The FEHBlog wishes everyone a very happy and prosperous New Year. In 2012, we can expect final rules on the Affordable Care Act’s summary of benefits and coverage rule and the HITECH changes to the HIPAA Privacy Rule. Hopefully, common sense will prevail among the regulators. Business Insurance notes that another major regulatory action will involve the Affordable Care Act’s pay or play provisions applicable to employers.
Walgreen CEO Greg Wasson said Friday chances are probably “slim to
none” that the drugstore operator will reach an agreement with pharmacy
benefits manager Express Scripts before their current contract ends
Saturday.
Walgreen Co. announced that it is taking several steps
to help patients covered by an Express Scripts pharmacy network to
continue to use Walgreen locations after the agreement ends. It expects
to keep more than 120 Express Scripts clients, which include employers
and health plans.
Walgreen has said it expects about keep about 10
million of the prescriptions it fills for Express Scripts. It filled
about 88 million prescriptions in fiscal 2011, so that would amount to a
loss of almost 90 percent of the prescriptions.
That’s a lot of revenue to lose.
CMS dropped Chickasaw Nations Industries as the Medicare Secondary Payer Recovery Contract effective
September 30, 2011, and it has issued an RFP to combine the secondary payer recovery and coordination of benefits functions according to the Medivest Blog. In the meantime, GHI is performing this combined contract. Senator Claire McCaskill explained the Government’s dissatisfaction with CNI in this fact sheet. Personal injury lawyers with aged clients have been having problems with delays encountered in trying to settle Medicare liens against tort recoveries — at topic discussed at Congressional hearing in June 2011.
The National Quality Forum has released a 2011 update to its list of Serious Reportable Events in Healthcare, such as wrong site surgeries and medication errors. The AMA News explains that
Hospitals in 24 states and the District of Columbia are required to report on some version of the National Quality Forum’s list, and items from the list have been selected for nonpayment by private health plans, Medicare and many state Medicaid programs. Four new items — part of the first update to the list since 2006 — are:
- Death or serious injury of a new born baby associated with labor or delivery in a low-risk pregnancy.
- Patient death or serious injury resulting from the irretrievable loss of an irreplaceable biological specimen (e.g., for a biopsy).
- Patient death or serious injury resulting from failure to follow up or communicate laboratory, pathology or radiology test results.
- Death or serious injury of a patient or staff associated with the introduction of a metallic object into the magnetic resonance imaging area.
The list now contains 29 serious reportable events.
Happy New Year!
The FEHBlog hopes the everyone is enjoying the holidays. It’s a slow week as we wind down 2011 and look forward to 2012.
Last week, CMS released a list of the thirty two health care organizations that will be serving as “pioneer” accountable care organizations beginning next week. “Under this initiative, operated by the Centers for Medicare &
Medicaid Services (CMS) Innovation Center (Innovation Center), Medicare
will reward groups of health care providers that have formed ACOs based
on how well they are able to both improve the health of their Medicare
patients and lower their health care costs.”
OPM has added a progress report to its web page concerning the Affordable Care Act mandated expansion of FEHBP coverage to Indian Tribal employees. OPM leads the progress report with the following announcement
OPM is excited to announce that Indian tribes, tribal organizations and urban Indian organizations may purchase FEHB coverage for their employees beginning in Spring of 2012. The earliest effective date of coverage for these employees is May 1, 2012. Tribes, tribal organizations and urban Indian organizations may also purchase FEHB coverage effective after this date.
Finally, the Tennessean reminds us that on January 1, 2012, doctors will face a one percent cut in Medicare Part B reimbursement if they are not using an electronic prescription system.
The news that today is the FEHBlog’s birthday has been eclipsed by the Hill report that
A House GOP leadership aide told The Hill that Speaker John Boehner (R-Ohio) and Senate Majority Leader Harry Reid (D-Nev.) reached an agreement to pass a version of the Senate’s two-month payroll tax cut legislation, with a fix demanded by Republicans to make implementation easier.
