[Congressional Record Volume 143, Number 152 (Tuesday, November 4, 1997)]
[House]
[Pages H9914-H9920]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
FEDERAL EMPLOYEES HEALTH CARE PROTECTION ACT OF 1997
Mr. MICA. Mr. Speaker, I move to suspend the rules and pass the bill
(H.R. 1836) to amend chapter 89 of title 5, United States Code, to
improve administration of sanctions against unfit health care providers
under the Federal Employees Health Benefits Program, and for other
purposes, as amended.
The Clerk read as follows:
H.R. 1836
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Federal Employees Health
Care Protection Act of 1997''.
SEC. 2. DEBARMENT AND OTHER SANCTIONS.
(a) Amendments.--Section 8902a of title 5, United States
Code, is amended--
(1) in subsection (a)--
(A) in paragraph (1)--
(i) by striking ``and'' at the end of subparagraph (B);
(ii) by striking the period at the end of subparagraph (C)
and inserting ``; and''; and
(iii) by adding at the end the following:
``(D) the term `should know' means that a person, with
respect to information, acts in deliberate ignorance of, or
in reckless disregard of, the truth or falsity of the
information, and no proof of specific intent to defraud is
required;''; and
(B) in paragraph (2)(A), by striking ``subsection (b) or
(c)'' and inserting ``subsection (b), (c), or (d)'';
(2) in subsection (b)--
(A) by striking ``The Office of Personnel Management may
bar'' and inserting ``The Office of Personnel Management
shall bar''; and
(B) by amending paragraph (5) to read as follows:
``(5) Any provider that is currently debarred, suspended,
or otherwise excluded from any procurement or nonprocurement
activity (within the meaning of section 2455 of the Federal
Acquisition Streamlining Act of 1994).'';
(3) by redesignating subsections (c) through (i) as
subsections (d) through (j), respectively, and by inserting
after subsection (b) the following:
``(c) The Office may bar the following providers of health
care services from participating in the program under this
chapter:
``(1) Any provider--
``(A) whose license to provide health care services or
supplies has been revoked, suspended, restricted, or not
renewed, by a State licensing authority for reasons relating
to the provider's professional competence, professional
performance, or financial integrity; or
``(B) that surrendered such a license while a formal
disciplinary proceeding was pending before such an authority,
if the proceeding concerned the provider's professional
competence, professional performance, or financial integrity.
[[Page H9915]]
``(2) Any provider that is an entity directly or indirectly
owned, or with a control interest of 5 percent or more held,
by an individual who has been convicted of any offense
described in subsection (b), against whom a civil monetary
penalty has been assessed under subsection (d), or who has
been debarred from participation under this chapter.
``(3) Any individual who directly or indirectly owns or has
a control interest in a sanctioned entity and who knows or
should know of the action constituting the basis for the
entity's conviction of any offense described in subsection
(b), assessment with a civil monetary penalty under
subsection (d), or debarment from participation under this
chapter.
``(4) Any provider that the Office determines, in
connection with claims presented under this chapter, has
charged for health care services or supplies in an amount
substantially in excess of such provider's customary charge
for such services or supplies (unless the Office finds there
is good cause for such charge), or charged for health care
services or supplies which are substantially in excess of the
needs of the covered individual or which are of a quality
that fails to meet professionally recognized standards for
such services or supplies.
``(5) Any provider that the Office determines has committed
acts described in subsection (d).
