Joe Davidson’s column in this morning’s Washington Post discusses an OPM briefing paper advocating changes to the FEHB Act that would increase competition by, for example, allowing regional PPOs to join the program. Davidson’s column also provides a link to a Blue Cross Blue Shield briefing paper with legislative alternatives to the regional PPO offerings. As Davidson points out at the end of his column this initiative is not on the legislative radar screen right now.

The National Business Group on Health announced the results of a nationwide survey yesterday finding that large employers expect to hold health plan cost increases to 7% in 2013 using high deductible plans and wellness initiatives.  Next month OPM will announce the FEHBP’s average premium increase for 2013 which the FEHBlog expects to be well below 7%.

Meanwhile, the AMA News breathes a sigh of relief that the number of primary care doctors visits is rebounding this year.   “Dr. [Glenn] Stream [president of the American Academy of Family Physicians] said it’s still too early to conclude that the first signs of
increased volume are going to be part of a sustained trend, or to know
how long such a trend will last. But over the longer term, he expects to
see a rise in demand for primary care due to the aging population and
the start of health coverage guarantees, mandates and subsidies in 2014.” Hope springs eternal.

Congress is now in recess until September following the political conventions and Labor Day.  Politico reported last week on lobbying efforts to head off the ACA’s health insurance fee which takes effect in 2014. The ACA imposed that fee ostensibly to require insurers to kick back some of the revenues from all of the new insureds entering the exchanges. The hefty fee does fall on insurers in the exchanges but it also falls on insurers in the FEHBP. The hefty fees will be counterproductive particularly in the FEHBP wherre the ACA did not expand membership other than certain Indian tribal employees.

The Centers for Medicare and Medicaid Services announced last week the final Medicare Part A reimbursement rates for inpatient care beginning October 1, 2012.  While in April, CMS proposed an 0.9% increase, the final rule grants acute care hospitals a three times larger increase of 2.8%. Beckers Hospital Review offers nine observations on the final rule. Medicare pricing impacts the FEHBP because there is a large cadre of Medicare Part A eligible annuitants in the FEHBP and a smaller and decreasing cadre of annuitants who retired before 1984 and are not eligible for Medicare Part A. Fee for service FEHB plans receive Medicare pricing on Part A care rendered to those individuals.

The Beckers article notes that the final rule added two new never events for Medicare payment purposes — surgical site infection following cardiac implantable electronic device procedures and pneumothorax with venous catheterization.

OPM now has a special webpage about extending FEHBP coverage to seasonal firefighters. The wildfire season evidently runs from April through October.

The Administration made a big splash about the effective date of the expanded women’s preventive care benefit on Wednesday. Humorously (at least to the FEHBlog), Kaiser Health News reports that the administrative burden of the expansion falls on the already overburdened doctors.

That’s because not all women are eligible for the cost sharing waiver at the same time. The rule went into effect Wednesday, but only for plans that are new or renewing after that date. Women with “grandfathered” plans that don’t renew for months or even years still face co-pays until that time.

For the FEHBP, the mandate takes effect with the new plan year on January 1, 2013.  OPM requires plans to cover these services whether or not they are grandfathered for ACA purposes.

Bear in mind that two of the “new” screening mandates

• Sexually transmitted infections counseling for sexually-active women.
• HIV screening and counseling for sexually-active women

have been covered under the FEHBP without enrollee cost sharing since 2011 for sexually active women and men. Those screenings are listed under the A and B screenings classified by the U.S. Preventive Services Task Force.

As you know, the FEHBlog believes that belaboring the obvious is a responsibility of his legal profession. However, that role is not limited to lawyers. Yesterday the Generic Pharmaceutical Association released a report trumpeting that generic prescription drugs are less costly than brand name drugs. Duh! The FEHBlog would like to know when the Food and Drug Administration will create the regulatory pathway for creating generic versions of expensive specialty or biologic drugs which was greenlighted by the ACA in March 2010. The European Union has been approving biogenerics for a decade.

The Federal Times reports that the leadership of both Houses of Congress and the President have agreed in principle to a continuing resolution that would fund federal government operations at current levels through March 31, 2013 — six months into the next federal government fiscal year. The continuing resolution will be drafted over the recess and considered in September. The current fiscal year ends on September 30.  The deal is not done, however, until Congress passes the resolution with the President’s approval.

