In advance of the FEHBP carrier conference, OPM has released the call letter for 2016 FEHBP plan benefit and rate proposals. Here’s a link to that important letter. 2016 proposals are due on May 31, 2015.

This is a big week for the FEHBP and the FEHBlog. On Thursday, OPM will release the call letter for 2016 benefits and rates submissions. The release will occur on the first day of the two day long OPM AHIP conference for FEHBP carrier conference in lovely Arlington, Virginia. The FEHBlog will be speaking on day two about challenges facing FEHB carriers in the next three to five years.  The FEHBlog is honored to have be speaking.

The Senate was in session this past week as the The Week in Congress reports.  Both Houses will be in session this coming week.  The appropriations committees in both Houses are busy holding budget hearings. Here is a link to the House Budget Committee’s FY 2016 budget proposal.

The federal debt ceiling which has been suspended for the last twelve months is back in place tomorrow as Bloomberg reports. “The Congressional Budget Office predicts the department can make it until October or November using “extraordinary” accounting measures to stay under the cap”

Congress is facing a March 31 deadline on the Medicare Part B reimbursement fix. Modern Healthcare reports that a bipartisan approach to repealing and replacing the current sustainable rate of growth formula is emerging. Nevertheless, “Congress must reach a deal by March 31 to avert a 21.2% reduction in
Medicare payments to doctors. How the 218 votes needed for passage in
the House can be cobbled together for the emerging deal remains a very
dicey proposition.”  So it appears that the can will be kicked down the road again. Robert Moffitt from the Heritage Foundation offers his solution in a post on the Hill. 

Finally, last week, the large prescription benefit manager Express Scripts released its 2014 prescription drug trend report.

Yesterday, the Congressional Budget Office released its estimates of the costs/savings created by the President’s FY 2016 budget proposal.  The CBO projections on OPM’s FY 2016 FEHBP initiatives are found on lines 82 through 85 of this attachment.

On Wednesday, the FEHBlog noted a Medscape story on a study finding that fewer readmissions occur when discharged patients visit their doctor soon after leaving the hospital. Better patient support should reduce readmissions. The FEHBlog is returning to this post because the study focused on patients who had a return visit in seven days following discharge. The FEHBlog does not believe that there is any magic in the seven day period. The patient or the doctor may not be able to schedule the appointment within seven days. The point is prompt follow-up care, the likelihood of which is improved by a strong personal support group, e.g., family members and friends, around the patient. Hopefully that is the norm in the FEHBP.

The FEHBlog had been surprised that there was no uproar about inability to access health insurance after the ACA’s first open season ended last Spring. The uproar has come this year as consumer groups and patient advocates are lobbying to treat pregnancy as a qualifying life event entitling a woman to enroll for ACA coverage outside an Open Season, according to this Yahoo Health article. Odds are in the FEHBlog’s view that this effort will be successful. But where do you draw the line. If an unexpected pregnancy is a QLE, then why isn’t an unexpected illness or car accident also a QLE?

Health Day has a report on a new American Medical Association / CBC initiative to engage in more diabetes 2 testing (the A1c test) and patient education because there are a lot of pre-diabetic people out there. This is a great idea.   

Bloomberg Business reports that Altarum Institute has concluded that U.S. healthcare spending jumped 5% in 2014 following five years of average 3.9% growth due to an mproving economy, millions of newly insured folks and skyrocketing prescription drug costs. Get a load of this observation by the Altarum health care director Charles Roehrig:

While Roehrig finds little evidence that recent reforms changed the rate of growth, he said that over decades, the amount by which increases in health spending have exceeded GDP growth has narrowed. “There’s more evidence now that we’ve been on a long-term steady decline in the excess growth rate,” he said. The good news is that if the trend holds, U.S. health spending will eventually stabilize. The bad news, according to Roehrig’s analysis, is that it wouldn’t happen until health-care accounts for about 25 percent of the American economy.

Finally, Federal News Radio reports on OPM’s thoughtful approach to information security called “orchestration.”  

The Congressional Budget Office issued its March 2015 baseline report on the ACA last Monday.  Here’s a Modern Healthcare perspective on the report. The FEHBlog was surprised that compared to the January benchmark CBO lowered the Cadillac tax’s projected revenue over the period 2016 – 2025 by $62 billion to $87 billion. This shows that employers are actively pursuing their options to lower their tax liability, e.g., by switching to consumer driven plans. The chances of repealing the Cadillac tax increase as the revenue projection drops.

The FEHBlog discovered yesterday in this iHealthbeat article that late last month, CMS issued a notice to providers advising that Medicare will not process claims with ICD-9 codes for dates of service after September 30, 2015 — no dual processing. A separate set of rule applies for hospital stays that begin before October 1 and end on after October 1 as explained in the CMS notice. This simplifies matters for health plans which generally take their lead from CMS on coding issues. However, you never know whether Congress will require a CMS dual coding accommodation to providers. Time will tell.