This means that the temporary Medicare Part B doctor reimbursement fix also is in this bill which avoids a lot of headaches for the healthcare industry, including FEHB plans.
Another looming deadline is the conversion to the ANSI X 5010 electronic transaction standards for health care transaction purposes under HIPAA. Health Data Management reports that
The Medical Group Management Association is calling for a contingency plan of at least six months for the transition to the HIPAA 5010 transaction sets, which has a compliance date of Jan. 1, 2012. Under the plan, health plans would continue to accept Version 4010 transactions and adjudicate 5010 transactions that lack all required data. The association, which regularly surveys members and has previously warned that physicians and much of the industry remain unprepared for 5010, says federal officials need to expand the current contingency plan. The Centers for Medicare and Medicaid Services in November announced a 90-day grace period for enforcement of 5010.
This conversion sets the stage of the ICD-10 conversion. The American Medical Association recently announced its belated opposition to this ICD-10 conversion. Good luck with that.
Speaking of exercises in futility, Business Insurance reports that the Medco shareholders have approved the company’s acquisition by Express Scripts. Considering how the Administration squashed the T-Mobile / AT&T deal, the FEHBlog will be surprised if this PBM deal survives anti-trust scrutiny. But stranger things have happened. Business Insurance notes that
Medco shares trade at a roughly 17% discount to the offer price,
reflecting caution about the deal’s ultimate approval, but that spread
has narrowed in recent months.
Finally, while Houses of Congress have resolved their spat, the New York Times reports that
Barring a last-minute agreement, the [contractual] relationship between the pharmacy benefits manager Express Scripts and the major pharmacy chain Walgreens] will end Jan. 1. Customers covered by an Express Scripts prescription plan will then face the choice of switching to another pharmacy or paying for their drugs out of their own pockets if they stay at Walgreen.
Walgreen has made a major push to get health plans and employers to end relationships with Express Scripts and contract directly with Walgreen. The drugstore chain said more than 100 health plans, employers and other clients had either changed benefit managers or taken steps to maintain access to Walgreens pharmacies in 2012. But some major clients, including the health insurance giant Wellpoint and the military’s Tricare plan, stuck with Express Scripts.
Meanwhile, Walgreen rivals like CVS Caremark and Wal-Mart have been marketing aggressively, including running radio ads, to woo its customers. A CVS spokeswoman said the pharmacy chain expected to pick up 20 million prescriptions managed by Express Scripts in 2012 that were previously filled by Walgreen.
The President has signed into law the megabus appropriations bill discussed in Friday’s FEHBlog according to this Govexec story. The Federal Times adds that
The bill gives the U.S. Postal Service another reprieve on a
legally required $5.5 billion payment into a retiree health care fund.
The payment, which USPS officials say they lack the money to cover, was
originally due Sept. 30. Lawmakers however, pushed back that deadline
until Friday under the existing continuing resolution. The megabus delays it again until Aug. 1, 2012.
Hopefully this will be enough time for Congress, the Postal Service, and the Postal Unions to straighten out this problem.
On Friday, the Senate approved a two month long tax extenders bill. This bill also would have extended the Medicare Part physician reimbursement patch until February 28, 2012. According to this Wall Street Journal report, the House leadership disclosed today that it wants a conference with the Senate over the year long tax extenders bill that it passed earlier in December. The Washington Post compares the House and Senate bills here.
The Senate leadership has stated that the Senate will not be returning until January 23 so it will be the House’s fault if the Social Security tax returns to 6.2% at the end of the current one year reduction. In that event, the 27.4% reduction in Medicare Part B reimbursements to doctors would kick in because CMS usually can only delay the implementation for two weeks. We’ll have to wait and see what happens. .
Last week, Standard and Poors announced that
The S&P Healthcare Economic Composite Index indicates that the
average per capita cost of healthcare services covered by commercial
insurance and Medicare programs increased by 5.11% over the 12-months
ending October 2011.
