Today, House and Senate leaders from the majority Republican Party agreed upon an FY 2016 budget resolution.  Once the resolution is approved by both Houses, the appropriations committee will pass FY 2016 spending bills based on the budget resolution. The budget resolution also includes reconciliation language that would permit the Senate (and of course the House) to enact an ACA repeal with 51 votes.  Of course, the President can veto the repeal and any of the spending bills so it should be an interesting period before the FY 2016 fiscal year begins on October 1.  Here’s a link to the Hill’s report on the budget resolution.

Following up on Sunday’s post, the Information Technology Committee of the House Oversight and Government Reform Committee did hold its hearing today on policy responses to encryption. However it turns out that the hearing was focused on the federal government’s negative reaction to the inclusion of encryption technology in mobile devices like cell phones, which is based on law enforcement concerns.  In one of her first public appearances, according to the Federal Times, our new Attorney General Loretta Lynch announced that combatting cybercrimes will be a high priority for the Justice Department, which is good news. To that end, the Justice Department has created a cybersecurity unit according to the Federal Times.

Publicly trade health insurers and other public companies have been announcing their first quarter 2015 results.  Aetna, United Healthcare, and Anthem all had positive news as ABC News and the Hartford Courant report.

The Leapfrog Group came out with updated hospital safety scores. “For the fourth time in a row, zero hospitals in the District of Columbia received an A grade.” That’s encouraging.

Finally, on the population health management front, the Social Service Research Council issued a Geographies of Opportunity report which ranks Congressional districts based on health. access to knowledge, and living standards. The health tidbits from the press release are not encouraging. For example,

Life expectancy ranges from just under 84 years in California District 19 (San Jose and part of Santa Clara County) to just under 73 years in Kentucky District 5 (rural southeastern Kentucky). This shocking gap is more extreme than the life expectancy difference between Japan and the Palestinian territories.

Check out your district.

From this morning’s WSJ — “On Feb. 10, Valeant Pharmaceuticals International Inc. bought the rights to a pair of life-saving heart drugs. The same day, their list prices rose by 525% and 212%.” According to the article, this is an MO for several drug companies.  Interestingly, the patents on these drugs expired years ago, but they currently have no generic competition. That may or may not change. But in any event,  cost curve up. 

Congress will be in session again this coming week. Here’s a link to The Week in Congress’s report on last week’s action. Here’s a link to a detailed Federal News Radio report on the House Oversight & Government Reform Committee hearing on cybersecurity held last Wednesday.  The Washington Post reported on a related House Small Business Committee hearing held the same day. This Wednesday, that Committee’s subcommittee on information technology will hold a hearing on encryption technology and potential U.S. policy responses which should be interesting.

Health Data Management reported on a Senate Appropriations Committee hearing about FY 2016 HHS appropriations held last Thursday. The Committee flailed the HHS Secretary Sylvia Burwell over the electronic health records program.

[Sen. Lamar] Alexander [(R TN)] referred to an American Medical Association-commissioned RAND Corp. study in which doctors identified EHRs as the leading cause of professional dissatisfaction, emotional fatigue, depersonalization and lost enthusiasm. To address these issues, Alexander, who is chairman of the Senate Health, Education, Labor, and Pensions Committee, told Burwell that he and ranking member Senator Patty Murray (D-Wash.) have formed a bipartisan working group to identify five or six EHR problems “that we can address administratively—in other words, you could do it—or legislatively if we have to.”

Sen. Bill Cassidy (R LA) also recommended that HHS allow doctors a two year implementation period for the ICD-10 coding system before imposing penalties. Currently, HHS plans to reject ICD-9 coded Medicare claims for service rendered on or after October 1, 2015. Health plans are generally planning to follow HHS’s lead.

Medical Practice Insider reports on Medscape’s 2015 physician compensation survey results.  Many key findings are presented graphically so check it out.  The survey finds a significant uptick in doctor participation in accountable care organizations (24% in 2013 to 30% in 2014).  Also, “across all types of payment models, specialists earned 45 percent more than PCPs in 2014.” Finally, “only 5 percent of respondents said they operated cash-only practices in 2014, down 1 percent from the prior year. Concierge care stayed level at only 3 percent participation in 2013 and 2014.”

In the last weekend update, the FEHBlog noted that the House Oversight and Government Reform Committee would be holding a hearing on enhancing cybersecurity of third party contractors and vendors.  Here is an FCW report on the hearing for those interested.

Two months ago today, the FEHBlog watched an online webinar about population health management (promote longevity – compress morbidity) presented by the National Diabetes Education Program which is part of NIH. Here are links to the slides and the script for that webinar. Very worthwhile.