The Hartford Courant reports that yesterday a federal judge in Connecticut joined other federal courts in holding the Defense of Marriage Act unconstitutional.  In that case, several federal employees sued for FEHBP coverage of their same sex spouses, which is prohibited by DOMA. The FEHBlog was aware of similar cases in Massachusetts and California. The article explains that there is another case — which reached the same result — decided in the federal district court in Manhattan and now on appeal to the U.S. Court of Appeals for the Second Circuit. That’s the same federal appellate court where the Connecticut decision is headed. The Supreme Court is expected to take this case for its next term that begins in October, and the FEHBlog is on record that the Supreme Court will hold DOMA unconstitutional principally on federalism grounds.

The FEHBlog enjoys reading the AMA News, and this week’s lead article concerns sleep centers. No the AMA News is not writing about mattress stores. Rather it’s writing about the facilities that offer sleep studies for people who have or may have sleep apnea. For years the studies have been performed in-patient and the number of facilities has grown dramatically to serve our aging population (337 in 1996 to 2412 today). But now the pendulum is swinging the other way as the costs have attracted attention, and in-home testing has arrived. How does the AMA News frame the issues — “How physicians responded to financial problems in one corner of the
health system — sleep testing — illustrates how all doctors can thrive
economically in the face of escalating pressure to provide higher
quality care for a lower cost.”

The House and the Senate will be in session this week. Next week both bodies go out of session for about five weeks for the August recess and the political conventions.

Last week, AHIP issued its annual report on the growth of health savings account qualified high deductible health plans. In 2011, the enrollment in such plans grew by over 2 million covered lives, reaching a total of 13.5 million. The enrollment is largely driven by their popularity with large employers who find that such plans do control costs. HSA qualified high deductible health plans have been offered in the FEHB since Congress approved the concept in late 2003.

The National Business Group on Health released the results of a survey of employees attitudes toward the health benefits coverage offered by their large employers. Similar to OPM surveys of federal employees, this survey reports that employees are satisfied with the coverage, even though employee cost sharing has been rising.

The FEHBlog read a very sad story today in the New York Times about a young woman who died in a New York City hospital after she called 911 because she thought that she had accidentally poisoned herself. Unfortunately, she did not reach any family or friends (or leave a message for them) before the ambulance arrived. The story of her health care is a mess, but surprisingly to the FEHBlog at least, the hospital which had no malpractice insurance won a jury trial trial in a lawsuit brought by the young woman’s family. Truer words have never been written than the article’s concluding quote from the young woman’s mother that . “No one should go to a hospital without someone with you — no one,”
she said. “Don’t go unless somebody at least knows you’re there.”

The FEHBlog has been buried under legal work this week. Every day, I scan through materials to find items to post on the blog but hey it’s the summertime. Not much. The FEHBlog knows like other wonks that the Congressional Budget Office and the Congressional Joint Committee on Taxation issued updated reports on the budgetary impact of the Affordable Care Act as modified by the Supreme Court decision. However, those reports are in the FEHBlog’s view a mish mosh of data with not much information relevant to the FEHBP except for the increasingly looming and staggeringly large ACA taxes, like the insurer fee (2014) and the high cost health plan tax (2018).

OPM is beginning to gear up for the 2013 federal benefits open season. The open season, which runs this year from November 12, 2012, until Monday December 10, 2012, is the period in which federal and postal enrollees can make FEHBP, FEDVIP, or FedFlex changes without any preexisting condition limitations. On Wednesday, the agency issues a benefits administration letter to federal agencies which discusses things that are new for this years open season, such as the introduction of the ACA’s summary of benefits and coverage (“SBC”):

Plans will provide information in their Open Season materials to their enrollees about where to find their SBC on their website as well as how to obtain a paper copy of the SBC. The plans may also have their SBC available at health fairs.

The AMA News reports on the new insurance summaries and quotes a Consumer Reports executive as follows:

“Consumers feel like when they consume medical care and have insurance, it’s like having a blindfold on,” she said. “They really need help, and this form goes a long way toward helping them.”

If that’s the case, then why don’t health care providers have to provide patients with SBCs explaining billing procedures and the medical benefits networks in which they participate. Confusion is limited to  the insurance side but that’s the ACA’s focus.

HHS announced yesterday a public-private collaboration to fight health care fraud.

The new partnership is designed to share information and best practices in order to improve detection and prevent payment of fraudulent health care billings. Its goal is to reveal and halt scams that cut across a number of public and private payers. 

AHIP comments on the initiative here.

The House and the Senate will be in session this week. The FEHBlog relies on the Hill’s “closer look at
next week” column on its Floor Action site to stay on top of these activities.

The Hill reports that Sen. Tom Coburn (R Okla.) has sent a letter to the OPM Director asking for legal justification to support OPM’s decision to cover seasonal firefighters under the FEHBP with an immediately effective interim final rule and for an assessment of the regulation’s economic impact, its impact on federal worker premiums and the estimated 10-year cost to taxpayers.”  The Senator added that the firefighters are to be commended for their service. Of course, OPM simply complied with the President’s order.

