Yesterday, as NPR reports, the President nominated Alex Azar to be Secretary of the Health and Human Services Department. Mr. Azar was deputy HHS Secretary in the George W. Bush administration and served as president of the U.S. branch of Eli Lilly pharmaceuticals. Mr. Azar’s nomination requires Senate confirmation.

The Postal Service reported its fourth quarter earnings today and according to Govexec.com the Postmaster General and the Postal Unions are urging Congress to enact the Postal Reform bill (H.R. 756) that the House Oversight and Government Reform Committee unanimously approved last Spring.  That bill would add a Postal Service Health Benefits Program to the FEHBP.

The Hill reports that

Speaker Paul Ryan (R-Wis.) on Tuesday said Republicans may need a short-term spending bill to prevent a government shutdown on Dec. 9.
Ryan said the House GOP’s goal was to pass a long-term spending bill by the end of the year, but suggested lawmakers may not be able to do so by a Dec. 8 deadline.
“We’re not talking about going into next year, we’re talking about getting it done this year,” Ryan said at a press conference on Tuesday. 

Mike Causey on Federal New Radio provides long time FEHBP expert Walt Francis’s take on the current Open Season.

Things you need to consider in your 2018 health plan include making sure your doctor is in the preferred provider option. Otherwise, you will need a new doctor, a new health plan or be prepared to pay a lot more for sticking with your favorite doctor by going out of network.
Your health plan’s catastrophic limit (the amount you will have to pay in a worst-case medical scenario) is often overlooked, but it is very important. If you or your family suffers a devastating medical event next year (illness or accident), the limit-to-you amount could be critical. Most bankruptcies in the U.S. are the result of medical bills. That shouldn’t happen to anybody in the federal FEHB program.
People should also check out plans with health savings accounts, which have been described as Roth IRAs on steroids. A little work. A lot of savings.

Of course the FEHBlog discussed HSAs on Sunday. The first point in the most important for all health plans because if you stay in network then your preventive care is “free” and you have ACA controlled out of pocket cost limits.

Tomorrow is the beginning of the Federal Benefits Open Season for next year.  The Wall Street Journal this weekend emphasized the tax benefits of enrolling in a high deductible health plan with a health savings account feature. This option is only available to folks who have not reached the age for Medicare eligibiity (and a federal court has ruled that you can’t opt out of Medicare Part A in order to maintain enrollment in an FEHB high deductible health plan with an HSA.

The HSA “is the most tax-favored savings vehicle in the tax code,” says Leo Acheson, a senior analyst at Morningstar Inc. who wrote a recent report about HSA. 

As with a traditional 401(k) or IRA, an HSA allows you to set aside money without paying federal or state income taxes on it. Money in HSAs grows tax-free and, if used now—or later—for medical expenses, can be withdrawn tax-free. In contrast, with a traditional 401(k) or IRA, income tax is paid on withdrawals. (Alabama, California, New Jersey and New Hampshire don’t provide a state tax deduction for HSA contributions and Alabama, California and New Jersey also tax HSA earnings.) 

Because of the HSA’s triple tax advantage—the upfront tax deduction, tax-free growth and tax-free withdrawals for medical expenses—experts recommend that those who can afford to contribute to both an HSA and a 401(k) kick in the maximum to both. 

For a 401(k), the current annual limit is $18,000 for people under age 50 and $24,000 for older investors—numbers that will rise to $18,500 and $24,500 in 2018. The annual caps for HSAs are $3,400 for individuals and $6,750 for families in 2017 and $3,450 and $6,900 in 2018—with those who are 55 or older permitted to kick-in an extra $1,000.

If you have a spouse who is 55 or older and has no coverage other than your FEHB plan, he or she can create his or her own HSA into which your spouse at least can make the spouse’s catch up contribution. The details are found in this Kiplinger’s article. (Of course, please check with your tax advisor.)

The Journal also had an article on how to get the most out of your HSA.

If your goal is to leave your contributions in the account for retirement, it is important to have a system to keep track of the money you spend out of pocket for current medical expenses. By saving your receipts, you will be able to file for reimbursement from your HSA at any time and create tax-free income in retirement. 

Before resorting to a shoebox or file cabinet to store your receipts, check whether your HSA provider offers an electronic repository; many, including Fidelity Investments, do. And make sure your heirs know where you keep the information. Spouses who are named as beneficiaries can inherit HSAs tax-free.

