FEDERAL EMPLOYEE HEALTH BENEFITS PROGRAM

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP86B00338R000400480005-3
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 24
• Document Creation Date: December 21, 2016
• Document Release Date: September 8, 2008
• Sequence Number: 5
• Publication Date: September 21, 1983
• Content Type: MEMO

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21 September 1983
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SUBJECT: ~ Federal Employee Health'Benefits Program
1. The Staff of the Subcommittee on Civil Service, Post
Office, and General Services, Senate Committee on Govern-
mental Affairs, advises that the Subcommittee will hold
hearings this fall on Federal employee health benefits
issues. On request, they provided the attached draft Bill
to be entitled the "Federal Employees' Health. Insurance
Amendments of 1983." This draft Bill and the accompanying
section-by-section analysis has been rewritten twice and,
per the staff, will probably undergo one more rewrite before
it is introduced by Senator Ted Stevens (R., AL), the
Subcommittee Chairman, circa mid-October 1983.
2. The Subcommittee staff advises that the hearings
will cover not only the Senator Stevens' Bill but also
S. 1685 introduced by Senator Dave Durenberger (R., MN),
also a member of the Steven's' Subcommittee. An agenda and
witness list will not be,available for 45 days or so.. I
will have discussed this subject in more detail with Senator
Stevens' staff by then and will report further when
appropriate.
STAT
Liaison Division
Office of Legislative Liaison
Attachments
As stated
Distribution:
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SUNNARY OF THE FEDERAL EMPLOYEES'
HEALTH INSURANCE AMENDMENTS OF 1983
Section 101 simply adds a couple of new definitions to the
definitions in the current law.
Section 102 establishes a new health benefits program for
annuitants. One carrier will offer two options for a three-year
period to annuitants. The first option will be basically a high
option plan, and the second option will be a Medicare wraparound.
The benefits are legislated. Basically, the level of benefits
will be equal to the Blue Cross/Blue Shield high option provided
in 1983. In addition, care provided in psychiatric hospitals and
skilled nursing facilities will be covered as well as alcoholic
and drug rehabilitation programs. Plus, provision of dental
care is included. There will be $150 deductible for the annuitant
plans. There will be 80/20% coinsurance ratio for all in-
hospital services and 90/10% ratio for those outside of the
hospital--except in emergencies where no coinsurance will be
applied.
The Medicare wraparound will consist of a plan whose bene-
fits, when combined with the Medicare provisions, will equal
benefits provided for under the high option. All Medicare co-
insurance and deductibles will be paid for by the wraparound
subject to the wraparound's deductible and coinsurance.
Spouses and dependents who are Medicare eligible will be
covered.by the wraparound despite the Medicare eligibility of the
annuitant. Those who are not Medicare eligible will be entitled
to be covered by the high option plan.
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Summary of Federal Employees'
Health Insurance Amendments of 1983
Page Two
There will be a $1,500 catastrophic limit for individuals
and $2,500 for family.
The government will be required to bid for the insurance
carrier who can provide the benefits at the lowest premiums.
The government will contribute 80% toward the premium for the
high option and 70% toward the premium for,the wraparound.
Annuitants may also join health maintenance organizations.
Section.103 authorizes either the service benefit plan,
the indemnity benefit plan, or any employee organization plan
the ability to offer the annuitant option. In addition,
it establishes the. authority to solicit bids and contract for
the annuitant option.
Section 201(a) requires that an employee organization plan
be reinsured either by other companies in a pool arrangement or
be unwritten by another insurance carrier. This requirement
will not take effect until three years after the date of enact-
ment of the legislation. Subsection(b) requires that any con-
tract entered into must contain a statement explaining any
changes in benefits, maximums and limitations and exclusions
in the. program. Subsection(c) authorizes OPM'.to contract with
a health maintenance organization that is either federally quali-
~fied under the HMO Act or meets the requirements of federal
..qualification as determined by OPM. Subsection(d) requires that
all plans carry reasonable deductibles and coinsurance. Plans
may reduce the deductibles and coinsurance for innovative bene-
fits and may waive them, for arrangements made with providers
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Summary of Federal Em to ees'
Health Insurance Amendments of 1983
Page Three
where the cost of services is equal to or less than the costs
explicitly established for similar services in the Medicare Act.
Subsection(d) also prohibits any plan from offering more than
two options but does not prohibit an underwriter from under-
writing more than one carrier who happens to offer two options.
