Since Monday afternoon, the FEHBlog has been attending (on and off) the Workgroup for Electronic Data Interchange’s fall conference in lovely Reston Virginia (near Dulles Airport).

Monday afternoon was a privacy and security summit. The speakers focused on risk assessments. The HIPAA Security Rule requires covered entities and business associates to conduct periodic risk assessments of the organization’s electronic protected health information. At a conference earlier this year, the FEHBlog heard a speaker discussing the extension of risk assessment to all forms of PHI. A speaker at Monday’s session noted that it’s a prudent measure for businesses also to conduct assessments of risk to people and property/money.

Risk assessments involve the following steps code named FARM

1. Frame the risks, e.g., where is my ePHI?, how is it used?, what are the threats?
2. Assess the risks
3. Respond to the risks, and
4. Monitor the risks

These are simply sound internal controls. The FEHBlog also learned that October is Cybersecurity Awareness Month.  Here is a link to HIPAA Security Rule Guidance.

Yesterday morning, the FEHBlog listened to talks about interoperability. The basic problem is that when Congress in 2009 made $30 billion available for “free” electronic health records, the manufacturers focused on selling hardware and software that would meet the government’s meaningful use requirements. Evidently, interoperability meaning that the electronic health record systems can talk to each other was not a meaningful use requirement. So now it’s time to do some backfilling. There was talk of a new interoperability law. Here’s a link to a Fierce Health IT article about the main interoperability talk yesterday.

The best talks were today’s. The first talk was by the American Medical Association’s President-elect Dr. Steven Stack  Dr. Stack bemoaned the “incredible morass of statutory and regulatory burdens” imposed on his profession. So the problem is the same on both sides of the fence — healthcare provider and healthcare payer.

He explained why the AMA wants to kill the ICD-10. He noted that the ICD-9 has 13,000 codes while the ICD-10 has 68,000 codes. He doubts that the explosion of codes will provide better detail on the population health because doctors don’t understand all of the detailed coding. (As an anecdote, he noted that death certificate information is not particularly reliable because absent an autopsy the coroner may default to heart disease.)  Doctors were not closely involved with creating the coding. He added that Canada’s ICD-10 which had more doctor involvement in its development has only 17,000 codes.

The AMA did not ask for the additional one year delay in the ICD-10. That was a Congressional bone thrown to the AMA because Congress punted on Medicare Part B sustainable rate of growth formula reform again. He had hoped (as the FEHBlog did) that HHS would implement the ICD-10 at the beginning of a calendar year not October 1. The AMA hopes that payers will providers a grace period while the providers and payers get used to the ICD-10.  He wants the government to do a better job implementing the ICD-11.

He said that the government’s meaningful use standards are a barrier to effective electronic health records.  Developers are focusing their bandwidth on meaningful use compliance rather than effective user design.

He also expressed a concern that the growing use of credit cards to pay doctors (due to higher enrollee cost sharing) is cutting into physician practice margins. The FEHBlog is not sure what health plans can do about that.  A Humana representative asked Dr. Stack what the AMA is doing to encourage doctors to accept electronic fund transactions from payers. Apparently the answer is bumpkus,

The final speaker that the FEHBlog heard today was Dr. Harry Greenspun from the Deloitte Center for Health Solutions. He pointed out that healthcare consumers seek the best service from their health care providers, not the best quality. Consumers need an incentive to use high quality providers. That is where health plans fit in. .

The FEHBlog received comments on last weekend’s entry concerning coverage of gender reassignment surgery. Joe Davidson in the Washington Post had announced that AFSPA will cover gender reassignment surgery next year. AFPSA / the Foreign Service Benefit Plan is open to  Foreign Service personnel  and employees of the State Department, the Defense Department and a few other agencies (as well as annuitants).  The FEHBlog received comments asking whether other plans would be covering the procedure next year. He discovered that Aetna’s FEHB plans also will cover the procedure for 2015.  Other plans may offer the coverage too.

The weekend update is coming out on Monday morning because the FEHBlog returned to DC from the Nutmeg State last night. Fall in Connecticut is quite enjoyable.

Congress remains on the campaign trail. The mid-term election is now only 15 days away.

FEHB plans are starting to unveil their 2015 benefit  changes on their websites as the 2015 Federal Benefits Open Season is a mere three weeks away. Last week, Joe Davidson in the Washington Post reported that the Foreign Service Benefit Plan will be covering gender reassignment surgery next year. The column notes that

But it is not a reality for other plans in the OPM-administered federal health-benefits program. OPM said it “removed its requirement that carriers exclude ‘services, drugs, or supplies related to sex transformations’ ” beginning in 2015, but it did not order health insurance companies to do so.

Readers will recall that in June 2014 OPM made this announcement after 2015 benefit and rate submissions had been submitted. The agency allowed carriers to modify their submissions to add this coverage. We may learn that other carriers took advantage of this opportunity for 2015, As we lawyers say, the Post column assumes facts not in evidence.

