CAQH, an alliance of health insurers, has announced

[T]he launch of a new, universal electronic funds transfer (EFT) enrollment tool for providers that facilitates the use of electronic payments between payers and providers by offering a single point of entry for adopting EFT. By streamlining and automating the EFT enrollment process, the tool creates efficiencies and cost savings for both payers and providers by eliminating the need for providers to enroll in EFT separately for each health plan in which they participate.

Beginning January 2014, all payers will be mandated to offer EFT under the requirements of the Patient Protection and Affordable Care Act (ACA) and Medicare will only reimburse providers through EFT. However, the Department of Health and Human Services (HHS) reports that only 32 percent of healthcare claims were paid electronically in 2010, partially due to the current cumbersome and burdensome enrollment processes which require that providers enroll separately with each payer. The switch to EFT for provider reimbursement will eliminate the need for redundant paperwork, reduce the time spent on printing, mailing and receiving checks, lower lockbox fees, as well as enable tighter security on monetary transactions. 

The CAQH press release indicates that Aetna and Cigna currently are making the new tool available. Quicker access to cash – that could improve relations between the Hatfield and McCoys too.

Following up on the last two FEHBlog posts on hospital readmissions, Kaiser Health News reports that

Writing in the Journal of the American Medical Association, researchers found no relationship between readmissions and mortality rates for Medicare patients who had heart attacks or pneumonia between 2005 and 2008. The paper did find a “modest” inverse relationship between readmissions and death rates for heart failure patients, where hospitals with low death rates tended to have somewhat higher readmission rates. But that was only for a small portion of hospitals and not strong even then.

“I feel we’ve dispelled the notion that your performance in mortality will dictate your performance in readmission,” said Dr. Harlan Krumholz of Yale University School of Medicine, the lead author of the study. “This result says they appear to be measuring different things, they’re not strongly related to each other and you can clearly do well on both.”

In other words, readmissions are not a sign of quality care.

Finally, the FEHBlog read with interest the report of a $50 million class action against a Long Island hospital whose patients were victimized by an identity theft ring.

Terence Lynam, spokesman for Great Neck, N.Y.-based North Shore-LIJ, confirmed in an e-mail that two people have been convicted and “multiple” other people have been arrested for operating “a widespread identity theft ring that victimized a number of organizations and about 1,000 individuals throughout the Northeast, including about 200 North Shore University Hospital patients.”

The victims say the 11-hospital system failed to notify them that their information had been compromised, even as thieves traveled the country opening credit lines and bank accounts in patients’ names, buying iPhones, maxing out patients’ existing credit cards and even filing bogus tax returns using victims’ information

This will be an interesting case to follow.

The House of Representatives and the Senate are both in session this week. On Thursday, the House Energy and Commerce Committee is holding a hearing about repealing and replacing the sustainable rate of growth formula discussed in Friday’s FEHBlog entry.

Modern Healthcare featured a detailed AP story about the myriad of efforts underway to reduce the “epidemic” of hospital readmissions, a topic in which OPM recently has shown interest.

There is no single solution. But what’s clear is that hospitals will have to reach well outside their own walls if they’re to make a dent in readmissions.
Otherwise a slew of at-home difficulties — confusion about what pills to take, no ride to the drugstore to fill prescriptions, not being able to get a post-hospital check-up in time to spot complications — will keep sending people back.
“This is a team sport,” says readmissions expert Dr. Eric Coleman of the University of Colorado in Denver. It requires “true community-wide engagement.”

Last year an underregulated compounding pharmacy in Massachusetts caused a string of deaths due to tainted medicine.  The Washington Post reported last week that

Shoddy practices and unsanitary conditions at three large-scale specialty pharmacies have been tied to deaths and illnesses over the past decade, revealing that the serious safety lapses at a Massachusetts pharmacy linked to last fall’s deadly meningitis outbreak were not an isolated occurrence, records and interviews show.

The AMA News reports this morning on the litigation fall out from the this catastrophe. Litigation is impacting the prescribing doctors on negligence and product liability theories because the compounding pharmacy quickly was shut down. . .

The sustainable rate of growth formula has been a political football for almost a decade. The SGR is a statutory formula that is used to annually adjust the reimbursement formula (known as the resource based relative value schedule) that Medicare Part B uses to pay doctors. Every year for the past eight or nine years the SGR has called for a sharp reduction in Medicare payments to doctors, and every year Congress defers the cut which is too painful to doctors and the Medicare beneficiary community. There is a concern that a sharp cut in Medicare reimbursements will cause doctors to leave Medicare in droves and with the looming expansion of the insured population next year that’s a very real threat. There won’t be enough doctors already according to many reports (and common sense).  However, the Washington Post’s Wonkblog recently took the contrary position.