The FEHBlog has a high deductible plan with an HSA (and Mrs. FEHBlog now has her own HSA) outside the FEHBP.

Congress is in session on Capitol Hill this week. Here’s a link to The Week in Congress report on last week’s activities there.

The FEHBlog nearly levitated out his Lazy Boy when he read in the Wall Street Journal that

[A] new study [in JAMA Cardiology] analyzed data for 115,245 Medicare patients hospitalized for heart failure at 416 hospitals between 2006 and 2014. Hospitals chosen for the study were part of a separate American Heart Association effort to reduce heart failure readmission rates. 

Researchers compared hospital readmission and mortality rates before the Affordable Care Act passed in 2010 and after penalties took effect in late 2012.

One in five heart failure patients returned to the hospital within 30 days before the ACA passed. That dropped to 18.4% after the penalties. Mortality rates increased from 7.2% before the ACA to 8.6% after the penalties, or about 5,400 additional deaths a year for Medicare beneficiaries not in managed care plans.

How do you like them apples? OPM also strong incents FEHB plans to avoid hospital readmissions for any cause.

The FEHBlog was alarmed when he read the beginning of this Govexec.com article today:

Nov. 16 looms large for government leaders paying
attention to the 1998 Federal Vacancies Reform Act. The law stipulates
that 300 days after a president is sworn in, officials who have been
serving in an acting capacity since that time lose much of their
authority.

Of course, OPM has an acting Director, Kathleen McGettigan. The FEHBlog was relieved when he read a Congressional Research Service advisory to which the article links that

There are two distinct periods during which an employee may serve as an acting officer: (1) for a 210-day period, beginning on the date that the vacancy occurred; or (2) if the President nominates someone to that office, for the period that the nomination is pending in the Senate. There is no limitation of days on this second period—so long as a nomination is pending, an acting officer may continue to serve. But if no nomination is submitted to the Senate, the 210-day period governs the acting officer’s service.

Ms. McGettigan and presumably the bulk of people in her position fall into the second category which has no deadline on legal authority.

Speaking of Ms. McGettigan, the FEHBlog read on Bankinfosecurity.com that

The head of the U.S. Office of Personnel Management cites “audit fatigue” as a factor explaining why the federal agency that experienced a massive data breach in 2015 continues to come up short in securing its information systems. 

OPM Acting Director Kathleen McGettigan, in response to the OPM inspector general’s annual audit required under the Federal Information Security Modernization Act, points out that the OPM’s IG is one of several entities that audit OPM IT.  

“Each time an engagement commences, OCIO (Office of the Chief Information Officer) is obligated to expend time and resources locating responsive documents, responding to questions and, ultimately, replying to these multiple, sometimes overlapping duplicative audits,” McGettigan says. “We appreciate and understand the importance of these audits, but believe OCIO would benefit from an effort to achieve a more tailored, streamlined and coordinated approach from its various auditors.”  

Welcome to the club Ms. McGettigan because FEHBP carriers similarly are under strict scrutiny by OPM, its Inspector General, and other government agencies.

Given OPM’s interest in population health, it’s worth linking to the ARHQ post on how to take a closer – state by state – look at health care quality using the agency’s National Healthcare Quality and Disparties Report which was recently updated.

In ACA News, our favorite ACA expert, Prof. Timothy Jost, notes that the Internal Revenue Service is preparing to crack down on “applicable large employers” who fail to comply with the ACA’s employer share responsibility provisions.

In prescription drug news,

• Becker’s Hospital News reports that in 2018 CVS Health pharmacies will offer same day delivery of prescriptions in certain large markets ( Miami, Boston, Philadelphia, Washington, D.C., and San Francisco) and second day delivery in other markets.  These pharmacies will begin same day delivery in Manhattan beginning December 4. 
• Modern Healthcare reports that “Drug prescribers throughout the country should establish a seven-day supply limit for initial opioid prescriptions, and they should be written electronically to slow the abuse of the addictive painkillers, a group of pharmacies, pharmacy benefit managers and health plans wrote in a letter to President Donald Trump Wednesday.”
• In the same vein, an article in the New England Journal of Medicine discusses various approaches to “Addressing the Prescription Opioid Crisis: Advancing Provider Education and Collaborating with All Stakeholders.”
• Drug Channels analyzes employer-sponsored prescription drug costs as reported in Kaiser’s 2017 Employer Health Benefits Survey. 

Finally, Health Tech Magazine offers CIOs some approaches to introducing blockchain security measures to healthcare.

