This week we enter into the second week of Federal Benefits Open Season. This opportunity to enroll for the FEHBP or FEDVIP plans and sign up for the federal employee flexible benefits programs (FSAFeds) for the coming year ends on December 9.

Congress is in session this week. The Hill’s Floor Watch blog provides an overview of its activities.

The IRS will be holding public hearings this week on the complex reporting rules that the Affordable Care Act imposes on health plans (Section 6055) and large employers (Section 6056) to implement the law’s individual and employer shared responsibility mandates. The Section 6056 hearing will be held tomorrow and the Section 6055 hearing will be held on Tuesday. Both hearings will be held in the IRS Building’s auditorium, 1111 Constitution Avenue NW., Washington, DC, beginning at 10 am.  The FEHBlog took a gander at the employer and health insurer comments on those rules (available on regulations.gov – docket no. 2013-21791). Here are links to the AHIP and National Health Underwriters Association comments which give you a flavor for industry concerns that will be raised at the hearings.

Govexec.com features an article identifying the metropolitan areas in the U.S. that have the highest share of federal employees. Washington DC surprisingly comes in fourth (14.1%). “Topping it are Colorado Springs (with a 16.4 percent federal share), Virginia Beach (16.1 percent), and Honolulu (15.4 percent).”

Kaiser Health News reports on the latest results of Medicare’s hospital quality incentive program. “Medicare has raised payment rates to 1,231 hospitals based on two-dozen
quality measurements, including surveys of patient satisfaction and—for
the first time—death rates. Another 1,451 hospitals are being paid less
for each Medicare patient they treat.” That’s encouraging.

Business Insurance reports on a bipartisan bill introduced in the House of Representatives to exempt self-insured plans from the ACA’s transitional reinsurance fee (H.R. 3489). The article notes that “The Obama administration recently said it would propose in future regulations an exemption from the fee, which begins in 2014, for ‘certain self-insured, and self-administered plans’ in 2015 and 2016.”  The bill’s sponsor think that exemption is “too limited.” The FEHBlog can’t understand how the ACA regulators can apply this fee ($63 per belly button in 2014) to all plans next year but then administrative create this limited exemption for the following two years when the statute does not even hint at an exemption. We shall see.

The FEHBlog was out of town for a couple of days. A lot of controversy has arisen over the Affordable Care Act rollout but that controversy does not impact the FEHBP.

A study was published Tuesday in the AMA Journal that finds that medical “price increases, not an aging population, are responsible for 91% of the hike in medical spending the U.S. has experienced since 2000.” This is not that surprising to the FEHBlog because Medicare, the health care program for the elderly, relies on statutory price controls. The article further explains that

[I]nsurers are bearing not only the increase in costs but a greater proportion of health-care spending. Personal spending on health care has dropped 83% since 1980, the study says, while either government or commercial insurers are paying more than 90% of hospital and doctor costs and 80% of drugs and care for the aged. It also found that chronic illnesses for all age groups, not just those of the elderly, are responsible for 84% of all medical costs.

A UPI article on the study adds that “the analysis found personal out-of-pocket spending on insurance premiums and co-payments declined from 23 percent to 11 percent since 1980, contradicting the conventional wisdom that out-of-pocket spending has increased.”

FierceHealthFinance reports that three states are implementing programs to provide greater transparency on health care prices. The article concludes that New Hampshire and North Carolina, which place the transparency burden on the provider, are having better implementation success than Massachusetts which, as Kaiser Health News explains, chose to place the burden on the insurer.

Speaking of chronic illnesses, Reuters reports that employers are using the Affordable Care Act’s wellness program provisions to crack down financially on their employees’ unhealthy behaviors. OPM advised Congress last Spring that wellness penalties cannot imposed in the FEHBP without a statutory amendment to the government contribution formula.

Last month, the FEHBlog noted CVS Caremark’s third quarter earnings report. It’s only fair to provide a link to the Express Scripts third quarter report.

The Federal Benefits Open Season begins tomorrow and OPM’s Open Season website is ready to go.

OPM posted its 2013 federal employee viewpoint survey results last week.  The survey discloses that 28% of the 354,000 survey employees use their heath and wellness programs and 14% use the employee assistance program (“EAP”).  Surprisingly less than 5% use available childcare and eldercare programs. Govexec.com takes a broader look at the survey results here.

Federal regulators issued final mental health parity rules on Friday. The new rules, which principally tweak the current mental health parity requirements applicable to FEHB plans and other large group health plans. The new rules  will become applicable to the FEHBP in 2015. In the meantime the interim final rules that took effect in 2011 will continue in force. (The FEHBlog was distraught to discover that the Labor Department reorganized its Affordable Care Act page (more compressed means more clicks — maybe the page will become easier to use over time).

