The OPM Director appeared before a closed session of the House Intelligence Committee last night to discuss the data breach.  A Democratic Congressman spoke with the Hill about the session here.

Arstechnica.com has a very detailed and interesting article about the scope and likely causes of the breach. The simple fact of the matter is that the Chinese government backed hackers linked to the Anthem, Premera, and OPM hacks currently have an advantage over our defenses.  The arstechnica.com article discusses this problem.  The FEHBlog does think that the best solution now under development is an encryption solution that preserves the searchability of the data. However, the country needs to improve its hacking defenses. Easier said than done.

The American Medical Association installed its new president this week. Dr. Steven A. Stack is an emergency room doctor from Tennessee. Dr. Stack, who is 43 years old, is the AMA’s youngest president.  The FEHBlog heard Dr. Stack speak at a WEDI conference last fall, and he was very impressed. Take 6.28 minutes to watch this Modern Healthcare interview of Dr. Stack. He explains that the AMA’s goals are to improve outcomes in diabetes and hypertension, bring medical education into the current century, and restore joy to the practice of medicine. Good luck, Dr. Stack.

A Food and Drug Administration Advisory Committee this week is reviewing the marketing applications for a new and of course expensive speciality drug designed to reduce cholesterol levels when statins don’t work.  The Wall Street Journal explains that

This new class of medicines is often called PCSK9-inhibitors, because they block a protein called PCSK9, which interferes with the liver’s ability to clear so-called bad cholesterol from the bloodstream. That cholesterol, called LDL, is linked to cardiac disease, albeit imperfectly.

The Journal reports that the advisory committee recommended that the FDA approve Sanofi’s marketing application for a limited class of patients.  The committee takes up an Amgen marketing application today.

Congress remains in session this week. The House Oversight and Government Reform Committee has a new website which reminds the FEHBlog of the recently refreshed HHS.gov website. Small world.

The Federal Times, which also has a recently refreshed website which the FEHBlog dislikes, reports on Congress reaction to the OPM data breach. Nextgov.com reports that the Government’s $3 billion Einstein 3.0 anti-hacking program did not prevent breach even though it was installed on the Interior Department’s shared services network.

The tool only looks at the traffic coming into the network as it traverses the Internet service provider, said Ron Gula, chief executive officer of Tenable Network Security, a major contractor for agencies that perform continuous monitoring. DHS is offering all agencies sensors, consulting services and other network surveillance tools under a $6 billion contract.

“The fact that EINSTEIN saw the attack or observed the network traffic from a long time ago is different from the fact that it was recognized as an attack only recently,” he said. Essentially, EINSTEIN cannot act as a real-time detection system unless it knows the specific malware exists in the world. 

“At the end of the day, I actually give the federal government high marks for detecting this and reporting it,” Gula said. “It was caught relatively quickly. The reality is, you are not going to keep out all intruders. It’s not a reasonable expectation in today’s day and age.” 

If the FEHBlog managed Einstein’s estate, he would be asking that Einstein’s name be taken off this software. NPR posted an interview of several information security executives about the OPM breach. Here is the concluding snippet:

SHAHANI: OPM is offering victims 18 months of free credit monitoring and cyber-insurance. Jason Lewis, with the security firm Lookingglass, criticizes this offer, calls it knee-jerk.

JASON LEWIS: They offer that creditor monitoring like that is somehow going to protect people. There’s no protection from anything.

SHAHANI: He says in this new era where our digital lives are being stolen, credit monitoring doesn’t hurt, but it also doesn’t help. Aarti Shahani, NPR News.

If Mr. Lewis is implying that there is a way to prevent these attacks (other than encrypting data in motion which the FEHBlog understands is not yet feasible), the FEHBlog asks how? The FEHBlog does consider these credit monitoring services to be helpful.

Sitting between the drug manufacturers and the pharmacies, including the PBMs’ mail order pharmacies are the drug wholesalers.  Drug Channels reports on recent consolidation in that important sector.

The FEHBlog expects a lot out of personalized medicine. Therefore he was happy to see the Wall Street Journal’s report that a major personalized medicine study was announced at last week’s convention of the American Society of Clinical Oncologists.

The National Cancer Institute is launching a major trial in which it will play matchmaker between 1,000 advanced cancer patients and the growing cadre of drugs that can target tumors by their genetic mutations, not just where they occur in the body. 

The study, called NCI-Match, seeks to advance the emerging field of precision medicine by helping to spur development of drugs that precisely target mutations linked to tumor growth. At least 10 pharmaceutical companies will provide a total of more than 20 treatments to be tested—all under the structure of a single study. 