Here’s an interesting perspective on last week’s HIMSS conference from Michael Arrigo, an advisor on disruptive healthcare regulations.  Five trends to follow.

OPM is encouraging FEHB plans to offer incentivized wellness programs.  Here’s an Employee Benefit Advisor report about an Optum survey of larger employers about their wellness program incentives.

• The most prevalent incentive mechanisms include company contributions to HSAs, HRAs or HIAs (38%); health premium reductions (34%–jumping from 27% in the prior year survey); and gift cards (29%).
• Only 16% of employers use cash incentives.
• The average value of incentives is $414, although 24% offer incentives in the $500-$999 range, and 11% provide incentives worth $1,000 or more.

Last week must have been employee wellness guidance week for the federal government. Fedweek reports that last Thursday OPM issued a memorandum to federal government employers urging support for employee wellness programs by explaining the business case for them. Both federal employing agencies and FEHB plans offer employee wellness programs.

The HHS Office for Civil Rights explained in a set of FAQs last Thursday that HIPAA privacy rights apply to health plan sponsored wellness programs but not to employer sponsored wellness programs. But there are other privacy laws that apply to the employment relationship. As the FEHBlog mentioned last week, there is crazy quilt of laws that apply to these wellness programs.

As employers, the internet, the media etc., are encouraging people to take an interest in their healthcare, Labcorp, a major laboratory test company, is making available a service by which people can self order laboratory tests. According to Bloomberg News,

Laboratory Corp. of America Holdings will let customers go online to pay for tests, visit a service center to get blood drawn, then view the results on the Web. The company has already been doing back-office lab work for a number of Internet firms that let people order up tests without a doctor.

Rapid and at-home diagnostics are a growing corner of the health-care market, with businesses like WellnessFX Inc. and Direct Laboratory Services LLC tapping into demand from patients who want to get sensitive results in private or seek to monitor their health outside of the traditional doctor’s office. Companies like LabCorp are tapping into demand from consumers who want to measure their bodies to monitor the effects of exercise and healthy living and to learn about their potential risks of disease.

“We need to retake that territory for ourselves,” LabCorp Chief Executive Officer David King said in a telephone interview. “It’s a growth opportunity for us. It’s something consumers increasingly want to have access to, and it’s something we’re doing already and our capabilities are being utilized without us getting the benefit from a branding perspective.”

This may in the words of Newman from the Seinfeld show create quite a conundrum for health plans which need health plan test claim information for many of the government mandated HEDIS quality measures. In this regard, the FEHBlog notes that because plans typically do not cover charges for “self-ordered” over the counter drugs, it’s likely that plans will not cover charges for self ordered lab tests. The FEHBlog doubts that a flexible spending account would reimburse such charges without a doctor’s prescription which may defeat the purpose of these new services, but then again who knows?

Employee Benefit News features an helpful article about how employers and health plans are addressing rising prescription drug costs.  The article was spurred by this Aon Hewitt report on the prospect of double digit prescription drug benefit increases. As OPM has recommended to Congress that the agency be allowed to administer prescription drug benefits for the FEHBP, it’s worth calling everyone’s attention to this AHIP ordered study prepared by the Menges Group which finds that

In the 28 states and the District of Columbia where Medicaid plans include (or carve in) prescription drug benefits in the coverage, they saved $2.06 billion in state and federal expenditures in 2014 alone, according to a new report by The Menges Group. The report attributes the significant savings to greater use of generics and lower-cost medications.
Meanwhile, the seven states that carve out prescription drugs forfeited $307 million in total savings last year by not integrating pharmacy and medical benefits. Those states also saw net costs per prescription jump 20 percent from fiscal year 2011 to 2014.

This is only the latest study supporting integration of these benefits.  Maintaining the current integration of these benefits in the FEHBP simply makes sense.

Congress will be in session again this coming week. Here’s a link to The Week in Congress’s view of last week’s activities. Last Thursday, the President signed the Medicare doc fix bill into law. On April 22 at 2 pm, the full House Oversight and Government Reform Committee will hold a hearing on enhancing cybersecurity of third party government contractors and vendors.

Last Friday, the FEHBlog mentioned a Wall Street Journal article on rising hospital prices.  Modern Healthcare notes that

The Altarum Institute’s Center for Sustainable Health Spending estimated that spending on hospital care jumped 9% from February 2014 to February 2015. That’s a “giant” increase, said Paul Hughes-Cromwick, a senior health economist at Altarum. By contrast, hospital spending climbed only 3.1% from February 2013 to February 2014.

The ACA regulators came out with FAQ XXV yesterday. This one concerns wellness programs in employer sponsored plans. As the FAQ points out, those wellness programs are blanketed by a crazy quilt of laws and rules. The Equal Employment Opportunity Commission issued a long awaited proposed rule yesterday on the relationship between wellness programs and Title I of the Americans with Disabilities Act which applies to the employment relationship.  Kaiser Health News reports that the proposal is earning business praise, consumer concerns.