Finally, the subsection prohibits OPN from requiring that any
carrier offer more than one option.
Section 202 amends the list of benefits that are optionally
provided by the various carriers in Section 8904, Title V. In-
stead.of the option to provide these benefits, the carriers are
required to offer them. In addition, it also requires that the
carriers offer mental health care. The section also applies a
catastrophic protection limit on all of the health carriers for
active employees. Catastrophic protection would assure that any
out-of-pocket expenses by the employee for health care covered
under'the health plan could not exceed $3,000 per person or
$6,000 for a family. These figures-are intended only as maximums.
In other words, any carrier can offer catastrophic protection that
is less than the amounts provided under law. In addition, the
catastrophic amounts are indexed yearly by the Consumer Price
Index.
Section 203 alters the contribution formula by the govern-
ment. Instead of the government's contribution being based upon
the average of the big six premiums, the government's contribu-
tion will now be 70% of the weighted average of all the premiums.
The weighted average will depend upon the number of enrollees in
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Summary of the Federal Employees.':
Health Insurance Amendments of 83
Page Four
each carrier's plan. In'other words., those plans which have
more enrollees will be given greater
weight in determining the government's contribution. .The
government is prohibited from contributing more than 100% to a
carrier's premium.
Section 204 establishes a cost containment program for
the health carriers. The bill specifies various features that
each carrier must comply with. They include other party
liability, claims adjudication, innovative benefits, utiliza-
tion review, fraud and abuse, management strategies and data
base, health education, and preferred provider arrangements.
Each carrier will'be required to pay into the health trust
fund 2% of its total premiun, . OPM shall audit each carrier's
cost containment program to determine its effectiveness and
then give them a rating for each part and then an overall
summary rating of excellent, satisfactory, or poor. Depending
upon the rating will be the award of money aggregated from the
2% surcharge. Those rating excellent and satisfactory will
receive some award; obviously those; receiving an excellent
rating will receive a greater award.. Those receiving poor
ratings for two consecutive years will be terminated from
the'program subject to .a. hearing on the record and appealable
to the Court of Appeals under the Administrative Procedures
Act. Finally, the Office of Personnel Management shall report
to Congress every year on the progress of the cost containment
program.
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Summary of the Federal Employees'
Hea1T- nsurance Amendments o 1983
Page Five
Section 205 requires that prior to any change in benefits or-
premiums,in the health plan, OPM must organize an open season.
This would not preclude the Office from reducing the frequency of
open seasons, as they can do in current law, but would require
that any change in benefits or premiums be made available to
employees prior to the employees' participation in that parti-
cular health plan. The section also requires that OPM make
available to every employee and annuitant fifteen (15) days
prior to an open season summaries of all of the health plans
available to those employees.
Section 206 establishes a three-year experimental program
for the Office of Personnel Management. OPM is required to
carry out this program in three large areas in the United States
where a substantial number of federal employees are located.
OPM shall negotiate agreements with providers of health care
to provide discount services for the employees of the government.
Where OPM makes these agreements, the carriers may waive de-
ductibles and coinsurance if their subscribers. go to those
providers.
Section 301 is simply technical amendments.
Section 302 makes the effective date the.date of enactment
except for the reinsurance requirement, which takes effect three
years after the date of enactment.
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9.. _~. CDNG"E c
1s~ Se~~ior
` ' ------
.(a
Mr. Stevens introduced the following till; which rya, read twice
and referred to the Committee on
To amend chapter 89 of title 5, United States Code, to reform the
Federal employees' health benefits program.
1 Be gnanigd gy ing zgnglg gnu pousg 21 ggQCeseniallye s
2 21 uhf Unified Siaie~ 21 AM!rj2A In 2202Less assgma1e9, That
3 this Act may be cited as1the "Federal Employees' Health
k Insurance Amendments of1983 ".
5 REFEPENCES
6 Sec. 2. Except as otherwise-specifically provided,
7 wherever in this Act a reference is expressed in terms of a
8 section or other provision, the reference shall be considered
9 to be made to a section or other provision, respectively,'of
10 title 5, United States Code.
11 TITLE I--MEDICARE SUPPLEMENTAL PLANS
12 DEFINITIONS
13 `Sec 101. Section 8901 ls.amended--
14 (1) by striking out "and " at the end. of clause (a);
15 (2) by striking out.the period at the end of clause
16 (9) and inserting'in lieu thereof a semicolon; and:.
