Let’s start with a piece of good news. The FEHBlog nearly fell off his chair yesterday when he read that Congress as part of the doc fix law enacted last month repealed a flawed part of the Affordable Care Act. SHRM explains that “Section 213 of the law now eliminates deductible limits imposed under the ACA (found in Section 1302) for the small-group market employer health plans. The new law, which took effect immediately, will allow more flexibility for plan designs.”

The Internal Revenue Service announced the health savings account contribution limits and high deductible health plan floor amounts for deductibles and ceilings for in-network out of pocket maximums.The IRS informally has said that high deductible plans must use the lower of the IRS out of pocket maximum and the HHS out of pocket maximum under the ACA for 2015 and future years. The IRS response to a question actually posed by the FEHBlog may be found on page 2 of the linked American Bar Association document.

Bloomberg reports that Gilead beats its first quarter sales projection for its recently approved “Hep C” drug Sovaldi by $1 billion.  Total quarterly sales hit $2.27 billion which is not that surprising considering there are 3 million Americans with this disease and Gilead charges $1,000 per pill for Sovaldi which adds up to $84,000 per course of treatment according to this SFGate report. Hepatitis C is considered a silent epidemic because the disease can be asymptomatic for several years. The U.S. Preventive Services Task Force last year identified as a Class B recommendation “screening for hepatitis C virus (HCV) infection in persons at high risk for infection and “offering one-time screening for HCV infection to adults born between 1945 and 1965.” This means that Hepatitis C testing will become cost sharing free (in-network) for this large cadre of FEHBP members next year. Sovaldi could be an actuarial time bomb for FEHB plans. Bloomberg adds that

Express Scripts Holding Co. (ESRX), the largest benefit manager, has said it may try to start a price war once competing medicines from AbbVie Inc. and Merck & Co. reach the market. CVS Caremark Corp., the second-biggest pharmacy manager, has said it might try to slow down the use of the drug.

Competition sounds like the preferable route.

The HHS Office for Civil Rights announced yesterday (hat tip to my colleague Theresa Defino)

OCR opened a compliance review of Concentra Health Services (Concentra) upon receiving a breach report that an unencrypted laptop was stolen from one of its facilities, the Springfield Missouri Physical Therapy Center.  OCR’s investigation revealed that Concentra had previously recognized in multiple risk analyses that a lack of encryption on its laptops, desktop computers, medical equipment, tablets and other devices containing electronic protected health information (ePHI) was a critical risk.  While steps were taken to begin encryption, Concentra’s efforts were incomplete and inconsistent over time leaving patient PHI vulnerable throughout the organization. OCR’s investigation further found Concentra had insufficient security management processes in place to safeguard patient information. Concentra has agreed to pay OCR $1,725,220 to settle potential violations and will adopt a corrective action plan to evidence their remediation of these findings.  

OCR received a breach notice in February 2012 from QCA Health Plan, Inc. of Arkansas reporting that an unencrypted laptop computer containing the ePHI of 148 individuals was stolen from a workforce member’s car.  While QCA encrypted their devices following discovery of the breach, OCR’s investigation revealed that QCA failed to comply with multiple requirements of the HIPAA Privacy and Security Rules, beginning from the compliance date of the Security Rule in April 2005 and ending in June 2012.  QCA agreed to a $250,000 monetary settlement and is required to provide HHS with an updated risk analysis and corresponding risk management plan that includes specific security measures to reduce the risks to and vulnerabilities of its ePHI.  QCA is also required to retrain its workforce and document its ongoing compliance efforts.

Encrypt your laptops and mobile devices without delay!

Speaking of HHS’s Office for Civil Rights, the ACA includes a health care and health insurance non-discrimination provision (Section 1557) that falls under its purview. HHS is planning on proposing an implementing rule this summer. Last year HHS ask the public to submit comments to assist the agency with this rule-making. HHS received 169 comments. Here are links to the AHIP and BCBSA comments which suggest to this reader that the Section 1557 rulemaking may impact the FEHBP.

Congress is out of session this week. Saturday April 26 is National Prescription Drug Take Back Day. Here’s a link where you can find a location near you to safely dispose of unused prescription and OTC drug.

