Mark the tape. It looks like the FEHBlog’s prediction about pending FY 2019 appropriations made in Sunday’s post may prove correct. The Wall Street Journal reports tonight that

The White House signaled on Tuesday it wanted to avoid a partial government shutdown this weekend, even if Congress doesn’t meet President Trump’s full demands on border security, but partisan divisions stymied new negotiations, prompting Senate Republican leaders to start readying a short-term spending deal to keep the government running.

Senate Appropriations Committee Chairman Richard Shelby (R., Ala.) said Tuesday night he was preparing a short-term spending bill keeping the government open [beyond the current deadline December 21] until early February.

“Barring some unforeseen development, I think that’s where we’re headed,” Mr. Shelby said. 

In litigation news, the intervenor defendant States defending the Affordable Act in the Texas v. United States litigation has asked the judge to stay his unconstitutionality decision pending appeal and they have asked the judge for permission to immediately appeal the decision. The Court has ordered the plaintiff States and defendant the Justice Department to respond to the motion no later than Friday December 21. He has allowed the intervenor defendant States an opportunity to reply to the parties’ responses by Wednesday December 26. The Court is likely to rule on the motion by Monday December 31.

Forbes columnist Avik Roy offers some interesting ideas on how Congress can resolve this conundrum.

Congress’ response should be simple. Congress should pass a simple, standalone measure guaranteeing that insurers offer coverage in the individual health insurance market to anyone, regardless of prior health status. Congress could even add on a requirement that insurers charge people of the same age the same premium, regardless of health status. In this way, Congress can reiterate this basic and popular guarantee, regardless of what happens to other parts of the ACA as this litigation continues. Most importantly, they can demonstrate a new intent for Congress: showing that covering people with pre-existing conditions can be done without the entire Rube Goldberg complexity of Obamacare.

In other litigation news, Healthcare Dive reports that

In a packed [D.C.] courtroom hearing Tuesday [/today],  [U.S.] District Court Judge Richard Leon suggested CVS Health appoint a monitor to keep a close eye on suggested separations between CVS and Aetna [while the Court considers whether “the DOJ’s condition for approving the merger, requiring that Aetna divest its Medicare Part D businesses, is sufficient for antitrust concerns.”]

The Court has allowed the parties to express their views on the Court’s suggestion the close of business on Thursday December 20.

In other merger and acquisition news, Hartford [CT] Business reports

Cigna last week scored two key approvals on its proposed deal to acquire pharmacy-benefits manager Express Scripts for $67 billion. State regulators in New York and California on Thursday issued approvals for the proposal after receiving assurances that consumers would not pay for acquisition costs.

The deal appears on track to close this month. This deal does not require judicial approval.

Also the Minneapolis Star Tribune reports

In hopes of winning regulatory approval for a deal first announced last year, the parent company of DaVita Medical Group has agreed to lower by more than $500 million the sale price of its clinic business to UnitedHealth Group, according to a Monday regulatory filing.  

Bloomberg reported last spring

The insurance giant [UnitedHealth] has spent the past decade steadily adding physicians to its ranks, fortifying itself against competing insurers as well as hospitals who are buying up physicians. Once the physician groups it bought from DaVita Inc. are fully under its wing later this year, UnitedHealth’s OptumCare unit will have one of the largest collections of doctors in the U.S.

UnitedHealth is betting that controlling many doctors can provide patients better care at a lower cost, and steer them away from expensive hospital stays. Bringing more doctors in-house provides a buffer against rivals and places an imposing moat in the path of upstarts.

That’s a solid wager, in the FEHBlog’s view.

The House and Senate continue their work on Capitol Hill this week as the curtain begins to fall on the 115th Congress. Here’s a link to the Week in Congress’s report on last week’s actions here.

The continuing resolution funding several federal agencies, including OPM, runs out on December 21. Federal New Network offers various outcomes here.  The FEHBlog expects that the continuing resolution will be extended into the next Congress.

Last week, the Health and Human Services Department’s Office for Civil Rights, which enforces the HIPAA privacy and security rules, issued an interesting request for information.

We are looking for candid feedback about how the existing HIPAA regulations are working in the real world and how we can improve them,” said OCR Director Roger Severino. “We are committed to pursuing the changes needed to improve quality of care and eliminate undue burdens on covered entities while maintaining robust privacy and security protections for individuals’ health information.”