1.7 (3)-by adding at the end thereof the following new
18 paragraphs:
IN THE SENATE. OF THE UNITED STATES
?`(10) `Office' means the Office of Personnel
20 Management; and
21 . ??(11) `medicare eligible individual' means any
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" (A) has attained age A5; and
(B) is eligible for benefits under part A of
title XVIII of the Social Security A:..''.
HEALTH BENFFITS PLANS FOP ANPflITANTS
Sec. ?22. (a) Section 89?3 i;: amended--
(1) by inserting "(a)" before "Tine'' In the first
sentence; and
(2) by adding at the end thereof the following new
subsection:
11 0`(b) (1) The Office shall contract with one qualified
12 carrier for a health benefits plan for annuitants which
13 offers--
14 "M for annuitants and other individuals who are
15 covered by an enrollment in such plan and are not
16 medicare eligible Individuals?
17 **(I) benefits which are of the types referred to
18 in section 8904 (5) of this title and are at least
19 actuarially equivalent to the benefits offered as of
20 January 1, 1983, in the higher level of benefits of
21 the plan described in section-8903 (a).(1) of this
22 title; and
23 "(11) the additional benefits which are of the
24 type referred to in section 8904 (5) of this title
25 and were not Included as benefits offered as of
26 January 1, 1983, in the higher level of benefits of.
27 the plan described In section 8923 (a) (1) of this
28 title; and
29 "M for annuitants and other individuals who are
30 covered by an enrollment In such plan and.are medicare
..31 eligible individuals, health benefits--
32 ?`(i) for which payment may not be made under
33 title- XVIII of the Social Security Act or 'for which
34 payment may be made under title XVIII of the Social
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1 Security A~,t but wb1c'?. err
not~
2 title by reason of deductibles, coinsurance a'ounta,
3 or other limitations impose; pursuant to such title;
4 and
5 *1(11) which, when combined with the health.
6 services and items provided'or paid'for under title
7 XVIII of the Social Security Act, resjlt in a.
8 combined health benefits package for suc^ individual
9 which is equivalent. to or-greater' than the health
10 benefits required to be provided under clause (A) of*
'11 this paragraph to individuals who are not medicare
12 eligible individuals.
13 '(2) The plan to which paragraph (1) of this subsection
14 applies shall require each annuitant enrolled in the plan to
15 pay--
16 "M the first $152 otherwise payable with respect
17 to the annuitant by'the carrier under the plan during any
18 year but for this paragraph;
19 "M in the case of inpatient services furnished
20 with respect to the annuitant other than in an emergency,
21 coinsurance in an amount equal to twenty percent of the
22 amount otherwise payable with.respect to the annuitant by
23 the carrier under the plan during any year but for this
24 paragraph; and
25 ?'(C) in the case of outpatient care furnished. with
26 respect to_the annuitant other than In an emergency,
27 coinsurance in an amount equal to ten percent of the
28 amount otherwise payable with'respect to the annuitant by
29 the carrier under'the plan during any year but for this
30 paragraph. "
31 (b) Section 8904 is amended by inserting after paragraph
32 (4) the following new paragraph:
33 "(5) Annuitant Benefits Plan.--
34 "M Benefits of the types specified in
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i paragraph:: (1) a.n,_4 (2) of
(B) Psychiatric hospital.care.
" (C) Skilled nursing facil1tie3 care.
"(D) Alcohol and drug rehabilitation.
(E) Dental care.''.
(c) Section 8905 Is amended--
(1) by striking out subsection (a) and inserting in
8 lieu thereof the following:
9 " (a) An employee may enroll only in an approved health
10 benefits plan described by section 89e3 (a). The enrollment
11 In such plan may be either as an individual or for self and
12 family.";
13 (2) in subsection (b), by striking out the period at
14 the end thereof and Inserting in lieu thereof a comma an.
15 "subject to subsection (f) of this section.";
16 (3) In subsection (e), by inserting a comma and
17 "subject to subsection .(f) of this section" after
18 "Office"; and
19 (4) by adding at the end thereof the following new
20 subsection:.
21 "(f) An annuitant may be enrolled-under this chapter
22 only In a health benefits plan described in subsection (a)
23 (4) or (b) of section 8903 of this title.".
24 (d) Section 8908 (b) is amended by inserting "subject to
25 section 8905 (f) of this title and" after '"may, "..