Health Data Management reports on an interesting CIGNA effort to engage participants in employered sponsored health plans with a “new technology ‘ecosystem’ platform that combines online, mobile, social media, gamification, and web-based incentives to help customers and their families get the most out of the benefits.” The article explains that

The platform, branded Cigna Health Matters, will be available to approximately 14 million consumers, Cigna executives said. Cigna Health Matters starts with a gamified health assessment that customers engage with as they enroll in their health plan. Cigna’s gamified version delivers completion rates of 90 percent compared to typical industry-wide rates of 30 percent, according to the company.

Fierce Health Payer discusses other approaches to incenting employees to take an interest in their health care here.

The FEHBlog is currently on a flight to Hartford for a weekend in the Nutmeg State. Aon Hewitt released an employer survey finding that employers are focusing on the ACA’s Cadillac tax which takes effect in 2018. You can’t start too soon to plan for this 40% excise tax on premiums above the law’s thresholds — $10,200 for self only and $27,500 for self and family, subject to certain adjustments. Employers are anxious for the IRS to issue proposed rules on the tax.

OPM has encouraged FEHB plans to keep an eye on community health concerns. The Trust for America’s Health has posted a new interactive map on state obesity rates here.

Enjoy the weekend.

My how time flies! Today begins the Medicare open enrollment period. The FEHB Open Season begins on November 10, and the ACA health insurance marketplace open enrollment period begins on November 15..

In preparation for the FEHB Open Season, OPM has finalized its rule that brings the federal government into compliance with the ACA’s employer shared responsibility mandate by extending coverage to temporary, seasonal, and intermittent employees who work on average at least 130 hours per month over at least 90 days. Because the early bird usually does catch the worm, OPM exempted the Postal Service from this rule. The Postal Service began a health benefit program for its part time employees at the beginning of this year. OPM also created an easy opt out process for Indian tribal employers. LifeHealthPro reviews civilian agency comments on the rule here.

Since the Supreme Court decided on October 6 not to review several lower court decisions finding a constitution right to same sex marriage, nine States have started to issue marriage licenses to same sex couples joining 21 other States and the District of Columbia. More States are sure to follow.  The interesting twist here is that beginning this year OPM has allowed federal employees to add the children of their same sex domestic partners to their self and family coverage if the employee lives in a State that does not license same sex marriages. If during the course of the year but before the first day of the Open Season, here November 10, the State of residence begins to license same sex marriages, then the domestic partner’s children lose coverage at the end of the year unless the employee and domestic partner marry.

The FEHBlog has no idea how many domestic partner children have been added to self and family coverage in the fourteen States that have begun to license same sex marriage just this year.One of the States that just began to license same sex marriages is Virginia. There are a lot of federal employees who live in Virginia. But same sex couples residing in these 14 States may be in for a rude awakening on January 1 when the domestic partner’s children are no longer covered under the FEHB plan because they decided on a Spring 2015 wedding, for example. No good deed goes unpunished as they say.

Congress remains on the campaign trail. The FEHBlog is rather despondent because the Washington NFL team is 1 and 5.

Following up on the FEHBlog’s entry last Friday about the new ACA guidance restricting reference pricing (also discussed in this Health Affairs blog entry), the FEHBlog noticed this Kaiser Health News article about a National Institute for Health Care Reform study questioning the utility of reference pricing. The FEHBlog continues to find the idea attractive because it places pressure on health care providers to tow the line.

Another idea that the FEHBlog has advocated is using Medicare’s RBRVS as the benchmark for paying out of network providers because after all how can the providers challenge Medicare’s schedule when the AMA plays a large role in its construction?  Today, a Washington Post columnist hammered on a local health insurer for using the RBRVS as its out of network payment benchmark. Of course the real problem is created by providers who don’t participate in provider networks. It’s unfortunate that Congress in the ACA did not require doctors to publicize the networks in which they participate similar to the summary of benefits and coverage obligation that the law imposes on insurers.

Finally, the Washington Post reports that on Friday the Food and Drug Administration approved a new Gilead Sciences pill dubbed Harvoni to treat Hepatitis C that combines its blockbuster drug Sovaldi with two related drugs that form the complete treatment. Gilead plans to charge $94,500 for a 12 week course of treatment. The Wall Street Journal provides some additional background:

Harvoni’s price is comparable to the cost of the Sovaldi regimen, and is less than the roughly $150,000 paid for an unapproved combination of Sovaldi and a Johnson & Johnson JNJ -0.83%  pill called Olysio that many patients have been taking this year, according to Gregg Alton, a Gilead executive.
Also, Mr. Alton said Harvoni will cost a third less–$63,000—for patients requiring eight weeks of treatment. Gilead estimates that about 35% to 40% of hepatitis C patients fall into this category, because their infections haven’t progressed far enough to scar the liver.
Insurers could “look at using the eight-week regimen more proactively as a way to reduce cost” long term because they wouldn’t have to pay for more longer and more expensive drug therapy later or for even costlier liver transplants after that, Mr. Alton said.
Yet insurers are counting on competition from other drug companies to reduce their costs. AbbVie Inc. ABBV -2.36%  says the U.S. Food and Drug Administration is scheduled to decide on approving its new treatment before the end of the year.