Fierce Healthcare reports that CMS has release information on a next generation version of accountable care organizations. The new model is intended to allow “participants to take on more financial risk with more predictable financial targets and the potential to obtain a greater reward.” Again time will tell.

Avoiding hospital readmissions has been an OPM objective for the FEHBP. Medscape reports on a study finding that “Hospital readmissions were significantly reduced when patients with multiple chronic conditions and a greater than 20% baseline risk for readmission received follow-up within 7 days of discharge, according to a study of 44,473 Medicaid recipients in North Carolina with 65,085 qualifying discharges.” “Better patient support = fewer readmissions” makes sense to the FEHBlog.

Congress is in session this coming week. Here’s a link to a report on last week’s work on Capitol Hill.  Modern Healthcare predicts that Congress will pass another extension of the Medicare Part B patch that prevents the statutory sustainable rate of growth formula from cutting reimbursements to doctors by 21.2%. The deadline for Congressional action is the end of this month.

Modern Healthcare also reports that Blue Cross of Massachusetts, a member of the value based care vanguard, lost $119 million from operations last year due to Hepatitis C drug costs and ACA and local taxes. The operating loss for this non-profit insurer was on “$6.5 billion in revenue, a -1.8% operating margin. When factoring
in investments and other income, the insurer posted an $8 million
surplus in 2014.”

Federal News Radio reports that “Just over 9,200 federal employees filed for retirement benefits in the shortest
month of the year, enough to swell the government’s backlog of retirement claims
to its highest point in more than 18 months.”  The point here is not to knock OPM but rather to illustrate FEHB demographics which skew toward an older demographic.

Kaiser Health News reports on the serious problem that has arisen due to the fact that the government spent $30 billion on electronic medical record systems that don’t communicate with each other electronically. Health Data Management reports that the Senators are not impressed by the government’s roadmap to interoperable electronic medical records. The FEHBlog is placing his bets on private sector organization like the eHealth Initiative and CAQH CORE to solve the problem.

Drug Channels offers an intriguing analysis of CVS’s SEC reports.  Here are a tidbit:  “CVS Health’s Caremark pharmacy benefit management (PBM) business
accounted for a record 35% of CVS retail pharmacies’ prescription
revenues. That’s much higher than Caremark’s overall market share.” The article focuses on the marvelous synergies of CVS’s Maintenance Choice program for both CVS and payers.

It’s been a busy week for the FEHBlog so TGIF indeed.  The FEHBlog wishes to point out more tidbit from the 2016 Notice of Benefit and Payment Parameters. The notice set the 2016 in-network out-of-pocket limit for self-only coverage at $6,850 and for other than self-only coverage at $13,700. The notice’s preamble (80 Fed. Reg. at 10,824-25) advises that beginning with the 2016 plan year, HHS will require that whenever a member of a self and family group reaches the plan’s self only max for in-network care, the plan must cover that member’s in-network cost sharing (deductibles, coinsurance and copayments) for the remainder of the plan year.  Once the family in-network max is met, then the entire  family’s in-network cost sharing is waived. 

It’s a red letter day. The Washington Post reports that the Food and Drug Administration approved earlier today “the sale of the first-ever biosimilar drug in the United States, opening the door to a cheaper class of drugs that could expand patient access to life-saving treatments. The FDA approved Novartis AG’s copycat version of Neupogen, a biologic cancer drug that recorded $1.2 billion in worldwide sales last year.”  The article notes that the FDA has four other biosimilar applications on its plate. Also, the “FDA is expected to issue more guidance on “interchangeability,” which could mean greater take up of biosimilars. A product deemed interchangeable could be automatically substituted for the original biologic at the pharmacy, similar to how traditional generics replace their brand-name counterparts.”

I Health Beat reports that the AMA and a boatload of other medical groups are urging CMS to create ICD-10 contingency plans if things go awry on October 1. The FEHBlog bets that Congress mandates contingency planning in the near future.

Gallup reports that according to its surveys U.S. federal government workers are thriving in their financial well-being more than the rest of the workforce. The article explains that

Gallup research defines financial well-being as managing one’s economic life to reduce stress and increase security. Financial well-being is not necessarily related to absolute income, but rather to approaches to saving and spending and future expectations of job security, among other subjective factors. The survey data indicate that working for the federal government is associated with higher financial well-being when compared with other U.S. workers, holding across income and education levels. Federal workers reporting higher levels of financial well-being could mean good news for the U.S. government because financial well-being is a crucial aspect of overall well-being, which has a significant effect on healthcare costs and engagement on the job.

That’s interesting.

The FEHBlog is of course aware that the Supreme Court heard the King v. Burwell case this week. The FEHBlog long ago gave up predicting the outcome of Supreme Court cases and in any event this case while important does not have a direct impact on our beloved FEHBP.

The Washington Post reports that Congress sent a clean Homeland Security funding bill to the President today, thereby ending the FY 2015 appropriations process without any government shutdown.

