[Congressional Bills 104th Congress]
[From the U.S. Government Publishing Office]
[S. 1759 Introduced in Senate (IS)]







104th CONGRESS
  2d Session
                                S. 1759

To amend title 5, United States Code, to require that written notice be 
   furnished by the Office of Personnel Management before making any 
     substantial change in the health benefits program for Federal 
                               employees.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                              May 15, 1996

 Ms. Mikulski (for herself and Mr. Sarbanes) introduced the following 
      bill; which was read twice and referred to the Committee on 
                          Governmental Affairs

_______________________________________________________________________

                                 A BILL


 
To amend title 5, United States Code, to require that written notice be 
   furnished by the Office of Personnel Management before making any 
     substantial change in the health benefits program for Federal 
                               employees.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE; FINDINGS.

    (a) Short Title.--This Act may be cited as the ``Federal Health 
Program Benefit Change Accountability Act''.
    (b) Findings.--The Congress finds that--
            (1) effective beginning in 1996, Federal retirees enrolled 
        in the Governmentwide service benefit plan under chapter 89 of 
        title 5, United States Code, are subject to a copayment for 
        prescription drugs obtained from a retail pharmacy, but are 
        exempt from such copayment if they instead use a plan's mail 
        order pharmacy;
            (2) that difference in policy--
                    (A) increases out-of-pocket health care costs for 
                and imposes financial penalties on the large majority 
                of Federal retirees who use their local pharmacies to 
                have prescriptions filled;
                    (B) fails to recognize the integral role of local 
                pharmacies in contributing to the health of their 
                patrons, such as through face-to-face counseling;
                    (C) unfairly discriminates in favor of out-of-state 
                mail order pharmacies at the expense of local retail 
                pharmacies;
                    (D) transfers millions of dollars in wages and tax 
                revenues out of State, and therefore hurts local 
                economies and small businesses; and
                    (E) reduces the accessibility of local pharmacies 
                for all individuals, particularly those living in rural 
                areas;
            (3) in making this major change, it appears that the Office 
        of Personnel Management--
                    (A) did not determine the impact on the quality of 
                pharmacy care provided to Federal retirees, who use a 
                disproportionate share of prescription medications, but 
                instead focused primarily on economic considerations;
                    (B) did not consider alternative cost containment 
                options in the prescription drug program, which has 
                disproportionately focused its cost containment 
                approaches on retail pharmacies;
                    (C) did not determine, and has not yet 
                demonstrated, whether the anticipated savings result 
                from lower costs of mail order drug products or because 
                retirees are simply paying more in copayments for their 
                prescription at local pharmacies;
                    (D) did not determine whether such change was 
                consistent with the structure of current private market 
                prescription drug programs, which traditionally give 
                retirees a fair economic choice of using mail order 
                pharmacies or retail pharmacies;
                    (E) did not assess the ability of the contractor to 
                fulfill the terms of the contract for mail order 
                prescriptions, given that thousands of retirees were 
                inconvenienced when the mail order pharmacies were 
                unable to meet the demand for prescriptions; and
                    (F) did not assess the impact of the change on the 
                overall health care marketplace, given that the Office 
                of Personnel Management is a major payor of health care 
                services and products; and
            (4) the Office of Personnel Management should be held more 
        accountable for major changes made in Federal health care 
        program benefit designs, and should be required to justify the 
        impact of such changes in terms of cost savings, access, and 
        quality of care, before such changes are implemented.

SEC. 2. REPORTING REQUIREMENT.

    (a) In General.--Section 8910 of title 5, United States Code, is 
amended by adding at the end the following:
    ``(e)(1) The Office shall prepare an annual report in which it 
shall describe, to the extent practicable, any substantial changes in 
maximums, limitations, exclusions, or other definitions of benefits 
that it intends to propose for implementation in the upcoming contract 
year.
    ``(2) Included in a report under this subsection shall be, with 
respect to each such change--
            ``(A) a statement of justification for the change;
            ``(B) an analysis of the anticipated savings, to the extent 
        that the change would be justified on the basis of cost 
        savings, as well as any alternative options considered and the 
        reasons why the proposed change is considered preferable;
            ``(C) a description of the anticipated impact of the 
        proposed change on access to and quality of care, and on costs 
        to enrollees likely to be affected;
            ``(D) an assessment of the ability of carriers to implement 
        the proposed change in a manner that is efficient and that 
        promotes the interests referred to in subparagraph (C); and
            ``(E) an analysis of the anticipated economic impact of the 
        proposed change with respect to providers and enrollees, 
        respectively.
    ``(3) The Office shall have each report under this subsection 
published in the Federal Register, and shall submit a copy of each such 
report to both Houses of Congress, as early in the year as possible, 
consistent with the goal of affording interested persons a meaningful 
opportunity to comment.''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply with respect to changes taking effect in any contract year 
beginning later than 6 months after the date of the enactment of this 
Act.
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