The SGR debate is relevant to the FEHBP because the FEHBP has a large cadre of Medicare eligible annuitant members. FEHB plans pay secondary to Medicare so when Medicare cuts payments, FEHB plans pick up the slack. That would happen for example when the statutory sequestration kicks in on March 1 and cuts Medicare payments to doctors by 2%.  Also pursuant to the FEHBA (5 USC § 8904(b)) fee for service plans pay doctors using Medicare reimbursement rates for annuitants over 65 who have declined Medicare Part B coverage.

The current SGR fix lasts until the end of this year. Medpage Today and the Hill’s Health Watch report on Congressional activity to repeal and replace the SGR this year. The FEHBlog was most intrigued by the AMA News article about how health insurers who are not bound by statutory reimbursement formulas are testing out new approaches such as shared savings, medical homes, and performance contracts. Time will tell.

The FEHBlog apologizes that last Friday’s FEHBlog entry was posted after the Super Sunday entry. The system clutched and failed to post the Friday entry on the same day.

The Wall Street Journal reports today that

[I]nsurers and health systems are sending teams of doctors, nurses, physician assistants and pharmacists into homes to monitor patients, administer treatments, ensure medications are being taken properly and assess risks for everything from falling in the shower to family care-giver burnout. Some are adopting programs called “Hospital at Home” to provide hospital-level care in the home, including portable lab tests, ultrasounds, X-rays and electrocardiograms.
In large part, the aim is to avoid new financial penalties from the Centers for Medicare & Medicaid Services. … But there is also growing pressure to keep patients from being admitted to the hospital in the first place, especially if they have chronic disease. Such patients, particularly older ones, are more vulnerable to infections and complications like bed sores in the hospital, and are actually safer at home, experts say.  * * *

For example, insurer Aetna  is contracting with home health agencies to expand a transitional care program for customers of its Medicare Advantage plan in a number of communities around the country. A pilot for the program reduced readmissions by 20% and saved $439 per member. “It is costly to send nurses into the home, but not nearly as costly as readmissions,” says Aetna national medical director Randall Krakauer.

The Commonwealth Fund issued a report concerning lessons from early adopters of telemedicine — an important innovation in a time where the medical profession could be overwhelmed by the ACA.  “Remote patient monitoring (RPM)—like home teleheath and
telemonitoring—can help improve coordination, improve patients’
experience of care, and reduce hospital admissions and costs.”

Innovation to lower overall costs. Cool. Unfortunately the Wall Street Journal also reports that the medical profession is fighting efforts by paraprofessionals like physicians assistants to fill this gap.  The FEHB Act, 5 U.S.C. § 8902(m)(2), for many years has required plans to reimburse paraprofessionals acting within the scope of their licenses for services normally only covered when provided by MDs when the care is provided in medically underserved states as designated by OPM. The number of medically underserved states is likely to grow in the next few years. The fights discussed in the WSJ article concern the scope of paraprofessional state licenses. For example,

One of the bitterest fights is in Kentucky, where physician assistants are lobbying the state legislature to repeal a law that says that for the first 18 months after certification, physician assistants are allowed to treat patients only when a supervising physician is on site. Being in phone contact isn’t deemed sufficient. 

AHIP released a claims processing survey today. Among the findings were the following tidbits:

• In 2011, 93 percent of electronic claims were processed within two weeks, compared to 79 percent of paper claims.
• The percentage of claims that were automatically adjudicated—processed without manual intervention—rose significantly from 37 percent in 2002 to 79 percent in 2011.
• In 2011, the average cost of processing a claim was reported at $1.36 per claim. The average cost of processing an automatically adjudicated claim was $0.99 per claim; the average cost of processing a “pended” or delayed claim (often a claim that requires additional information or more complex manual processing) was $3.99 per claim.
• In 2012, responding plans estimated that 88 percent of all claims were paid on an “in-network” basis, up from 85 percent in 2008.

Well we deserve a TGIF this week because it was a full work week. The FEHBlog’s high school senior son was shocked this morning when there was no two hour school delay even though it was lightly snowing. The snow has now stopped.