In addition to requesting broad input on the HIPAA Rules, the RFI also seeks comments on specific areas of the HIPAA Privacy Rule, including:

•     Encouraging information-sharing for treatment and care coordination
•     Facilitating parental involvement in care
•     Addressing the opioid crisis and serious mental illness
•     Accounting for disclosures of PHI for treatment, payment, and health care operations as required by the HITECH Act
•     Changing the current requirement for certain providers to make a good faith effort to obtain an acknowledgment of receipt of the Notice of Privacy Practices

Public comments on the RFI will be due by February 11, 2019. 

Healthcare Dive reminds us that the antitrust lawsuit against the Blue Cross Blue Shield Association continues to grind on in the courts six years after the complaint was filed.

Following up on Friday’s post, the FEHBlog’s mind was blown because he expected that the federal judge in Texas which would follow the recommendation of the U.S. Justice Department and strike down the individual mandate and two closely related provisions as unconstitutional, not the entire law.  That’s likely where the case will wind up after appellate court review and the Trump Administration has a plan to protect people with pre-existing conditions should that outcome be upheld by the Supreme Court.

The U.S. District Court for the Northern District of Texas decided this evening that the tax reform act’s zeroing out of the ACA’s individual shared responsibility tax penalty effective January 1, 2019, renders the entire Affordable Care Act unconstitutional effect as of that date. A copy of the judge’s opinion is available here.

The decision, of course, will be appealed to the U.S. Court of Appeals for the Fifth Circuit. Undoubtedly, the decision will be stayed pending the outcome of the appeal.

In a perfect world this decision would cause Congress to revise the law which is unduly complicated. But the world is imperfect. So we shall see.

Yesterday, AHIP, Blue Cross and several other organizations released a set of guiding principles to encourage the federal government to take steps toward solving the problem of surprise billing that typically occur in the course of emergency care.

STAT offers a report on FDA Administrator’s recent talk about reducing insulin prices.

Insulins are biologic drugs, meaning they’re made from living cells. But they haven’t been regulated the same way. Neither have copycat or generic insulins, known as follow-on insulins, been regulated the same way as most copycat biologic drugs, known as biosimilars. 

That’s set to change in 2020, when insulins will be regulated as biologics, and, thus, the copycats will be regulated the same way as biosimilars. 

That transition was written into the 2009 Affordable Care Act, and Gottlieb expects it will lead to more competition and lower prices for patients. “This is a watershed moment for insulin products,” Gottlieb said Tuesday, about the 2020 transition.

The FDA released guidance about how it intends to implement this change.  Congress is expected to consider surprise billing and drug pricing legislation next year,

The HHS Office for Civil Rights, which enforces the HIPAA Privacy and Security Rules, announced another settlement yesterday.  The settlement, which includes a $111,400 payment from and a compliance plan obligation on Pagosa Springs (CO) Medical Center (“PSMC”).

The settlement resolves a complaint alleging that a former PSMC employee continued to have remote access to PSMC’s web-based scheduling calendar, which contained patients’ electronic protected health information (ePHI), after separation of employment. OCR’s investigation revealed that PSMC impermissibly disclosed the ePHI of 557 individuals to its former employee and to the web-based scheduling calendar vendor without a HIPAA required business associate agreement in place.

According to OPM, the Federal Benefits ends at 11:59pm, in the location of your electronic enrollment system, on Monday December 10, 2018.

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

Last week, the Leapfrog patient safety group issued its annual list of top hospitals. “Top Hospitals have better systems in place to prevent medication errors, higher quality on maternity care and lower infection rates, among other laudable qualities.”

Health Data Management provided a sobering list of three cybersecurity predictions for 2019.

The same publication also reports that the Medical Group Management Association is pressing the Department of Health and Human Services to better enforce HIPAA’s electronic transactions standards.

“The feds have a robust HIPAA privacy and security policy, but they have yet to issue a fine against a non-compliant health plan for ignoring HIPAA rules,” says Robert Tenant, IT policy director at MGMA. “And, prior authorization transactions are not yet supported by health insurers.”

Further, use of the HIPAA attachment standard remains problematic after all these years—a provider can submit a claim or encounter, but the health plan routinely will want more documentation before accepting the claim or encounter.