The Hill included an op ed by a Republican Congressman Reid Ribble (R Wisc) and a Democratic Congressman Kurt Schrader (D Ore) supporting the President’s proposal to “modernize” the FEHBP with more plan types.  Neither member sits on the House Oversight and Government Reform Committee, which has oversight responsibility for the FEHBP.  Of note, Mr. Ribble is a member of the Republican Study Committee, and Mr. Schrader is a member of the Energy and Commerce Health subcommittee, among others.

The FEHBlog likes to link to hospital quality surveys. He has noticed that there’s not a lot of noticeable alignment among the surveys. CNN reports on a Health Affairs study concluding that the FEHBlog’s observation is correct. Here’s the Health Affairs squib on the study:

Matt Austin of Johns Hopkins Medicine and coauthors compared four well-known national hospital rating systems designed for use by US consumers: U.S. News & World Report’s Best Hospitals; HealthGrades’ America’s 100 Best Hospitals; Leapfrog’s Hospital Safety Score; and Consumer Reports’ Health Safety Score. They analyzed ratings covering the time period from July 2012 to July 2013.
With each system using its own rating methods, having a different focus to its ratings, and stressing different measures of performance, the authors found that only 10 percent of the 844 hospitals rated as a high performer by one system were equally rated by any of the other rating systems. The complexity and opacity of the different rating systems, conclude the authors, “are likely to cause confusion instead of driving patients and purchasers to higher-quality, safer care.” They recommend that organizations sponsoring ratings assist patient interpretations of their ratings through the media and other information channels.

The FEHBlog prefers to ask nurses and allied health professionals for their opinion on hospital quality.

Quite a few interesting tidbits crossed the FEHBlog’s desk today.

• Here’s a link to the Edington Associates’ presentation from the population health management webinar that the FEHBlog attended last Thursday. You can view a recording of the webinar at this link.
• This statement does not surprise the FEHBlog but he was surprised that a study came to this intuitive conclusion — “Based on publicly available information, there is scant evidence to back up claims by large, nonprofit integrated health systems that they deliver higher quality care more efficiently [than for-profit systems], according to a new study released today from the nonpartisan National Academy of Social Insurance (NASI).”  Here’s the link. 
• It should come as no surprise to anyone that Information Management reports that medical identification thefts are on the rise due to the government incubated growth of electronic medical records. Paper records were more secure but that ship has sailed. Let’s hope we do get the bang for the buck out of this $30 billion government investment.
• The Washington Post reports that a Northern Virginia security firm has linked the Anthem data breach to China.  “Malicious software used in the Anthem hack conclusively matches malware that was used to target a small U.S. defense contractor and that the FBI has said originated in China, said Rich Barger, chief intelligence officer of ThreatConnect. “The malware is so unique — the digital signature is so precise — in these two incidents that we strongly feel the same Chinese actors were involved,” Barger said. He said the links do not reveal who exactly carried out the Anthem hack but point to involvement of Chinese government-sponsored entities.”
• Truven Health Analytics today released its 2015 lists of top 100 hospitals in the United States.

The FEHBlog is back from NYC and woo boy is it icy here in Washington DC.  Congress remains in session this week, and Homeland Security appropriations remains at the top of its agenda. Here is a link to the Week in Congress’s look at last week.  The Supreme Court will hear arguments in the King v. Burwell case on Wednesday morning.  This case involves the  legality (not the Constitutionality) of providing ACA subsidies in the federally managed marketplaces.

The Wall Street Journal reports that a higher percentage of ACA marketplace enrollees changed plans in the last Open Season than typically occurs in an FEHBP open season. The FEHBlog hardly finds that surprising with an immature program, but it’s worth noting.

The Washington Post reports that the battle over providing subsidized marketplace coverage to members of Congress and their official staffs continues apace.  Back in the day, the FEHBlog thought that this problem could be solved by a Congressional appropriation. However, the IRS then overruled years of precedent by holding that employers can’t reimburse their employees’ health insurance premiums on a pre-tax bas.  Even then Congress could have provided the subsidy on an after tax basis which is probably where we all will wind up in a few years, e.g, no more employer exclusion for health care coverage with tax credits toward health insurance coverage for lower income folks.

Finally, last week the nation’s fourth largest PBM Catamaran (after CVS, Express Scripts, and Optum Rx) announced the acquisition of Health Solutions Inc. for 4405 million. Here are Chicago Crain’s articles about Catamaran’s “comeback story” and this deal.

The FEHBlog is up in New York City. His oldest daughter’s wedding shower is tomorrow and he is helping out his wife.

The FEHBlog did participate in yesterday’s Eddington Associate’s free webinar on population health management. The most interesting factoid was that close to 80% of the population is considered low health risk. Part of the challenge is keeping people in that category as they age. Here’s a link to their webinar page.

Otherwise, things keep rolling right along. It looks like Congress will will kick the can down the road on both the Homeland Security appropriations bill (deadline imminent) and the Medicare Part B doctor reimbursement formula (deadline March 31 extension four to six months).  CMS boasted about favorable ICD-10 end to end testing results but that major conversion still could be problematic when the rubber hits the road on October 1.