Just short of one year following the merger announcement, CNBC reports CVS Health has closed on its deal to acquire major health insurer Aetna. The deal is valued at $70 billion. CVS Health’s CEO Larry Merlo predicts “the combined company will create a new data-driven health-care model that’s more personal, convenient and tailored to individual patients than ever before.”Good luck with that effort.

According to Hartford Business, Cigna and Express Scripts extended the December 8, 2019 deadline for closing on their merger deal by six months as they still have some state regulatory hurdles to clear. The parties nevertheless expect the deal to close before the end of this year.

The Centers for Medicare and Medicaid Services announced a proposed rule that would give Medicare Part D and Medicare Advantage plans more bargaining power to lower prescription drug costs. The proposed changes include:

• Providing Part D plans with greater flexibility to negotiate discounts for drugs in “protected” therapeutic classes, so beneficiaries who need these drugs will see lower costs;
• Requiring Part D plans to increase transparency and provide enrollees and their doctors with a patient’s out-of-pocket cost obligations for prescription drugs when a prescription is written;
• Codifying a policy similar to the one implemented for 2019 to allow “step therapy” in Medicare Advantage for Part B drugs, encouraging access to high-value products including biosimilars; and
• Implementing a statutory requirement, recently signed by President Trump, that prohibits pharmacy gag clauses in Part D.

CMS is also considering for a future plan year, which may be as early as 2020, a policy that would ensure that enrollees pay the lowest cost for the prescription drugs they pick up at a pharmacy, after taking into account back-end payments from pharmacies to plans.

Healthcare Dive offers an interesting analysis of the proposed rule here.

In a hopeful step, America’s Essential Hospitals, a trade association of tertiary care hospitals, now offers providers an online toolkit to help them hold cost of care discussions with patients. The toolkit should prove helpful to health plans too. Bravo.

Yesterday, HHS’s Office for Civil Rights, which enforces the HIPAA Privacy and Security Rules, announced a HIPAA privacy rule breach settlement with a small Hartford, CT, medical practice.

In February 2015, a patient of Allergy Associates contacted a local television station to speak about a dispute that had occurred between the patient and an Allergy Associates’ doctor. The reporter subsequently contacted the doctor for comment and the doctor impermissibly disclosed the patient’s protected health information to the reporter.  

The practice agreed to pay OCR $125,000 and commit to a corrective action plan.

Business Insider reports that having obtained all required government approvals, CVS Health’s acquisition of Aetna, valued at $69 billion, will close by Wednesday November 28, 2018. Both Aetna and CVS Health participate in the FEHBP in various roles.

Congress returns to Capitol Hill this week following the Thanksgiving holiday. The most pressing issue is completion of FY 2019 appropriations.  (FY 2019 began on October 1, 2018.) The bulk of FY 2019 appropriations (in terms of dollars) were resolved in September.  The following appropriations measures are funded with a continuing resolution through December 7, 2018: Agriculture; Commerce, Justice, Science; Financial Services & General Government (which includes OPM/FEHBP); Homeland Security; Interior, Environment; State, Foreign Operations; and Transportation, Housing and Urban Development. For more details check out the Committee for a Responsible Federal Budget’s Appropriations Watch.

Healthcare Dive discusses a Health Care Cost Institute report on primary care visits covered by employer sponsored plans like the FEHBP.  The highlights of the report are as follows:

Office visits to primary care physicians (PCPs) declined 18 percent from 2012 to 2016 for adults under 65 years old with employer-sponsored health insurance, while office visits to nurse practitioners (NPs) and physician assistants (PAs) increased 129 percent. 

Comparing 2012 to 2016, there were 273 fewer office visits per 1,000 insured individuals to primary care physicians over that span, while visits to nurse practitioners and physician assistants rose from 88 visits per 1,000 insured members to 201. The rate of office visits to specialists and other non-physician providers remained relatively unchanged over the period. 