The FEHBlog’s long standing solution to this problem is to repeal the electronic transactions standard as it’s difficult for the law to keep pace with technology. The FEHBlog expects that the industry could provide a better long term approach.

While on the IT topic, it’s worth noting that Healthcare Dive reports that a group of health insurers, including Aetna, Humana, and United Healthcare,  and providers, including the largest Catholic healthcare system in the U.S., Ascension, seek to apply blockchain technology to the knotty problem of keeping provider directors up-to-date.

The blockchain alliance’s pilot uses a multi-company, multi-site, permissioned blockchain, which allows each member to determine how its nodes are deployed, according to a new white paper. “[Ethereum-based] Quorum nodes use the go-ethereum client to maintain transaction data that is visible to all network participants as well as private data that is visible only to parties of private transactions,” according to the paper. “Private transactions are enabled through the Constellation extension of Quorum.”

The Federal Benefits Open Season ends on Monday December 10. Tammy Flanagan on govexec.com offers some guidance to procrastinators.  The FEHBlog’s advice is to make sure that your health care providers are in-network if at all possible.

Federal New Network confirms that Congress did pass a two week long extension of the continuing resolution funding certain agencies, including OPM, in the current fiscal year. The new deadline is December 21, 2018.

The Centers for Medicare and Medicaid Services (“CMS”) Office of the Actuary issued yesterday its 2017 report on national health expenditures. Health Payer Intelligence observes that

National health spending grew 3.2 percent on a per capita basis last year, compared to four percent in 2016. A descent in the residual use and intensity of goods and services; particularly in hospital care, physician and clinical services, and retail prescription drugs, primarily fueled the overall slowdown, escalating 1.1 percent in 2017, down from 2.1 percent the year before. However, medical price growth slightly up ticked, from 1.3 percent in 2016 to 1.6 percent last year.

The CMS press release explains that “Details from the slower spending growth in these three largest goods and service categories are:

• Hospital spending (33 percent of total healthcare spending) decelerated in 2017, growing 4.6 percent to $1.1 trillion compared to 5.6 percent growth in 2016. The slower  growth for 2017 reflected slower growth in the use and intensity of services, as growth in outpatient visits slowed while growth in inpatient days increased at about the same rate in both 2016 and 2017. 
• Physician and clinical services spending (20 percent of total healthcare spending) increased 4.2 percent to $694.3 billion in 2017. This increase followed more rapid growth of 5.6 percent in 2016 and 6.0 percent in 2015. Less growth in total spending for physician and clinical services in 2017 was a result of a deceleration in growth in the use and intensity of physician and clinical services.
• Retail prescription drug spending (10 percent of total healthcare spending) slowed in 2017, increasing 0.4 percent to $333.4 billion. This slower rate of growth followed 2.3 percent growth in 2016, which was much slower than in 2014, when spending grew 12.4 percent, and in 2015, when spending grew 8.9 percent. These higher rates of growth in 2014 and 2015 were primarily the result of the introduction of new, innovative medicines and faster growth in prices for existing brand-name drugs. Retail prescription drug spending growth slowed in 2017 primarily due to slower growth in the number of prescriptions dispensed, a continued shift to lower-cost generic drugs, slower growth in the volume of some high-cost drugs, declines in generic drug prices, and lower price increases for existing brand-name drugs.”

Fedweek reminds us that the Federal Benefits Open Season is winding down.

While FEHB and FEDVIP coverage continue unchanged unless the enrollee makes a change during the open season, a new enrollment is required each year for those who want a health care flexible spending account, a dependent care account, or both in the following year.

The dependent care maximum remains $5,000 while the health care maximum is rising to $2,700 (a figure set by the IRS after materials were prepared reflecting the old $2,650 figure). Also, you must have a health care account in the following year to take advantage of the $500 allowable carry-over in that type of account.

The Open Season ends on Monday December 10.

CVS Health today announced a new pricing policy for employer sponsored health plans known as its guaranteed net price model. Healthcare Finance explains that

The guaranteed net cost is calculated using plan utilization and expected rebate value, and applying projected drug price inflation and expected shift in drug mix, such as from brands to generics.