The FEHBlog has noted that the two largest prescription benefit managers CVS Caremark and Express Scripts recently issued their annual utilization reports. Consultant IMS Health issued its own study with the top line finding — “Total spending on U.S. medicines increased 1.0 percent on a real per capita basis in 2013, while the use of healthcare services overall rose for the first time in three years [as the impact of the Great Rescession receded].  The New York Times had a story about all three studies last week which notes that

the IMS report also found that more patients were opting to visit the doctor, go to the hospital and fill prescriptions for drugs in 2013. Visits to specialists increased by 4.9 percent, the report said, and patients filled an average of 12 prescriptions a year, an increase of 2 percent over the previous year.

It also worth noting that Express Scripts announced Friday afternoon that it has been awarded a monster seven year long contract to provide all sorts of prescription drug services to TRICARE.

Finally, last week, CMS’s Hospital Compare website added psychiatric care quality data according to iHealthbeat. CMS press release explains that

Beginning April 17, 2014, Hospital Compare will feature data from 1,753 inpatient psychiatric facilities on patient care for the period of October 1, 2012 through March 31, 2013.  Public reporting will allow consumers to directly compare facilities based on data collected for the following measures:

• Hours of Physical Restraint Use
• Hours of Seclusion Use
• Post-Discharge Continuing Care Plan Created
• Post-Discharge Continuing Care Plan Transmitted to Next Level of Care Provider Upon Discharge

Hospital Compare is based on data from all hospital, not just Medicare, admissions.

The Congressional Budget Office scored the President’s FY 2015 budget proposal yesterday. The scoring for the President’s / OPM’s legislative proposals for the FEHBP are found on page 3 of this CBO link.

Earlier this week the Wall Street Journal reported that some doctors and patients are feuding over what constitutes “free” preventive care for Affordable Care Act purposes. The FEHBlog certainly sides with the doctors because of course there really is no such thing as a free lunch. In any event, the FEHBlog got a kick out of this paragraph from the article:

Insurers also are trying to educate plan members. UnitedHealth Group Inc. website features a jovial professor playing a game of “Preventive or Not Preventive?” to help explain the distinctions. (A routine mammogram? Preventive. A follow-up six months later to check on a suspicious finding? Not preventive.)

Ihealthbeat reports that the recently formed (?) Coalition for ICD-10 is urging the HHS Secretary to set a new ICD-10 compliance date of October 1, 2015. The FEHBlog thinks that a calendar year switch January 1, 2016, would make more sense. But he certainly appreciates the reasons for the Coalition’s evident frustration.

Business Insurance reports that the Mercer consulting firm has projected the 2015 dollar amounts applicable to high deductible health plans and health savings accounts as follows:

Under an employer-sponsored HDHP, minimum annual deductibles will be set at $1,300 for single-coverage plans and $2,600 for family plans, while employee out-of-pocket costs will be capped at $6,450 for single-coverage plans and $12,900 for family coverage, according to Mercer’s report. Additionally, Mercer’s report projects tax-deductible contributions to employees’ HSAs will be limited to $3,350 for employee-only plans and $6,650 for family plans.

The Internal Revenue Service will set the actual 2015 dollar amounts next month. The IRS informally has said that high deductible plans must use the lower of the IRS out of pocket maximum and the HHS out of pocket maximum under the ACA for 2015 and future years. The IRS response to a question actually posed by the FEHBlog (who is an ABA member) may be found on page 2 of the linked document.

Finally, and appropriately for Easter / Passover weekend, Joe Davidson from the Washington Post has a feel good story about FEHB coverage in today’s paper. Have a pleasant weekend.

•     Drug trend for traditional drugs increased by 2.4%, a big turnaround from last year’s -1.5% decline. 
•     Drug trend for specialty drugs increased by 14.1%, its lowest rate since 2007.
•     Specialty drugs accounted for 27.7% of total spending, up from 24.4% in 2012.
•     Specialty spending remains highly concentrated within four therapy classes.

In a brief interview, FDA Commissioner Margaret Hamburg seemed to agree, saying that although addiction is a “huge concern” with opiate drugs, “it’s concerning when either a state, or Congress, steps in to make decisions about what drugs should be approved or what drugs should be withdrawn from the marketplace.” 

