In last Friday’s Federal Register, the Internal Revenue Service published an Affordable Care Act rule that further delves into the topics of whether health plan coverage provides minimum value or is affordable for ACA purposes. A Health Affairs blogger offers a good post on the proposed rule.  The public comment deadline is July 2.

An Employee Benefits News blogger offers an entertaining post arguing that return on investment principles should not be applied to wellness programs. The FEHBlog agrees that the use of strict ROI rules to meaure soft dollar benefit savings misses the point of these programs.

The FEHBlog discussed prescription drug wastage in a recent post. The FEHBlog therefore noted with interest an iHealthBeat story that CVS pharmacies are terminating their prescription refill reminder service out of a concern that their drug manufacturer compensation for the service may be inconsistent with the Hitech Act omnibus rule that takes effect on September 23.

The FEHBlog notes that late last month the U.S. Preventive Services Task Force (“USPSTF”) approved two new “A”   level recommendations:

The USPSTF recommends that clinicians screen for HIV infection in adolescents and adults ages 15 to 65 years. Younger adolescents and older adults who are at increased risk should also be screened.
The USPSTF recommends that clinicians screen all pregnant women for HIV, including those who present in labor who are untested and whose HIV status is unknown.

The decision triggers on obligation on FEHB plans and other health plans to cover these screenings without cost sharing when performed in-network beginning next year. [CORRECTION — This change will take effect in 2015 under the ACA rules.]  Currently, this mandate is limited to patients who are considered at risk.

Kaiser Health News reviews a bevy of new studies looking at whether the recent slow down in health care spending was tied to the Great Recession or reflects structural changes. The FEHBlog was struck by this statement in the article:

“On this front, history is not encouraging,” wrote John Holahan and Stacey McMorrow, researchers at the Urban Institute, in the paper released by the Robert Wood Johnson Foundation. “Health spending growth has rebounded after every major attempt at cost containment and this creates understandable skepticism that the most recent slowdown will be lasting.”

Time will tell.

Among structural changes are the retail clinics that have popped up a pharmacies and other retailers. Modern Healthcare reports that

The industry’s Convenient Care Association estimates nationwide there are now more than 1,400 health clinics inside retail chain stores, double the number from six years ago. Industry leader CVS Caremark Corp. now operates 650 MinuteClinics in 25 states and Washington, D.C., and plans to open 150 new clinics in the coming year on its way to having 1,500 in 35 states by 2017. Walgreen, the second-largest player, is planning double-digit growth in 2013 as it expands its Take Care clinic roster of 372 stores. 

The FEHBlog closes this evening with a link to an ACA Burden Tracker developed by the House majority based on agency estimates under the Paperwork Reduction Act. Right now the burden on businesses and the general public stands at about 190,000,000 hours annually.

Congress will be back in session this week following a district work session. The Hill provides a closer look at Congress’s work week here. The FEHBlog got a kick out of reading a Hill story headlined “Left boils as Obama floats major change to Medicare Parts A and B.” The Republicans have proposed modernizing Medicare by consolidating Medicare Part A (hospital care) and B (doctors’ services) and adding catastrophic protection to traditional Medicare. That’s modernization. Medicare is effectuated by laws and regulations which are hard to change. The FEHBP is effectuated by contracts which are much more flexible. Although lately that flexibility has been constrained by new federal laws such as the Affordable Care Act. Nevertheless, the FEHBP is much more malleable than Medicare.

This coming week is Public Service Recognition Week. The FEHBlog tips his hat to the federal and Postal Service employees and annuitants that the FEHBP serves.

Aetna announced on Friday that “the U.S. Department of Justice (DOJ) has cleared Aetna’s proposed acquisition of Coventry Health Care, Inc. Aetna expects to complete its acquisition of Coventry within the next three business days.” Aetna and Coventry each participate in the FEHBP as HMO carriers. Coventry also administers three employee organization sponsored plans in the FEHBP.

The prescription benefits manager Express Scripts recently reported that that the U.S. wasted $418 billion last year on poor medication related decisions. The research, presented this week at the Express Scripts Outcomes Symposium in Orlando, Florida, revealed the following:

$55.8 billion was spent unnecessarily on higher-priced medications when more affordable, clinically equivalent alternatives were available.
$93.1 billion could have been saved if patients would have used the most cost-effective and clinically appropriate pharmacies, including home delivery and specialty. This savings includes $33.5 billion in lower drug costs, as well as $59.6 billion in avoided medical costs attributed to the higher adherence rates associated with home delivery and specialty pharmacies.
An additional $269.4 billion was spent on avoidable medical and pharmacy expenses as a result of patients not remaining adherent to their medication treatments. This total does not include the $59.6 billion in adherence savings directly associated with better pharmacy choices.
According to the research, the most wasteful one-third of states spent between $1,404.82 and $1,622.76 per capita in avoidable costs. States with high levels of waste were found to be primarily located in the southern region of the country – an area also associated with higher rates of chronic disease. States with the lowest levels of avoidable costs were predominately in the Midwest and Northeast. Vermont wasted the least amount per capita among all states in the U.S., yet still experienced an average of $1,004.39 in unnecessary costs per resident.

