The Senate today followed the House of Representatives by passing the $1.1 trillion omnibus appropriations bill that funds the federal government through the end of the current fiscal year on September 30, 2017. The BNA report on the action is here. The President is expected to sign the bill.

Speaker of the House Paul Ryan (R Wisc) finally had the votes today for the House to pass the American Health Care Act (H.R. 1628) by a narrow 217-213 margin.  All of the Democrats and 20 Republicans voted against the bill. (The Republicans have a 22 seat majority in the House; four House seats currently are vacant.) The House Energy and Commerce Committee’s section by section analysis of the bill (only 15 pages) is here.

If this were a Medicaid blog the AHCA discussion would continue at length. But this is the FEHBlog and in the FEHBlog’s view the law would not have a significant effect on the FEHBP.

The bill focuses on reforming Medicaid and attempting to stabilizing the individual market, both heavy lifts. It also lifts the individual and employer mandates and virtually all of the ACA taxes. (The Cadillac tax effective date is pushed back to 2026).  The law leaves the large group market alone. It’s up to the Administration to inject more flexibility in the group market by sensibly loosening ACA regulations and sub-regulatory guidance.

The bill goes over to the Senate now. The bill is structured as a reconciliation measure so that it can be enacted with 51 votes. The Senate Parliamentarian plays a role in determining reconciliation status but the Parliamentarian must report to the Senate leadership. The Republicans have a two seat majority in the Senate so the Republicans could afford to lose two of its own assuming that the Democrats and independents who caucus with the Democrats remain united against the bill. Of course, Vice President Pence is the Senate President who can cast a tie breaking vote.  

Notwithstanding the fact that federal courts blocked two health insurer mega-mergers, hospitals system mega-mergers continue apace according to Modern Healthcare. 

Last night, the Congressional leadership announced a funding deal for the last five months of the current federal government fiscal year.  Here’s a link to the Washington Post’s report.

Congress continues its work on Capitol Hill this week. Here’s a link to the Week in Congress report on last week’s efforts.  The short term continuing resolution funding the federal government expires on Friday May 5.  The House also may vote on the American Health Care Act this week.

The FEHBlog ran across a couple of articles from last week’s Health DataPalooza.  The first article from FCW.com concerns a speech by HHS Secretary Tom Price, and the other from Healthcare IT News concerns a speech by HHS Office for Civil Rights Director Roger Servino. These were their first speeches to the healthcare IT community.

The Wall Street Journal reports that large prescription drug manufacturers are ripping a page out of the Hollywood producer’s playbook by arranging for third party financing of the expensive final stage of their new drug projects — the clinical trials required for FDA approval.  “The drawback: sharing risk also involves sharing the rewards. Such collaborations involve the company in question agreeing to relinquish some of the drug’s profit to its partners.”   This innovation may add more new drugs to the pipeline but the FEHBlog doubts that it will lower the cost curve. 

Also as expected (the act of the deciding, not the outcome), the U.S. Court of Appeals for the D.C. Circuit issued its decision in the Anthem / Cigna merger case. By a 2-1 vote, the panel upheld the lower court decision to block the merger on anti-trust grounds as the Justice Department has sought.  The fate of the merger agreement now lies in the hands of the Delaware chancery court, which will hear Anthem’s motion to block Cigna from terminating the merger agreement on May 8.

Yesterday, the Senate confirmed the President’s nomination of Alexander Acosta to be Secretary of Labor by a 60-38 vote. President Trump’s cabinet finally has been filled. Before long we should have an OPM Director nominee.

The Pharmacy Times reports that Prime Therapeutics, a Blue Cross related prescription benefits manager, and Walgreens recently closed on the formation of “a combined central specialty pharmacy and mail services company, as part of a strategic alliance first announced by the companies last August. The company, AllianceRx Walgreens Prime, is headquartered in Orlando, Fla.”

AllianceRx Walgreens Prime will manage several consolidated mail service and central specialty pharmacy operations. Its workforce of approximately 3,000 employees nationally will be comprised of current Walgreens and Prime employees, including those currently working at the existing Prime location in Orlando. The AllianceRx Walgreens Prime brand will be rolled out in the marketplace over the coming months.
While Prime’s pharmacies will now be part of the combined company, Prime will continue its core function of providing pharmacy benefit management services from its locations in Minnesota, Nebraska, New Mexico and Texas. Similarly, Walgreens will continue to operate its more than 230 specialty pharmacies throughout the U.S., in addition to its retail pharmacies.