26 CONTRACTING AUTHORITY AND REQUIREMENTS FOR MERGER AND
27 DISCONTINUANCE OF MEDICARE SUPPLEMENTAL PLANS
28 Sec. 103. (a) Section 8902 is amended by adding at the
29 end thereof the following new subsection:
30 .?(n) The Office shall solicit from qualified carriers
31 bids to furnish the annuitants benefits plan provided under
32 section 8903 (b) of this title. The office shall enter into a
33 contract with the qualified carrier which submits the bid
34 which is most advantageous to the Government considering
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1 } . v` and su wrr' V the L f a c to: a s t f e V ] 1 ri. lrJ Z . 1 -
J `? C
2
2 solicitation.".
3 (b) Section 8902 is amended--
4 (1) in subsection (b), by strik.inq out "section 8923
5 (2) of this title" and inserting in lieu thereof
6 "subsection (a) (2) of section-'8903 of'this title or a
7 plan describea in subsection (c) of such section which is
8 of a type described in subsection (a) (2) of such
9 section";
10 (2) in subsection (c) by striking out "section 9923
11 (1) or (2) of this title" in paragraph (1) and inserting
12 in lieu thereof "subsection (a) M or ) or (a) (2) of
13 section 8903 of this title or a plan described in
14 subsection (b) of such section which is of a type
15 descrioca in subsection.(a) (1) or (a) (2) of such
16 section"; and
17 (3) in the first sentence of subsection (1) by
18 striking out "section 8903 (u) " and inserting in lieu
19 thereof "section 8923 (a) (4) ".
20 (c) Section 8909 is amended--
21 (1) in the first sentence of subsection (d), by
22 striking out "section 8.903 (3) of this title'' 'and
23 inserting in lieu thereof "subsection (a) (3) of section
24 8903 of this title, or subsection (b) of such section.in
25 the case of a plan described in such subsection which is
26 of a type described in. subsection (a) (3) of such
27 section,"; and
28 (2) in subsection (e), by striking out "section 8903
29 (3) or (4) of this title" and inserting in lieu thereof
30 " subsection'(a) (3) or (a) (4) of section 8903 of this
31 title'or a plan described in subsection (b) of such
32 section which is of a type described in subsection.(a)
33 (3) of such section
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1 TITLE .II--ADDITIONAL RRE~UIRE!:EN TS FOR FEDt:RAL =? i'i 3Y's `=~
2 HEALTH BENEFITS PPOSPAII
3 CONTRACTING AUTHORITY
4 Sec. 201. (a) Subsection (c) of section P902 is amended--
5 (1) by inserting "(1)" after "(c)";
6 (2) by cedesignating clauses (1) ant' (2) as clauses
7 (A).and (B), respectively; and
6 (3) by adding at the end thereof the following new
9 paragraph:
1e '*(2) A contract for a plan described by subsection (a)
11 (3) of section 8903 of this title shall require that the
12 carrier--
13 "M satisfy the?requirementz; of paragraph (1) (A) -
14 of this subsection; or
15 "(B) be underwritten by a company that is licensed
16 to issue group health insurance in all the States and the
17 District of Columbia.".
18 (b) Subsection (d) of such section is amended to read as
19 follows:.
20 06(d) Each contract under this chapter shall include a
21 detailed statement specifying the benefits offered under such
22 contract and the maximums, limitations, exclusions,
23 definitions, deductibles, and coinsurance applicable to such
24 benefits. Any such contract that is entered into for a term
25 of more than one year shall include a detailed statement
26 describing each change, if any, in such benefits, maximums,
definitions, deductibles, and
28 coinsurance taking effect during the term of the contract and
29 the effective date of such change.".
30 (c) The second sentence of subsection (1) of such section
31 is amended to read as follows: "For the purposes of this
32 subsection, 'qualified health maintenance carrier' means any
33 qualified carrier which--
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0
07991P..249
0
1 ( 1 ) is a qual if ied heal Lt lrrt` ~.: :' o: 7 is 2'3 . )
2 within the meaning of section .1310 (d) the Public
3 Health Service Act (42 U.S.C. 30.0e-9 (d) (1)); or
4 "(2) satisfies the requlreTpntc of section 1301 (c)
5 (1) (A) of such Act (42 U.S.C. 322+' (c) (1) (A)), as
6 determined by the Office of Fefs'onnel Management in
7 consultation with the Secretary of?~Healtl ano-Hunan.
