Tuesday, April 27, 2010

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Monday, April 26, 2010

Dependent children coverage changes

Yesterday, the FEHBlog reminded readers that FEHB plans cannot accelerate implementation of the increase in the dependent child limiting age from age 22 to 26 because the FEHB Act specifies the current age 22 ceiling. Today, the Federal Times reports that
The Office of Personnel Management is working with Congress to implement the health reform law early by allowing health insurance coverage of employees' adult dependent children up to age 26 before Jan. 1. If current laws are not changed, however, dependents age 22 and older will have to wait until 2011 for coverage.

It occurs to me that OPM may be working with Congress to add this change to the pending bills that would extend FEHB coverage to same sex domestic partners.

Sunday, April 25, 2010

Weekend update

Last Thursday, the Centers for Medicare and Medicaid Services chief actuary Richard Foster released his report estimating the cost impact of the new health care reform law which Congress enacted in March. I strongly encourage everyone to read this report.

Mr. Foster finds that the new law will cause a net increase in health care spending over the next decade (est. $253 billion) while adding 34 million to the health insurance roll, principally Medicaid. Business Insurance reports that "The number of people enrolled in employer-sponsored plans will actually decline slightly when the new health care reform law is implemented fully" as people shift into the Exchanges and Medicaid.

The minority staff of the Joint Economic Committee published a report on the sizeable health insurer fee which the health care reform law applies to insured plans beginning in 2014. The fee is charged to insurers based on net premiums and is not tax deductible. It starts at $8 billion in 2014 and grows to $14.3 billion in 2018 (and indexed to medical inflation thereafter). This fee along with the fees on medical device manufacturers, brand name pharmaceuticals, etc. all will fall on the consumer. It's no wonder that the CMS chief actuary expects the health care reform bill to bend the health care cost curve up.

Modern Healthcare reports that "HHS Secretary Kathleen Sebelius said government officials are expecting to face continued resistance from the insurance industry to some aspects of the reform bill, even as the commercial payers are implementing other aspects earlier than mandated deadlines." I note that many insurers are accelerating implementation of the increased age 26 ceiling for dependent children. As OPM has indicated, this change will take effect for the FEHB Program on January 1, 2010. FEHB plans cannot make this change any earlier because the FEHB Act, 5 U.S.C. Sec. 8901, sets the ceiling at age 22.

In my view, HHS generates insurer resistance by, for example, issuing regulations, such as the February 2, 2010, interim final regulations implementing the 2008 federal mental health parity law, that cater to the medical profession and bend the cost curve up. I am concerned that HHS will follow the same path with the regulations implementing the health care reform law.
Publish Post

As previously noted on the FEHBlog, a group of managed behavioral health organizations known as the Coalition for Parity has challenged the validity of those mental health parity regulations in federal court. On April 14, the Coalition for Parity filed a summary judgment motion together with a supporting memorandum and statement of undisputed material facts. The Government's response is due on May 3, and any reply is due on May 7. A federal district court decision should be handed down soon after oral argument of the motion (which I assume will take place). 

Wednesday, April 21, 2010

Mid week update

On Monday, the FEHBlog discussed an OPM proposed rule which would change the annual Open Season period to the month of November. I expressed my surprise that according to the rule's preamble, OPM intended to make this change effective this year. I now understand that in the final rule OPM will implement this change next year 2011.

OPM issued a final rule concerning the Federal Employees Dental and Vision Insurance Program on Tuesday. The new regulations, which is effective on May 20, 2010,  permit (1) retroactive FEDVIP enrollment changes when an enrollee has lost his or her spouse through death or divorce or the enrollee’s last eligible child dies, marries, or reaches age 22 and (2) the enrollment of an individual up to 31 days before, as well as up to 60 days after, the enrollee or an eligible family member loses other dental and/ or vision coverage.