Tomorrow, OPM will issue its annual Federal Register announcement identifying the states that are medically underserved areas for purposes of Section 8902(m)(2) of the FEHB Act. As OPM explains,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. The announcement discloses that “Alaska and Kentucky were designated as a Medically Underserved Area in 2012, but will not be so designated for 2013. South Carolina is being added as a Medically Underserved Area for the 2013 calendar year. (The Monday Federal Register becomes available on the preceding Saturday.)

Modern Healthcare reports that “Twenty-six states had adverse-event reporting systems in 2008 but hospitals reported few adverse events to the state systems, HHS’ inspector general’s office said in a new report (PDF).” The report blames the low rate on failure to identify rather failure to report. Modern Healthcare adds that half of the 2008 reports came from Pennsylvania which requires all adverse events to be reported regardless of severity.

In tomorrow’s Federal Register, OPM will be publishing a proposed rule that, if finalized, will extend FEHB and FEDVIP self and family coverage to the children of a federal employee’s same sex partner conditioned upon sufficient documentation of the relationship as described in the regulation. Such children would be classified as eligible step children. Under current law, taxable income must be imputed to the employee for the fair market value of such coverage. The rule rule requests public assistance with establishing a benchmark for fair market value of the coverage. The comment period will be open for 60 days from tomorrow.

Peace at last! Walgreens and Express Scripts today announced a settlement of their contract dispute effective September 15, 2012. According to the press release, “The companies are not disclosing the terms of the new contract.”
The FEHBlog bets that Walgreens caved because Medco which recently merged into Express Scripts had even more Walgreen’s business that Express Scripts did. Ah, leverage.

File this under truth is stranger than fiction. The Sacramento Business Journal reports that “State regulators ordered Anthem Blue Cross on Monday to stop trying to collect millions in reimbursement from providers for medical claims the health plan thinks were overpaid.” According to the article, California state law bars routine insurer overpayment activities beginning one year after the claim payment date, unless the insurer can prove that the provider engaged in misrepresentation or fraud. And under the regulators’ view garden variety double billing is not misrepresentation or fraud. Cost curve — UP!

OPM, acting at the President’s decision issued an interim final rule today to extend FEHB coverage to emergency responders who work for the federal government to fight wildfires during certain times of the year.  OPM overrode its regulation, 5 C.F.R. Sec. 890.102, that generally excludes temporary or seasonal federal employees from FEHB coverage.  The rule is effective immediately. The Washington Post reports that “OPM said the firefighters will be allowed to continue their insurance
coverage when not federally employed, although entirely at their own
expense.” This option will be available under the FEHBA’s temporary continuation of coverage provisions.

The AMA News includes a helpful explanation of how CMS’s recent proposed rule stating its Medicare Part B payment policies for 2013 will affect primary care providers and specialists in this essentially zero sum game. “For instance, the effect of new policies on services that primary care
physicians tend to bill would increase overall pay to family physicians
by 7%. Other changes to services billed by radiation oncologists would
result in overall payments for that specialty dropping by 14%.”  Medicare pricing impacts the FEHB Program in several ways because there is a large cadre of annuitants over age 65 in the program. Also as the FEHBlog has noted health plans increasing are basing their out of network provider pricing on Medicare Part B pricing.

AHIP called the FEHBlog’s attention to an American Journal of Managed Care analysis that “examines perspectives on health plan efforts to use data on the race,
ethnicity, and language of their members to measure such differences and
to develop approaches that improve quality of care.”  Reducing the impact of such cultural disparities on health care is an objective of the Affordable Care Act.

The House and Senate will be in session this week. Recently, the FEHBlog discussed a provision in the new transportation authorization law that authorizes OPM to create a phased-in retirement program for federal employees. The FEHBlog was surprised to read this Federal Times report that OPM does not expect many federal employees to elect this option.

AHIP drew the FEHBlog’s attention to this Robert Wood Johnson study that belabors the obvious (the FEHBlog’s job as a lawyer) — hospital consolidations in a geographic region raise prices paid by insurers. The Boston Globe reports on Massachusetts legislative efforts to rein in the market power of  health care providers “who demand high prices for their services.”  A wise cost accounting expert once explained to the FEHBlog that price and cost are independent constructs. Costs do not necessarily drive prices.

At the OPM FEHBP carrier conference a few months ago, speakers discussed health plan efforts to divert members from hospital emergency rooms to less expensive facilities such as urgent care centers. This AMA News article illustrates the problem – high tech procedures and tests, among other factors, are leading to significant emergency department overcrowding. 85% of the patients have health insurance.