Forbes reports that last week, key trade associations such as the Pharmaceutical Research and Manufacturers of America (PhRMA), the National Association of Chain Drug Stores, the Council for Affordable Health Coverage, and the American Academy of Family Physicians launched Prescriptions for a Healthy America.  which seeks to improve medication adherence habits among Americans. Good luck with that effort.

Yesterday, the Internal Revenue Service released Rev. Proc. 2013-25 which includes health savings account (“HSA”) and high deductible health plan (“HDHP”) minimums and maximums for 2014.  The HSA contribution limits are $3,300 when you have self-only HDHP coverage and $6,500 when you have self and family HDHP coverage in 2014.  That’s an inflation adjusted increase of $50 over 2013 limits for both types of HDHP coverage.  The minimum HDHP deductible is $1250 for self only HDHP coverage and $2500 for self and family HDHP coverage, which is no change for 2013. The HDHP out of pocket (“OOP”) expense maximums (deductibles, co-payments, and other amounts [e.g. co-insurance , but not premiums) for 2014 are $6,350 for self-only coverage or $12,700 for self and family coverage. Those are inflation adjustments of $100 and $200 respectively compared to 2013.

There’s an additional significance to the OOP maximums for 2014 as pursuant to ACA § 1302(c) those OOP maximums also apply to group health plans, including FEHB plans, which are not HDHPs. Under ACA FAQ XII, group health plans that current have separate major medical and pharmacy benefit OOP maximums have a one year grace period to come into compliance with the new rule as long as the two OOP maximums independently comply with the HDHP limit.

The ACA regulators came out with FAQ XV yesterday which included a bit of a bombshell. Many years ago, the FEHB Act, 5 U.S.C. § 8902(m)(2), established a medically underserved areas policy. OPM’s web site explains that

If you live in a medically underserved area and are enrolled in a fee-for-service plan, your plan must pay benefits up to its contractual limits, for covered health services provided by any medical practitioner properly licensed under applicable State law.  Each year, before the FEHB open season begins, OPM determines which states qualify as medically underserved areas for the next calendar year. OPM announces the results of this determination before each open season in a public notice in the Federal Register. The medically underserved areas are listed in each fee-for-service plan’s brochure and on OPM’s Plan Information page.

Well, a new ACA provision, Public Health Service Act § 2706(a), extends this sensible FEHBP policy to all states whether or not medically underserved according to FAQ XV, Q&A 2. The one difference is that “nothing in PHS Act section 2706(a) prevents “a group health plan, a health insurance issuer, or the Secretary from establishing varying reimbursement rates based on quality or performance measures.” That caveat may be helpful to fee for service plans. (The FAQs announced that there will be no implementing regulation for this provision.)  Nevertheless. The chiropractor community is overjoyed — see here and here. Cost curve up.

HHS’s Centers for Medicare and Medicaid Services is proposing to increase Medicare Part A payments to hospitals by 0.8% for the federal fiscal year that begins on October 1, 2014.  CMS also is proposing changes to its hospital readmissions control program:

CMS currently assesses hospitals’ readmission penalties using three readmissions measures endorsed by the National Qualify Forum (NQF): heart attack, heart failure, and pneumonia. For FY 2014, CMS proposes a revised methodology to take into account planned readmissions for these three existing readmissions measures.  CMS also proposes to add two new readmission measures, which would be used to calculate readmission penalties beginning for FY 2015: readmissions for hip/knee arthroplasty and chronic obstructive pulmonary disease. 

Furthermore, CMS explained that

Section 3008 of the Affordable Care Act required CMS to establish a financial incentive for IPPS hospitals to improve patient safety by imposing financial penalties on hospitals that perform poorly with regard to hospital-acquired conditions (HACs).  HACs are conditions that patients did not have when they were admitted to the hospital, but that developed during the hospital stay.  This proposed rule outlines a general framework for the HAC Reduction Program for the FY 2015 implementation.
Under this program, hospitals that rank in the lowest-performing quartile of hospital acquired conditions would be paid 99 percent of what they would otherwise be paid under the IPPS beginning in FY 2015.  To determine this quartile, CMS is proposing quality measures and a scoring methodology as well as a process for hospitals to review and correct their data. 

On a related note, Kaiser Health News reports that efforts to coordinate healthcare still have a long way to go. Based on recent personal experience the FEHBlog agrees.