The FEHBlog was puzzled by the Commissioner’s statement that Congress which created the FDA could not interfere with the FDA but that’s beside the point. The FEHBlog is sympathetic with the Commonwealth’s position as reported by the Post:

Massachusetts Public Health Commissioner Cheryl Bartlett said that officials didn’t take the Zohydro ban lightly. Rather, she said, the decision came out of months of discussions about ways to combat the growing number of deaths linked to heroin and prescription drug overdoses — and out of a sense that the state should take whatever measures it could to prevent more harm.  “The idea that a new drug would come on the market that would add to the problems just didn’t seem to make sense,” Bart­lett said. “We’re not denying people pain medication. There are plenty of alternatives. We’re addressing another public health crisis.”

In any event, the federal court yesterday enjoined the Commonwealth from banning the FDA approved drug according to this Post report. That outcome does not surprise the FEHBlog in the least.

The FEHBlog has been following another court case now pending before the U.S. Court of Appeals for the D.C. Circuit.  The D.C. Circuit is reviewing a district court decision upholding the position of the Labor Department’s Office of Federal Contractor Compliance Programs that hospitals under network contracts with FEHBP HMO plans are federal government subcontractors that must comply with affirmative action program requirements that OFFCP enforces.  OPM’s long standing regulations are contrary to that outcome. The American Hospital Association is concerned that OFCCP’s aggressive efforts will disrupt FEHBP and TRICARE provider networks and related patient care.  The FEHBlog on March 14, 2014, noted that Rep. Tim Walberg (R Mich) has introduced a bill (HR 3633) to strip OFCCP of jurisdiction over FEHBP and TRICARE providers. At a hearing on his bill, Rep. Walberg explained that the Labor Department has implemented a 5 year long enforcement moratorium with respect to TRICARE but not FEHBP providers. In a letter to the DC Circuit. filed on April 10, 2014, OFCCP explained that    

The moratorium does not apply to healthcare providers that hold only FEHBP subcontracts. However, because plaintiffs hold both FEHBP subcontracts and TRICARE subcontracts, the practical effect of the moratorium is that OFCCP will not conduct compliance reviews of the plaintiffs for five years. However, the moratorium does not affect OFCCP’s jurisdiction over healthcare subcontractors, which the plaintiffs challenge in this appeal. Moreover, the moratorium specifically states that it does not affect “TRICARE subcontractors’ obligation to refrain from discrimination,” and that OFCCP will continue to investigate and redress “complaints of discrimination” that individual employees lodge with the agency.

How equitable.

The FEHBlog was an early endorser of the Choosing Wisely Campaign in which medical societies provide the public with “evidence-based recommendations that should be discussed to help make wise decisions about the most appropriate care based on a patients’ individual situation.”  OPM encourages FEHB plans to utilize the fruits of this campaign. Kaiser Health News, however, reports that the some of medical societies participating in this campaign may be motivated by self interest. Ruh roh.

Finally, Government Health IT reports that the U.S. may be on the verge of a new consumer driven health economy.

In Healthcare’s New Entrants: Who will be the industry’s Amazon.com?, PwC suggests that “market disruptors” — new industries, new technologies — will soon make a big mark on the $2.8 trillion healthcare sector. These new players are the leading edge of a what PwC calls a “new health economy” — one that “over the next decade will see today’s siloed healthcare industry become a wide open health marketplace,” said Kelly Barnes, PwC’s U.S. health industries leader, in a press statement. “To meet looming revenue threats, traditional healthcare companies will have to partner, innovate or can face fading away,” she added. “Meanwhile, the nimble and innovative new entrants can benefit from partnerships with existing healthcare organizations, which understand the complex regulatory and reimbursement landscape.”

Congress is on Spring break for the next two weeks.

In his last post, the FEHBlog noted that CVS Caremark had issued its annual report on prescription drug utilization. It turns out that the other mega PBM Express Scripts issued its annual utilization report last week too. Here’s a link to it.