The FEHBlog recently discussed a Congressional Research Service report concerning a flawed provision of the health care reform act (PPACA) which called into question the availability of FEHB Program coverage for Members of Congress and their official staffs. The Washington Post reports today that
the Office of Personnel Management has concluded that the section of the law forcing them into the exchanges doesn't take effect until the exchanges become operational and that no one will lose his or her insurance. "The provision . . . has no current effect upon the eligibility of Members of Congress or their staffs to participate in the Federal Employees Health Benefits Program," OPM Director John Berry wrote in the letter, dated Friday and sent to House Speaker Nancy Pelosi (D-Calif.) and Senate Majority Leader Harry M. Reid. (D-Nev.).
On Monday, the Centers for Medicare and Medicaid Services announced a proposed rule on Medicare Part payments to hospitals for the federal fiscal year 2011 that begins on October 1, 2010. "CMS is proposing to update acute care hospital rates by 2.4 percent for inflation, a slight increase over the FY 2010 inflation rate, and apply an adjustment of -2.9 percentage points to recoup one-half of the estimated excess spending in FY 2008 and 2009 aggregate payments, due to changes in hospital coding practices that did not reflect increases in patients severity of illness." CMS expects to make a further proposal that addresses PPACA required changes to Medicare Part A's hospital payment rules.

AIS recently released reports on PPACA's provisions authorizing the Food and Drug Administration to create a regulatory pathway for approval of biosimilar drugs and a new Comparative Effectiveness Research Institute which AIS expects to study biosimilars. Biosimilars bear the same relationship to expensive speciality or biologic drugs as generic drugs bear to brand name prescription drugs. Biosimilars are expected to generate large cost savings over time.

NCAQ President Mary E. O'Kane recently opined on tiered PPO network which "allow consumers to choose physicians in a higher performing tier while encouraging those in lower performing ones to improve their performance."NCQA points out that
A recent study in the American Journal of Managed Care analyzed consumer awareness, use and trust of a tiered provider network. The study showed that using tiered networks to help consumers choose physicians requires increased consumer education.

Monday, April 19, 2010

OPM Proposes FEHBP Changes

The U.S. Office of Personnel Management ("OPM") issued a proposed rule in the Federal Register today that, if finalized,
  • would change the annual FEHB Program Open Season from the Monday of the second full workweek in November through the Monday of the second full workweek in December, to November 1st through November 30th of each year, and
  • would allow FEHB employee organization sponsored plans and FEHB comprehensive medical plans (or HMOs) to offer three options, without the current requirement that one of the options be a high deductible health plan.
Surprisingly (to me at least) OPM intends for the Open Season schedule to change this year.  OPM also proposes to make a couple of regulatory changes that are mandated by federal statute.  OPM is accepting public comments on this proposed rule until June 18, 2010.

Sunday, April 18, 2010

Weekend update

On Friday, the President signed the bill (HR 4851) which extends the COBRA / TCC subsidy program and the moratorium on the 21.2% cut in Medicare Part B reimbursement to doctors retroactively from April 1 through May 31. The Centers for Medicare and Medicaid Services announced that the agency "has instructed Medicare contractors to begin processing claims under the new law for services provided by physicians, non-physician practitioners (NPPs) and others paid under the MPFS. Most claims with dates of service April 1 and later were held by Medicare in anticipation of congressional action."

Government Health IT reported that an HHS panel will report on April 21 a "trust fabric" for use in securing protected health information flowing through the National Health Information Network, a patient locator system for electronic health records.

Looking at the flip side of that coin, the HHS Office for Civil Rights which enforces the HIPAA Privacy and Security Rules, announced on April 13 how the agency will use information that it receives about breaches of unsecured protected health information. Under the HITECH Act, HIPAA covered entities must report such breaches to OCR. OCR explained that it will store that data in its Program Information Management System
and may disclose that  information to conduct investigations, to provide technical guidance to covered entities and to inform the public. OCR is accepting comments on this policy change for 40 days from March 30, 2010.

Earlier this month, the FEHBlog noted the Council for Affordable Healthcare Quality's private sector efforts to streamline and improve the HIPAA electronic claims and related transactions processes.  On Friday, CAQH announced that
twenty health plans, clearinghouses, providers and health information technology vendors have achieved or will certify their implementation of the CAQH Committee on Operating Rules for Information Exchange®
This accomplishment is the result of the widespread voluntary adoption of business rules being developed by CORE. The CORE rules are streamlining the exchange of administrative data, which is resulting in improved access to coverage and financial information by providers at the point-of-care. Certified organizations complete a testing process to confirm that their systems or products comply with both the CORE infrastructure and data content rules. The Phase II rules address requirements for electronic connectivity and digital certificates, patient identification, real-time claims status and reporting of year-to-date deductibles. Each phase is designed to build upon earlier phases and is aligned with Federal interoperability efforts.
Well done.