Yesterday the Government Accountability Office issued a report on the FEHBP titled “Enrollment Remains Concentrated Despite More Plan Offerings and Effects of Adding Plan Types Are Uncertain.” The Federal Times, Govexec, Federal News Radio, FedSmith, and Health Payer Intelligence all provide their perspectives on the report. 

GAO certainly is skeptical as to whether adding new plan types like regional PPO plans would improve competition in the FEHBP.  At least for the past two years, no new carrier has joined the FEHBP. In the FEHBlog’s view, the problem is that OPM does not offer an inviting competitive environment. OPM, for example, has introduced a new plan performance system which offer a limited reward to the HMO carriers and imposes a financial penalty on others.  The financial penalty necessarily is a deterrent to new carriers.

OPM has posted its 2018 Federal Benefits Open Season webpage which provides a link to the 2018 FEHB plan comparison tool. The Open Season runs from November 13 to December 11.

Congress will be in session this coming week on Capitol Hill. Here’s a link to the The Week in Congress’s report on last week’s actions.

Reuters reports that “U.S. pharmacy operator CVS Health Corp and health insurer Aetna Inc are working toward finalizing merger terms and announcing a deal for more than $70 billion as early as December, according to people familiar with the matter.” The initial unofficial reports suggested a deal valued at $60 billion or $200 per Aetna share.

The Wall Street Journal reports that

Anthem Inc.’s Chief Executive Joseph R. Swedish will step down, and the insurance giant will name veteran managed-care executive Gail K. Boudreaux as its next leader, according to people with knowledge of the matter. 

It wasn’t immediately clear how quickly the transition will occur, but the plan is expected to be announced as soon as next week, the people said. Mr. Swedish is expected to keep his title as chairman for a transition period, one of the people said.

Finally, the Omaha World Herald offers an interesting article on a new direct primary care model that 23 states including Nebraska have adopted.

Under the arrangement, patients pay a monthly membership fee to their doctor, generally under $100 a person. Patients, in turn, get their primary care needs met, all without having to file insurance claims, meet deductibles or pay copays. Patients generally get longer appointments and increased access to their health care providers through unlimited visits and contacts via cellphone, text, websites or secure apps.

This has the potential to lower the cost curve and improve healthcare quality in the FEHBlog’s view. The article notes that

Two of the Omaha area’s newest direct primary care offerings, in fact, are being launched not by physicians but by other players in the health care sector:
» Subsidiaries of Blue Cross Blue Shield of Nebraska and the Clarkson Foundation are partnering to open the Nurture Health clinic in January on the second floor of the Think building at 7100 West Center Road.
» CHI Health is offering for next year a direct primary care program for individuals and businesses as well as a slightly different version for employees, both at its clinic at 132nd Street and West Center Road. The health system has had a pilot program running since July 1 with about 150 patients, some 80 of whom are not employees of CHI. More than 1,000 people, between CHI employees and their dependents, signed up for the employee direct primary care option during the health system’s open enrollment period, which ended midweek.

Imitation is the sincerest form of flattery.

Following up on yesterday’s post about CMS’s release of a final rule on Medicare Part B reimbursement to physicians, Becker’s Hospital CFO report provide six takeaways which includes the FEHBlog’s lead takeaway about an increase in telehealth spending. Becker’s also notes that

Physician payment rates will increase 0.41 percent in 2018 compared to this year. CMS arrived at this increase after accounting for a 0.5 percent increase required by the Medicare Access and CHIP Reauthorization Act and a negative 0.09 percent adjustment required under the Achieving a Better Life Experience Act of 2014.

Earlier this week, the Leapfrog Group released its latest hospital safety grades.  Typically when the FEHBlog makes note of this event, he remarks that there are no A graded hospitals in Maryland, his home state. The Leapfrog Group press release alerts us that

One state appears on the state rankings for the first time today, the state of Maryland. Maryland had previously been the only state unable to be graded due to an exemption from reporting key safety metrics at the national level. Unfortunately, Maryland ranked fourth from the bottom. Of the 44 hospitals graded in Maryland, just one (2.3%), Howard County General Hospital in Columbia, earned an “A”

When the FEHBlog took a look at the grades of hospitals within 50 miles of his home zip code in Maryland, it appeared that 40-50% of the facilities declined to participate. 