The Obama Administration keeps rolling out new Affordable Care Act regulations. On Wednesday HHS and IRS regulations governing the individual mandate (or tax in Chief Justice Roberts view) were issued. Here’s a link to the HHS fact sheet.  According to these rules, federal and postal employees and annuitants who enroll for FEHBP coverage, which is employer sponsored coverage, will not be subject to the individual mandate penalty, which is $95 in 2014 and ramps up to $695 over three years or so.

The Hill’s Healthwatch blog observes that “The Obama administration had a clear message Wednesday as it issues rules for the healthcare law’s individual mandate: Not many people will be affected by the new requirement to buy insurance or pay a penalty.” That can’t make insurers happy as they have been relying a strong penalty / tax to offset the risks of eliminating pre-existing condition penalties.

As an aside, the FEHBlog refers readers to the New York Times Economix blog which explores an interesting and perfectly legal (for now) approach to gaming the individual mandate. Complex laws get people to thinking.

Around Thanksgiving, the IRS issued proposed welllness program rules allowing health plan sponsors to adjust premiums based on certain health factors as wellness program incentives. These rules do not apply to the FEHBP because there is a statutory contribution formula (5 U.S.C. § 8906). The comment period on this rule recently ended. Business Insurance reports that several powerful Democratic members of Congress asked regulators “to severely limit wellness programs that use premium variation based on health status factors as an incentive, by narrowing the allowable health status factors to tobacco use only.”   Given the fact that HHS responded to similar objections to the HITECH Act rule, the FEHBlog expects HHS to jump again here (and why not? — although health cost curve up).

Both of Houses of Congress will be in session this week. The Hill’s Floor Watch blog sums it up this way — the two Houses will pursue “dueling agendas.” Meanwhile the March 1 sequestration implementation date gets ever closer without a compromise in sight. (Of course the sequestration itself was something of a compromise when Congress and the President created the deficit reduction approach in August 2011.) The sequestration would not adversely impact the FEHBP directly but doctors will not sit still for the 2% Medicare cut that would hit them.

Mark the tape. On Friday, health insurers officially became public utilities. As part of the great compromise to permit both the exercise religious freedom and the delivery of free contraception to women, the Administration is proposing to mandate that the health insurers provide free insurance.

With respect to insured group health plans, the eligible [religious employer] organization would provide the self-certification to the health insurance issuer, which in turn would automatically provide separate, individual market contraceptive coverage at no cost for plan participants.  Issuers generally would find that providing such contraceptive coverage is cost neutral because they would be they would be insuring the same set of individuals under both policies and would experience lower costs from improvements in women’s health and fewer childbirths.

With respect to self-insured group health plans, the eligible organization would notify the third party administrator, which in turn would automatically work with a health insurance issuer to provide separate, individual health insurance policies at no cost for participants.  The costs of both the health insurance issuer and third party administrator would be offset by adjustments in Federally-facilitated Exchange user fees that insurers pay.

The FEHBlog does not know where this compromise leaves faith based health plans. In FEHB appropriations laws, Congress has exempted those plans participating in the FEHBP from the FEHB’s contraception coverage mandate.

Also on Friday, America’s Health Insurance Plans issued a series of detailed state based reports about the problem of out of network providers who fly the pirate flag and charge exorbitant rates. The problem is nicely illustrated in this LA Times article. CMS issued a health care transparency rule on Friday about relationships between health care providers and drug manufacturer representatives. How about a professional ethics rule requiring providers to inform patients about the price of the care before it is rendered? Lawyers have to discuss that issue with their prospective clients. Dentists do it too because the insurance is limited.  

The New York Times reports that specialty drug manufacturers are lobbying state legislatures to pass laws restricting the ability of pharmacists to substitute biosimilar drugs for brand name drugs even before the Food and Drug Administration has approved a regulatory pathway for approving the marketing of biosimilar drugs in the U.S. That’s crazy.

Modern Healthcare reports that the Trust for American Health has issued a report urging smarter government spending and oversight of preventive care. Reuters gets to the nub of the issue

The report also makes an economic argument for preventive care, highlighting the possibility of reducing healthcare spending — which in 2011 reached $2.7 trillion, just shy of 18 percent of gross domestic product — by billions of dollars. And that has health economists shaking their heads.

“Preventive care is more about the right thing to do” because it spares people the misery of illness, said economist Austin Frakt of Boston University. “But it’s not plausible to think you can cut healthcare spending through preventive care. This is widely misunderstood.”

The FEHBlog understands the public health economics often are counter-intutitive and that economic forces tend to force the cost curve up despite the best efforts of health plans and insurers..

