Friday update

David Ermer–Uncategorized–

The FEHBlog can’t call it a TGIF update because the 2015 FEHBP benefit and rate proposals technically are due tomorrow May 31 and carriers must be busy tying up loose ends on those proposals.

It is not an easy time to be a health plan. The Affordable Care Act and related federal laws are causing providers and consumer groups to really feel their oats. For example, BNA reports about a class action lawsuit filed by “Psych Appeal Inc.” against United Healthcare contending that the insurer applied its medical necessity limitation to residential treatment facility care and nutritional counselling in a manner that violates ERISA and the federal mental health parity law. UPI reports that a consumer advocacy group has filed an ACA Section 1557 discrimination complaint against several Florida insurers contending that they structured their prescription drug copays to discriminate against people with AIDS/HIV. These are examples of a multitude of complaints.

In defense of the insurers, the federal mental health parity act is extremely complicated. For example, it is entirely possible to violate the implementing parity rule by simply mirroring the cost sharing arrangements for medical surgical and mental health benefits. What’s more the current rule (that will change in this respect next year) permits the difference that the lawsuit appears to challenge.   The consumer groups are testing the ACA’s expanded individual non-discrimination provision. Also on the horizon is the ACA regulator’s proposed rule implementing Section 1557.

The FEHBlog noticed an interesting 2013 pharmacy market analysis on Drug Channels.net. Here are the highlights:

  •     Total outpatient prescription growth was 0.2% in 2013, a slowdown from the 1.2% growth in 2012.
  •     Chains rebounded, in the biggest single-year market share increase in at least 10 years.
  •     Supermarkets continued their comeback, returning this format’s share to 2005 levels.
  •     Mail prescriptions took their biggest dive ever, shrinking sharply in both absolute size and market share.
  •     Independents experienced another year of small declines, but the format’s share now equals that of mail pharmacy.
And AHIP, bless their hearts, posted this projection that California in 2014 will spend more on purchasing Sovaldi, the Hepatitis C drug, for Medicaid patients than on all K-12 and higher education (just over $51 billion). Wow.