As yesterday, the Centers for Medicare and Medicaid Service issued a new version of its on line Hospital Compare service. The new version gives hospitals star ratings (one to five).  To see a selected hospital star rating, you have to select the hospital for comparison and then click on the survey of patient experiences tab. The two hospitals closest in distance to the FEHBlog’s home both have two stars.  According to iHealtbbeat,

Medicare awarded five-star ratings to 251 of the 3,553 eligible hospitals — or about 7% of the nation’s hospitals. In addition:
1,205 hospitals, about 34%, received four stars;
1,414 hospitals, about 40 %, received three stars;
582 hospitals, about 16% received two stars; and
101 hospitals, about 3%, received one star.

Perhaps the FEHBlog should consider moving.

Yesterday’s Wall Street Journal had a fascinating story on hospital prices. Hospitals have been raising their list prices because the rack rate comes into play for Medicare purposes when the patient is consider an outlier  from / sicker than the standard patient population considered when CMS develops is standard prospective price. The prospsective price is based on diagnostic related groups or DRGs.

Hospitals’ list prices have faced criticism for years as patients—often with limited or no insurance—received towering bills. The hospitals argue that few pay those rates, often called the “chargemaster” prices. Private insurers negotiate discounts with hospitals in their networks, and Medicare has its set prices for services.
Will Fox, who advises hospitals on pricing strategies as an actuary with Milliman Inc., said that, even so, “there’s still a big reward” for increasing list prices. He said hospitals raise prices primarily to increase revenue from private insurers, which sometimes reimburse based on list prices. Higher Medicare payments, he said, are viewed as a smaller “bonus.”

The Journal notes a ripple impact on non-Medicare patients who receive out of network coverage for hospital services.

Forbes reports that “In 2014, the U.S. healthcare system spent $373.9 billion on drugs—13.1% more than it did the previous year and the highest rate of spending growth since 2001, according to a new report from IMS Health’s Institute for Healthcare Informatics.  This should come as no surprise given the Hepatitis C drugs, generic inflation, and the ACA.  Drug Channels reports on the status of generic drug inflation which may be easing after a surge last year.

Finally the big HIMSS conference wrapped up in Chicago with HHS keynote speakers.  MedCity News reports

In the face of growing criticism and impatience with the Meaningful Use EHR incentive program, National Health IT Coordinator Dr. Karen DeSalvo remains upbeat but aware of the tough work ahead to achieve the vision of a learning health system underpinned by a network of interoperable EHRs.
“Interoperability is a priority, but it is still just a means to an end,” De Salvo said Thursday morning in a keynote session on the last day of HIMSS15 at McCormick Place in Chicago. Without interoperability, it will be difficult to achieve healthcare payment and delivery reform, she added.

No kidding.

The Senate passed the House of Representatives version of the Medicare Part B doc fix bill last night. The President had agreed to sign the House version. This means that the sustainable rate of growth formula for reimbursing doctors under Medicare Part B has been replaced by a phased in approach that is intended to do away with fee for service medicine in Medicare in 2019. Doctors will get a 0.5% pay raise from Medicare Part B beginning on July 1.  Wealthier Medicare beneficiaries will pay higher premiums beginning in 2018. Full / necessary details are in this Kaiser Health News piece.

It took Congress over 15 years to fix this problem. Congratulations to the House Speaker and Minority Leader for their leadership rolls. This stabilizing law is important to the FEHBP because there is a large cadre of Medicare Part B annuitants in the FEHBP and the FEHBPs nationwide plans use the Part B formula to pay doctors for services render to annuitants who don’t elect Part B (5 U.S.C. Sec. 8904(b)).

The Office of National Coordinator for Health IT (the health IT czar) issued an update privacy and security guide for healthcare providers.  The guide is over 60 pages long which is bound to discourage small practices. As far as the FEHBlog can tell, the guide does not include the best advice which is to apply for and purchase cyber-liability coverage. The insurer’s underwriting rules will help you get in shape.  IHealthBeat reports on a recent study illustrating the fact that this problem will be with us for a while at least.

Health Data Management reports on the keynote address by Humana’s CEO Bruce Broussard to the big HIMSS health care technology conference this week.

Here’s a link to a fascinating and lengthy Strategy and Business interview with Aetna’s CEO Mark Bertolini about Mr. Bertolini’s preventive disruption approach to his business.

Spring has sprung here in DC!  Congress resumes its session on Monday.  Iran, the Medicare Part B doc fix bill, and reconciling the House and Senate budget resolutions will be on the front burner.