8 Services. ".
9 (d) Such section (as amended by, section 103 (a)) is
10 further amended by adding at the end' thereof the following
11 new subsections:
12 -'(o) Except as otherwise provided in this chapter, each
13 plan offered under a contract entered into under this section
14 shall provide reasonable deductibles and coinsurance for all
15 benefits under the plan. The plan may provide for reduction
16 of deductibles and coinsurance pursuant to a program of
17. Innovative benefits offered under the plan, but may not
18 provide for the elimination of deductibles and coinsurance
19 pursuant to such program. Deductibles and coinsurance may be
20 waived under a plan in the case of charges for health care
21 furnished by a provider pursuant?to an agreement to discount
22 charges for subscribers of the plan if the charges do not
23 exceed amounts approved for charges for such care for the
24 purposes of title XVIII of the Social Security Act.
25 ""(p) The Office may not contract with any qualified:
26 carrier under subsection (a) of this section for any plan
27 described In subsection (a) (1), (a) (2), or (a) (3) of
28 section 8903 of this title, or for any plan described in
29 subsection (b) of such section, which provides-more than two
30 levels of benefits. This subsection does not prohibit any
31 qualified'carrier offering a plan which provides two levels
32 of benefits under a contract with the Office from
33 underwriting plans offered by other qualified carriers under
34 contracts with the office.
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1 Each contract 1 c an a -,nuI
2 plan under section 8923 (b) of this title shall be for a terr
3 of three years.
4 "(r) The Office shall not require a-s a condition for
5 entering into a contract with any qualified carrier under
6: subsection,(a) of this section that such carrier offer under
7 such contract a health benefits plan wnich provices more than
8 one level of benefits. ".
9 TYPES OF HEALTH BENEFITS; CATASTROPHIC BENEFITS
10 Sec. 202. (a) Section 8904 is amended--
11 (1) by striking out " may " in the first sentence and
12 inserting in lieu thereof "'shall";
13 (2) by adding at the end of paragraph (1) the
14 following new subparagraph:
15 "(G) (G) Benefits for care for and treatment of
16 mental disorders. " ;
17 (3) by adding at the end of paragraph.(2) the
18 following new subparagraph:
19 % *(G) Care for and treatment of mental
20 disorders.";
21 (4) in paragraph (3), by striking out " section*' and
22 inserting in lieu thereof "subsection";
23 (5) in paragraph (4), by striking out "section" and
24 inserting in lieu thereof "subsection"; and
25 (6) by striking out the last sentence and inserting
26 in lieu thereof the following new subsection:
27 61(b) (1) In the case of a catastrophic illness or
28 injury, the benefits required by subsection (a) of this
29 section to be provided under a plan shall be provided under
30 such plan without regard to the provisions of such plan
31 relating to deductibles, coinsurance, maximums, and other
32 limitations, if any. For the purposes of this subsection, an
33 illness or injury is considered catastrophic during any
34 contract year after the time when the total of the amounts
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?
an er.;;loyee or annuitant :urinc. y:%'J C n3.',~'
2 of the application of such provisions to thee-;benefit,
3 provided under such plan with respect to such illness o.-
4 injury and illnesses and injuries 'related to-such illness Pr
5 injury equals the lesser of (A) the amount specified In"the
6 plan for ' the purpose of this subsection or ('B) the reference
7 amount computed under paragraph (2). of this subsection.
8 " (2) (A) Except as provided in subpara;r aph (B) of t`iis
9 subsection for the.pu.poses of paragraph (1) of this
10 subsection, the reference amount is,-subject to subparagraph
11 (C) of this paragraph---
12 " (1) $3,000 per person receiving benefits under a
13 plan by reason of the illness or injury and illnesses and
14 injuries related to-such illne;;s or injury;. or
15 " (11) S6,002,
16 whichever is less.
17 **(B) For the purposes of paragraph (1) of this
18 subsection, in the case of the annuitant benefits plan, the
19 reference amount is--
20 " (1) $1,500 per person receiving benefits under a
21 plan by reason of the illness or injury or illnesses and
22 injuries related to such illness or injury; or
23 6 *(11) $2,500,
'24 whichever is less.
25 " (''C) Effective January 1 of each year, the' amounts
26' specified in clauses (I)-and (11). of subparagraph (A) of this
27 paragraph (as previously deemed to be increased under this
28 subparagraph) shall be deemed to be increased by the percent
29 increase, if any, in the price index published for December
30 of the second calendar year preceding such-January 1 over the
31 price index published for December of the third calendar year
32 preceding such January 1. For the purpose of the preceding
33 sentence, `price index' shall have the same meaning as.