That’s quite a leap.
As measured by the S&P Healthcare Economic Commercial Index, healthcare costs covered by commercial insurance increased by 6.91% over the year ending October 2011. This annual rate has rise for a fourth consecutive month. Growth rates in Medicare claim costs rose from its September low of +2.03% to an annual rate of +2.39%, as measured by the S&P Healthcare Economic Medicare Index. The S&P Healthcare Economic Hospital Medicare Index also increased from +0.66% in the year ending September 2011 to +1.12% in October
These indices illustrates the cost shifting from Medicare to the private sector. This Washington Post article about Medicare coverage of hospice care exposes the basic problem with Medicare — if you build it they will come.
Congress is in the process of approving the final Fiscal Year 2012 appropriations bill (H.R. 2055) known colloquially as the megabus. This bill includes the now standard FEHBP appropriations provisions — a Cost Accounting Standards exemption (OPM has created specific rules for the FEHBP), an abortion coverage limitation, and a contraception coverage mandate. The FEHBP’s appropriations provisions are found in Parts 6 and 7 of Division C.
The FEHBP’s contraception coverage mandate is narrower in scope than the HHS mandate issued this year under the no-cost preventive care provision of the Affordable Care Act because it allows for the impostion of enrollee cost-sharing. It is broader in the sense that it applies to all FEHB plans while the HHS mandate applies to FEHB and other health plans that are not grandfathered for Affordable Care Act purposes. The FEHBP’s contraception mandate also has a more generous exception for religious institutions than the HHS mandate. The HHS mandate does not apply to the FEHBP until January 1, 2013.
HHS issued an essential health benefits bulletin for public comment today. HHS appears to be following the recommendations of the Institute of Medicine — a good move in the FEHBlog’s view. This is the next step in the process that will lead to the Secretary of HHS issuing an essential benefits package for use by qualified health plans operating in state health insurance exchanges. The guidance indicates that HHS will be allowing the States leeway in establishing a package for their respective populations. Plans operating outside the exchanges will not be required to offer the essential health benefits package but will be prohibited from imposing annual or lifetime dollar caps on those identified benefits.
The Washington Post this morning is reporting this morning that the threat of a government shutdown looms. The current continuing resolution funding the Government expires on Friday December 16. The final “megabus” appropriations bill for the current Government fiscal year is done or nearly done, depending on who you believe. However, the Senate leadership, in a tactical move, is keeping the megabus in the garage until Congress completes work on the other major piece of legislation, the tax extenders bill. That bill includes the payroll tax relief extension and the Medicare Part B reimbursement patch. ‘
The FEHBlog is interested in the appropriation bill because it always contains FEHBP provisions. The FEHBlog expects that Congress will extend the continuing resolution for another week rather than let the government shutdown. OPM explained earlier this year that in the event of a shutdown, the FEHBP would continue operating
Congress also is considering a national defense authorization bill (HR 1540) which is another annual exercise. Federal News Radio reports that the House Senate conference report which was released on Monday includes TRICARE premium hikes. This law often includes government procurement law changes that impact the FEHBP but the FEHBlog did not notice any such changes in this massive bill. The Hill reports that the President is quiet on his threat to veto this bill if enacted.
The FEHBlog noticed yesterday that OPM has posted its annual financial statement for the fiscal year ended September 30, 2011 (known as the performance and accountability report). It’s always interesting reading.
Monday December 12 is the last day of the Federal Benefits Open Season and the beginning of a busy week on Capitol Hill. The Washington Post is prognosticating that Congress will achieve a compromise on the final omnibus appropriations bill by the December 16 deadline.
A Washington Post columnist Steven Pearlstein has offered his views on why the Government should prevent the merger of two large prescription benefits managers, Express Script and Medco. The FEHBlog offer this link to illustrate why the FEHBlog thinks that the anti-trust winds are blowing against this deal even though the parties tried to anticipate this problem.