A key driver of the strategy is the fact that the same cancer-causing molecular traits are often found in a variety of tumor types, raising hope that a drug effective against the target in, say breast cancer, would be effective in a tumor originating in another organ. Indeed, Roche Holding AG’s breast-cancer drug Herceptin, which targets a receptor called Her2, turned out to be effective—and was eventually approved—for gastric tumors that have high levels of Her2. 

But the drug Zelboraf, which is especially effective against the skin cancer melanoma with a certain mutation in a gene called BRAF, turns out to have essentially no effect against colon cancer harboring the same mutation.
“It’s a much more complicated issue than most people would like to hear,” said Richard Pazdur, chief of oncology at the U.S. Food and Drug Administration and a supporter of the studies. “I would have some element of caution” toward assuming broad success in the approach.

Of course, Rome was not built in a day.

Finally the U.S. Supreme Court has four more decision days calendared for this term.  The FEHBlog will be watching the old Scotusblog on Mondays this month. But it’s possible that the Court could add a decision day particularly to the last week. The 2012 decision on the constitutionality of the ACA was handed down on Wednesday as the FEHBlog recalls.

Groups of hackers working for the Chinese government have to date compromised the networks of the Office of Personnel Management, which holds data on millions of current and former federal employees, as well as health insurance giant Anthem, among other targets, the researchers said.

“They’re definitely going after quite a bit of personnel information,” said Rich Barger, chief intelligence officer of ThreatConnect, a Northern Virginia cybersecurity firm. “We suspect they’re using it to understand more about who to target, whether electronically or via human recruitment [for espionage].”

In other words, the OPM, Anthem, and Premera hacks, among others, represent a significant national security issue which requires nationwide cooperation between government and industry to defeat the hackers, not finger pointing. That will not be easy, but it has to be done.

Here’s a link to a the latest report from the Week in Congress, dated today. Congress will be in session on Capitol Hill again next week.

Modern Healthcare had two interesting articles on surveys:

• One article reports that Accenture found by survey that consumers prefer quality over choice in health plan provider networks.  Furthermore, 

Consumers are more loyal to their preferred airline or hotel chain than their doctors, he added. Only 26% of the 1,980 adults surveyed said they would definitely leave a network if their doctor stopped participating in it. Ninety-four percent said access to their medical records was the single most important piece of information-sharing.

They also valued things such as the ability to talk to their physician during and after business hours and tools such as online scheduling. “The assumption is that consumers are going to stay in these networks if their doctors are in the network,” Stephan said. “(But) it’s not about the doctor, it’s about the network experience.”

That is surprising to the FEHBlog.  

• The other reports that bioethicists are concerned that the current Medicare driven focus on patient satisfaction with hospital care may be leading to bad medical practices. 

The current metrics used to rate, rank and evaluate hospital quality continue to undergo scrutiny as the field of quality measurement advances in healthcare. Improvements are more frequently gained on easily tracked process measures, like using checklists and giving discharge instructions. But many have questioned whether focusing on those priorities will lead to improvements in patient outcomes such as lower mortality and lower readmission rates or result in unintended consequences.

That could likely be the case for patient satisfaction, the Hastings researchers suggest. “Pressure to tell patients what they want to hear and accede to unreasonable requests may increase the provision of unnecessary care,” and ultimately “lead healthcare astray, undermining the provision of optimum care for all.”

That does not surprise the FEHBlog.  

There were three articles in the Wall Street Journal today that caught the FEHBlog’s eye.

1. CMS released data on 2013 Medicare Parts A and B payments to hospitals, doctors, and other providers today.  The Journal which brought a successful lawsuit to force the annual release of this data observes that 

The top 1% of billers of the federal insurance program for the elderly and disabled in 2013 reaped 17.5% of all payments that year. That same cluster of doctors and other individual providers received 16.6% of the program’s payments in 2012, figures show.

      2.   The Journal also reported on shortages of oncology and painkilling drugs in the U.S.

Interviews with company executives, hospital pharmacists and regulators point to several causes of the shortages. Companies have failed to build enough production capacity, haven’t maintained equipment, and failed to ward off contamination in aging plants. A U.S. Food and Drug Administration crackdown on shoddy quality unintentionally worsened the shortages because some companies responded by shutting down plants or scaling back production during renovations.

Many of the scarce drugs are older, injectable treatments that can be complex and costly to manufacture, but which command relatively low prices because they aren’t protected by patent. Hospitals and doctors’ offices are the main buyers of the drugs. Companies can’t easily increase prices because insurers reimburse many generic hospital-administered drugs under a payment system that is more frugal than for other medicines.

             Perhaps insurers can re-evaluate this payment system.