For new parents out there, the Centers for Disease Control has created a new app called Milestone Tracker. The free app allows you to

Track your child’s milestones from age 2 months to 5 years with CDC’s easy-to-use illustrated checklists; get tips from CDC for encouraging your child’s development; and find out what to do if you are ever concerned about how your child is developing.

Handy!

Yesterday, the Presidential Commission on Combating Drug Abuse and the Opioid Crisis issued its final recommendations to the President. Here’s a link to the USA Today report on this issuance.

The commission called for 56 specific policy changes, including:
*Creating uniform block grants for all federal opioid and substance abuse funding, making it easier for states to navigate the multiple grant programs currently available across several federal agencies.
*Requiring health-care providers to complete an educational program on opioids before they can renew their federal prescriber licenses.
*Requiring states to share data from their prescription drug monitoring systems as a condition of receiving certain federal money for those initiatives.
*Establishing federal drug courts in all 93 judicial districts across the country, so those arrested for possession can be diverted to treatment instead of prison.
*Giving the Department of Labor more power to crack down on insurance companies that discriminate against those with substance abuse disorders.
“Just spending money won’t be enough,” Christie said, adding that federal funding must be directed to programs that have been proven to be effective. “Now it’s incumbent upon Congress to step up” and give the administration the resources it needs to combat the epidemic, Christie added.  

Oh joy, more crackdowns on insurers.

Also yesterday, CMS issued a final Medicare rule which inflamed the hospital industry by making a huge cut for drugs sold by hospitals. Hospitals plan to challenge the rule in court according to Fierce Healthcare. Of course, the old standby is to shift Medicare losses onto private sector plans, including FEHB plans.

Today, CMS issued a final Medicare Part B physician payment rule for 2018. Of note —

To strengthen access to care, especially for those living in rural areas, CMS is transforming access to Medicare telehealth services by paying for more services and making it easier for providers to bill for these services. Improving access to telehealth services reflects CMS’s work to modernize Medicare payments to promote patient-centered innovations.

OPM announced today that is withdrawing a proposed rule concerning  FEHBP contributions for employees in leave without pay or other nonpay status. The rule had been proposed on August 31, 2016. OPM concluded that the rule was not necessary. Well done.

Drug Channels reports on the latest tidbits about Amazon’s planned entry into the pharmacy business, and CAQH CORE compliments three nationwide FEHB plans, APWU, GEHA, and NALC, for obtaining certification that their claim systems are compliant with HIPAA’s operating rules for electronic transactions.

Happy Halloween.

The Senate Homeland Security and Governmental Affairs Committee held a business meeting yesterday at which it approved for final Senate consideration the President’s nomination of Emily Murphy to be General Services Administrator. The FEHBlog vainly hoped that the meeting would be televised in case there was some discussion about the status of the OPM nominees. No such luck.

The FEHBlog also hoped to attend the HCP LAN conference yesterday but law firm demands prevailed. Helpfully, CMS posted CMS Administrator Seema Verma’s remarks at the conference. Here’s the beginning.

“We need to move from fee-for-service to a system that pays for value and quality – but how we define value and quality today is a problem,” said Administrator Verma. “We all know it: Clinicians and hospitals have to report an array of measures to different payers. There are many steps involved in submitting them, taking time away from patients. Moreover, it’s not clear whether all of these measures are actually improving patient care.”
Administrator Verma announced a new approach to quality measurement, called “Meaningful Measures.” Meaningful Measures will involve only assessing those core issues that are most vital to providing high-quality care and improving patient outcomes. The agency aims to focus on outcome-based measures going forward, as opposed to trying to micromanage processes.
Additional agency efforts that Administrator Verma highlighted include:

• CMS is moving the Innovation Center in a new direction that will promote greater flexibility and patient engagement.
• CMS is implementing the Medicare Access and Chip Reauthorization Act (MACRA) in a way that minimizes the burden and costs providers face in meeting the requirements. 

“Our overall vision is to reinvent the agency to put patients first,” Administrator Verma said during her address. “We want to partner with patients, providers, payers and others to achieve this goal.” 

This all makes sense to the FEHBlog.  She doubles down the move away from fee for service but with a lighter and more sensible regulatory touch.

Fedsmith.com has posted a National Association of Postal Supervisor’s list of FEHB plans that will reimburse Medicare prime annuitants for a share of their Medicare Part B premiums in 2018.  OPM has been encouraging carriers to take this step. CMS still hasn’t announced 2018 Medicare Part B premiums and cost sharing amounts yet.