Also this week the FEHBlog ran across the website of Amino, Inc.   The company was co-founded by David Vivero, a former executive of Zillow, the online real estate company.  The company’s objective is to provide health care consumers with insights on healthcare pricing and quality at no charge.  The company relies on a database of de-identified medical bills. Interesting.

Reuters reports that Congress is poised to extend the continuing resolution funding the federal government for an additional week to allow the Congressional parties to complete their negotiations over FY 2017 appropriations.

The Wall Street Journal is reporting that the Republican majority in the House of Representatives are coalescing around the new, improved version of the American Health Care Act. “The bill has gotten new life because of a compromise crafted by Rep. Tom MacArthur (R., N.J.), a co-chairman of a centrist-leaning coalition of lawmakers called the Tuesday Group. His amendment would let states pursue federal waivers to opt out of some of the law’s insurance provisions.” A House floor vote could occur later this week if the stars continue to align.

Healthcare Dive provides us with six takeaways from the American Telemedicine Association conference.  The article is worth a gander as FEHBP carriers continue to roll out telemedicine coverage.

The large health insurer Anthem, a Blue Cross licensee, has been in the news alot lately. Fierce Healthcare features an interview with Anthem’s chief executive, Joseph Swedish. Following up on yesterday’s tidbits

Swedish confirmed Tuesday that Anthem has put out request for proposals for a new PBM provider, but he also emphasized that the insurer hasn’t yet ruled out any options—including Express Scripts. Anthem expects to have an update on its PBM plans in Q4, Swedish added, noting that “we’ve very excited about the opportunity to put together a new solution that serves our members better.”

Where are they now?  The Federal Times tells us that former OPM acting Director Beth Cobert is now the chief executive of The Markle Foundation’s Skillful labor-market initiative. The FEHBlog noticed last night on LinkedIn that former OPM policy director Jon Foley and former OPM healthcare and insurance director John O’Brien have form a consulting company called Westcott Partners. Best of luck to them all.

Yesterday, the U.S. Supreme Court declined to review an Arizona Court of Appeals decision (No. 16-912) and a U.S. Court of Appeals for the Eighth Circuit decision (No 16-504) which presented the same issue as Nevils — whether the FEHB Act preempts state anti-subrogation law. In contrast to Nevils, those court had answered the question in the affirmative. The Supreme Court made its unanimous ruling in Nevils even more emphatic for the benefit of the Missouri Supreme Court who must take the Nevils case again for the third time.

It occurred yesterday to the FEHBlog that the U.S. Court of Appeals for the D.C. Circuit had not yet decided Anthem’s appeal of the lower court’s decision blocking Anthem’s acquisition of Cigna.  By its terms, the merger agreement expires on Sunday April 30 at least as the FEHBlog understands it. Healthcare Dive reports that Anthem has moved the Delaware Chancery Court for a preliminary injunction barring Cigna from terminating the merger agreement, The motion will be heard on May 8. The FEHBlog expects that the D.C. Circuit, which is aware of the April 30 deadline, will rule before then.

HHS Office for Civil Rights took another scalp this week. According to the HHS press release, CardioNet, a Pennsylvania based wireless healthcare service provider, agreed to pay a $2.5 million fine and implement a correction action plan. The investigation stemmed from a data breach affecting 1,391 patients. Healthcare IT News explains that “The size of the settlement demonstrates OCR’s stance on the need for organizations to implement strong, HIPAA-compliant security policies.”  This is the third public HIPAA related settlement this month.

The Wall Street Journal reports that the large prescription benefit management company “Express Scripts announced Monday that Anthem, its largest customer, is unlikely to renew its contract once it expires at the end of 2019. Anthem, which accounts for roughly one-sixth of total Express Scripts revenue, has sued the company for allegedly overcharging on prescription drugs over several years.” That’s attention grabbing. The Journal provides more perspective on the “corporate feud” in its article.

Meanwhile, the Drug Channel blog takes a gander at prescription benefit manager Optum Rx’s 2016 insights report.

Finally, the Wall Street Journal offers Deloitte Consulting’s views on challenges facing health insurers this year and the Health Affairs blog gives advice to large employers who sponsor health plans.

Congress returns to work on Capitol Hill tomorrow. This week’s deadline is April 28 when the current federal resolution funding the federal government expires. The FEHBlog does not foresee a government shutdown when the same party holds the Presidency and control of both Houses of Congress.

Later this week, Thursday and Friday specifically, the popular Health Data Palooza will be held here in Washington DC.  The registration information is here.