Thursday, April 15, 2010

Late week update

The Senate approved a bill (H.R. 4851) by a 59 to 38 vote today that would extend from April 1 through May 31 the COBRA / TCC subsidy program and the moratorium on the 21.2% cut in Medicare Part B payments to physicians. The bill now goes back to the House of Representatives for final approval.

The Senate Commerce Committee continued its assault on health insurers with an investigatory report alleging that health insurers are engaging in creative accounting to limit the impact of the minimum loss ratio provisions of PPACA that take effect next year.  Business Insurance reports that the Department of Health and Human Services has asked the National Association of Insurance Commissioners for assistance in developing implementing regulations. This new law which requires group health plan insurers to have a minimum loss ratio of 85% may impact community rated HMO plans participating in the FEHB Program but will not impact the FEHB Program's experienced rated PPO plans which have loss ratios well over 90%.

Kaiser Health News reports that the House Commerce Committee has backed off of its plan to interrogate executives of certain large public companies over their decision to take charges against earnings based on certain PPACA provisions. The hearing had been scheduled for April 21.

Tuesday, April 13, 2010

Tuesday Tidbits

The Wall Street Journal reports today on health care innovations. It's a good read. There's an interesting story about free Web 2.0 tools that can help people stay healthy such as The Carrot and Keas. Both of these sites are designed to help people quit smoking -- expanded smoking cessation programs are a required 2011 benefit in the FEHB Program.

The New York Times reports on the Congressional Research Service report mentioned in Sunday's FEHBlog which finds that Congress created problems for itself with the PPACA, which is the acronym for the health care legislation (pronounced "PEA-pack"). Yesterday, according to Govexec.com, Congress passed the first, but certainly not the last, technical correction to PPACA which concerns TRICARE, not our beloved FEHB Program.

Business Insurance reports that the Senate is close to approving a bill (H.R. 4851) which retroactively will extend the COBRA/TCC subsidy program and the moratorium on the 21% cut on Medicare Part B payments to doctors from April 1 through April 30, 2010. 

Business Insurance also reports that the Health and Human Services Department is readying the claim forms that employers can use to tap into PPACA's temporary reinsurance program for plans which cover early retirees (aged 55 to 64).  The White House released a fact sheet on the program yesterday.  According to Business Insurance, "Congress allocated $5 billion for the program, which will begin June 23 of this year and end Jan. 1, 2014. However, unless Congress authorizes additional funding, the $5 billion fund is expected to be exhausted quickly."  Yes, indeed.

Sunday, April 11, 2010

Weekend update

Joe Davidson of the Washington Post reported about various organizations' opinions on OPM's April 7, 2010, call letter for 2011 benefit and rate proposals. NARFE strongly endorsed OPM's request for carriers to propose sub-options that would better coordinate FEHB and Medicare primary coverage for annuitants in order to encourage them to remain in Medicare Part B.

OPM released its detailed OpenGov plan.

OPM released a letter to FEHB plan carriers concerning its health data warehouse project. As first announced in OPM's FY 2011 budget, OPM will be collecting health plan claim and encounter data from carriers and their prescription drug managers in order to take a "holistic" approach to FEHB Program management and worksite wellness programs, among others.

A group of managed behavioral healthcare organizations, including health insurers, known as the Coalition for Parity, Inc., has filed a lawsuit in the federal district court here in DC challenging the legality of the February 2, 2010, federal regulations implementing the 2008 mental health parity act. Business Insurance reports that "The suit alleges that regulators failed to provide a “true and complete comment period [as required by the Administrative Procedure Act],” which has resulted in “confusing, flawed and untested requirements.” I agree. Here's a link to the complaint. The presiding judge Hon. Colleen Kollar-Kotelly has ordered an expedited briefing schedule. The rule, which is discussed in OPM's call letter, becomes applicable to the FEHB Program on January 1, 2011.

Wednesday, April 07, 2010

Happy New Year!

OPM has kicked off the 2011 contract year by issuing its annual call letter for benefit and rate proposals. Current and new carriers will have until May 31 to submit their proposals to OPM.  OPM settles on the 2011 benefit and rate packages by the end of August, and then carriers prepare for the 2011 Open Season. Good luck to all of the plans!

Tuesday, April 06, 2010

Happy National Employee Benefits Day

I thought that Hallmark created all of the new holidays, but it turns out that the International Foundation of Employee Benefits Plan has created National Employee Benefits Day which is celebrated today. The focus of the 2010 NEBD is promoting wellness in the workforce. And, as we know, OPM shares that goal.