Moreover,

[CVS Health] would be accountable for the impact of drug price inflation and shifts in drug mix [and,]

Clients will continue to have the option to implement point-of-sale rebates to provide plan members visibility into the net costs of their medication. 

Speaking of CVS Health, Fierce Healthcare tells us that CVS Health’s Aetna subsidiary closed yesterday on the sale of its Medicare Part D business to Wellmark which was the Justice Department’s prerequisite to approving the merger under federal anti-trust laws.

As of Sept. 30, WellCare has 1.1 million Part D members. Aetna’s business adds 2.2 million more, pushing the insurer ahead of Blue Cross Blue Shield and Express Scripts in terms of Part D market share 

Forbes columnist Avik Roy explains why all healthcare consumers will benefit if the Senate joins the House in suspending the ACA’s onerous health insurer tax for 2020 and 2021. The tax was in effect in effect for 2014-16 , suspended for 2017, and resurrected for 2018. Congress suspended the tax for 2019. Roy explains, and the FEHBlog heartily agrees that

[T]he blue ribbon for the Dumbest Tax in Obamacare goes to its tax on health insurance premiums, which the Joint Committee on Taxation estimates as raising $161 billion in revenue between 2019 and 2028. (The number would be higher, but for the fact that Congress passed a one-year premium tax holiday for 2019.) 

The problem is this: Health insurers aren’t in the business of going broke. So they pass along the cost of the tax in the form of higher premiums for consumers. According to estimates developed by consultants at Oliver Wyman, for every dollar Washington raises in taxes, premiums go up by around $1.27.

That translates to an annual premium increase in 2020 of $196 per person for those buying coverage through Obamacare; $458-479 for individuals obtaining coverage through their employers [including the FEHBP]; $241 for enrollees in Medicare Advantage; and $147 for enrollees in Medicaid managed care plans.

Hopefully the Senate will pass this bill before the lame duck session ends later this month.

HHS’s Office for Civil Rights announced a $500,000 plus compliance program settlement with a Florida hospitalist practice which was sharing protected health information with a billing service vendor without first putting a business associate agreement in place.

The Washington Post reports that “Congressional leaders and White House officials agreed Monday to extend a government funding deadline by two weeks, until Dec. 21,” due to the late President Bush’s state funeral this week.

The Wall Street Journal, to the FEHBlog’s surprise reports that

[Senior Federal Judge Richard Leon] in a brief hearing Monday said [to lawyers for the Justice Department, CVS Health, and Aetna] he’s considering requiring that the merged firm hold the CVS and Aetna assets separate until he has more time to consider the settlement. If he does so, it could cause considerable disruptions for the newly merged firm, as CVS began integrating Aetna’s assets immediately after the deal closed last week.

The judge set another hearing date for December 18. If he were to issue such an order, it would be appealable to the U.S. Court of Appeals for the DC Circuit, in the FEHBlog’s opinion.

Also on the competition front, the ACA regulators, the Department of Health and Human Services, the Department of Labor, and the Department of the Treasury, have released a report to President Trump on Reforming America’s Healthcare System Through Choice and Competition as required by Executive Order 13,813. Check it out.

Congress remains in session this week on Capitol Hill. Here’s a link to the Week in Congress’s report on last week’s actions there.

The continuing resolution funding several federal agencies, including Homeland Security and OPM, expires at the end of December 7.  Fedsmith has more details here. Given the fact that President George H.W. Bush’s state funeral occurs on December 5, it’s most likely in the FEHBlog’s view, that Congress will extend the continuing resolution into next week if the parties are close to agreement or to next year / the new Congress. Bear in mind that because OPM’s FEHBP operations are funded by a a premium surcharge, the FEHBP is not subject to full or partial shutdown. Nevertheless the FEHBlog is sensitive to the fact that federal employee compensation, e.g., a 2019 raise, is a topic to be resolved by the appropriations minibus to replace the continuing resolution.

Well-deserved congratulations to OPM FEHBP actuary Ron Gresch for being named a meritorious professional recipient of the 2018 Presidential Rank Award. The award ceremony will be held on December 13 in Washington, DC.  

Late last week, the U.S. Centers for Disease Control issued their 2017 reports on life expectancy in the U.S. NPR explains that

For the second time in three years, life expectancy in the U.S. has ticked downward. In three reports issued Thursday, the Centers for Disease Control and Prevention laid out a series of statistics that revealed some troubling trend lines — including rapidly increasing rates of death from drug overdoses and suicide. 

