Well we are less than two weeks away from the deadline imposed on FEHB plan carriers for submitting their 2016 benefit and rate proposals to OPM. It’s a busy time for carriers.

Fierce Health Finance reports that “The latest price data from the Altarum Institute indicate hospital prices rose 0.4 percent in March compared to March 2014, an increase Altarum referred to as “scant.” For the entire healthcare sector, prices rose 1.3 percent year-over-year.”  Over the same period, the CPI-U for all items declined by 0.1%.  So that’s a significant jump in healthcare.

Drug Channels reports that the drug store industry is maintaining a steady profit margin.

In an bit of good news, Health Day reports that due to the work of U.S. Preventive Services Task Force fewer men are undergoing the PSA screening test for prostate cancer. The USPSTF has concluded that the test creates more problems than it solves and doctors are accepting this recommendation.

Healthcare Finance reports that the incoming AMA President Steven Stack has not thrown in the towel on his effort to kill the ICD-10 coding system which is scheduled to take effect October 1. Health Data Management reports on a bill to expand ICD-10 testing and create an 18 month transition period (HR 2247).  CMS is planning on a clean break. We shall see.

The FEHBlog spent his weekend driving up to New Haven, Connecticut, and back. The principal purpose of the trip was a visit a close friend who is hospitalized at Yale New Haven.  Consequently the FEHBlog has not had much time to think about this weekend update, but the trip was worthwhile.

Congress was in session last week as explicated in The Week in Congress.  Congress will continue in session this week and return to their home districts for the week following Memorial Day.

The House is working on the FY 2016 defense authorization bill which usually has government contracting implications for FEHB contractors and a 21st Century Cures Act which is aimed at the Food and Drug Administration. Here’s a link to a Health Affairs blog article on that important bill.  Health Data Management reports that the latest version of this bill also includes a rather strict electronic medical records interoperability mandate.

Prescription benefit manager Express Scripts issued a report titled, Super Spending: U.S. Trends in High-Cost Medication Use.  The report

examines prescription drug use among patients with exceedingly high annual medication costs under the pharmacy benefit. The number of U.S. patients estimated to have annual medication costs greater than $50,000 jumped 63 percent between 2013 and 2014, from 352,000 to 576,000 Americans. The population of patients estimated to be taking at least $100,000 worth of medication nearly tripled in the same time period, from 47,000 to 139,000 Americans.

And of course, the drugs at issue are specialty drugs and insurers covered virtually all of the costs.  This is a trend that needs to be curbed quickly as the ACA’s high cost coverage excise tax kicks in about 30 months from now (2018).  Express Scripts offers some strategies and tactics.

OPM and the rest of the federal government has been promoting cessation of tobacco use. The other major PBM CVS Health reported on a tobacco cessation study conducted on 2500 of their own employees.

The researchers randomly assigned approximately 2,500 CVS Health colleagues and their family and friends to one of four incentive-based smoking cessation programs or to usual care, which consisted of informational resources and free access to a behavioral-modification program and nicotine-replacement therapy. Across all of the incentive-based programs, participants were eligible for up to $800 for successfully quitting smoking but the programs differed in how incentives were accrued and disbursed. Two of the programs required participants to pay an upfront deposit of $150, which was reimbursed if participants successfully quit smoking.  Overall, study participants who enrolled in any of the four incentive-based programs were nearly three times more likely to quit smoking than those who received usual care alone. In addition, although participants assigned to the groups requiring an upfront deposit were more likely to decline participation than those in the pure incentive-based programs, deposit programs led to nearly twice the rate of abstinence from smoking at six months among people who would have accepted either type of program.

The study appears to confirm human nature. OPM, however, does not allow FEHB carriers this level of flexibility in crafting their smoking cessation programs.

The Health Care Cost Institute which is a consortium of health insurers released a report on the cost of diabetes care in the U.S.

The report, Per Capita Health Care Spending on Diabetes: 2009-2013, is one of the first of its kind to examine health care spending for adults and children with diabetes relative to those without diabetes, both in terms of total per capita health care spending and out-of-pocket costs. It is based on the health care claims of more than 40 million Americans younger than 65 covered by ESI from 2009 to 2013. HCCI identified 5.3% of the ESI population as having diagnosed diabetes (type 1 or type 2) in 2013, up from 4.7% in 2009.
“The number of people with diabetes continues to grow, as does the health care spending for these individuals,” said HCCI Executive Director David Newman. “We, and others, need to better understand the relationship between spending and actual health outcomes for people with diabetes, particularly children.” 

Good luck with that effort. HCCI does good work.

The NPR / Kaiser Health News report on Monday’s ACA FAQ XXVI says it all.  

