The FEHBlog’s colleague kindly share a copy of the OPM comments with the FEHBlog. Here’s a link for your edification. The FEHBlog found the OPM comments to be thoughtful.
He was delighted to read that OPM is considering converting the healthcare flexible spending account (“FSA”) to a limit scope dental and vision FSA. The former is subject to the excise tax, while the latter according to the IRS’s first excise tax notice no. 2015-16, will be exempt from that tax. Because the cost of a full blown healthcare FSA will be added on top of the health insurance premium, a full blown healthcare FSA can push the cost employer sponsored coverage over the excise tax threshold. Employers also are considering making after tax contributions to health savings accounts beginning in 2018 because pre-tax contributions count toward the excise tax threshold. It’s a hideously complex provision that will burden all employers unnecessarily.
According to Notice 2015-52, the IRS will consider public comment on these two notices as part of the process of drafting a proposed rule implementing the tax. Congress continues to consider repealing the tax.