While the utilization of office visits to NPs and PAs increased dramatically over the study period, the substitution did not result in cost savings. Since 2012, the average cost of an office visit to a primary care physician remained closely aligned with the cost of a NP and PA visit. In 2016, the average cost per visit to a primary care physician was $106 compared to $103 for an office visit to a NP or PA. 

Every state saw declines in office visits to PCPs and an increase in office visits to NPs and PAs between 2012 and 2016.

Modern Healthcare tells us about an innovative company called 98point6.

Ever since house calls fell out of favor, most medical care has been delivered in hospitals and doctor’s offices. But apply smartphones and AI to the situation, and that need not be the case, at least not for primary care. The company 98point6, for one, wants to take primary care virtual, through text conversations.

For patients, the experience begins with 98point6’s automated assistant, which asks what’s wrong. Behind the scenes, natural language processing and machine learning analyze the chat to narrow in on the relevant topic, allowing the assistant to ask questions that will give human physicians the information they need to diagnose and treat the problem.

The software itself isn’t handling treatment—a physician is. After the initial narrowing, the software presents the case to 98point6’s board-certified physicians, all of whom are permanent employees of the company. In anywhere from a few seconds to a couple of minutes, the physician connects with the patient, messaging to ask any additional questions—using video and photos, if necessary—and then will submit an electronic prescription, order labs, or recommend the patient see someone in person. But that last option is rare: More than 95% of cases are resolved virtually.

98point6 is currently focused on the self-insured employer market. Employers pay a single fee for unlimited access for their employees. “That’s key,” Cape said, since a single fee doesn’t limit patients’ use of the service. 98point6 also has a direct-to-consumer offering, which costs $20 for the first year and $120 per year after that.

Perhaps this approach will be more appealing to consumers than telehealth.

Federal News Network columnist Mike Causey promoted Consumers Checkbook FEHB Open Season Guide in last Friday’s column captioned Easy on the Brain Health Plan Tips. (The FEHBlog subscribes to this guide.)  Mr. Causey writes

[Th]e health insurance open enrollment season . . . runs through close-of-business Dec. 10 . . . . Here are three quick tips for health plan hunters from Walton Francis. He’s the guy who literally wrote the book, “Checkbook’s Guide to Health Plans For Federal Employees.” The book is available at many stores in the D.C. area while the online version is available courtesy of their agency to most employees at work.

• Catastrophic coverage is the most important feature of a health plan. How much will you be out of pocket if you suffer a major illness or accident next year?
• Would you like to be covered by a health plan that will give you a savings account that is more than the premiums you’ll pay?
• And finally, will shifting to the standard or basic option of your plan give you the same coverage at a much lower premium?

If you don’t have a primary care doctor, use the health plan open season as an opportunity to find an in-network primary care doctor. Blue Cross offers five tips on finding a primary care doctor here.

Also with regard to the Consumer Checkbook’s second tip. the FEHBlog has a high deductible plan with a health savings account (outside the FEHBP).  He thinks it’s a great choice for people who are starting to think about retirement because health savings accounts are triple tax free — deposits are made tax free; the account grows tax free, and the payments out of the account for tax deductible medical expenses are tax free. The best. Build up your health savings account in preparation for retirement. The right to contribute to Medicare ends once you become eligible for Medicare.

In today’s healthcare merger and acquisitions news —

• Reuters reports that CVS Health advised that closing on its acquisition of health insurer Aetna will occur after Thanksgiving as the parties await approval from New York and another state, and 

• The Wall Street Journal reports that 

Drugstore owner Walgreens Boots Alliance Inc.  and health insurer Humana Inc. are in preliminary discussions to take equity stakes in each other, according to people familiar with the matter, as health-industry players scramble for tie-ups that will help them compete in a rapidly evolving environment.