The FEHBlog’s eye was caught by this Health Affairs study finding a “Small Decline In Low-Value Back Imaging Associated With The ‘Choosing Wisely’ Campaign, 2012–14.”   The Choosing Wisely campaign which was launched five years ago is an intiative that encourages patients to question a doctor when he or she recommends a service or supply that Choosing Wisely describes as questionable / low value based on medical society recommendations. The problem here, in the FEHBlog’s view, rests with the doctors who should know better, not the patients.

The FEHBlog’s eye also was caught by the Society for Resource Management article pointing out that the 2017 graduating class is composed of Generation Z, the generation that follows the Millenial Generation.  The FEHBlog’s youngest kid is member of the graduating class of 2017. He had no idea that his youngest kid was in a different generation from his older sisters and brother. You learn something new everyday. Anyway, Modern Healthcare featured an article last week about the health care demands of the Millenial Generation.

[The] millennial generation *** wants instant access to healthcare. They’re also looking for a healthcare encounter that is frictionless, convenient and defined by good customer service. The younger generation—and many tech-savvy older Americans—are no longer willing to put up with the long wait times and inconvenient access points traditionally offered by large hospital systems and office-based physician networks.
And that is presenting a big challenge to major health providers such as Advocate, a Chicago-based healthcare system with a dozen hospitals and 1,500 employed physicians. It is among the many major players now looking to establish new access points for younger healthcare consumers, who give less weight to name brands or personal referrals than previous generations.
But many are late to the game. When it comes to meeting the new consumer expectation for speed and convenience, traditional players such as Advocate face mounting competition from stand-alone urgent-care centers, in-pharmacy health clinics and telehealth consultations. In some cities, there’s even a return of on-demand home visits.

Interesting.

Well, Congress is nearing the end of its two week long home district work session. The continuing resolution funding the federal government expires on Thursday April 28 which is the 99th day of the Trump administration. UPI reports that the House leadership has worked up another amendment to the American Health Care Act in a continuing effort to obtain majority support for the bill. Of course, funding the government must be addressed first.

In an interesting development, the big health insurer United Healthcare made executive leadership changes according to this Twins Cities Business Journal article. The FEHBlog’s attention was caught by the following paragraph from the article —

In a conference call with investors, [a UHC executive] said the company changes up its leadership team every two to three years. “I think it provides fresh new focus, a lot of energy,” he said. “In many respects … we move [executives] from one spot to another to broaden experience as well.”

 Here are few closing tidbits:

• HHS Office for Civil Rights sanctioned a healthcare provider because it was unable to produce a written HIPAA business associate agreement for a particular vendor. It’s good practice for covered entities and business associates to routinely inventory those agreements. 
• Walgreen Co. agreed with the Justice Department to settle False Claims Act charges based on its alleged failure to comply with Medi-Cal’s billing policies for off-label drugs. Off label drug coverage is a delightfully complex issue. A doctor can prescribe a prescription drug for a purpose that is not on the FDA approved label, but that does not mean that the health plan must cover it.  In this case, Medi-Cal, California Medicaid, added hoops for off-label drug coverage. And of course, the drug company is prohibited from marketing a drug for off-label uses. 
• Federal News Radio offers a two part report on its interview with Linda Springer about government reorganization. Ms. Springer is a senior advisor to the Director of the Office of Management and Budget. She was one of the OPM directors during the George W. Bush administration. 

Nearly eleven years ago, U.S. Supreme Court Justice Ruth Bader Ginsburg authored a 5-4 decision in Empire Healthchoice v. McVeigh. The case concerned a federal court jurisdiction issue but in the course of the opinion, the FEHB Act’s state law preemption provision (5 U.S.C. Sec. 8902(m)(1)) was placed under a cloud. This provision allows for uniform nationwide administration of FEHB plans. The court’s decision lead to a lot of costly litigation.

Today, Justice Ginsburg righted the ship by authoring a unanimous opinion strongly upholding the FEHBA’s state law preemption provision. The Court held in Coventry Health Care v. Nevils that the FEHBA preempts a Missouri state law prohibiting health insurers from recovering benefit payments from the responsible party, e.g., the person who caused the auto accident. As Congress directed, where FEHBA contract terms “relate to the nature, provision, or extent of coverage or benefits (including payments with respect to benefits),” § 8902(m)(1) ensures that those terms will be uniformly enforceable nationwide, free from state interference.” Amen.

Thank you Justice Ginsburg , the other members of the Court, and Miguel Estrada, the Gibson Dunn lawyer who argued the case for Coventry, for this outcome which will simplify FEHBP administration.