34 provided in section 8331 (15) of this title.".
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1 (t) (1) The headin,^ of such sEctior; 1:,
2 follows:
"s 8904. Benefits".
(2) The item relatin; to section 8924 in the table of-
sections, at the beginning of chater b9 ih amended to read a
follows:
"8904. Benefits.".
8 Sec. 203. (a) Subsection (a) of section 8906 is amended
9 to read as follows:
le "'(a) (1) For the purpose of computing the amount of the
11 Government contribution for subscription charges payable for
12 an employee or annuitant enrolled in a health benefits plan
13 under this chapter during any contract year, the Office shall
14 determine the weighted average of the subscription charges in
15 effect on the beginning date of such contract year under
16 health benefits plans (other than health benefits plans
17 described in section 8903 (b) of this title) which are
18 offered :by carriers under contracts entered into under
19 section 8902 (a) of this title for such contract year and
20 were offered by such carriers for the-preceding :ontra:t year
21 under contracts entered into under such section.
22 (2) For the purposes. of paragraph (1) of this
23 subsection, the weighted average of the subscription charges
24 in effect on the beginning date of a contract year under the
25 health benefits plans referred to in such paragraph shall be
26 determined by--
27 "M multiplying, in the case of each such plan, for
28 each type of enrollment authoriz_ed'by section 8905 (a) of
29 this title and each level of benefits provided under such
30 plan, the biweekly subscription charge in effect on such
31 beginning date by the number of employees and annuitants
32 enrolled for the preceding contract year in such plan for
33 such level of benefits under such type of enrollment; and
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1 ? ? (j:) dividinc the cu i , tlP t,~v~.,.r .. ?' 'c-- .?. :,f ,~
2 such plans under clause (A) of this paraq.r=h y the
3 total number of employee-, and annuitants,enrollei in'' ^t?
4 plans during the contract year. preceding such beginning
5 date.".
6 (b) (1), Subsection (5) (1) of sucn section is amended to
7 read as follows:
8 ?(t) (1) Except as provided by,pa raraph (2) of this
9 subsection, the biweekly Government contribution for health
10 benefits in any contract year--
11 "M in the case of an employee enrolled under this
12 chapter in a health benefits plan (other than a health
13 benefits plan described in section 8903 (b) of this
14 title) is adjusted to an amount equal to 72 percent of
15 the weighted average subscription charge determined for
16 ? such contract year under subsection (a) of this section,
17 or if less, the subscription charge for such employee or
18 annuitant for such contract year; or
19 "(B) in the case of an annuitant who is enrolled
20 under this chapter in a health benefits plan described in
La*> 46 A-
21 section$ (b)~of this title and--
?4 J&eA,*- 6Ro3
22 "M is not a medicare eligible individual, is
23 adjusted to an amount equal to 80 percent of the
24 subscription charge for such plan; or
25 "(11) is a medicare eligible individual, is
26 adjusted to an amount equal to 70 percent of the
27 subscription charge for such plan for such contract
28 year.
29 To: an employee, the-adjustment begins on the first day of
30 the employee's first pay period of such contract year..For an
31 annuitant, the adjustment begins on the first day of the
32 first period of such contract year for which an annuity
33 payment is made.".
34 (2) Subsection (b) of such section is further amended--
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1 (A) by striking out paragraph (2); 3n
2 (B) by redesignating paragrap?: (3) a:; pa:a;rape (2).
