The press has been following up on CVS’s decision to stop selling tobacco products on October 1. Fierce Healthpayer predicts that CVS is trying to gain an edge over Walgreen’s in their battle to serve Accountable Care Organizations (“ACOs”). “ACOs predominately use primary care doctors, nurse practitioners and pharmacists, including those employed by CVS and other chain stores, to reach out to patients about their care and medications with the goal of reducing overall healthcare utilization.”  Health Data Management discusses several other pharmacy chain initiatives designed to burnish their credentials as health care providers. The FEHBlog’s interest was picqued by this statement in that report:

In January, HealthSpot, of Dublin, Ohio, introduced a walk-in telehealth kiosk that brings live video chats with physicians to retail clinics. The kiosk is outfitted with medical devices to take vital signs and other basic readings, then beam the data over the Internet to the remote doctor.

According to Healthspot’s CEO who was quoted in the article Healthspot may be announcing partnerships with at least one major pharmacy chain next month.

Also on the technology front, Modern Healthcare reports this afternoon that the Centers for Medicare and Medicaid Services evidently in response to industry and Congressional pressure plans to run Medicare claims with ICD-10 codes through “end to end” testing   End to end “testing will allow the participating providers and suppliers to submit test claims to the CMS with ICD-10 codes and receive a remittance advice explaining how the claims were processed, according to the CMS.”  “Notice of the testing program for ‘a small sample group of providers,’ was posted to the CMS’ Medical Learning Network newsletter.

The Workgroup for Electronic Data Interchange has posted a succinct white paper for health care providers and payers on the unsecured protected health information breach process.

Finally, health plans get ready to expand your list of medically unnecessary procedures.  Fierce Healthcare reports that “Healthcare providers could significantly reduce costs if they eschew five low-value, often unnecessary emergency medicine procedures, according to a new study published in JAMA Internal Medicine.” Here are that study’s top five:

•  Post-traumatic computed tomography (CT [or CAT scan]) of the cervical spine for patients who are not high-risk;

•  CT of the head for mild traumatic head injury patients who are not high-risk;

•  Use of CT to diagnose pulmonary embolism without first assessing patient risk;

•  Anticoagulation studies for patients who do not have hemorrhage or suspected clotting disorder; and

•  Magnetic resonance imaging (MRI) of the lumbar spine for lower back pain among patients who do not have high-risk features.

Happy Presidents’ Day. At lunch today, the FEHBlog learned to his great surprise that for official federal government purposes (5 U.S.C. § 6103(a)) today is Washington’s Birthday, not Presidents’s Day. Live and learn. Congress is not in session this week.

The Wall Street Journal, the New York Times, and others are reporting an investment group lead by former AIG CEO Maurice Greenberg is planning to purchase Multiplan from its current investment group owners for around $4.4 billion.  Multiplan is a preferred provider network developer and administrator. In the last decade, another independent PPO network vendor, PHCS, was merged into Multiplan. Several FEHB plans use Multiplan as a secondary network.

Following up on FEHBlog post last week about the ICD-10 code set, EHR Intelligence writes about the American Medical Association’s latest efforts against the code set, including a twitter campaign and another letter to the HHS Secretary. The Washington Post featured a humorous article about the code set yesterday titled “When squirrels attack, there’s a medical code for that.”  The article explains that

Two key factors help explain the explosion in medical codes. First, ICD-10 adds in the ability to differentiate between left and right sides of the body. This can help insurers, for example, to root out fraud. A hip replacement on both the left and right side might not raise any red flags — but two hip replacements on the left side probably would.
Second, the new codes categorize whether a trip to the hospital was the first round of treatment or a subsequent encounter. This is important for reimbursement purposes, as first visits to the doctor tend to require more resources.

That’s a pretty weak justification for this enormous expense. FYI, people do receive replacement hip transplants.

The Hill reports that Senate followed the House’s lead yesterday by passing a bill to suspend the federal debt ceiling until March 15, 2015. The next deadline which impacts the FEHBP is the March 31, 2014, expiration date for the current Medicare Part B fix. Congress has settled upon a solution to the problem but has not announced how they plan to pay for the solution. Modern Healthcare has more on this issue here.  

Health Data Management reports that the American Medical Association is taking asking the Secretary of Health and Human Services to reconsider the looming ICD-10 code set compliance date.  Under HIPAA, health plans must implement electronic claims transaction changes mandated by HHS like the ICD-10 code set.  The ICD is a code set that all healthcare providers use to provide diagnosis codes on electronic health claims and hospitals also use to provide procedure codes on those claims. The current ICD-9 uses five digit codes. The ICD-10 uses 6 digit codes. Just adding a digit to a field can be expensive. However, the digit was added in order to permit the explosion of codes and that explosion requires more system reprogramming and retraining for coders.