It has been a busy week for the FEHBlog. No rest for the weary.

The ACA regulators are at it again. The FEHBlog has written about reference pricing which involves health plans setting a benchmark price for surgeons (think knee replacements) or pharmacies (think specialty drugs). If plan members use those providers the bill is paid in full. If members use providers who don’t accept the benchmark, they have to pay the difference between their provider’s price and the reference price. And according to an ACA FAQ that came out in the springtime, the out of pocket cos would not count toward the ACA’s out of pocket maximum.  Cost curve down right? Not exactly, for today the ACA regulators weighed in with consumer protections in ACA FAQ XXI

OPM has been militating in favor of transferring FEHB prescription drug benefits administration from the carriers to the agency. This change requires legislative approval. It does not make a lot of sense to the FEHBlog because integrating medical and pharmacy benefit administration can and does lower the cost curve. BCBSA just released a major study that included FEP claims confirming the validity of the FEHBlog’s working assumption.

The study examined yearly medical costs of 1.8 million members of Blue Cross® and Blue Shield® (BCBS) independent companies, whose pharmacy benefit services were divided between “carve-in” and “carve-out,” which is the term used when an employer chooses a pharmacy benefit manager to manage prescription benefits separately from the insurance company administering medical benefits.
Blue System members covered under insurance plans that integrate pharmacy benefits within their overall product offering had nine percent fewer hospitalizations and four percent fewer emergency room visits than members with a pharmacy benefit administered separately from the insurer. Those with integrated pharmacy benefits also incurred 11 percent lower medical costs, with an average savings of $330 in yearly medical costs. The study, conducted with data spanning 2010 and 2011, showed patients with integrated pharmacy benefits incurred total medical costs of $3,176 versus $3,506 for members with a separate pharmacy benefit.*

that his favorite OPM Benefits Administration Letter of the year — Significant FEHB plan changes for the following year – here 2015 — was released today. The letter provides all of the details on plan adds, drops, enrollment code splits, service area changes, etc.  Now it really feels like the fall.

Medicare Part B base and income adjusted premiums and the calendar year deductible will remain unchanged for 2015. The monthly base premium and the calendar year deductible are $104.90 and $147, respectively.

There are “modest” changes in Medicare Part A:

The Medicare Part A deductible that beneficiaries pay when admitted to the hospital will be $1,260 in 2015, a modest increase of $44 from this year’s $1,216 deductible.  The Part A deductible covers beneficiaries’ share of costs for the first 60 days of Medicare-covered inpatient hospital care in a benefit period. Beneficiaries must pay an additional $315 per day for days 61 through 90 in 2015, and $630 per day for hospital stays beyond the 90th day.
For beneficiaries in skilled nursing facilities, the daily co-insurance for days 21 through 100 in a benefit period will be $157.50 in 2015, compared to $152.00 in 2014.

These Medicare changes are relevant to the FEHBP because many FEHBP members also have Medicare coverage and FEHB plans are obligated to coordinate their benefits with Medicare.

Also this week, CMS released a new user guide for group health plans, including FEHB plans, required to report certain enrollee information to CMS for Medicare COB purposes, colloquially known as Section 111 reporting.

Thee Washington Post, Federal Times, Govexec, and Federal News Radio all have stories on the OPM press release. FedWeek helpfully identifies the four HMO plans coming into the FEHBP for 2015 and the five HMO plans that are leaving for 2015. “The dropouts affect more than 25,000 enrollees, who will have to elect new coverage for 2015.”

Blue Cross FEP already has posted its 2015 benefit changes. Watch for other plans to follow suit soon.

A couple of the OPM press release stories mention that Postal employee contributions for certain plans will be jumping 19%, more than 4 times the average increase for civil service employees and annuitants. A sharp eyed friend of the FEHBlog pointed out that there is a flaw in OPM’s rate comparison chart for Postal employees. Last year, Postal employee category 1 showed rates for the Postal Service Police. This year Postal employee for the major collective bargaining unit members. So the chart provides an apples to oranges comparison. The FEHBlog trusts that OPM will fix the chart in due course.

Finally, the FEHBlog wants to add a note on the OPM press release not found in any of the articles. The FEHBP carriers, many of whom are FEHBlog clients, deserve a lot of credit for maintaining relatively low premium increases over the past four years. According to the press, OPM officials credit the Affordable Care Act. However, the ACA’s onerous heath insurer tax which falls on most FEHB plans and its transitional reinsurance fee which fall on all FEHB plans for 2014, combined with health care cost trends, are responsible for premium increases. Absent those taxes, the increases would have been materially lower. With the ACA, it’s cost curve up, not down, unfortunately.