Last week, Optum, a UnitedHealth Group division, announced the acquisition of a walk in medical care center chain called Medexpress.  Medexpress, which several emergency room doctors started in West Virginia, has 141 locations in 11 states and it’s growing. The FEHBlog thought that Medexpress was Optum’s introduction to this business, but Healthcare Finance News illuminated the FEHBlog with news that Optum already has a chain of nine Optum walk-in clinics. The first Optum Clinic opened in Houston last year. The FEHBlog is skeptical about insurers getting into healthcare and healthcare systems getting into health insurance, but the ACA is driving this integration movement unquestionably.

It’s not just the FEHBlog’s viewpoint. Forbes reports that Walgreen’s CEO, Italian billionaire Stefano Pessina, is predicting more healthcare merger and acquisitions activity due to the ACA.  (Walgreens recently merged with a major European pharmacy chain Boots Alliance.)  Forbes and Drug Channels queries whether Walgreens may target Rite Aid for acquisition. The St. Louis Post-Dispatch (Express Scripts is based in St. Louis) examines whether Walgreens may target Express Scripts which of course would be humorous considering the battle between those companies just a few years ago following the Express Scripts Medco merger.) Time will tell.

On Friday, HHS issued a report to Congress blaming anti-competitive instincts of healthcare providers and their information technology developers for the electronic medical record interoperability mess according to the Nextgov.com report. However, “agency heads acknowledged there isn’t yet much quantifiable information about the practice.” The FEHBlog continues to credit the insights of AMA President elect Steven Stack who has explained that the federal government’s meaningful use standards, which IT developers strictly followed, failed to include interoperability standards because the government did not consider the individual user’s / doctor’s needs.

The sun is coming out here in downtown DC which suggest a promising Spring weekend weather-wise. Congress resumes its session on Monday April 13, and Modern Healthcare suggests that the bill to repeal and replace the sustainable rate of growth formula for reimbursing doctors under Medicare Part D will pass the Senate. The House passed the bill, which includes a two year Children’s Health Insurance Program extension and more funding for community health centers, by a wide bi-partisan vote late last month. This permanent doc fix is important to the FEHBP because a large cadre of Medicare prime annuitants are enrolled in Part B and the experience rated plans use Medicare Part B reimbursement rates to pay doctors for services rendered to Medicare prime annuitants who don’t elect Part B. OPM is encouraging annuitants to pick up Part B.

Nothing frosts the FEHBlog’s cake more than the fact that the experts who devised the meaningful use standards for the free electronic medical record systems that Congress handed out to hospitals and doctors did not include interoperability standards.  Now over five years later a lot of back-filling and mitigating is going on. It strikes the FEHBlog that authorizing HHS to create a patient identifier would boost these efforts but as Healthcare Data Management reports Congress continues to block appropriations for this logical action on privacy ground.  That publication also is reporting that the Federal Trade Commission is warning that EMR interoperability could impair competition which was a surprise to the FEHBlog. Let’s just get this problem fixed so the country can receive the full benefit of its $30 billion investment in these systems.  There’s no doubt in the FEHBlog’s mind that interoperability will improve healthcare and lower costs.

Kaiser Health News reports that a new coalition of healthcare providers, payers and consumer organizations has launched the Clear Choices Campaign in an effort to improve healthcare pricing transparency. Good luck with that effort.

Health Affairs this month includes a study on the public health costs of mammograms that produce false negatives — $ 4 billion annually.  That’s a lot of money.

In recent years, the prevalence of false-positive mammography
screenings and overdiagnosis of breast cancer (diagnosis of cancer that
will never cause symptoms or death during a patient’s lifetime) has been
well-documented. Until now, however, the full, national-scale cost
burden has not been documented.

Mei-Sing Ong of the Boston Children’s Hospital Informatics Program
and Ken Mandl, Harvard Medical School professor and Boston Children’s
Hospital Informatics Program faculty member, assessed the costs from false-positive mammograms and breast cancer overdiagnoses
among more than 700,000 women ages 40–59, between 2011 and 2013.
Average expenditures ranged from $852 for every false-positive mammogram
to $12,369 for each misdiagnosis of ductal carcinoma in situ (abnormal
changes in the cells of the milk ducts of the breast—the most common
type of non-invasive breast cancer).

The authors found that the national costs of false-positive
mammograms and breast cancer overdiagnoses are $4 billion each year.
They note that these costs must be considered in debates about whether
screening guidelines should take into account additional factors beyond
age.

This is an example of how the ACA’s “free preventive care” mandates can boost healthcare costs. There’s no doubt that preventive care together with rapidly improving cancer care is saving lives but the medical profession needs to find a happy medium here.