Finally here’s a link to a troubling article from the Wall Street Journal. Several years ago doctors started to use a tool called a morcellator to pulverize the uterus. This approach required much less recovery time than a traditional hysterectomy. However, if there were cancerous rumors attached to the uterus and the surgeon did not remove all of the pieces of the broken up  tumors, the tumor fragments remaining in the woman’s body seriously endangered her health. Surgeons took a while to pick up on this rare problem. They now are addressing the problem and disclosing it to patients. The FEHBlog does not know what to make of this article. Even surgeons are humans who make mistakes, but The article is a head shaker.

Federal News Radio and others are reporting that HHS Secretary Kathleen Sebelius is resigning from her position tomorrow and President Obama plans to appoint OMB Director Sylvia Mathews Burwell to fill the vacancy. According to that article, 

The FEHBlog is pleased that his college UConn’s men’s and women’s basketball teams won their NCAA national championships earlier this week, repeating a feat first accomplished in 2014. Teams of destiny fulfilled.

The FEHBlog was not so pleased to read a Medpage article stating that OPM has mandated coverage of obesity medications. The article was based on an OPM carrier letter which encourages but nowhere mandates, FEHBP carriers to cover obesity drugs under appropriate limits.  The letter reads in relevant part

It has come to our attention that many FEHB carriers exclude coverage of weight loss medications. Accordingly, we want to clarify that excluding weight loss drugs from FEHB coverage on the basis that obesity is a “lifestyle” condition and not a medical one or that obesity treatment is “cosmetic”- is not permissible. In addition, there is no prohibition for carriers to extend coverage to this class of prescription drugs, provided that appropriate safeguards are implemented concurrently to ensure safe and effective use. 

The FEHBlog had a great weekend. One of his nieces got married in Philadelphia, and UConn, the team of destiny, continued its march toward a fourth national men’s basketball championship in Texas.

Congress will be in session this coming week according to the Hill’s Floor Action blog.  Congress continue sot evaluate postal reform. The House Oversight and Government Reform Committee will hold a hearing on the President’s proposed FY 2015 Postal Service budget on Tuesday morning. The Federal Times reports in an article about the Postal Service planning that Postmaster General  “Donahoe said the concept of a separate health plan for postal employees is also a ‘dead issue’” because he does not want the issue to interfere with broader postal reform.

As early as this week, the Centers for Medicare and Medicaid Services will be issuing a boatload of information about 2012 Medicare payments to doctors much to the chagrin of the American Medical Association according to a Washington Post report. The Wall Street Journal which pressed for this disclosure explains that

[The data set ] will include how many times the providers carried out a particular service or procedure, whether they carried it out in a medical facility or an office setting, the average amount they charged Medicare for it, the average amount they were paid for it, and the total number of people they treated. The data set would show the names and addresses of the [880,000} providers in connection with their reimbursement information,

This morning’s New York Times has a lengthy front page story on the rising cost of health care for people with chronic diseases, in particular diabetes 1. The article is definitely worth reading.

The FEHBlog appreciates receiving reader comments on this blog.  Here are the FEHBlog’s responses to recent comments:

1. A commenter on the FEHBlog’s entry on Provider Non-Discrimination noted that the Senate Finance Committee report dated July 11, 2013 (to accompany S. 1284) directing the ACA regulators to expand the scope of the ACA’s provider non-discrimination rule (PHCS § 2706) as discussed in ACA FAQ XV  to include an any willing provider requirement, among other things, “was included in the omnibus. The Explanatory Statement that goes along with the Consolidated Appropriations Act includes language that gives the Senate report the force of the full bicameral managers.” The FEHBlog will be sure to check this out but the ACA regulators don’t perceive the Senate report as binding. What’s more the Federal Trade Commission has recognized that any willing provider laws are anti-competitive.

