Well, we now are in the middle of the two week long end of the year holiday period. The FEHBlog enjoyed the Christmas holidays with his wonderful family.  Congress is keeping the home fires burning too.  Nevertheless, the Pharmacy Times reports that a bipartisan team on Congressmen will be introducing a bill to increase the transparency of generic drug pricing in the FEHBP, Medicare Part D, and TRICARE next month.  The burden of the law would fall principally on the prescription drug managers. Community pharmacists are leading the charge for its passage.

Federal News Radio reports on OPM’s workforce goals for 2015.  OPM is requiring agencies to designate Senior Accountable Officials who will be responsible for improving employee engagement.

OPM earlier this month imposed now obligations on FEHBP carriers to root out fraud, waste, and abuse.  FEHBP carriers have every incentive to take such actions because they bear the financial risk of their health plans. In any event, the FEHBlog takes note of this fact because the Wall Street Journal wrote yesterday about how hard it is root fraud out of Medicare. The article explains that Medicare has problems screening bad actors out of the program and kicking bad actors out once they are identified. The article makes an interesting point:

[S]imple improvements to the screening process would make it easier to spot fake medical providers.  “Even to get a driver’s license, you need to take a driver’s education course and pass a test,” said Ryan Stumphauzer, former head of the Medicare Fraud Strike Force in Miami. “Why not perform this type of common-sense screening before handing out Medicare billing privileges? Ask basic questions: Does the applicant have education, training or experience in health care? Are they versed in basic Medicare rules and regulations?”

Hopefully Congress will impose this vetting obligation on the providers and their professional associations where the burden belongs.

Healthcare Data Management reports that 2014 was a landmark year for health care data breaches.
In the good old days before electronic records, there probably were a lot fewer breaches. Of the 10 most recent breaches according to Beckers Hospital Review, only one (#10) involved paper records. Putting this genie back in the bottle is impossible at this point (as illustrated by ONC’s new five yer plan) but the government, which also has suffered data breaches, needs to be more understanding and take the lead in efforts to improve data security, in the FEHBlog’s view.

The FEHBlog thought that he could take a week off, but noooo, the ACA regulators kept up the drumbeat of new rules with an proposed rule updating the summary of benefits and coverage (“SBC”).  The SBC is a four double side page explanation of health plan coverage to be accompanied by a uniform glossary of health insurance terminology. Of course, is the brainchild of the ACA, and it sits on top of the lengthier and definitive summary plan description for ERISA plans and plan brochure for FEHB plans.  The FEHBlog is not sure how many people actually use the SBC, which was introduced a couple years ago, but the ACA regulators have decided in their infinite wisdom to update it with, e.g., a new “coverage example” for a simple leg fracture to accompany the existing examples of diabetes 2 treatment and the delivery of a baby. Timothy Jost in Health Affairs already has taken the time to review the proposed changes here. The rule is now in its comment period. The ACA regulators anticipate that the new SBC will be used beginning on September 15, 2014   Congress should require health care providers to give their patients a list of the networks in which they participate and sample prices. That would really improve transparency.

The other big news is that last Friday December 19, the Food and Drug Administration approved for marketing Abbvie’s “Viekira Pak (ombitasvir, paritaprevir and ritonavir tablets co-packaged with dasabuvir tablets) to treat patients with chronic hepatitis C virus (HCV) genotype 1 infection, including those with a type of advanced liver disease called cirrhosis.”  Genotype 1 is the most common form of Hepatitis C.  Gilead Sciences no longer has a monopoly with its Sovaldi and Harvoni drugs for that disease. On Monday, the Chicago Tribune reported that the large prescription drug manager Express Scripts announced  that on January 1, 2015, it will only offer Abbvie’s drug for Hepatitis C genotype 1 infections.   “Express Scripts did not say how much AbbVie would cut the $83,319 wholesale cost of the drug, but said it will be comparable to the price Gilead Sciences charges in Western Europe for its blockbuster drug Sovaldi, which costs $51,373 in France and $66,000 in Germany, for example ”  The Wall Street Journal’s Phamalot blog added more perspective in its report which explains why Abbvie’s drug will not entirely supplant Gilead’s drugs and that Express Script’s deal is not exclusive.  “Sanford Bernstein’s Porges writes that he also expects Gilead ‘will need to make a significant concession to CVS/Caremark in order to retaliate against AbbVie and possibly secure an exclusive arrangement with CVS/Caremark.’”

Merry Christmas to all!

Last week, Express Scripts published a report on opioid / strong painkiller use/abuse which is a national health care problem,  The report which is worth reviewing goes into more details on the talk that the FEHBlog heard at an Express Scripts conference in October.  Solving this problem requires provider buy-in in the FEHBlog’s view, e.g, better prescribing practices, more patient oversight.