Health plans have spent millions on implementing the ICD-10, and HHS has extended this compliance date once from October 1, 2013, to October 1, 2014. HHS’s principal stick is that larger medical offices must submit claims electronically to Medicare, and HHS has said that Medicare will reject electronic claims with ICD-9 codes for services provided on or after October 1, 2014.  Smaller practices can use paper claims but HHS has changed the paper claim form so that providers can fill in the ICD-10.  It’s a mess. The FEHBlog does expect that HHS will delay the Medicare claim rejection date for a few months when push comes to shove later this year.

The New York Times reports that a large scale, longitudinal study that evenly split 90,000 participating women between breast exam and mammogram screening groups over a 25 year period found equivalent results in terms of identifying breast cancer and death rates. “The death rate from breast cancer was the same in both groups, but 1 in 424 women who had mammograms received unnecessary cancer treatment, including surgery, chemotheraphy, and radiation.” The article concludes

In the United States, about 37 million mammograms are performed annually at a cost of about $100 per mammogram. Nearly three-quarters of women age 40 and over say they had a mammogram in the past year. More than 90 percent of women ages 50 to 69 in several European countries have had at least one mammogram.
Dr. Kalager, whose editorial accompanying the study was titled “Too Much Mammography,” compared mammography to prostate-specific antigen screening for prostate cancer, using data from pooled analyses of clinical trials. It turned out that the two screening tests were almost identical in their overdiagnosis rate and had almost the same slight reduction in breast or prostate deaths.
“I was very surprised,” Dr. Kalager said. She had assumed that the evidence for mammography must be stronger since most countries support mammography screening and most discourage PSA screening.

The FEHBlog’s concern is that the ACA’s “free” preventive care mandate politicizes the practice of medicine even more than it had been.

Health insurers, including FEHB plans, must implement and report on NCQA HEDIS quality metrics, but so do health care providers. A pediatrician writing in the Wall Street Journal this morning reports on quality metric overload.

There are certainly good metrics. “Med reconciliation,” reviewing and updating medication lists when a patient meets with a physician, is well-accepted as a good metric. But many other measures have little bearing on improving patient health. Would you rather your doctor won the “quality” contest by doing good list management and robust box checking or spent that time listening to you?

Word.

These are not exactly tidbits, but I like the title.

In an unexpected denouement, discretion being the better part of valor, the House of Representative just voted to suspend the federal debt ceiling until March 15, 2015, according to the Hill.  The Senate is expected to approve the measure tomorrow, and the threat of a government shutdown vanishes for a year or so.

The FEHBlog nearly fell off his chair yesterday when the Internal Revenue Service announced a further delay of the employer shared responsibility mandate. The employer shared responsibility / pay or play mandate is the part of the Affordable Care Act that applies to employers with 50 or more full time employees. Full time for purposes of this law is considered to average 30 rather than 37.5 or 40 hours per week.  Such a large employer’s failure to offer minimum essential coverage to at least 95% of its full time employees would subject the employer to a $2,000 per employee (over the first thirty) penalty. (Of course as with all things ACA there are more penalties but let’s just stick with this one.)  On July 3, 2013, the IRS delayed the effective date for this mandate from January 1, 2014, to January 1, 2015

The FEHBlog had expected OPM to lead the way by expanding FEHBP coverage to federal and postal employees who work on average more than 30 hours per week but are not eligible for contributory FEHBP coverage for 2014, notwithstanding the delay. OPM evidently did not have the resources for this initiative as it was engaged in expanding the FEHBP to Indian tribal employers and adding multi-state plans to the health insurance exchanges. But the FEHBlog notes that OPM has undertaken efforts to so expand the FEHBP for 2015.

Now the IRS has said that employer with 100 or more full time employees do not have to comply with the full employer shared responsibility mandate until 2016 if they cover 70% of their full time workforce in 2015 (and then 95% in 2016).  This mandate is hideously complicated by considerations of temporary and seasonal employees, etc. The bottom line here is that the IRS has allowed OPM a grace period of another year. We will have to wait and see whether or not OPM accepts the offer.

The IRS also extended another year’s grace period to all employers with 50 more but less than 100 employees. Here is a link to the IRS’s Qs & As on the final employer shared mandate rule and here’s a link to the 227 page rule if like the FEHBlog you are a glutton for punishment.

Congress is in session this coming week. However, according to the Hill’s Floor Action blog, it’s unlikely that Congress will resolve the debt ceiling this week due to scheduling issues. The Politico notes that Congress recesses this week on Wednesday, then takes a week off and comes back Feb. 25 — just two days ahead of the [the Treasury Secretary’s debt ceiling increase] deadline.

The FEHBlog ran across (via twitter of all things) this interesting Businessweek chart suggesting that the reported demise on independent medical practices is in error. “The share of self-employed doctors has leveled off at around 60%.” That’s down from 75% from thirty years ago but much higher than Accenture’s prediction that the self-employed doctor percentage would be at 36% in 2013.