3 COST CONTAINMENT PROSOPA!
u Sec. 204. (a) Chapter 89 is amended by adding at the end
5 thereof the following new section:
6 "S 8914. Cost containment program
7 " (a) Each carrier entering into a contract under section
8 8932 of this title shall develop and carry our- a cost
9 containment program for each plan offered under such
10 contract. The program shall include--
11 "(1) procedures which ensure that the carrier fully
12 carries out Its responsibilities under the plan without
13 assuming the financial obligations of others in
14 furnishing the benefits or without furnishing benefits to
15 subscribers or members of family of a subscriber which
16 are furnished by others under circumstances involving
17 coordination of benefits, subrogation, no-fault motor
18 vehicle accident insurance, compensation arrangements,
19 and workers' compensation insurance;
20 " (2) procedures which ensure that benefits not
21 authorized to be furnished under the plan are not
22 furnished under the plan;
23 "(3) provisions to furnish benefits which are
24 suitable alternatives to and less costly than in-patient
25 medical and hospital care, including ambulatory surgery,
26 home health care, hospice care, preadmission testing,
27 second opinions on surgery, and care in skilled nursing
28 faclities;
29 "(4) procedures to evaluate on a continuing basis
30 the necessity, appropriateness, and efficiency in using
31 medical services, medical procedures, and medical
32 facilities, including, in the case of hospital care,
33 evaluation of hospital admissions, services ordered and
34 furnished, length of stay of patients, and current and
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? S
1 past discharge practicez:
2 " (5) procedures and actio,nz. to
Bete t ~~~~lily.:
3 fraudulent claims submitted by providers of health:ca:e
4 or subscribers;
'*(A) the devlopment and in'plen:entation of strategies
to contain the costs of benefits furnished under the
7 plan., including the development ,of data oa:;e;, to provide
8 the capability to analyze, on the basic- of any
9 subscriber's individual account under the plan, the costs
10 and payments relating to such account and the utilization
11 of medical services, medical procedures, and medical
12 facilities. by such subscriber;
13 (7) the distribution of published materials and the
14 conduct of other. activities to inform patients,
15 subscribers, employees,,annuitants, members of families,
15 and providers of health care about the appropriate uses
17? of health care services and facilities, personal habits
18 and practices which promote good health, and other health
19 care matters; and
20 "(S) efforts to enter into agreements with providers
21 of health care to discount charges for furnishing health
22 care to subscribers under the plan.
23 %`(b.) Each contract with a carrier under section 8922 of'
24 this title shall include a provision requiring the carrier to
25 pay annually into the Employee Health.Benefits Fund referred
26 to in section 8909 of this title an amount equal to two
27 percent of the total amount of subscription charges payable
28 to such carrier under such contract for the calendar year.
29 All amounts.paid into the Fund under this subsection shall be
30 available for distribution pursuant to subsection (c) of this
32 "(c) (1) The Office shall audit the cost containment
33 program of each carrier under subsection (a) of this section
34 and shall rate each carrier on the effectiveness of each
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079810.249
1 provision required by such subsection to be include: in the
2 program.and on the overall effectivene-s-of the program. For
3 the purpose of this paragraph, a provision of the program and
4. the program overall shall be rated a,: excellent,
'5 satisfactory, or poor.
6. " (2) Under such regulations as the O'.fice shall
7 prescribe, a monetary award shall be palo at the end of each
B calendar year to each carrier carrying out a cost containment
9 program which was rated as excellent or satisfactory overall
10 for the year. The amount of the monetary award payable in any
11 year to a carrier shall be a percentage of the amount paid by
12 such carrier into the Employee Health Benefits Fund under
13 subsection (D) of this section for such year. The monetary
14 award paid in any year to each carrier rated at the same
15 level for such year shall be computed at the same percentage.
16 The percentage used to compute each monetary award paid in
17 any year for an excellent rating shall be greater than the
18 percentage used to compute each monetary award paid in such
19 year for a satisfactory rating. A monetary award may not be
20 paid in any year to a carrier carrying out a cost containment
21 program which was rated as poor overall for theyear.
22 "(3) The Office may not enter into a contract under
23 section 8902 of this title with any carrier carrying out a
24 cost containment program which is rated as poor overall for
25 two consecutive calendar years unless three years have
26 elapsed since the date on which the latest contract With, such
27 carrier under section 8902 of this title has expired. The
28 carrier shall be entitled to a hearing on the record before
29 the Office makes an intitial determination not to enter into
30 such a contract with the carrier by reason of the first
31 sentence. of this paragraph. The determination of the Office
32 shall be subject to review by the Courts of Appeals of the
33 United States under chapter 7 of this title.
34 "(d) At the end of each calendar year, the Office shall
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?
1 tr3ns!rit to the Con;revs a re;ort ~u^?~~~::
2 the cost containment programs carried out und' this section
3 for the year. Each report shall set.forth the ratings of each
4 carrier under subsection (c) of this section for the year..".
"6914. Cost containment program.".
OPEN SEASON
5 (b) The table of sections at the beginning of chapter 8;
6 Is amended,by adding at the end thete.of the following new
7 Item:
Sec. 205. (a) Chapter 99 is further amended by adding at
31.' subscription charge payable by each employee or
32 annuitant enrolled under such plan during such term;
33 "(2) a document setting forth the benefits,
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10 the end thereof the following new section:
11 **S 8915. Open enrollment
12 "(a) Before any change in benefits or amounts payable. by
13 an employee or annuitant under a health benefits plan under
14 this chapter takes effect, the office shall organize and
15 carry out a program under which each employee and each
r?