Finally, HHS’s Office for Civil Rights has posted a variety of guidance materials for consumers about the HIPAA Privacy and Security Rules here.

Congress is teleworking this week. Both the House and Senate are having home district work sessions. Before leaving and in furtherance of the kerfluffle discussed in last Thursday’s post, Rep. Bill Cassidy (R La.) introduced a bill (H.R. 1735) that would require the President, Vice President, and Cabinet Secretaries to join members of Congress and their personal staff members in the exchanges next January. The Hill reports that House Ways and Means Committee Chairman Dave Camp (R Mich.) introduced a bill (H.R. 1780) that would require not only the executive branch leaders but also all of the executive branch employees to leave the FEHBP and join the exchanges. The bills were referred to the House Oversight and Government Reform Committee and the Energy and Commerce Committee.

Last week, the House Energy and Commerce Health Subcommittee held a hearing on the impact that the HIPAA Privacy Rule has on mental health care. The Des Moines Register has an interesting background story on the hearing.

Ron Honberg, legal director for the National Association on Mental Illness, attended Friday’s hearing. In a phone interview afterward, he said the stories told there showed how frayed the country’s mental health system is. Honberg said that too often, care providers use HIPAA “as a crutch” to avoid talking to patients’ families. “I call it hiding behind the veil of HIPAA,” he said. “It’s kind of like, ‘Wow, I’d really like to talk to you, but HIPAA won’t let me.’ ” Honberg said he could see tweaking the law to make clear that talking to families is encouraged. 

The FEHBlog has heard the director of the agency responsible for enforcing that rule say that the rule is “a valve, not a blockage.”  Perhaps the valve should be opened further so that families can more easily participate in the mental health care of loved ones.

Modern Healthcare reports that “After sifting through 2,000 pages of public comments, staff members for the Senate Finance Committee say the healthcare industry wants clearer rules, fewer redundant audits and more focus on proactive healthcare fraud prevention.” Ah, common sense rears its lovely head.

OPM has been encouraging FEHB plan carriers to adopt value based benefit design.  The National Business Group on Health explains that

Value-Based Benefit Design is the explicit use of plan incentives to encourage enrollee  adoption of one or more of the following:
• appropriate use of high value services, including certain prescription drugs and  preventive services;
• adoption of healthy lifestyles, such as smoking cessation or increased physical  activity, and
• use of high performance providers who adhere to evidence-based treatment  guidelines.
Enrollee incentives can include rewards, reduced premium share, adjustments to  deductible and co-pay levels, and contributions to fund-based plans, such as a Health  Savings Accounts.
VBBD grew out of the recognition that some medical services are of greater value to specific individual enrollees than to others when three factors are considered: 1) medical  evidence of the effectiveness of a particular treatment, 2) the cost of the treatment, and  3) the resulting benefit of the treatment. 

Business Insurance reports that employer adoption of value based health plan design is low due to insufficient price transparency and lagging health management accountability. Indeed, measures of value based plan adoption receded last year.  Business Insurance notes that “A key obstacle providers and employers said they must overcome is the widespread lack of consumerism and accountability for health management among individual employees.”  Of course, Rome was not built in a day, but the Affordable Care Act does not greatly encourage such consumerism and accountability.

Two weeks ago, the House Federal Workforce Subcommittee held its FEHBP oversight hearing. House Oversight and Government Reform Committee chairman Darryl Issa (R CA — the big chairman)  and Rep. Eleanor Holmes Norton asked OPM Assistant Director Jonathan Foley for his insights on an upcoming change of bipartisan interest — the Affordable Care Act requires members of Congress and their personal staff members (somewhere around 10,000 people) to leave the FEHBP in favor of exchange coverage. Mr. Foley declined because OPM is developing regulations to implement the change. Chairman Issa was not pleased and said he would take the discussion off line as they say.

Today there was a barrage of news articles about this impending change. The Politico reported this morning that Congress secretly was preparing to exempt itself for the exchanges (/ stay in the FEHBP??0.  Ezra Klein from the Washington Post rather indignantly disagreed with Politico. By this evening the Politico was backing off on its morning report, but Congress is planning on clarifying the law, which makes sense.  The Hill and the Washington Examiner also weighed in.

Congress does need to legislate for the purpose of  creating a government contribution for the exchange coverage and explain how this change impacts eligibility for retiree coverage under the FEHBP. OPM can draw the regulatory line between those up on Capitol Hill who leave the FEHBP and those who don’t.

The ACA requires health plans to fund a patient centered outcomes research institute with millions and millions of dollars. Modern Healthcare reports that the PCORI will be spending some of those millions on national patient-powered networks.