Business Insurance points out that the final mental health parity rule’s major change is applicable to small group plans. The mental health parity law which was enacted as part of TARP in 2008 created an exemption for small group plans (< 50 employees).  The ACA regulators have required mental health coverage and compliance with the mental health parity rule as part of the ACA’s essential health benefit requirements.  Thus the final rule “wipes out” the small group plan exemption found in the 2008 law.

OPM’s 2014 Open Season website is operational and OPM’s Federal Benefits Facebook page and Twitter account are again operational. Open Season is only a few days away. Can the FEHBlog control his excitement?

CVS Caremark, the major phamacy chain / prescription benefits manager,  issued a positive third quarter earning report on Tuesday according to the AP. This nugget is of interest given OPM’s push for generic drug utilization:

CVS Caremark said more than 81 percent of the prescriptions it dispenses from its retail pharmacies are now generics. That’s up from nearly 80 percent in last year’s quarter.
In contrast, the company’s retail pharmacies had a 73 percent generic dispensing rate in the third quarter of 2010, a year before top-selling drugs like the cholesterol fighter Lipitor lost U.S. patent protection. 

OPM also has been pushing plans to give plan members ready access to their claim records through Blue Button. That’s all well and good but the mother lode of information is the doctor’s records, and Government Health IT reports about successful initiatives to make primary care doctors’ notes available to patients electronically.

Finally Employee Benefit News discusses how mobile devices can supplement traditional case management programs.

If people with chronic conditions only spend about an hour a year with their physician, how can they stay adherent with medication and their disease education for the 8,759 hours they’re outside the doctor’s office? The most promising answer is through mobile devices.
Health plan providers and plan sponsors can use mobile devices to monitor and engage participants with notifications, such as medication reminders, when it is most convenient for them. Backsliders know where they are failing through self-monitoring in real time and coaches monitoring their results can intervene when necessary.

The FEHBlog noted last week that HHS Secretary Sebelius had sent a letter to Congress last week indicating that exchange plans are exempt from the federal health programs anti-kickback law. Hospitals saw that law as an obstacle to pay patients’ premiums for exchange coverage, The Wall Street Journal reported that brand name drug manufacturers were jumping for joy because the letter appeared to give the green light for the use of co-pay cards in the exchanges. Yesterday, however, CMS posted the following FAQ which will not make hospital or drug manufacturer CFOs happy:

Q: Are third party payors permitted to make premium payments to health insurance issuers for qualified health plans on behalf of enrolled individuals?
A: The Department of Health and Human Services (HHS) has broad authority to regulate the Federal and State Marketplaces (e.g., section 1321(a) of the Affordable Care Act). It has been suggested that hospitals, other healthcare providers, and other commercial entities may be considering supporting premium payments and cost-sharing obligations with respect to qualified health plans purchased by patients in the Marketplaces. HHS has significant concerns with this practice because it could skew the insurance risk pool and create an unlevel field in the Marketplaces. HHS discourages this practice and encourages issuers to reject such third party payments. HHS intends to monitor this practice and to take appropriate action, if necessary.

But let’s end on an upbeat note. The Cleveland Clinic, a hospital, recently announced its top ten medical innovations for 2014 (not a typo). The number one innovation is a “bionic retina, capable of restoring rudimentary sight in patients after years of near blindness,” Amazing.

Katherine Archuleta was sworn in as OPM’s 10th director yesterday. The OPM press release is here — the White House blog post welcoming Ms. Archuleta is here — Ms. Archuleta’s own OPM Director blog post is here. Good luck, Ms. Archuleta.

We are one week away from the Federal Benefits Open Season which begins next Monday November 11.

OPM announced last week that beginning next year the children of same sex domestic partners will be eligible for self and family FEHBP (and FEDVIP) coverage as stepchildren provided that the federal employee and domestic partner register their relationship with the employee’s agency and they don’t live in a state that permits same sex marriage. In states that recognize same sex marriage OPM expects the same sex couple to marry in order to cover the partner’s children (just like an opposite sex couple).

The Senate, but not the House, is in session this coming week according to the Hill’s Floor Action blog.

Following up on Friday’s note about HHS’s decision not to apply the federal program’s anti-kickback act to qualified health plans in the ACA exchanges, the Wall Street Journal reports tonight that prescription drug manufacturers are enthused by the fact that the decision allows them to offer subsidies, e.g., co-pay cards, to cover QHP co-payments on their brand name prescription drugs. The article notes that

[D]rug makers have been concerned that high copayments and deductibles on plans sold on the exchanges could deter newly insured people from filling their prescriptions, said Dan Mendelson, president of consulting firm Avalere Health LLC. He said the average “silver” health plan offered through the exchanges has a $2,500 deductible, while the average “bronze” plan’s deductible is $5,000.