16 annuitant may elect to enroll, not to enroll, to continue
17 enrollment, or to discontinue enrollment in a health benefits,
18 plan offered under this chapter or to transfer enrollment
19 from one such health benefits plan to another such health
20 benefits plan.
21 " (b) Not later than fifteen days before the date on
22 which any program of open enrollment under' subsection (a) of
23 this section begins, the Office shall distribute to each
24 employee and each annuitant--
25 "M a document or documents--
26 (A) summarizing the benefits provided under
27 each health benefits plan offered under contracts
28 entered into under section 8902 of this title for the
29 ensuing contract term; and
30 `?(B) setting forth the amount of the
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1 including maximums, lim,itaticn:,
c~fir:ition.;,
2 deductibles, and coinsurance which will be provided
3 during such term under the plan in which such employee or
annuitant is enrolled, if any, on the date on which such
program of open enrollment begins; and
",(3) an application for enrollment or change of
enrollment in a health benefits plan.".
8915. Open enrollment.".
8 (b) The table of sections at the beginnin; of such
9 chapter is amended by iadding at the end thereof the following
10 new item:
12 Sec. 206.. (a) The Office of Personnel Management shall
13 carry out an experimental program in at least three large
14 areas of the United States where a substantial number of
15 employees of the Government are' located. Under such program,
16 the Office shall negotiate agreements with providers of
17 health care to discount the charges for health care furnished
18 by the providers to employees of the Government.
19 Notwithstanding.section 8902 (o) of title 5, United.States
20 Code (as added by section 201 (d) of this Act), deductibles
21 and coinsurance under any health benefits plan offered under
22 chapter 89 of such title may be waived in the case of health
23 care furnished by a provider under the program.
24 (b) The experimental program under subsection-(a) shall
25 commence not later than January 1, 1984, and shall terminate
26 January 1, 1987.
27 (c) Not later than January 31, 1987, the Office of
28 Personnel Management shall transmit to the Congress a report
29 on the experimental program carried out under subsection (a).
30 The report shall describe the administrative actions taken or
31 proposed to be taken based on the information resulting from
32 the program and shall include such recommendations for
33 legislation as the Office considers appropriate based on such
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? ?
1 Information.
2
3
TITLE III--MISCELLANEOUS PROVISIONS
TECHNICAL AND CONFOR";,ING AMEND! ZNTS
4 Sec. 301. (a) Section 8901 (e) is amended by striking o;
5 " 8923 (3) " and inserting in lieu thereof " 8923 (a) (3) ".
6. (b) The second sentence of section 8902 (1) is amended by
7 striking, out "health benefits Clans de crite;, by section
8 8903 (1) and (2) " and-inserting in lieu thereof "health
9 benefits plans described by subsection (a) (1) or (a) (2) of.
10 section 8903".
11 (c) Section 8923 is amended--
12 (1) in. paragraph (1)-- -
13 (A) by striking out offering two levels of
14 benefits, and
15 (B) by striking;'out **89e4 (1) " and inserting In
16 lieu thereof `%89`04 (a) (1)11;
17 (2) in paragraph (2)--
18 (A) by striking out offering two levels of
19 benefits,"; and
20 (B) by striking out "8904 2)" and Inserting in
21 lieu thereof "8904 (a) (2)11;
22 (3) in paragraph (3) by striking out "8904 (3) " and
23 inserting in lieu thereof "8904 (a) (3) " ; and
24 .(4) in the first sentence of paragraph '(u) (A) by
25 striking out **8904 (.4)" and inserting in lieu thereof
26 ? ? 8904 (a) (4) ".
27 EFFECTIVE. DATES
28 Sec. 302. (a) Except as provided In subsection (b) of
29 this section, the amendments made by this Act shall take
30 effect with respect to contracts entered Into under section
31 8902 (a) after the date of enactment of this Act.
32 (b) (1) The amendments made by section 201 (a) of this
33 Act shall take effect January 1 of the first year that begins
34 not less than three years after the date of. enactment of this
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13
2 (2) The amendment made by sectior. 20`., of th1= Act sha11
3 take effect on the date of enactment of this Act.
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