For all the talk of wondrous European health-care systems, the American generics system is the envy of the world. Nine in 10 prescriptions in the U.S. are cheaper generics, which saved $265 billion last year. Compare that with 70% in Canada and less than half in many European countries. The U.S. pays big for breakthroughs but eventually prices fall as competition arrives. Europe enjoys less price discipline.

That’s is what is happening with Truvada as the Food and Drug Administration this summer approved a generic version of that drug. The FEHBlog is happy to learn about this drug. Happy Thanksgiving.

Congress will be out of town this week due to the impending Thanksgiving holiday. Here is a link to the Week in Congress’s report on last week’s activities on Capitol Hill.

Following up on last weeks’s good news on improvements to electronic health record interoperability, Health Payer Intelligence reports that

The health information network Surescripts is using data from both payers and PBMs to give prescribers access to patient-specific and formulary-based benefit and cost information for nearly three-quarters of all covered lives in the country.

At theI point of care, there have been 30 million views of this data which is integrated within electronic health record technology via the Surescripts Network Alliance’s Real-Time Prescription Benefit tool, the organization stated midweek.

EHR vendors representing 77 percent of the market have signed on at this point, including Allscripts, Cerner, and Epic Systems.

Healthcare Dive tells us about a recent Blue Cross Blue Shield Association study on prescription drug costs.

Insurers under the Blues’ umbrella, dozens of independently run payers, spent about $100 billion on prescription drugs in 2017, roughly 20% of plans’ overall healthcare spending. The figure is 2% higher than it was in 2016, continuing a trend of consistent increases in drug spending since 2010. While generic drugs accounted for 83% of total prescriptions, branded drugs were 79% of total drug spending at $79.5 billion last year.

The Wall Street Journal reported last week that Walmart, which has 1,500,000 employees in the U.S.,

said it will require its employees to use certain hospitals for costly spine surgeries, an effort to weed out unnecessary procedures and lower its health-care spending.

The retailer has been trying since 2013 to encourage employees to undergo the surgeries at hospital systems known for their quality by offering to pay the full cost of the procedures and travel. But not all workers took Walmart up on the offer, and the retailer continued to pay for surgery elsewhere.

Walmart decided to mandate the travel, starting in January, after finding that half of the workers who volunteered to travel ended up avoiding the high-cost surgery even though their local doctors said it was needed, said Lisa Woods, who oversees the design of the company’s health plan. * * *

The retailer decided to mandate spine surgeries at certain well-regarded hospitals, such as Mayo Clinic’s around the U.S., Geisinger’s in Pennsylvania and Memorial Hermann Health System’s facilities in Texas, after finding employees who volunteered to travel to the hospitals avoided unnecessary procedures and Walmart saved money, Ms. Woods said.

Tammy Flanagan offers advice on handling the Federal Benefits Open Season via Govexec.com. In this regard, yesterday, the Internal Revenue Service announced that “For taxable years beginning in 2019, the dollar limitation under § 125(i) on voluntary employee salary reductions for contributions to health flexible spending arrangements [“FSA”} is $2,700.”  The Affordable Care Act capped the maximum FSA contribution at $2,500 subject to an inflation adjustment. The 2019 inflation adjustment is $50 over the 2018 maximum. According to this OPM website,  OPM will apply this new max to the FSAFeds program which is part of the Federal Benefits Open Season.

November is National Diabetes Awareness Month. Gallup offers a new study on diabetes and obesity rates in our country.

• No states have experienced declines in their diabetes rates since ’08-’09
• Obesity has climbed in 34 states over same period while declining in none
• Rising diabetes linked to rising obesity among states.

CommonWell’s new connection to the Carequality framework, which on Friday becomes available to all the groups’ participants, promotes interoperability by linking the country’s biggest electronic health record vendors, including Epic Systems Corp., Cerner, Athenahealth, Allscripts, and others. Previously, the connection was available on a limited basis.