The FEHBlog also found this Drugchannels.net article about the “explosive” growth of specialty drug pharmacies.  Specialty drug pharmacies dispense expensive “large molecule” biotech drugs which often are injectable or infused and require special handling. According to the article,

In 2008, only two companies—CuraScript (4 locations) and Optum Rx (2 locations)—had achieved [URAC] “Full Accreditation.”  As of December 2013, 59 companies with 114 specialty pharmacy locations had achieved “Full Accreditation” from URAC. An additional 51 companies are “In Process” and will likely be accredited shortly. 

Despite the accreditation boom, market share for dispensing specialty drugs remains highly concentrated—for now. (See New Drug Channels Institute Study Finds Three Companies Dominate Specialty Pharmacy, Identifies Key Trends Affecting Profitability.) The specialty industry is becoming much more competitive, which will compress margins for undifferentiated pharmacies.

Cost curve up.

The FEHBlog just watched his beloved UConn Huskies men’s basketball team lose a heartbreaker to Cincinnati. But the FEHBlog has a lot of news to share so he has to soldier on.

The FEHBlog was too pessimistic about Congress reaching an agreement on the Medicare Part B fix. The House and Senate announced today a bipartisan measure to repeal and replace the faulty sustainable growth rate (“SGR”) formula that is used to calculate Medicare Part B payments to doctors. According to Medpage, the pay go funding for the bill has not been worked out yet. But there’s reportedly a lot of confidence that this issue will be resolved too.

According to the Congressional press release, the bill would

• Repeal the SGR and end the annual threat to seniors’ care, while instituting a 0.5 percent payment update for five years.
• Improve the fee-for-service system by streamlining Medicare’s existing web of quality programs into one value-based performance program. It increases payment accuracy and encourages physicians to adopt proven practices.
• Incentivize movement to alternative payment models to encourage doctors and providers to focus more on coordination and prevention to improve quality and reduce costs.
• Make Medicare more transparent by giving patients more access to information and supplying doctors with data they can use to improve care.

(1) expressly allows [federally regulated / most medical] labs to provide patients direct access to their lab test results and (2) requires labs covered under HIPAA [again practically all medical labs] to provide test results directly to patients in the form or format requested, (i.e., paper or electronic) if it is readily producible in that manner.
Today, patients’ access to clinical lab information is determined by the states. Only seven states and the District of Columbia allow such direct reporting and thirteen states prohibit it. Twenty-three states have no laws addressing the issue. The new rules will preempt state laws and regulations that prohibit medical laboratories from providing patients access to their test reports.

The federal debt ceiling will be reimposed on Friday and the Treasury Secretary has advised that extraordinary measures to avoid a default will not last beyond late February due to the need to make tax refund payments. The Hill and Politico are reporting that the House leadership is not planning on a fight with the President over a debt ceiling increase. The Politico suggests that House leadership may try to attach an extension of the Medicare Part B payment fix from March 31 to December 31, 2014.

Progress is being made on a bill to repeal and replace the statutory sustainable growth rate formula that is the cause of the Medicare Part B payment fix. The fly in the ointment (besides finding the funding) is the fact that the legislator who is leading these negotiations, Sen. Max Baucus (D Mont), is expected to be confirmed as the next U.S. Ambassador to China tomorrow. Therefore he will be leaving the Senate and the country soon. Bloomberg reports that Sen. Ron Wyden (D Ore.) will replace Sen. Baucus as the chair of the Senate Finance Committee. In any event, the FEHBlog expects peaceful resolutions of these issues as we head toward the November elections.

Last Thursday, HHS provided an update on the ACA’s Medicare savings initiative, including Accountable Care Organizations. The lead sentence in the related Kaiser Health News’ report says it all — “Accountable care organizations are saving some money, though what exactly that means is still unclear.” In fairness to HHS, it’s still early in the game.

The Wall Street Journal on Saturday (best paper of the week) published a review of a book on the development of the first Hepatitis C drug that reached the market. This drug recently was overtaken by the Gilead drug mentioned in last Tuesday’s Tidbits. The book review discloses that Gilead owes a lot to the developer of the first drug, Vertex.

Hepatitis C was an “underrated and undervalued disease,” Mr. Werth writes in “The Antidote,” lacking the visibility of AIDS or cancer. The disease also lacked a deep history, its causative virus and responsibility for cirrhosis and liver cancer having been discovered only recently. Worse still for the political visibility of hepatitis C was the disease’s demography: Major vectors of transmission were widely understood to be intravenous drug use and tattooing. There were about three million people infected in America, and 150 million to 200 million world-wide, but U.S. victims were concentrated among the poor and African-Americans. In California, 40% of prisoners were infected with the hepatitis C virus, compared with about 2% of the general population.