OPM is encouraging FEHB plans to be more creative in offering coverage to treat obesity. The AMA News has suggestions from the medical community.

Addressing obesity is “challenging in terms of the time required to do it right and the lack of coverage” by most insurers, said Yul David Ejnes, MD, a Cranston, R.I., internist and past chair of the Board of Regents of the American College of Physicians.

Although Medicare covers a series of primary care visits for obesity counseling among patients with a body mass index of 30 kg/m2 or greater, such appointments are not covered by most other insurance companies, said Scott Kahan, MD, MPH, director of the National Center for Weight and Wellness. The multidisciplinary obesity treatment center is based in Washington. As a result, physicians often must squeeze complicated discussions on improving diet, boosting physical activity and changing eating behaviors into short appointments that are scheduled for a separate health problem.

Kaiser Health News reports that a robotic surgical tool called DaVinci that health plans generally cover and that adds cost to procedures is not uniformly cost effective. Shocker!

Modern Healthcare also provided a link to an HHS Office for Civil Rights PowerPoint discussing the results of the first round of Privacy and Security Rule compliance audits of HIPAA covered entities. “Security was overwhelmingly an area of concern,” the OCR presenter said, noting that 47 of the [61 audited] providers had not done a complete and accurate risk assessment for potential data problems.” That’s a big bowl of wrong.

The House and the Senate are in session this week as the Hill reports. The House “will take up legislation that would take $3 billion from a preventive
health fund created by the 2010 healthcare law and use it to fund the [same law’s] Pre-existing Conditions Insurance Plan (PCIP). The Obama administration
stopped enrollment in that program earlier this year.” The FEHBlog has expected that additional funding will be provided to the PCIP but the debate will be over the source of the funding.

The House Energy and Commerce Committee will hold several healthcare related hearing this week according to its press release.

The Supreme Court will hear a case tomorrow morning (Hillman v. Maretta) that concerns the scope of the Federal Employees Group Life Insurance Program’s state law preemption provision.  The FEHBlog will be in attendance for this oral argument because the FEHBA’s state law preemption provision is similar to FEGLI’s. It’s a second bounce of the ball thing.

Standard and Poors announced last week that

All nine of S&P Healthcare Economic Indices showed slower annual growth rates for February 2013 compared to January 2013. As measured by the S&P Healthcare Economic Commercial Index, healthcare costs covered by commercial insurance plans rose by 4.62% in February, down from +5.41 % reported for January . Annual growth rates in Medicare claim costs increased by 0.78%, according to the S&P Healthcare Economic Medicare Index, down from + 1.40 % recorded last month.

Local police departments in cooperation with the Drug Enforcement Administration will be collecting unused / expired prescription and over the counter drugs next Saturday as a part of  its National Takeback Initiative.

Medpage Today reports on two interesting studies —

• Better surgical outcomes significantly reduce hospital revenues, and 
• Doctors become cost sensitive when they know the prices of the diagnostic tests they are ordering (duh!),

Federal News Radio had the most informative article about the FEHBP oversight hearing held last week. The FEHBlog remains puzzled by claims that the Program needs to be modernized — refined perhaps but not modernized.  As the FEHBlog has previously mentioned the law relies on the participating carriers to keep the Program modern and they have. For example, Blue Cross executive Bill Breskin noted at the hearing that by the end of 2013 the Blue Cross Federal Employees Plan will offer its enrollees in all 50 states and DC the opportunity to join a patient centered medical home.

The FEHBlog has discovered that the Congressional Research Service on February 13, 2013, issued a report on the evolution of the FEHBP.   By the way. the FEHBlog learned something else tonight. He thought that the FEHBA’s comprehensive medical plan provisions in 5 U.S.C. § 8903 were added when Congress passed an HMO law in the early 1970s. However, the staff model and individual practice model CMP provisions are found in the original law. Since enactment of the law in 1959, Congress did recognize a new type of comprehensive medical plan (the mixed model plan) . Live and learn.

Congress also added a new type of employee organization plan in the mid-1980s (5 U.S.C. § 8903a). About a dozen employee organization plans joined the Program at that time. With the benefit of the retrospectoscope, we now know that the mid to late 980s was a time of sharp health care cost increases (due in the FEHBlog’s view to Medicare’s prospective pricing system for hospital claims that kicked in around 1985 — big time cost shifting there.)  That’s not a good environment in which new health plans to grow.  All of those plans eventually dropped out of the program. The last of those plans, the Secret Service Association Plan, merged into SAMBA in the middle of the last decade.

It’s worth noting though that employee organizations that left the FEHBP can ask OPM for permission to rejoin the Program after they have been out of the Program for three years under a change to the law that Congress made 15 years ago (5 USC § 8903b). But no employee organization plan has rejoined the program under this authority.