2. Another commenter asked “Want to know what you mean by this statement [ in last Tuesday’s Tidbits, you didn’t explain: Congress did enact its 17th Medicare Part B payment fix yesterday which is good news for the FEHBP due to its large cadre of annuitant members over age 65.”  The FEHBlog chose not to provide an explanation last Tuesday because he has plowed this ground before. But he is happy to plow it again. Absent this Congressional action, Medicare Part B payments to doctors would have dropped by over 20%. When an FEHB annuitant has Medicare Part B, the FEHB plan pays secondary to Medicare. The result of this change would have been an increase in secondary payments. When an FEHBP annuitant enrolled in a fee for service plan has declines Medicare Part B coverage, the FEHB Act (5 U.S.C. § 8904(b)) allows the FEHB plan to price doctors services using Medicare Part B pricing. In those cases, the FEHB plan’s payment would have dropped. A lot of members would have been effected. On the occasions, which have occurred over the past 15 years, when Congress missed this deadline and adopted the fix retroactively,a lot of administrative work was created. So it’s a big deal for FEHB plans. Hopefully Congress will pass a reliable permanent fix in lame duck session of Congress.

3. Another commenter asked what’s next now that Congress has delayed the ICD-10 coding compliance date. The short answer is that we all have to wait for guidance from the Centers for Medicare and Medicaid Services, which is the HHS agency responsible for administering and enforcing the HIPAA electronic transactions and code sets needs to provide guidance to the affected parties — health plans, health care providers, and healthcare clearinghouses as Modern Healthcare further explains in this helpful article.  Here’s a link to a relevant press release from the industry group WEDI.

Congress did enact its 17th Medicare Part B payment fix yesterday which is good news for the FEHBP due to its large cadre of annuitant members over age 65. In the course of doing so, Congress also delayed the ICD-10 coding compliance date until at least October 1, 2015. Health Data Management reports on reactions to this development. You can read the FEHBlog’s right here.

In compliance with HIPAA and HHS’s implementing rules, health insurers have spent millions making their claims processing systems capable of handling claims bearing ICD-10 codes in anticipation of the HHS mandated October 1, 2014, compliance date. As readers of the FEHBlog know, the American Medical Association (“AMA”) has been crying the big tears about the cost of ICD-10 compliance to medical practices. The FEHBlog agrees with the AMA that the ICD-10 conversion will do nothing to advance HIPAA’s express objective of administrative simplification. The FEHBlog has noted that the AMA should have put more pressure on Congress at the time that HHS was considering whether or not to implement the ICD-10 late in the last decade. The FEHBlog thought that the AMA had missed its opportunity to defeat the ICD-10. But NOOOOOO, the AMA at the eleventh hour pulled out a legislative victory. Never underestimate the AMA’s legislative power.  In any event, the current delay is not all bad because HHS’s hard core approach to ICD-10 implementation this year portended a claims processing train wreck at Medicare.

Next the FEHBlog expects the AMA to argue that HHS should just stick with current ICD-9 until the ICD-11 is released later this decade. The FEHBlog would prefer that Congress just repeal HIPAA”s electronic transaction rules and let the industry work these problems out on its own. But the FEHBlog has no legislative clout.

At last week’s carrier conference, a medical director from the Blue Cross Blue Shield Association spoke about the need for health plans to consider community attitudes and resources at the zip code level when making decisions about promoting better health. The FEHBlog was reminded earlier this week that one of the best available public resources on community level health care is the Robert Wood Johnson Foundation’s online U.S. County Health Rankings.

Finally, here’s a potpourri of interesting pharma stories:

• A Wall Street Journal article about soaring sales for a new biologic drug called Solvadi that treated hepatitis C. A 12 week course of treat costs $84,000. 3.2 million Americans may be infected with this disease. You do the math. 
• A Wall Street Journal article about a promising and as yet still experimental class of biologic drugs to lower cholesterol — one of the Million Hearts campaign recommendations to avoid heart attack and stroke. “The companies [developing these drugs [called PCSK9 inhibitors] are vying in a market that includes millions of patients who can’t control their cholesterol with statins, which are among the most widely used and most lucrative drugs ever developed by the pharmaceutical industry.”
• Fierce Pharma reports that the Food and Drug Administration approved last Friday a  request to move 24 hour Nexium, a blockbuster acid reflux drug losing its patent protection, to over the counter status.  The prescription drug manufacturer Pfizer which owns the rights to the over the counter version of Nexium sought this FDA approval. Over the counter status simply means that the drug can be taken safely without a doctor’s supervision.