[Congressional Record Volume 142, Number 68 (Wednesday, May 15, 1996)]
[Extensions of Remarks]
[Pages E811-E812]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




      THE FEDERAL HEALTH PROGRAM BENEFIT CHANGE ACCOUNTABILITY ACT

                                 ______


                        HON. BENJAMIN L. CARDIN

                              of maryland

                    in the house of representatives

                        Wednesday, May 15, 1996

  Mr. CARDIN. Mr. Speaker, I rise today with a bipartisan group of 
Representatives to introduce the Federal Health Program Benefit Change 
Accountability Act. This legislation would prevent the Office of 
Personnel Management [OPM] from making significant changes to Federal 
retirees' health benefits without first reporting to Congress what 
those changes will entail, how costs to retirees will be impacted, and 
how quality will be assured.
  This legislation comes in direct response to OPM's decision to allow 
Blue Cross/Blue Shield [BC/BS] to alter the prescription drug benefit 
of their standard benefit package for Federal retirees on Medicare. 
Prior to 1996, there was no cost-sharing for prescription drugs 
purchased at a network retail pharmacy or through the mail order 
pharmacy. Starting in January 1996, BC/BS began charging Federal 
retirees on Medicare a new 20 percent copayment for prescriptions 
purchased at their network retail pharmacies. The only way this new 
copayment can be avoided is to use the mail order pharmacy program 
offered by BC/BS.
  Many of us heard from constituents who opposed this change. Most 
seniors live on fixed incomes and are sensitive to sudden increases in 
the cost of prescription drugs. They are also the segment of our 
population that uses the most medications. At the same time, seniors 
tend to have long standing relationships with their local pharmacists 
who provide important health care services to them. A local retail 
pharmacist is often willing to perform services such as color-coding 
their prescriptions, providing special caps for easy opening, and 
offering important face-to-face counseling. In addition to being health 
care providers, local pharmacies play an important local economic role. 
Sending prescriptions to mail order pharmacies takes dollars and jobs 
out of our communities. The bottom line is that this benefit change by 
BC/BS hurts both our constituents' health and our local economies.
  More than 70 colleagues joined me in writing to OPM in December 1995 
opposing this benefit change. We are still awaiting an important report 
from GAO that will detail the effect of various prescription drug 
policies on both enrollees and community pharmacies. We asked OPM to 
delay implementation of this benefit change until the GAO study was 
complete and until other cost-savings alternatives were investigated. 
That letter is attached at the end of this statement.
  OPM did not agree with our concerns and went ahead with implementing 
the benefit change as scheduled. What happened then was nothing short 
of chaos. The mail order pharmacy company was not prepared for the 
tremendous increase in business resulting from the new 20 percent 
copayment at retail pharmacies. We received reports of doctors 
attempting to submit prescriptions being told that the fax machines had 
been unplugged and they were not accepting new prescriptions, enrollees 
were reporting delays of several seeks before obtaining their 
prescriptions, and there were problems with incomplete or incorrect 
orders. A constituent of mine in Baltimore stated that she had 
``literally spent one month on this phone with this company.'' She also 
said that when her order finally arrived, her bottle was seven pills 
short, and her husband's was shy two pills.
  To OPM's credit, they immediately moved to correct these severe 
inadequacies of the program. They allowed a limited number of enrollees 
to temporarily obtain their drugs at their local pharmacies without the 
copayment penalty. While it does appear that these extreme problems 
have been corrected, the fact remains that there are still problems and 
inequities.
  Mail order pharmacies are certainly an appropriate option to make 
available for enrollees. However, this new copayment structure