3.   At the annual  meeting of the American Society of Clinical Oncologists, Leonard Saltz,  MD,  chief of gastrointestinal oncology at Memorial Sloan Kettering Cancer Center spoke truth to power (big pharma finances this conference) by criticizing the high price of oncology drugs according to this Journal report.  “Cancer-drug prices are not related to the value of the drug,” Dr. Saltz said. “Prices are based on what has come before and what the seller believes the market will bear.”  This cock-eyed pricing philosophy which drug manufacturers apply across the board is bankrupting the country.  

Congress returns to Washington this week. (In fact the Senate is in session now.)  June will be the last month of the Supreme Court’s current term. There are five Mondays in June on which opinions can be delivered, including the important ACA related decision in King v. Burwell.

Last Thursday, the Bipartisan Policy Center issued a set of recommendations on preventive healthcare  decision making focused on incorporating cost efficacy and community health concerns therein.   Modern Healthcare reflects on those recommendations here (note — the article’s headline is out of synch with its substance).

Last Friday, the FEHBlog noted that HHS is seeking public comment on the HIPAA health plan identifier which is now in a state of limbo (not an unusual status for HIPAA standards). Here’s a Health Data Management overview of that situation.  Here is recent provider testimony to HHS’s National Committee of Vital and Health Statistics (“NCVHS”) on the utility of a health plan ID.  What’s puzzling to the FEHBlog given all of the Congressional buzz over adding interoperability to electronic medical records is why isn’t HHS urging Congress to fund the adoption of a HIPAA patient ID. That certainly would aid interoperability.

The FEHBlog also found this update on CAQH CORE operating rules on the NCVHS website.  Congress as part of the ACA doubled down on HIPAA by incorporating into that law these privately developed rules intended to facilitate electronic claim transactionx. NCVHS is holding a two day hearing on the HIPAA standards and operating rules on June 16 and 17,

May 29 is just another weekday for FEHBP carriers because the 2016 benefit and rate proposal must be submitted to OPM no later than this coming Sunday May 31 according to the call letter.

Time marches on though. The Wall Street Journal reports this afternoon that the board of directors of Humana, a major health insurer is considering selling the company to another health insurer such as Aetna or Cigna. Humana which is based in Louisville, KY, focuses on the Medicare market but also is an FEHBP carrier

The Ponemon Institute has released its 2015 study on the cost of data breaches. That’s another cost curve that is headed up. “Over the past year, the cost of data breaches due to malicious or criminal attacks has increased from an average of $159 to $174 per record.”

Today, the Department of Health and Human Services released a request for public comment on the future of the HIPAA health plan identifier. HHS pulled the rug out from under this initiative last year and with good reason for doing so. After all electronic claims have been processed for over 15 years without a health plan identifier. The comment deadline is July 28.

A couple months ago, the FEHBlog was doing backflips because the FDA had approved its first biosimilar drug Zarxio for marketing. Zarxio is biosimilar to a brand name cancer supportive drug Neupogen which Amgen manufactures. Yesterday the FEHBlog learned from Business Insurance that earlier this month the U.S. Court of Appeals for the Federal Circuit issued a preliminary injunction blocking the sale of the Zarxio pending an an Amgen appeal of a San Franciso federal district court decision rejected a Amgen patent challenge to Zarxio.  The Federal Circuit will hear oral argument on the appeal next Wednesday June 3. Lowering costs is not easy. But the FEHBlog remains confident that biosimilars will be on the U.S. market soon. After all, biosimilars have been offered in Europe for over a decade.

The FEHBlog cringes whenever he sees an email announcing a new set of Affordable Care Act FAQs.  He cringed yesterday when FAQ XXVII was issued. Part one of the FAQs was an effort by the regulators to circle the wagons around HHS. A few months ago, HHS released the 2016 notice of benefit and payment parameters, a massive annual rule making.  HHS explained in the preamble that health plans, beginning in 2016, must embed a self only out of pocket maximum in other than self and family coverage. Confusion reigned because HHS overlooked actually adding this requirement to the rules. Rather than amend the rule-making, HHS issued sub-regulatory guidance to cover its tail which climaxed in FAQ XXVII.  The ACA regulators collectively assert in FAQ XXVII that the embedded OOP maximum rule applies to all non-grandfathered plans, including group plans (e.g., FEHBP) and high deductible health plans. Cost curve up.

The other part of FAQ XXVII continues the saga of ACA FAQ XV which addressed in part the ACA’s provider non-discrimination rule, PHSA § 2706. In response to Congressional complaints, no doubt spurred on by the chiropractor and other allied health professional lobbyists, the ACA regulators retracted the meat of the guidance of FAQ XV which of course favored health plans. The other shoe should drop before long with a new rule.  Cost curve up again.