The Centers for Medicare and Medicaid Services has created a web service called the CMS Dashboard which "offers statistical views of the Inpatient Prospective Payment System (IPPS) data as it relates to claims payment and volume as collected by CMS. The data contained in this beta version is current as of March, 2010, for inpatient discharges from January, 2006, to December, 2009."

America's Health Insurance Plans has released a publicly available tool "for health care companies to assess their organizations’ approaches to ensuring that communication with patients promotes consumer engagement, and to advance their health literacy programs." According to AHIP's press release,  
Developed by Emory University researcher and highly respected health literacy expert Dr. Julie Gazmararian, the tool addresses the work of all departments and professionals in health plans that touch consumers via the written word, the spoken word, or the world-wide web.  It includes five sections that assess printed information for members, web navigation, member services/verbal communication, forms, and nurse call lines.  It evaluates policies, procedures, and training of professionals in clear health communication.

Sunday, April 04, 2010

Weekend update

Happy Easter!  The Federal Times takes its shot at assessing the impact of the health care reform law on the FEHB Program.  Without a doubt, the most visible immediate impact will be the increase in the dependent children eligibility cap from age 22 to age 26 which takes effect on January 1, 2011, according to OPM. Moreover, this new law also permits married dependent children to continue their enrollment. Under the current law, children under age 22 lose FEHB coverage if they marry.

The fact is that there are a mountain of changes in this new 2,000 plus page law impacting health insurers, including those in the FEHB Program, which phase in over the next seven to eight years.  Here's a link to the Kaiser Family Foundation's implementation timeline. As you can see, 2014, the year that the health insurance exchanges are scheduled to become operational, is a big year. For more background, the Congressional Research Service has published a report on the taxes and fees created by the new law, such as the 40% excise tax on high cost plans and the health insurer fee.

Friday, April 02, 2010

Good news

The PPACA creates several new HIPAA electronic transaction requirements which begin to take in effect in 2013 right around the time that health plans must become compliant with the complex and expensive 5010 electronic transactions standards and the ICD-10-CM code set changes. I therefore was pleased to learn in a Health Date Management article that an industry group called the Committee on Operating Rules for Information Exchage (CORE), a CAHQ initiative.  Health Data Management reports that
 Mandates in the health reform law to adopt "operating rules" for a series of existing and new HIPAA transactions between 2013 and 2016 should easily be achievable, two consultants familiar with the health care electronic data interchange business say.
Industry stakeholders have worked for five years [though CORE] to reach consensus on the rules, which seek to make electronic claims and related transactions far more uniform than they are today, says Rachel Foerster, principal at Rachel Foerster & Associates Ltd., Beach Park, Ill.

Thursday, April 01, 2010

Human genone sequencing at 10 years

The LA Times reflects on the tenth anniversary of the phenomenal scientific accomplishment of sequencing the human genome.  I do hope that the personalized medicine will bring down health care costs over time. A leading genetic scientist, J. Craig Venter, observes in the journal Nature

"Where will genomics be ten years from now? As sequencing capacity increases globally and the data quality improves, we will move beyond the current goal of one genome per person to sequencing multiple genomes per person from sources including sperm and egg cells, blastocysts, stem cells, pre-tumour cells and cancer cells. This will enable us to select healthy cells for reproduction and tissue transplants, or to better understand ageing and tumour development. Equally important for medical progress is the sequencing of the genomes of the millions of microbacteria that dwell within all of us. The genome revolution is only just beginning."

Reuters reports that U.S. prescription drug sales in 2009 climbed by 5% in 2009 to just over $300 billion. The AP reports that "Sales of high-priced specialty drugs made up more than 20 percent of sales, up from 7.5 percent in 2008. Specialty drugs include injectable, biotech medications used to treat chronic conditions like cancer and psoriasis."  The Patient Protection and Affordable Care Act created a regulatory pathway for approval of  "generic" versions of specialty or "large molecule" drugs (or "biosimilars") which after a 12 year exclusivity period for the manufacturer.  The European Union which created this regulatory pathway in 2004 has approved several biosimilar drugs according to the Biotechnology Industry Organization.

Congress created a regulatory pathway for approval of generic versions of small molecule drugs in 1984.  Reuters notes that "The shift toward [small molecule] generics is likely to accelerate by 2012, when several major products, including the world's two biggest-selling medicines - the cholesterol fighter Lipitor and the blood clot preventer Plavix - face competition from cheap generics."