Payers, Providers, and Patients – Oh My! Is Crowell & Moring’s health care podcast, discussing legal and regulatory issues that affect health care entities’ in-house counsel, executives, and investors. In this episode, hosts Payal Nanavati and Joe Records, sit down with former regulators Jon Foley, Rob Shriver, and Kristi Martin to discuss the
On Thursday, March 22, the U.S. Office of Personnel Management (OPM) and America’s Health Insurance Plans (AHIP) hosted the annual Federal Employees Health Benefits (FEHB) Program Carrier Conference. The conference featured OPM’s policy and contracting priorities for the FEHB Program for 2018. It followed and discussed OPM’s FEHB Program Call Letter (available here), which provides a high-level outline of its intentions for contract negotiations for plan year 2019.
This year’s Carrier Conference included three key highlights for FEHB carriers:
- OPM will re-open the Indemnity Benefit Plan to contract with either a nationwide carrier or a consortium of carriers to begin offering coverage in 2020.
- OPM is seeking legislative changes to apply the Anti-Kickback Statute to the FEHB Program.
- OPM is interested in Plans improving value by offering Accountable Care Organization or other innovative models
Beginning January 1, 2016, the Federal Employees Health Benefits Program (FEHBP) will include a self plus one enrollment option for its members. For 2015 and previous years, federal employees and annuitants enrolling in FEHBP plans had only two options, self only or self and family. The change was initially mandated by the 2013 Bipartisan Budget Act, and the U.S. Office of Personnel Management (OPM) published regulations on September 17, 2015 finalizing implementation of the self plus one enrollment type.
The new self plus one option will allow FEHBP members with one eligible dependent to enroll in a potentially less-expensive plan option than self and family. The rule does not impact eligibility for FEHBP benefits, either for employees and annuitants or for dependents, nor does it generally change the processes for members to enroll in coverage or modify coverage during the year. Premium conversion members—that is, FEHBP members whose shares of premiums are paid with pre-tax dollars, including most active employees—may enroll and change enrollment either during the open season in November and December of each year or upon the occurrence of a Qualifying Life Event (QLE). Like newly enrolling or changing from one plan to another, switching a covered family member will be permitted only during open enrollment or following a QLE. In addition to during open season and after QLEs, non-premium conversion members, including annuitants, may decrease enrollment type at any time by moving from self and family to self plus one or self only or from self plus one to self only. To address the novelty of the self plus one enrollment type and mitigate the effects of member confusion, in early 2016, OPM will allow a special “limited enrollment period” that will allow premium conversion members to decrease coverage from self and family to self plus one.
This week, the U.S. Office of Personnel Management (“OPM”) published three notices of proposed rulemaking (“NPRMs”) regarding the administration of the Federal Employees Health Benefits (“FEHB”) Program. The FEHB Program provides for coverage of federal employees and annuitants and their dependents. 5 U.S.C. § 8901, et seq. These three NPRMs address subrogation and reimbursement recovery, enrollment after termination of a plan or plan option, and rate setting for community-rated plans.
Subrogation and Reimbursement Recovery
OPM’s proposed rule on subrogation and reimbursement recovery would ensure that FEHB Program carriers may seek reimbursement or subrogation recoveries in all states. 80 Fed. Reg. 931 (Jan. 7, 2015) (available here). The supplementary materials to this regulation reiterate the position the government has consistently taken—“that a covered individual’s entitlement to FEHB benefits and benefit payments is conditioned upon, and limited by, a carrier’s entitlement to subrogation and reimbursement recoveries pursuant to a subrogation or reimbursement clause in the FEHB contract.” 80 Fed. Reg. at 931.
These regulations would add a new section, 5 C.F.R. § 890.106, to FEHB Act implementing regulations. Section 890.106 would do the following:
- Require that all FEHB contracts provide for subrogation and reimbursement by carriers;
- Condition Program benefits and benefit payments to covered individuals on the carriers’ rights to subrogation and reimbursement, and require FEHB brochures (official statements of benefits) to explain this condition;
- Set forth the two requisite circumstances that trigger a carrier’s right to subrogation or reimbursement: receipt of benefits or benefit payments by a covered individual as a result of an illness or injury, and the individual’s recovery or right to recovery from a third party based on the same illness or injury;
- State that a carrier’s claim for subrogation or reimbursement is not subject to OPM’s administrative disputed claims process outlined at 5 C.F.R. § 890.105; and
- Establishes procedural rules for carriers’ recoveries.
On Monday, December 15, the Office of Personnel Management (OPM) published a notice of proposed rulemaking that would modify the framework within which OPM evaluates Federal Employees Health Benefits (FEHB) plan performance. For both experience-rated and community-rated plans, plan performance significantly impacts FEHB carriers’ profits. OPM describes the proposed framework as more consistent, objective, and transparent than the current framework. The proposed rule can be found here.
Currently, under the FEHB Acquisition Regulation (FEHBAR), OPM evaluates experience-rated plans and community-rated plans using different frameworks. Experience-rated plans are evaluated based on six categories of factors used to determine the amount of the service charge paid to the carrier: contractor performance, contract cost, federal socioeconomic programs, cost control, independent development, and capital investments. Community-rated plans are evaluated based on two performance elements that may lead to OPM withholding a percentage of plan premiums: customer service and contract compliance requirements.
Under the proposed framework, both experience-rated and community-rated plans would be evaluated using the same set of “profit analysis factors”—clinical quality, customer service, resource use, and contract oversight. The proposed regulatory text briefly describes each factor:
- Clinical quality would include elements like preventive care, chronic disease management, medication use, and behavioral health.
- Customer service would include communication, access, claims, and member experience.
- Resource use would include utilization management, administrative, and cost trends.
- Contract oversight would capture audit findings, fraud, waste, and abuse, responsiveness to OPM, benefits and network management, contract compliance, technology management, data security, and federal socioeconomic programs.
On August 7, 2013, the Office of Personnel Management (OPM) released a proposed rule on federal employee health benefits for members of Congress and congressional staff. The Affordable Care Act (ACA) contains a provision requiring Congress and their staff to obtain health insurance coverage via an Affordable Insurance Exchange or a health plan created by …
On April 10th, 2013, the U.S. Office of Personnel Management (OPM) Director of Healthcare and Insurance released an FEHB Program Carrier Letter outlining the ACA MLR procedures for FEHB insurance carriers and related entities. The Carrier Letter may be found here.
Under the ACA, all health insurance issuers—including FEHBP carriers—must submit MLR calculations to…