Also last week Cigna and Safeway published a study on the successful application of reference pricing to clinical laboratory charges.  Reference pricing is a benchmark approach that can be use with in-network providers.  Reference pricing encourages the plan participants to pay attention to the price of health care services.

The study involved two groups of employees enrolled in a Cigna health plan so that the researchers could draw credible conclusions about the effectiveness of the benefit design. The first group comprised Safeway employees who had a reference-based pricing benefit for lab services. The second group comprised employees of various employers who did not have this benefit but lived in the same community and received the same lab services as the Safeway employees.

Members of the first group had access to an online shopping tool that showed information about the cost, location and type of lab services in their geographic area based on the application of the reference-based pricing benefit. They also received educational information about this benefit. The result: Individuals with the reference-based pricing benefit demonstrated a 20% increase in selection of lab services below the reference price compared to those without the benefit (69% vs. 57%). 

“This study is an important first step, but we can’t conclude from it that the benefit alone drives the greatest behavior change,” Cigna’s Aube said. “Though not specifically demonstrated through this study, we do know that communication and education are essential to all of Cigna’s consumer-directed efforts. Our hypothesis is that it is a combination of benefit structure, with effective education and messaging, that presents the greatest opportunity to change behavior.” 

“We looked at very early data for this analysis,” said Safeway’s Dr. Bradley. “The understanding of reference pricing along with adoption of online tools to inform the consumer has increased significantly since the early days of 2011. Thoughtful application of reference pricing warrants consideration as a mechanism to improve value in health care and help individuals reduce their costs for certain services.” 

Jingle bells!

Although this is not an FEHBP matter, the FEHBlog was pleasantly surprised to read this ACA regulators’ press release issued today announcing their intent to allow employers to supplement ACA marketplace coverage for employees who fall outside the ACA’s employer shared responsibility mandate, e.g. employees of employers with 50 employees (100 for 2015) and employees who work less than 30 hours for employers subject to that mandate a/k/a part-time employees:

The proposed rules would allow group health plan sponsors, in limited circumstances, to offer wraparound coverage to employees who are purchasing individual health insurance in the private market, including through the Health Insurance Marketplace. The rule proposes two pilot programs for wraparound coverage. One pilot would allow wraparound benefits only for Multi-State Plans in the Health Insurance Marketplace and another would allow wraparound benefits for part-time workers who could otherwise qualify for a flexible savings arrangement who enroll in individual market plan.

Ihealthbeat reports that CMS has added more healthcare quality data to the Hospital Compare and Physician Compare websites. Those websites cover care rendered to all patients, not just Medicare patients.

Following on a couple of recent FEHBlog posts, not surprisingly health information technology groups are at odds over the CRomnibus’s electronic medical record interoperability mandate.  The underlying problem in the FEHBlog’s view is embedding technology requirements in law. However, the government could not be expected to shell out $30 billion on electronic medical record systems without attaching strings. Unfortunately the 2009 law omitted an interoperability string which has created the current problem,

Also, the Wall Street Journal’s Pharmalot blog predicts that the Philadelphia public transit health plan’s price gouging lawsuit against Gilead Sciences, which manufactures the only FDA approved Hepatitis C drugs, won’t be successful:

“Monopolists, themselves, are not unlawful. They are allowed to charge any price they want. It’s only if they take any anticompetitive conduct that a problem may exist,” says Ankur Kapoor, an attorney at the Constantine Cannon law firm who specializes in antitrust law. He notes that antitrust laws do not have price-gouging provisions, “I can’t recall seeing a case like this,” he says.  As a result, the Gilead pricing is unlikely to be considered illegal, experts say

The FEHBlog was intrigued by the health plan’s offensive use of the ACA’s anti-discrimination law, PHSA § 1557 in this lawsuit, a point that the WSJ article did not discuss. In any event, according to another WSJ article, the Food and Drug Administration may soon deprive Gilead of its monopoly status by approving a competitive drug manufactured by AbbieVie.  

Analysts don’t expect AbbVie to overtake Gilead in the hepatitis C market, but believe it can capture a decent share of a market that continues to grow. AbbVie hasn’t disclosed pricing for its regimen, but some expect that the company could gain market share by selectively discounting it versus Gilead’s Harvoni, which costs about $94,500 for a 12-week regimen. Gilead’s Sovaldi hepatitis C drug, which was introduced a year ago, costs $84,000 for a standard course of treatment.

Have a good weekend.