FEHB plans expressly are not subject to this complicated anti-kickback law. The PBM trade association plans to fight the HHS decision because the co-pay cards interfere with their formulary arrangements.

Yesterday House and Senate leaders made available a discussion draft of a bill to replace the Medicare Part B sustainable rate of growth formula with a reformed “fee-for-service (FFS) payment system [that places] greater focus on value over volume, and encourage[s] participation in alternative payment models (APM), such as accountable care organizations and patient-centered medical homes [consistent with the ACA]. According to the Washington Post, the American Medical Association supports the bipartisan proposal.

AHIP announced that a bipartisan bill to delay the onerous health insurer fee has been introduced in Congress.  The FEHBlog has higher hopes for passage of the SGR replacement bill.

Earlier this week, CMS announced that the Medicare Part B premiums and deductible will not change for 2014. “The Medicare Part A deductible that beneficiaries pay when admitted to the hospital will be $1,216 in 2014, an increase of $32 from this year’s $1,184 deductible.”  The Part A deductible covers the first sixty days of inpatient confinement per spell of illness.  “Beneficiaries must pay $304 per day for days 61 through 90 in 2014, and $608 per day for hospital stays beyond the 90th day.  For 2013, per day payment for days 61 through 90 was $296, and $592 for beyond 90 days.  For beneficiaries in skilled nursing facilities, the daily co-insurance for days 21 through 100 in a benefit period will be $152.00 in 2014, compared to $148.00 in 2013.”

The IRS announced yesterday that the $2500 cap on contributions to health care flexible spending accounts will not increase for 2014.  The IRS did create a new option yesterday that allows health care FSA plan sponsors to allow participants to roll over up to $500 in unused funds at year end (in lieu of the permitted grace period).  The roll over would not count against the $2500 cap for the next year. IRS Notice 2013-71 

A friend forwarded me a link to a Tenesseean article about hospitals thinking about footing the bill for patients’ subsidized ACA exchange coverage similar to the way in which they help impoverished patients sign up for Medicaid.

Into this environment of uncertainty and change, hospitals and clinics are asking the question: “If my patients do not buy the new Obamacare health insurance, can we get it for them?” A recent Credit Suisse report has analyzed the ACA exchange rates and concluded that up to 6.5 million Americans could literally get free health insurance if they select the Bronze Plan. If it is free, can hospitals sign them up? If it is not free, can hospitals pay the premium for them? 

According to this report from the Association of Corporate Counsel, HHS Secretary Kathleen Sebelius has informed Congress that qualified health plans on the exchanges are not federal health programs subject to the federal programs anti-kickback act.  Subjecting QHPs to the AKA would have complicated the hospitals’ plan. The fly in the ointment is that a patient cannot just enroll for subsidized coverage when he or she is admitted unless the admission occurs during an Open Season and even then the coverage at best begins on the first day of the following month.

Happy Halloween! The Senate confirmed Katherine Archuleta to be the new OPM Director yesterday. The Washington Post reports 

Archuleta, 64, a Colorado native, was the national political director for Obama’s reelection campaign and will rank among his administration’s prominent Latinas. She served as chief of staff to former Labor secretary Hilda Solis and had positions at the Energy and Transportation departments. She has long been a force in Colorado’s Hispanic community.
Archuleta replaces John Berry, whose term expired in April and who is now U.S. ambassador to Australia. Elaine Kaplan will leave the agency as acting director to become a judge at the Court of Federal Claims.

Govexec.com has a report on Rep. Issa’s proposal to open the FEHBP to all Americans, and the article quotes the FEHBlog.

Govexec.com also reports that federal annuitants will receive a 1.5% cost of living adjustment for 2014.

The 2014 cost-of-living adjustment is a relatively small one, and marks the second consecutive year the figure has dropped. The 2013 COLA was 1.7 percent, while the 3.6 percent boost in 2012 was the first COLA increase since 2009.

The Joint Commission, a credentialing body, released its annual list of top performing hospitals according to Medscape.

The number of institutions that made the cut by scoring high on quality measures for pneumonia, heart failure, and other conditions rose from 620 in 2012 to 1099 in 2013 — a 77% increase. The scores are based on hospital performance in the preceding year.
The latest crop of top performers represents one-third of all hospitals accredited by the Joint Commission that reported quality data for 2012. The vast majority of the elite 1099 lack a national reputation. Only 7% of them — or almost 80 — are major teaching hospitals. But that figure represents an increase over 2012, when major teaching hospitals constituted 5% of the 620 top performers.

Recently the FEHBlog noted that the Leapfrog Group had released its Fall 2013 hospital safety survey results. FierceHealthcare.com reports that several hospitals are questioning the validity of the survey results.