OPM posted its FY 2018 Agency Financial Report today. OPM’s external auditor Grant Thornton gave OPM a clean opinion on its agency financial statements. However Grant Thornton did identify a material weakness in internal controls which should come as no surprise in view of GAO report discussed in Tuesday’s Tidbits.

In FY 2018, OPM’s independent auditor reported deficiencies in various aspects of OPM’s information system control environment, including in the areas of security management, logical and physical access controls, and configuration management. Due to the continued existence of these deficiencies, they continue to be reported collectively as a material weakness in OPM’s internal control over financial reporting by the independent auditor.
OPM concurs with the independent auditor’s assessment. Notwithstanding the progress that has been made to mature the OCIO organization and enhance the information system control environment, OPM will continue to actively develop and implement appropriate, risk-based, cost effective corrective plans.

Page 23. Narrative discussions about the FEHBP can be found at pages 100-106, 114, 116, and 123-126.

The Government Accountability Office reports today that

The Office of Personnel Management (OPM) has made progress in implementing GAO’s [information security] recommendations, but further efforts remain. As of September 20, 2018, OPM had implemented 51 (about 64 percent) of the 80 recommendations, but had not provided any evidence, or provided insufficient evidence, to demonstrate implementation of the remaining recommendations.

Nextgov.com points out that

The [OPM] inspector general also noted a “significant deficiency” in OPM’s IT security controls, noting that all the agency’s IT systems had valid security assessments and authorizations but some of those assessments and authorizations included low-quality work and questionable supporting documentation.

A federal appeals court [for the District of Columbia Circuit] is currently considering whether to reinstate a lawsuit brought by two federal employee unions over OPM’s data breach. That suit was scrapped at the federal district court level when a judge ruled the plaintiffs didn’t have standing to sue because they hadn’t suffered any clear harm. [The appellate court heard oral argument in the case on November 2, 2018.]

Chinese government-linked hackers are widely believed responsible for the 2015 OPM breach but U.S. officials have never formally accused the Chinese government of being responsible for the breach. There’s no clear evidence that data stolen in the breach has ever been released on the dark web or used to conduct identity theft.T 

Ten years after enactment of the current federal mental health parity law, Health Affairs considers the state of compliance with that law and how to improve compliance in this article.

Fierce Healthcare discusses a new study on regional health care pricing differences prepared by the Network for Regional Healthcare Improvement (NHRI).

NRHI tracks healthcare costs across six benchmarking areas: Colorado, Utah, Oregon, Maryland, Minnesota and St. Louis, Missouri. In Maryland, for example, costs for patients with private insurance were 20% lower than the national average in 2016, while in Colorado costs were 19% higher than average that year. 

Costs were also below average in St. Louis and Utah, by 6% and 4% respectively and higher by 11% in Minnesota and 4% in Oregon. 

NRHI has been monitoring these cost trends over the past several years and found they’ve remained fairly consistent over the three years of study. * * * NRHI’s team said that having a handle on these trends across different areas makes it clear that the industry can’t find a national, one-size-fits-all solution to the problem.

Interesting.

HHS released the second edition of its Physical Activity Guidelines for Americans.

Notable updates:

• The previous guidelines stated that only 10-minute bouts of physical activity counted toward meeting the guidelines. This requirement has been removed because all activity counts.
• There are immediate health benefits, attainable from a single bout of activity, including reduced anxiety and blood pressure, improved quality of sleep, and improved insulin sensitivity.
• There are more long-term benefits from physical activity, including improved brain health, reduced risk of eight types of cancer (previously two), reduced risk for fall-related injuries in older adults, and reduced risk of excessive weight gain.
• Physical activity helps manage more chronic health conditions.
• It can decrease pain for those with osteoarthritis, reduce disease progression for hypertension and type 2 diabetes, reduce symptoms of anxiety and depression, and improve cognition for those with dementia, multiple sclerosis, ADHD, and Parkinson’s disease.
• There are new key guidelines for preschool children to be active throughout the day to enhance growth and development.