The House of Representatives in in recess this week while the Senate continues to work on the Hurricane Sandy relief legislation according to the Hill.

Modern Healthcare reports that health care “reform brightens the [finanial] outlook” for for profit hospital chains like HCA and Tenet. The chains already have taken their bitter medicine over the cliff deal and sequestration, the next shoe to drop on March 1, will hit doctors, not hospitals, with a 2% Medicare cut which has the AMA News freaking out.

The S&P Healthcare Index for the 12 months ended November 2012 (the most recent report) was up 5.07%, a deceleration from the 5.27% rate reported for the prior month. The Professional Services Commercial Index remained over 9%.  The Hospital Commercial Index hit its lowest rate since the index began in January 2005 — an annual growth rate of 4.26%.

Modern Health care also reports on health plan and healthcare provider efforts to lower the cost of specialty drugs — a concern that OPM raised in the March 2012 benefits and rates proposal call letter. When will the Food and Drug Administration finally create the regulatory pathway for biosimilar or generic specialty drugs which Congress requested almost three years ago. The European Union created this gateway over a decade ago. Puzzling indeed.

Government Health IT provides five sensible tips for health care providers and health plans to prepare for an HHS Office for Civil Rights audit of their compliance with the HIPAA Privacy and Security Rules. Enforcement efforts will only continue to ramp up as we hit the fourth anniversary of the HITECH Act’s passage as part of the early 2009 financial stimulus law.

It doesn’t seem quite right to use the TGIF label on a short workweek when the FEHBlog has only done one post. So Friday update it is.

OPM has rolled out its new website. Here’s a link to the new FEHBP page site.

Following up on the last post, the Wall Street Journal reported on an initiative that OPM has endorsed – reducing hospital readmissions. Medicare is penalizing hospitals for high readmission rates, and this penalty has caught the hospital’s attention. However, the article illustrates that reducing readmissions, a worthy goal, is much easier said than done. Here’s the rub:

Some researchers also contend that 30 days may not be a fair time period to judge a hospital for conditions such as heart failure, a chronic disease in which risk of death or readmission can accumulate months after initial hospitalization. And hospitals that keep patients alive by rehospitalizing them may be penalized for higher readmission rates even though they lower mortality rates.
“The caution, unfortunately, will probably be that hospitals will begin to restrict readmissions,” regardless of a patient’s condition, in order to avoid Medicare cuts, says Todd Rosengart, chairman of the Michael E. DeBakey Department of Surgery at Baylor College of Medicine in Houston,

The bottom line is that public health measures are imperfect because health care is complex.

The Labor Department issued a potpourri of Affordable Care Act guidance yesterday in FAQ XI.  “This set of FAQs addresses the employer notice of coverage options,
health reimbursement arrangements, disclosure of information related to
firearms, employer group waiver plans supplementing Medicare Part D,
fixed indemnity insurance and payment of PCORI fees.” This information is interesting but not directly relevant to the FEHBP. The FEHBlog gets a kick out of the fact that the Labor Department uses Roman numerals to identify the FAQs as if they were the equivalent of Super Bowls. But they are darn handy.

The FEHBlog hopes that everyone enjoyed the long holiday weekend. Of course, the President was inaugurated for a second term (twice) over the weekend, and both Houses of Congress return to work on Tuesday. The House of Representatives will be working on its debt limit strategy and the Senate will be working on the Hurricane Sandy relief package that the House passed before the break according to the Hill’s Floor Watch blog.

The FEHBlog has noticed a few articles following up on OPM’s initiatives contained in its March 2012 benefits and rates proposal call letter:

• Encourage expectant mothers to hold off have a C-section before the 39th week of pregnancy. Kaiser Health News reports on the state of collective efforts by providers, insurers, and others to achieve this goal advocated by the March of Dimes.
• Encourage a reduction in serious medical errors known as never events. The AMA News reports on a recent Joint Commission study finding that never events occur in hospital operating rooms nationwide about 80 times weekly, e.g., forgetting a sponge in a patient. To err is human, but ….
• Allow plans to cover applied behavioral analysis therapy for children diagnosed with autism. The Wall Street Journal reports on a University of Connecticut longitudinal study of children diagnosed with autism spectrum disorder (UConn is the FEHBlog’s alma mater) confirming “a notion” that these children can recover. “‘It’s now apparent that some have a very good prognosis,'” said the
  NIMH’s Dr. Insel. ‘The problem is we don’t know how to identify that
  group.'” That’s essentially good news that over time should lead to improved diagnosis and treatment.