So Vertex took a leading role in lobbying to widen hepatitis C screening, to shed any stigma associated with the disease, and to get it thought of not as a drug users’ disease but as an affliction of the influential baby-boomer generation. The company also tried to show that even a hugely expensive drug treatment—Incivek was eventually priced at about $50,000 for a 12-week course—would cost patients and insurers less than the alternatives, such as liver transplantation. For Vertex’s molecule to make serious money, hepatitis C had to be culturally reconsidered and politically repositioned. 

PBMs are pushing back at Gilead’s decision to price its drug $84,000 per course of treatment.

The Government Accountability Office released a report last week on recent trends in federal civil service employment.

From 2004 to 2012, the federal non-postal civilian workforce grew by 258,882 employees, from 1.88 million to 2.13 million (14 percent). Permanent career employees accounted for most of the growth, increasing by 256,718 employees, from 1.7 million in 2004 to 1.96 million in 2012 (15 percent). Three agencies–the Departments of Defense (DOD), Homeland Security (DHS), and Veterans Affairs (VA)–accounted for about 94 percent of this increase. 

For a little FEHBP perspective, OPM’s March 2012 headcount report as found in the FEHBlog’s archives indicates that 1,858,330 annuitants, 1,707,618 civil service employees, and 449,183 Postal Service employees were then enrolled in the FEHBP,  From March 2007 to March 2013, civil service employee enrollment increased by 10% (2/3s of the total permanent career service employee increase of 15%), Postal Service employee enrollment dropped by a jaw-dropping 27% (from 614,044 in March 2007), and annuitant enrollment increase by 3% across the FEHBP. Annuitants compose roughly 46% of the total FEHBP enrollment.

Yesterday, the Senate Homeland Security and Government Reform Committee began its markup of a substitute postal reform bill (S 1486) sponsored by the Committee’s Chairman Sen. Tom Carper (D. Del.) and Tom Coburn (R. Okla.).  For several years, the Postmaster General has been seeking legislative authority to pull Postal employees and annuitants out of the FEHBP.  His goal is to lower the health benefit costs by betting coordinating coverage with Medicare.  The Postmaster General got on this kick because of a 2006 statutory change that requires the Postal Service to pre-fund its retiree health insurance obligations. As the Postal Service and the Postal unions have pointed out, no other American business is under this obligation. Nevertheless, postal reform bills in Congress reduce but retain that obligation.

The Carper-Coburn substitute bill (Section 104) would create a Postal Service Health Benefits Program within the FEHBP under OPM’s administration. The PSHBP would be more tightly coordinated with Medicare. As one Senator noted at the markup yesterday, the Postal Service is funded by its customers just like any other U.S. business and all other U.S. businesses that cover there annuitants with Medicare put the primary payment obligation on Medicare. More details can be found in the Federal News Radio article.

Section 104 strikes the FEHBlog as a Goldilocks solution. There was a lot of discussion at the markup yesterday but no concerns were raised about Section 104. Govexec’s headline on yesterday’s meeting is that after contentious debate the Committee delayed the bill.  The markup did end after three hours without a final vote. However, the FEHBlog expects that the issues eventually will be ironed out, thereby allowing the bill to reach the Senate floor. This may be the year that postal reform legislation is enacted. Good luck to the Postal unions.

Following up on Sunday’s post about drug costs, the FEHBlog noticed this LifeHealth Pro article about how prescription benefit managers and insurers are pushing back against a prescription drug manufacturer Gilead that is charging $1,000 per pill for a Hepatitis C medication — that’s $84,000 for a 12 week course of treatment. Gilead has leverage because Hepatitis C is a serious illness with few treatment options that affects a lot of people.  The article explains that

Express Scripts Holding Co., Catamaran Corp., Aetna Inc. (NYSE:AET) and CVS Caremark Corp. among others are already pushing back against the high cost of Gilead’s drug. They’re discussing how to pit similar drugs against each other, refusing coverage for some, or subjecting treatments to more review by outside experts and refusing to pay a premium based on one drug being more convenient to take than another.

Good luck with that.

Yesterday, three senior Republican Senators introduced a bill to replace the Affordable Care Act.  The FEHBlog The FEHBlog read the position paper last night.  The proposal certainly is worth discussion.

Finally Congress created a three month sustainable growth rate formula (“SGR”) patch in the budget deal. That patch expires at the end of March. The SGR is the flawed statutory formula for reimbursing doctors under Medicare Part B. Former CMS administrators are suggesting that Congress should suspend the SGR for five years in order to allow time to develop a sensible replacement. This Medpage article reports that the administrators believe that their approach would cut the cost of the repeal and replace approach in half. Of course, Congress passed the SGR in 1997 so there already has been over 15 years to fix it.