The Internal Revenue Service today released Notice 2017-67 which implements the perhaps most significant provision of the President’s recent executive order on health care. The notice clarifies that small business (under 50 full time employees as defined by the ACA) can use health reimbursement accounts to fund employee purchase of coverage in the ACA marketplace up to certain dollar limits and other reasonable requirements.  The notice combines this flexible small business HRAs created by the 21st Century Cures Act (“QSEHRAs) and the President’s initiative to allow the funds in these accounts to purchase marketplace coverage. The FEHBlog could never understand why in 2013 the IRS blocked this approach which should add enrollment to the marketplace.

The House of Representatives and the Senate will be in session on Capitol Hill this coming week. The Senate Homeland Security and Governmental Affairs Committee will hold a business meeting afternoon to consider the nomination of Emily Murphy to be General Services Administrator.  The Committee initially intended to consider Ms. Murphy’s nomination along with the OPM Director and Deputy Director nominations. However, the Committee Chair Sen. Ron Johnson (R Wisc.) severed Ms. Murphy from the OPM nominees in order to maintain pressure on the agency to comply with his records request as discussed in the FEHBlog last week. Here’s a link to the Week in Congress’s report on last week’s activities on Capitol Hill.

The Department of Health and Human Services is proposing the 2019 Benefits and Payment Parameters Notice as required by the ACA. The notice principally pertains to the individual and small business plans operating in the ACA marketplaces. The one provision of the notice that applies to the FEHBP is its announcement of the maximum annual limitation on cost sharing [e.g. deductibles, co-payments, and co-insurance]: 

[W]e propose [based on statutory requirements] that the 2019 maximum annual limitation on cost sharing would be $7,900 for self-only coverage and $15,800 for other than self-only coverage. This represents an approximately 7 percent increase above the 2018 parameters of $7,350 for self only coverage and $14,700 for other than self-only coverage.

As usual, Prof. Timothy Jost and a colleague offer comprehensive coverage of the Notice here.

On Saturdays, the FEHBlog enjoys watching the Wall Street Journal Editorial Board program on television. The panel this week turned to the President’s declaration that the opioid crisis is a national public health emergency.  The panel referred to Sally Satel, MD, as a helpful take on the crisis. 

The FEHBlog had not heard of Dr. Satel who turns out to be a psychiatrist and professor at Yale University, a prolific author, and a scholar at the American Enterprise Institute.  The FEHBlog thanks to You Tube watched a panel on the opioid crisis that Dr. Satel chaired. One of the panels was Christopher Caldwell who authored an April 2017 article titled “American Carnage: The New Landscape of Opioid Addiction.” The FEHBlog encourages you to read the article which provides a history of the our country’s problems with opioids which dates back to the Civil War and an overview of the current problems. 

The Wall Street Journal also reported over the weekend that CVS Health has been on a big hunt for a health insurer partner

CVS Health Corp.’s bid for Aetna Inc. is the culmination of a wide-ranging hunt by the drugstore giant for a deal partner, highlighting a broader effort among health-care companies to find new avenues of growth by combining diverse businesses under one roof. 

The Woonsocket, R.I., company has been examining different deal possibilities for about six months, according to people familiar with the matter. CVS approached Anthem Inc. ANTM 2.14% about potentially buying the health insurer, and discussed a combination with UnitedHealth Group Inc., the people said. In both cases, the talks were preliminary and informal.

Interesting.

Modern Healthcare reports that

MS launched an initiative Thursday to help it determine what provider regulations it should junk or revamp, citing growing concerns that its regulations are reducing the time providers spend with patients.
As part of the Patient over Paperwork initiative, CMS officials will travel the country to gather information on the impact their regulations have on physicians. Those conversations have been taking place informally for weeks.
The outreach effort comes at a time that primary-care physicians are spending 27% of their time on clinical activities and 49% on administrative activities, according to a 2016 Annals of Internal Medicine study. The CMS now releases around 58 rules, or 11,000 pages of regulation, each year. 

Kudos to CMS for this initiative but what is CMS is doing for Medicare Advantage and Prescription Drug plans or OPM doing for FEHB plans in this regard? The ACA after all put the greatest administrative and financial burden on health insurers.

The FEHBlog mentioned the rising use blockchains as a defense against cyberattacks, in particular distributed denial of service (DDoS) attacks a week or two ago. PC Magazine has a good article that explains the blockchain defense for the layperson.