CDC Director Robert Redfield described the data as “troubling.” 

“Life expectancy gives us a snapshot of the Nation’s overall health and these sobering statistics are a wakeup call that we are losing too many Americans, too early and too often, to conditions that are preventable,” he said in a statement released Thursday. 

Redfield tied the drop in overall life expectancy, which averaged 78.6 years in 2017, a decrease of 0.1 from the year before, to the rise in deaths from overdose and suicide.

Here’s a Healthline list of the leading causes of death drawn from these reports. The number one cause is heart disease. A few years ago, the FEHBlog heard the American Medical Association President elect remark that heart disease is the doctor’s fallback diagnosis to fill in the cause of death blank on the death certificate. The FEHBlog considers it is reasonable to draw a conclusion from these reports that the ACA is not a magic bullet.

Let’s wrap it up with a few tidbits

• Interesting Medcity News account of John Doerr’s take on where Amazon is headed in the the healthcare field. Mr Doerr led an investment bank’s investment into Amazon in 1995. “Doerr pointed to how the company’s foundational corporate strategy around ‘price, selection and convenience’ easily translates to healthcare, with the replacement of inefficient physical locations with online or virtual experiences.”

• Medcity News also reports on United Health Group’s rollout of a fully portable individual health record (“IHR”) for its members. 

UnitedHealth plans to offer IHRs at no charge for all of its 50 million comprehensive benefits plan members across North and South America by the end of 2019 as a technology solution meant to improve patient experience, lower costs and improve outcomes. The platform will also be accessible by more than 1 million care providers during that time frame.

The Internal Revenue Service has granted self-funded large employers and insurers including FEHB plans, a 30 day grace period (from January 31, 2019, to March 4, 2019) for distributing Forms 1095-B and 1095-C to employees / plan enrollees. These forms document the enrollees compliance with the ACA’s individual shared responsibility mandate and the large employer’s compliance with the ACA’s employer shared responsibility mandate. The IRS did not extend the reporting entity’s deadline to submit the forms to the IRS.  The IRS will have to revisit these forms for the next reporting year when the individual mandate penalty starts to be zeroed out.

CNBC interviewed Express Scripts’ chief medical officer Steve Miller, MD.

Dr. Miller sees a potential watershed moment in the year ahead when it comes to drug pricing in Washington. He thinks the administration could find allies on both sides of the aisle in the incoming Congress to move even further with reforms which seemed unthinkable just a couple of years ago.

“I never would have thought I’d have a Republican president in Donald Trump who’s advocating for international price controls, that I would have the former head of Lilly, Alex Azar HHS, advocating for low prices and low rebates, and Scott Gottlieb who’s been spectacular at the FDA accelerating approvals of generics, accelerating approvals of the 2nd and 3rd in class per drug. It’s really an incredible moment,” Dr. Miller said.

With respect to the drug pricing issue, Healthcare Dive reports that

After years of delay, HHS finalized a rule Thursday that will impose a ceiling price to limit how much drug manufacturers can charge hospitals participating in the 340B drug discount program for their products, as well as civil monetary penalties for manufacturers charging above the ceiling.

While this is good news for tertiary care hospitals in particular, it probably means that the drug manufacturers will be seeking to make up lost ground with other customers.

Health Payer Intelligence discusses a recent customer satisfaction survey of health plan consumers that Newsweek arranged. Humana, Blue Cross, and Aetna topped the results.

Tailored experiences and a personal touch are in extremely high demand, said Nancy Cooper, Newsweek Global Editor in Chief, especially as automation threatens to fundamentally alter the way consumers interact with large corporate entities. 

“As we examined the larger, impersonal forces that are transforming retail, it seemed like a good time to recognize a more personal factor in business success: the ways in which many companies nurture their relationships with consumers,” she said. 

“The automated future is already upon us, and the hope is that we—as a nation and as individuals—can shape it to our advantage.” 

Healthcare payers are certainly trying to balance the efficiencies of automation with the individualized customer service their beneficiaries expect. 

By combining advanced data analytics and artificial intelligence with personalized outreach and tailored communications, payers are creating innovative new opportunities to increase satisfaction and adherence to recommended treatment pathways.