The reason that the FEHBlog cringes upon the release of ACA FAQs is that the FAQs typically announce consumer protections that push the cost curve up just as we creep ever closer to 2018 when the high cost coverage excise tax kicks in as discussed in a recent post.  It’s unfortuante that the ACA regulators can’t simply let health plans offer consumers choice. In the FEHBP some plans offer embedded self only OOP maximums in self and family coverage. Others don’t. If a consumer wants the embedded maximum, he or she can find it (via the summary of benefits and coverage or the plan brochure).

The Wall Street Journal reports that

[As] part of a growing push for so-called pay-for-performance deals amid complaints about the rising price of medications, some of which cost more than $100,000 per patient a year [, s]ome insurers and prescription-benefit managers are * * * arguing that they should pay less when drugs don’t work well in certain patients. Drug companies are countering with pricing models of their own, such as offering free doses during a trial period.

The FEHBlog does not quite follow this approach. If a much lower price is charged when the drug is ineffective, won’t that encourage use of the drug on those cases?  In any event, Drug Channels reports on the drug trend reports of Express Scripts, CVS Health, Catamaran, and Prime Therapeutics. .

Retired Admiral Earl Gay, special advisor to the OPM Director, has posted some timely thoughts on opm.gov for this national holiday. Thank you for your service Admiral.

Congress is out of town this week. Here is a link to last week’s activities from the Week in Congress.  The House Energy and Commerce Committee last week unanimously (51-0) approved the 21st Century Cures bill which would provide a funding boost to the National Institutes of Health and the Food and Drug Administration. There are a bunch of health care related pay-goes according to this Modern Healthcare article. Health Data Management reports that the bill also includes some strict electronic medical record interoperability mandates.

This New York Times piece on hospital productivity caught the FEHBlog’s eye.  Enjoy the holiday.

Ah yes, today is the end of the great three day holiday drought that runs from Presidents’ Day to Memorial Day. The FEHBlog wishes everyone a great weekend.

Last Friday was the deadline for public comments on IRS Notice No. 2015-16 which was the first wave of guidance on the high cost coverage excise tax.  Beginning in 2018, the ACA imposes on 40% excise tax on the cost of employer sponsored coverage that exceeds $10,200 for self only coverage and $27,500 for self and family coverage.  The law includes permits an adjustment to those thresholds to the extent the cost of Blue Cross FEP Standard Option coverage over the period 2010-2018 exceeds 55%. That adjustment will wind being a big goose egg because according to the FEHBlog’s calculations, Blue Cross FEP Standard Option coverage has increased only 18% over the period 2010 through 2015. In any event, the FEHBlog suggest that readers take a gander at the American Health Insurance Plans’ comments to the IRS. AHIP makes many good points. In short this is a very disruptive tax which merits repeal.

Modern Healthcare offers an interesting story about the coverage conflicts between insurers on one side and doctors and patients on the other caused by the price of the very expensive Hepatitis C drugs. The most sensible solution is for Gilead Sciences to lower the absurdly high price (even after discounts), but that’s unlikely to occur.

Healthcare Dive reports on the indictment of a Texas anestheisologist who allegedly defrauded our beloved FEHB Program to the tune of $5 million.

The New York Times reports on CVS’s acquisition of Omnicare this week and its writer predicts that this acquisition signals the end of pharmacy mergers due to market concentration.  Omnicare’s principal business is distributing medications to nursing homes and other institutions, which is an obvious fit with CVS’s business. The article adds, however, that

One of Omnicare’s main moneymakers is expensive niche medicines, which it helps manufacturers distribute and get reimbursed for by insurers and the United States government. Those drugs account for about a quarter of company sales, and those sales are growing at an annual rate of more than 20 percent. But the lucrative business may end up conflicting with Caremark’s focus on extracting discounts from pharmaceutical firms.

It will be interesting to see how the Justice Department and the Federal Trade Commission react.

Today, the U.S. Office of Personnel Management published a final rule to help FEHB plan carriers in their ongoing efforts to recover benefits from other responsible parties and insurers.  For example, if an FEHB plan member is injured in a motor vehicle accident, the FEHB plan will cover the costs of treating the injury and then will pursue the motor vehicle insurers to recover the payments.  It’s equitable. The rule makes it clear that the FEHB Act overrides state laws that may interfere with this process.

Two recent note-worthy surveys:

• U.S. News and World Report has released a nationwide survey of the quality of hospital delivery of five common services.  
• Fierce Health Payer reports on two surveys of healthcare provider attitudes toward health insurers / their golden geese.