[[Page E812]]

does not result in a real choice for seniors--it simply increases their 
out-of-pocket costs. Mail order pharmacies are not an appropriate 
source for acute drugs because of the length of time it takes to obtain 
a prescription. This new BC/BS policy imposes a new 20 percent 
copayment--which can be a significant cost--on enrollees needing acute 
prescriptions. For them, the mail order pharmacy is not a viable option 
to avoid this new costs. If the 20 percent copayment is a serious 
impediment, then the senior may use the mail order option anyway. Their 
health could be seriously impacted by that decision. In addition, 
people have been unable to obtain color-coding for their 
prescriptions--an important service for a frail senior taking a strong 
regimen of prescriptions.
  I, along with several colleagues, have spent months looking into 
possible remedies to prevent OPM from making decisions on benefit 
changes in a vacuum as they do today. Our goal is to avoid any repeat 
performances of the problems we have seen this year. Our legislation is 
entitled ``The Federal Health Program Benefit Change Accountability 
Act.'' It details the multiple problems resulting from OPM's decision 
to make this benefit change and would institute a new reporting 
process. OPM would be required to provide an annual report to Congress 
that would describe any significant changes for the upcoming year in 
Federal retiree health benefits. The report would also provide Congress 
with the details that were missing this past year. It would explain 
what cost savings expected to be achieved, how enrollees would be 
financially affected by the change, and how quality of care would be 
impacted. Congress would then have time to react if there were concerns 
with the change.
  The bill has been endorsed by the National Association of Chain Drug 
Stores, the National Association of Retail Druggists, the National 
Council on Aging, and the National Council of Senior Citizens, The 
original cosponsors are: Representatives J.C. Watts, Hoyer, Gilman, 
Morella, Pickett, LaFalce, Cramer, Pomeroy, Brewster, Tim Johnson, 
Moran, Meek, and Ehrlich. We urge our colleagues to join us in 
preventing OPM from making new benefits changes that negatively impact 
seniors' health and our local communities.

                                Congress of the United States,

                                Washington, DC, December 15, 1995.
     James B. King,
     Director, Office of Personnel Management, Washington, DC.
       Dear Mr. King: We are writing to raise concerns about the 
     implementation of a new 20 percent copayment for 
     prescriptions filled in local retail pharmacies under the 
     Blue Cross/Blue Shield Federal Employees Health Benefits 
     Program.
       As you know, beginning January 1, 1996, this change will 
     make it more costly for almost one million Federal retirees 
     with Medicare Part B coverage if they want to continue to 
     obtain their prescriptions at their neighborhood pharmacy. 
     The only way for Federal retirees to avoid the imposition of 
     this new cost-sharing will be for them to leave their 
     neighborhood pharmacy and send their prescriptions to an out-
     of-state mail order firm. The rationale for this change is 
     that it is a cost-saving measure. While we commend efforts by 
     BC/BS to lower costs for the Federal Government and their 
     enrollees, we question whether these savings will be passed 
     through to enrollees.
       Two aspects of these efforts are abundantly clear to us. 
     Last year, BC/BS's use of a mail order operation diverted 
     $400 million from our districts in sales, revenues and jobs 
     from the local pharmacies. If this new change becomes 
     effective, an estimated $600 million will leave our districts 
     in 1996 and instead be invested in an out-of-state mail order 
     firm. Many local pharmacies are small businesses that cannot 
     afford a shift of their local business to out-of-state mail 
     order firms. Second, Federal retirees, many of whom take 
     multiple prescriptions that require face-to-face pharmacist 
     counseling and close monitoring of prescription use, will 
     lose the medical counseling of their local pharmacists when 
     they switch to the mail order program due to financial 
     constraints.
       We have strong reservations about cost-saving solutions 
     that place an economic penalty on the use of local 
     pharmacies. There are alternative approaches that BC/BS could 
     take to achieve cost-savings in the area of prescription drug 
     use. One solution would be to implement a mandatory generic 
     drug program. Another solution could be a reasonable 
     copayment, such as one or two dollars, per prescription drug. 
     Neither of these alternatives would disadvantage our 
     neighborhood pharmacies which play important health care and 
     economic roles in our communities.
       You may be aware that the GAO has recently been asked to 
     study the impact of BC/BS's FEHBP's prescription drug program 
     policies on enrollees and community pharmacies. We believe 
     that this is an important study and that the results should 
     be known before this new policy is implemented. Therefore, we 
     ask you to take action to postpone implementation of this 
     change until the GAO study is complete and to consider 
     alternative cost-saving approaches such as those mentioned in 
     this letter.
           Sincerely,
         Benjamin L. Cardin and 68 Members of Congress.

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