The ACA regulators issued ACA FAQ XXVI) today.  These FAQs, which respond to consumer group complaints, address various aspects of the ACA mandate on non-grandfathered plans (most FEHB plans) to cover certain preventive services with no enrollee cost sharing when provided in network. 

CCIIO also issued FAQs on the new HHS mandate to embed an individual self only out of pocket maximums under other than self only enrollments. As indicated in the FAQs, HHS announced this mandate in the preamble to the 2016 notice of benefit and payment parameters but as unmentioned in the FAQs, HHS failed to appropriately amend the ACA rules. This oversight doesn’t seem to concern CCIIO. The FEHBlog is surprised that HHS has not issued an errata to the notice of benefit and payment parameters. That fix may be still be forthcoming.

Happy Mothers’ Day to all.

Congress continues in session this week. The FEHBlog keeps waiting for the Financial Services Subcommittees of the House and Senate Appropriations Committees to consider OPM’s proposed budget. Nothing has popped up on their calendars yet.

OPM has submitted a final FEHBP rule to the U.S. Office of Management and Budget for its approval:

AGENCY: OPM RIN: 3206-AN14
TITLE: Federal Employees Health Benefits Program; Subrogation and Reimbursement Recovery
** RECEIVED DATE: 05/07/2015 LEGAL DEADLINE: None

There are several other FEHBP rules that are in the finalization process, e.g., self plus one enrollment type, new plan performance assessment system.  The FEHBlog appreciates reginfo.gov.

On Friday, the U.S. Attorney in Jacksonville, Florida, announced that “the United States has settled allegations that nine hospitals in Jacksonville had a practice of routinely ordering basic life support ambulances when this type of transport was not medically necessary. The United States has also settled allegations with an ambulance company for its role in submitting millions of dollars of false claims to federal healthcare programs.”  The false claims totaling millions of dollars
affected the FEHBP as well as other federal health care programs.

It’s the 70th anniverary of the Allies victory over Nazi Germany in World War II. Around noontime, the FEHBlog watched a World War II warplane flyover on the National Mall here in Washington, D.C.  Cool.

Here’s a link to the Week in Congress. The Senate joined the House of Represenatives this week in passing an FY 2016 budget resolution that includes reconciliation provisions to repeal the ACA. Timothy Jost reviews the ACA aspects of the budget resolution here.

Health Data Management reports on the latest Ponemon Institute study on health care related data breaches.

For the first time, criminal attacks are the leading cause of data breaches in healthcare, with such attacks up 125 percent versus five years ago, replacing lost laptops as the top cybersecurity threat to the industry. That is the finding of a new study by the Ponemon Institute, sponsored by security software and services vendor ID Experts, in which 45 percent of healthcare organizations indicate the root cause of their data breach was a criminal attack and 12 percent say it was due to a malicious insider.

Wow. The lost laptop problem was resolved by encryption. Hopefully it won’t be long before operating system data can be encrypted without disrupting operations.

Employee Benefit News reports on the growing patient and payer comfort level with telehealth services.

The U.S. telemedicine market is expected to reach $4.5 billion by 2018 – a massive gain from $440.6 million in 2013, notes a recent study by business information provider HIS. In addition, a recent Harris Poll found that 64% of the 2,019 U.S. adults it surveyed are willing to have doctor visits via video telehealth.
Employers are now warming up to the concept, which could save them more than $6 billion a year in health care costs, according to Towers Watson analysis. The consulting firm also found that 37% of U.S. employers with at least 1,000 employees expect to offer telemedicine consultations by 2015 compared with 22% in 2014 and another 34% are considering it for 2016 or 2017.

Drug Channels reports based on 2014 sales data that Walgreens and CVS sit on top of the pharmacy chain mountain.

Kaiser Health News reports based on a Harvard study that hospital closures generally do not adversely affect community health care.

