[Congressional Record Volume 143, Number 80 (Tuesday, June 10, 1997)]
[Extensions of Remarks]
[Page E1153]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

[[Page E1153]]



          FEDERAL EMPLOYEE HEALTH CARE PROTECTION ACT OF 1997

                                 ______
                                 

                            HON. DAN BURTON

                               of indiana

                    in the house of representatives

                         Tuesday, June 10, 1997

  Mr. BURTON of Indiana. Mr. Speaker, I am pleased to introduce today, 
H.R. 1836, the Federal Employee Health Care Protection Act of 1997. 
This is significant legislation for our Federal employees and taxpayers 
because it will help strengthen the integrity and standards of the 
Federal Employees Health Benefit [FEHB] Program, and allow it to 
maintain its reputation as a high quality and cost-effective program. 
H.R. 1836 includes three main provisions that will improve and protect 
the FEHB Program. First, it gives OPM better tools to deal swiftly with 
health care providers who try to defraud or abuse the FEHB Program, 
second, it requires full disclosure of discounted rate agreements 
between health care providers and health benefit carriers to prevent 
the fraudulent use of such discounts, and third, it provides the same 
Federal health benefits coverage for Federal Deposit Insurance 
Corporation and Federal Reserve Board employees that other Federal 
employees have.
  The FEHB Program is the largest employer-sponsored health insurance 
system in the country. In 1997, the $16 billion FEHB Program will 
insure more than 9 million Federal employees, retirees, and their 
dependents. Partial portability, no preexisting condition limitation, 
and an annual open enrollment period are facets of the FEHB Program 
that make it an extremely attractive health care system. The free 
enterprise-based program has effectively contained costs through 
private sector competition with limited governmental intervention. The 
program is often cited as a model of efficiency and effectiveness that 
the private sector and the public sector should attempt to replicate. 
The bill I introduced today will improve the program and its 
performance, without changing the market principles that are the key to 
the program's success.
  One of the most important provisions of this bill addresses the 
debarment of health care providers engaging in fraudulent practices. 
This provision would strengthen the ability of OPM to bar FEHB Program 
participation by, and impose monetary penalties on, health care 
providers in the FEHB Program who engage in professional or financial 
misconduct. Under this bill, the administrative sanctions authority 
would conform more closely with the Medicare Program, particularly with 
regard to grounds for imposing sanctions and the general availability 
of post-termination appellant rights.
  Another important component of this bill is that it would provide 
consistent health benefit coverage for employees of the Federal Reserve 
Board [FED] and the Federal Deposit Insurance Corporation [FDIC]. A 
number of years ago the FED decided to drop out of the FEHB Program and 
offer its employees a separate health care plan. Then, in 1993, the FED 
elected to abandon this health care experiment and offer its employees 
only FEHB health care options. However, under current law, all 
employees must have 5 years of continuous enrollment in the FEHB 
Program to carry their health benefit coverage into retirement. As a 
result a number of employees who retired during the years when the FED 
had its own health care system, and some employees currently 
approaching retirement, are not eligible for FEHB coverage. The FDIC 
faces a similar situation because it plans to eliminate its alternative 
health insurance plan at the end of 1997, and go with FEHB options. 
Without this legislation, the FDIC and the Board will have to establish 
a non-FEHB plan for those employees who are ineligible for coverage. 
This would be administratively burdensome and costly to these Federal 
agencies and, ultimately, to taxpayers. Under this proposal, these 
ineligible employees would be offered FEHB coverage at no additional 
cost to the Government.
  The third key provision in this bill would require FEHB carriers and 
their subcontractors to disclose in writing any discounted rate 
contracts with health care providers. If carriers do not include the 
required disclosure, they will be prohibited from accessing discounts. 
I believe that this language is necessary because it will eliminate the 
practice of silent preferred provider networks [PPO's]. Under 
conventional PPO arrangements, networks offer enrollees discounted fees 
to use network providers, or preferred providers. However, under silent 
PPO's, these discounts are being applied to patients that are not 
contractually covered by the PPO network. I have great concerns over 
the ethics and legality of the practice of these types of 
organizations. The effect of such practices is to reduce carriers' free 
market bargaining power. It also undermines the value of, and 
jeopardizes the expansion of, legitimate PPO networks. According to the 
American Hospital Association, discounts paid to silent PPO's may 
account for as much as $1 billion in costs for providers throughout the 
industry. This type of abusive practice should not be allowed in the 
health care arena, and I believe that the language in this bill will 
address this problem and protect providers, patients, and legitimate 
PPO's.
  I believe that the changes made in this legislative proposal are 
important to help improve and strengthen the FEHB Program. I urge my 
colleagues to join me in supporting this essential legislation.

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