[T]he package includes language directing ONC [the Health IT Czar] to decertify electronic health record systems that prevent the electronic exchange of health information. The new law states, “ONC should take steps to decertify products that proactively block the sharing of information because those practices frustrate congressional intent, devalue taxpayer investments in (certified EHR technology) and make CEHRT less valuable and more burdensome for eligible hospitals and eligible providers to use.”

The law also includes a coupe of provisions requiring reports to Congress.  My money is riding on the private sector to fix this pressing problem. Ihealthbeat further notes that 257,000 eligible healthcare professionals will get smacked with meaningful use penalties starting January 1, 2015. Of course, the cost of those penalties ultimately will be shifted onto private sector payers.

The Christian Science Monitor reports that Congress also passed the ABLE Act which will allow for the creation of tax free savings accounts for disabled people.

The ABLE Act helps people with disabilities save for health-care costs, housing, lifelong education, and other needs. Under current law, a child diagnosed with a disability can’t have assets worth more than $2,000 or earn more than $680 per month without forfeiting eligibility for government programs like Medicaid. The ABLE Act would allow a tax-free savings account up to $100,000 to pay for disability-related expenses.

In Monday’s Federal Register OPM announced a proposed rule for a new performance assessment system for FEHBP carriers.  Federal News Radio provides an overview of the proposed rule. The comment period for the proposed rule ends on January 14, 2015.  When contemplating carrier performance, the important facts to bear in mind are that the FEHB Act requires carriers to compete and also bear the insurance risk. That’s plenty of motivation for good performance and as the FEHBlog noted earlier this month a recent Morning Consult survey of 500 federal employees found that federal employees genuinely appreciate their plans.

The Drug Channels blog offers highlights of CVS Health’s latest specialty market forecasts here. Reuters reports that a new specialty infusion drug from Amgen that treats a rare leukemia called acute lyphoblastic leukemia. Price tag — $178,000 per treatment.

Because it’s the holiday season, let’s wrap things up with this day brightener article from Fierce Health Payer about how Aetna is using technology “to connect members who have recently been diagnosed with breast cancer to members who have already survived the disease. The insurer aims to help its members address the emotional impacts of cancer in addition to all the physical issues.”

The Hosue has adjourned for the holidays, and the Senate has one more day of sessions to handle nominations.  Before leaving town, Congress passed several bills blurbed in this Week in Congress, most significantly the CRomnibus bill and the National Defense Authorization Act. As the FEHBlog has noted, the CRomnibus keeps most of the federal government funded through the end of the current fiscal year. Hopefully, both the Senate and House next year will address appropriations in regular order rather than using an omnibus.

The Federal Times calls to our attention the fact that the NDAA includes a few provisions affecting federal employees, most significantly, a “section [that] allows retired employees to return to the federal workforce without taking a cut to their salaries.” Congress extended this pilot program for another five year period. “Before the authority [first] was granted in 2009 an agency rehiring a retiree
had to offset their salary by the amount of the annuity unless it got a
waiver from the Office of Personnel Management.”

Last Friday, the FEHBlog noted that the Republican Senate Conference last week voted to require all of their staff to be covered under the DC Health Link rather than the FEHBA. Newsmax points out that the Republican House Conference rejected a similar motion. The Washington Post reported last winter that 88% or over 12,000 of the enrollees in the DC Health Link’s small business option are members of Congress and their official staff members. The Democrat Conferenes in Congress like the House Republicans permit legislators to designate their staff members who have to leave the FEHBA for the DC Health Link.

Following Congress’s brief extension of the continuing resolution funding the federal government,. the Senate is on track to join the House of Representatives in passing  the CRonnibus bill (HR 83) which will continue to fund the federal government through September 30, 2015, with the exception of the Department of Homeland Security whose funding will end on February 27. 2015.  Interestingly, the CRomnibus does include a few amendments tot the Affordable Care Act, but none of those changes significantly effects the FEHBP.  The President has promised to sign this bill.

The FEHBlog has complained about Gilead’s pricing of its Hepatitis  C drugs. The Washington Post reports that the health plan for Philadelphia’s public transportation system has sued Gilead for unjust enrichment, violating federal antitrust law,  and violating the ACA’s broad anti-discrimination law. PHSA Sec. 1557 as a result of that pricing decision.  The FEHBlog will be following this lawsuit.

The Washington Post also reports that the Senate’s Republican conference has agreed to require all of its staff members to receive health benefits coverage from the DC marketplace rather than the FEHBP. This change will take effect in 2015.