The FEHBlog loves his Ipad and is finding Walter Isaaceson’s biography of Steve Jobs quite interesting. The FEHBlog is not sure about the Iphone because he likes the Blackherry’s key pad but this may be too much information. The point is that the Surgeon General has created a Medical Apps Challenge! The FEHBlog read about one such app My Medications that the American Medical Association is hawking. For 99 cents, the FEHBlog, who isn’t getting any younger, is giving the app a whirl.
The Federal Benefits Open Season ends on Monday December 12 and the continuing resolution funding the federal government expires next Friday December 16. Yesterday, a House-Senate conference committee started meeting on a final omnibus appropriations bill for the current federal government fiscal year. According to the Hill blog, the goal is to release a bill on Monday.
These negotiations are separate from the competing bills to extend the Social Security payroll tax reduction for another year. The House leadership proposed their bill today which also would extend the Medicare Part B reimbursement patch for two years with a 1% payment sweetener. See Modern Healthcare for more details. However, the bill has provisions that adversely impact federal employees as Govexec.com reports. The bill was not well received by the House minority or the Senate majority according to a Hill report. Time will tell.
Business Insurance reports that the government has announced that it will not accept Early Retiree Insurance Program claims incurred after the end of this year because the $5 billion appropriated for the Program in nearly tapped out.
Earlier this week, the Centers for Medicare and Medicaid Services announced a new policy concerning public access to the gigantic Medicare claims database. The Wall Street Journal which has been pushing the government to open up the database reports that
Under the new rules, the agency is allowing a new category of organizations to obtain the data: community groups comprising doctors, health insurers, businesses, consumers and government that work to improve health care at the local level.
These groups, which the agency estimates number about 25 nationwide, will be able to use the data to publish studies, such as report cards on certain procedures, hospitals or doctors. Although they will have to notify the subjects of their reports 60 days in advance, doctors won’t be able to block publication. Patient information will remain confidential.
The new rules make no mention of allowing news organizations to gain access to the data. The media might conceivably be allowed to partner with the local health-care monitoring groups that obtain the data to produce investigations, but that idea wasn’t specifically addressed by the department.
Also the FEHBlog ran across a website for a community pharmacists group that opposes the Express Scripts – Medco merger — Preserve Community Pharmacy Access Now! — which has its own blog!
Well, the clock continues to tick down to the end of the current continuing resolution on December 16. With so many issues up in the air, as Federal News Radio reports, Your guess about the income is as good as the FEHBlog’s.
In this year’s call letter for benefit and rate proposals, OPM encouraged FEHB plans to utilize the patient centered medical home (“PCMH”) concept which financially rewards primary care providers for pro-actively managing the care of their chronically ill patients. AIS reports that two large Blue Cross plans, Independence Blue Cross (“IBC”) and Blue Cross and Blue Shield of Tennessee (“BCBSt”), have found success with their patient centered medical home pilots.
PCMHs have proven so successful that BCBST is contemplating expanding them into other therapy areas next year, such as behavioral health, oncology and cardiology. IBC already has an oncology practice acting as a PCMH.
Two items reminded the FEHBlog that there are some important rules that should be finalized soon. AIS reports that a Senate Committee flogged the head of the HHS Office for Civil Rights because the rules implementing various provision of the HITECH Act, amending HIPAA’s privacy, security, and enforcement provisions. The GAO issued a report on the efficacy of the 2008 mental health parity act which notes that the regulators needs to issue a final implementing rule for that law too.
AHIP discussed a recent longitudinal state by state study of health care spending by the CMS Actuary. Not surprisingly the report finds wide variations in spending.
The states with the highest per capita spending tended to be older in
population with higher per capita incomes. The lowest per capita states
reflected areas with younger populations, lower per capita incomes and
higher numbers of uninsured.
What did surprise the FEHBlog is an AMA news report that the use of antibiotics varies widely from state to state. You would think that this particular medical practice would be more standardized given the public health focus on avoiding antibiotic use for viral infections. Apparently a greater effort is needed.