• Govexec.com reports that Rep. Steven Lynch has introduced a bill in Congress (H.R. 2715)  that “would prohibit [FEHBP prescription benefit managers] PBMs from switching drugs without a physician’s approval; demand PBMs return to the federal plan 99 percent of all rebates, market share incentives and other monies from pharmaceutical companies in exchange for FEHBP business; and create stronger disclosure requirements.” The National Treasury Employees Union came out in strong support of the bill.  NEWS FLASH:  The Office of Personnel Management introduced these reforms by contract five years ago as first explained in Carrier Letter No. 2010-04.  In contrast to Medicare, reforms can be implemented and revised contractually which is much more flexible than passing a law. 
• In their press release, the NTEU states “FEHBP cannot buy drugs off the Federal Supply Schedule, which is why the program’s prescription costs are 15 percent to 45 percent higher than those for Medicare and federal health care systems run by the Veterans Administration and the Pentagon, the NTEU leader said.” Be careful what you wish for.  There are two components to cost — price and volume. In order to take advantage of statutorily low prices, the government must restrict the drug formulary to those low priced drugs.  In any event, the FEHBP already has high generic drug utilization in the FEHBP — a big cost saver — and the federal supply schedule focuses on drugs that are still under patent. 
• This brings me to my final point related to this bill. The FEHBlog often reads that prescription drug spending is 30% or so of the FEHBP’s benefit spend. That is  ten to fifteen percentage points higher than the commercial sector.  The reason for the 30% figure is that the FEHBP has a boatload of annuitants with Medicare Part A hospitalization coverage. Medicare covers the hospital bills for these annuitants, and the FEHBP covers their prescription drug costs. The FEHBlog expects that absent Medicare, FEHBP’s spending on prescription drugs would be in line with other commercial carriers.
• Yesterday, according to Accounting Today, the IRS released the 2016 dollar adjustments to limits on contributions to health savings accounts,  the minimum deductibles for high deductible health plans, and the upper limit on out-of-pocket cost maximums for those plans IRS Rev. Proc 2015-30).
• The FEHBlog also noticed an interesting FierceHealthPayer article about a New Jersey health insurer QANI now part of Cigna that stratified its membership by high, moderate, and low utilizers / risks and then focused appropriate managed care attention on each segment. The attention relied on technology and member engagement.  “The engagement program has succeeded to the point that, as of 2015, QANI applies it across its membership base.”

The FEHBlog is visiting lovely Denver Colorado. Meanwhile back in Washington, DC, Congress is in session this coming week. Here is a link to the Week in Congress’s review of last week’s activities.

This is also Public Employee Recognition Week.  Thank you government and postal employees.

At the OPM FEHBP Carrier conference in late March, OPM read off a laundry list of FEHBP regulations that the agency is in the process of finalizing. While none of those regulations have been submitted to the U.S. Office of Management and Budget for final approval as yet, reginfo.gov does tell us that an important HHS proposed rule is now pending at OMB:

AGENCY: HHS-OCR RIN: 0945-AA02
TITLE: Nondiscrimination Under the Patient Protection and Affordable Care Act
STAGE: Proposed Rule ECONOMICALLY SIGNIFICANT: Yes
RECEIVED DATE: 04/29/2015 LEGAL DEADLINE: None

Ah, it’s the first of May.  The beginning of the three best months of the year (weather-wise) here in Washington, DC.

Two other insurers, Cigna and Humana as well as the two big prescription benefit managers, CVS Health and Express Scripts, have reported their first quarter results. The winter weather did not adversely impact healthcare companies.

The Federal Times reports that the reconciled FY 2016 budget moving through Congress does not include any express federal employee benefit cuts. However, the resolution does direct the Congressional committees to reduce civil service spending which in turn could lead to reductions. Specifically, according to the Washington Post, “The joint budget agreement calls for cutting that amount over 10 years from programs under the House Oversight and Government Reform Committee,” which of course has jurisdiction over the FEHBP and other federal employee benefit programs. .Defense spending would be increased.

Yesterday, CMS released details on $103 billion of Medicare spending on prescription drugs in 2013. The Administration trumpets this action as evidence of its transparency and the action certainly has attracted press attention as illustrated by this Kaiser Health New collection of articles. However, the FEHBlog thinks that OPM’s “small ball” request made in the 2016 call letter that FEHBP carriers offer a webtool that allows consumers and their healthcare providers to see consumers would pay for prescription drugs pushes the transparency ball down the path further than this HHS move.

Health insurers and employers have been funding a Patient Centered Outcomes Research Institute (“PCORI”) to the tune of millions of dollars since the ACA’s enactment. The FEHBlog has wondered what the PCORI has accomplished other than spending the money on research studies. The FEHBlog is gratified that Modern Healthcare is asking the same question.

The Affordable Care Act created an independent organization to support research that assesses which healthcare interventions are most effective. But three years after it started funding studies, there’s no central repository of results or a clear strategy for making sure the knowledge reaches the clinicians it’s intended to influence.
The Patient-Centered Outcomes Research Institute distributed grants worth $30 million to its inaugural round of 50 projects. About 30 are complete and more results are anticipated this summer, PCORI leaders told Modern Healthcare.
It’s not clear, however, when or where those results can be found. PCORI says grantees are expected to have a plan for sharing their findings but also that it does not set timelines for completing studies.
As of last week the group said it had not been notified by project leaders of the completed research whether or not they have submitted manuscripts to peer-reviewed journals. The institute also said it does not have a central database where results can be shared, and researchers are not required to submit manuscripts to journals for publication. 

This problem could have a quicker fix than the electronic medical record interoperability problem. Time will tell.