House leaders posted the omnibus FY appropriations bill colloquially known as the “Cromnibus” (H.R. 83) last night.  The bill would fund the federal government generally through September 30, 2015 and the Department of Homeland Security through February 2015.  The FEHBlog found no FEHBP surprises in the bill. The bill does include the now standard FEHBP-related appropriations provisions — an abortion coverage restriction, a contraception coverage mandate, and a prohibition against apply full Cost Accounting Standards coverage to FEHBP carriers. The Washington Post notes that  “The bill authorizes a 1 percent pay raise for military service members and allows a 1 percent pay raise for federal employees, ordered by [President] Obama, to begin in January.”  This Federal News Radio article provides more details on the end game, e.g., a brief extension of the continuing resolution to allow the House and then the Senate to approve the bill later this week. 

Well, it was a rough day to be a fan of DC’s NFC franchise, but life goes on. Tomorrow is the last day of the Federal Benefits Open Season.  Here’s a link to This Week in Congress’s one page update on last week’s activities on Capitol Hill. 

Congress is expected this coming week to pass an omnibus appropriations bill for all of the federal government except for the Department of Homeland Services. That department which is responsible for implementing the President’s executive order on immigration will be placed on a short leash so that its appropriations can be addressed early in the next Congress which the Republicans will fully control. As a result of Louisiana’s final election on Saturday, the Republicans have 54 seats in the Senate (out of 100) and 246 seats in the House (out of 435 with one election still undecided).  The next Congress will convene in early January.

The House leadership plans to post these appropriations bills on the internet tomorrow according to the Hill.  This could be interesting for FEHBlog readers because last year’s omnibus appropriations bill included the self plus one option.  The FEHBlog will be keeping an eye out for this important post.

By the way the FEHBlog has noticed a couple of articles, such as this one from Fedsmith, highlighting some regulatory impact language in the self plus one rule. Federal agencies prefer to avoid triggering scrutiny for expensive / major regulations (economic impact of $100 million or more). Therefore, the language expressed the agency’s view that OPM is unsure about the financial impact of the self plus one option.  The rule could cause premiums to spike but likely it will be revenue neutral.

In the words of Green Bay’s quarterback, Aaron Rogers, R-E-L-A-X. Because of the choices that the FEHBP offers federal employees, if, assuming strictly for the sake of argument, self plus one causes your plan’s family coverage premium to spike there are bound to be other available plans that will be in your price range. That’s the beauty of the FEHBP. Plus any spike likely will be a one  or two year phenomenon. 

The FEHBlog had a routine doctor’s visit yesterday. His doctor, an internist, railed against the fact that Medicare Part B has not given internists a raise in 12 years. Point taken. His comment illustrates the fact the Medicare’s low reimbursement rates force doctors to jack up prices to me and other patients under age 65.  He also complained about the lack of interoperability of electronic medical records systems. He explained that unrelated EMRs currently rely on faxes to communicate between providers, 1980s style. That’s sad. The federal government has spent almost $30 billion on these systems. You can’t solve a problem by throwing money at it. The FEHBlog hopes that the private sector can resolve this very serious lack of interoperability problem without a new law.

The Hill reports on a biosimilars conference held on Capitol Hill yesterday.  The FEHBlog got a kick out of this exchange:

Though healthcare professionals are hailing biosimilars for their potential to cut patient costs, the head of the National Association of Medicaid Directors raised concerns about whether the nation’s biggest healthcare provider will be able to afford the biological copycat drug.
Medicaid as a payer is not equipped to pay the types of prices we’re seeing out there,” Matt Salo said. “Not just with the drugs to treat hepatitis C or cystic fibrosis, I’m talking about what’s in the pipeline.”
But Lori Reilly, executive vice president for policy and research at Pharmaceutical Research and Manufacturers of America (PhRMA), said the notion that Medicaid prescription drug costs break the budget is misleading.
“Medicaid gets the best price in the market minus a 23 percent statutory discount and in most cases a supplemental rebate on top of that,” she said. 

If Medicaid is complaining out the prices, the root cause is that the prices are just too dam* high.

But it’s Friday so let’s end on a bit of good news. The New Hampshire Business Review reports on a new plan called ElevateHealth that was formed by two large health care providers and an insurer. The Review interviewed ElevateHealth’s CEO

Q. What makes ElevateHealth different?
A. ElevateHealth is a joint venture between two hospital systems and a payer. It’s sort of the first in the country to have a model like this. By sharing data, by integrating and having each entity doing what they are best at, instead of often duplicating efforts, there is an opportunity to reduce costs and improve care.
A lot of health care is struggling because of misaligned incentives, and that is one thing we address immediately by jointly owning ElevateHealth.
Q. How does that address it?
A. Typically in health care, the incentives are for a provider to do a lot of tests, to really increase their revenues through volume. The goal of a payer is to try to reduce their rate of patients. We are trying to address that volume incentive by having the providers be joint owners.

This is not the only such consortium, The number is bound to grow.