Any determination under paragraph (4) relating to whether a
charge for health care services or supplies is substantially
in excess of the needs of the covered individual shall be
made by trained reviewers based on written medical protocols
developed by physicians. In the event such a determination
cannot be made based on such protocols, a physician in an
appropriate specialty shall be consulted.'';
(4) in subsection (d) (as so redesignated by paragraph (3))
by amending paragraph (1) to read as follows:
``(1) in connection with claims presented under this
chapter, that a provider has charged for a health care
service or supply which the provider knows or should have
known involves--
``(A) an item or service not provided as claimed,
``(B) charges in violation of applicable charge limitations
under section 8904(b), or
``(C) an item or service furnished during a period in which
the provider was debarred from participation under this
chapter pursuant to a determination by the Office under this
section, other than as permitted under subsection
(g)(2)(B);'';
(5) in subsection (f) (as so redesignated by paragraph (3))
by inserting after ``under this section'' the first place it
appears the following: ``(where such debarment is not
mandatory)'';
(6) in subsection (g) (as so redesignated by paragraph
(3))--
(A) by striking ``(g)(1)'' and all that follows through the
end of paragraph (1) and inserting the following:
``(g)(1)(A) Except as provided in subparagraph (B),
debarment of a provider under subsection (b) or (c) shall be
effective at such time and upon such reasonable notice to
such provider, and to carriers and covered individuals, as
shall be specified in regulations prescribed by the Office.
Any such provider that is debarred from participation may
request a hearing in accordance with subsection (h)(1).
``(B) Unless the Office determines that the health or
safety of individuals receiving health care services warrants
an earlier effective date, the Office shall not make a
determination adverse to a provider under subsection (c)(5)
or (d) until such provider has been given reasonable notice
and an opportunity for the determination to be made after a
hearing as provided in accordance with subsection (h)(1).'';
(B) in paragraph (3)--
(i) by inserting ``of debarment'' after ``notice''; and
(ii) by adding at the end the following: ``In the case of a
debarment under paragraph (1), (2), (3), or (4) of subsection
(b), the minimum period of debarment shall not be less than 3
years, except as provided in paragraph (4)(B)(ii).'';
(C) in paragraph (4)(B)(i)(I) by striking ``subsection (b)
or (c)'' and inserting ``subsection (b), (c), or (d)''; and
(D) by striking paragraph (6);
(7) in subsection (h) (as so redesignated by paragraph (3))
by striking ``(h)(1)'' and all that follows through the end
of paragraph (2) and inserting the following:
``(h)(1) Any provider of health care services or supplies
that is the subject of an adverse determination by the Office
under this section shall be entitled to reasonable notice and
an opportunity to request a hearing of record, and to
judicial review as provided in this subsection after the
Office renders a final decision. The Office shall grant a
request for a hearing upon a showing that due process rights
have not previously been afforded with respect to any finding
of fact which is relied upon as a cause for an adverse
determination under this section. Such hearing shall be
conducted without regard to subchapter II of chapter 5 and
chapter 7 of this title by a hearing officer who shall be
designated by the Director of the Office and who shall not
otherwise have been involved in the adverse determination
being appealed. A request for a hearing under this subsection
shall be filed within such period and in accordance with such
procedures as the Office shall prescribe by regulation.
``(2) Any provider adversely affected by a final decision
under paragraph (1) made after a hearing to which such
provider was a party may seek review of such decision in the
United States District Court for the District of Columbia or
for the district in which the plaintiff resides or has his or
her principal place of business by filing a notice of appeal
in such court within 60 days after the date the decision is
issued, and by simultaneously sending copies of such notice
by certified mail to the Director of the Office and to the
Attorney General. In answer to the appeal, the Director of
the Office shall promptly file in such court a certified copy
of the transcript of the record, if the Office conducted a
hearing, and other evidence upon which the findings and
decision complained of are based. The court shall have power
to enter, upon the pleadings and evidence of record, a
judgment affirming, modifying, or setting aside, in whole or
in part, the decision of the Office, with or without
remanding the case for a rehearing. The district court shall
not set aside or remand the decision of the Office unless
there is not substantial evidence on the record, taken as
whole, to support the findings by the Office of a cause for
action under this section or unless action taken by the
Office constitutes an abuse of discretion.''; and
(8) in subsection (i) (as so redesignated by paragraph
(3))--
(A) by striking ``subsection (c)'' and inserting
``subsection (d)''; and
(B) by adding at the end the following: ``The amount of a
penalty or assessment as finally determined by the Office, or
other amount the Office may agree to in compromise, may be
deducted from any sum then or later owing by the United
States to the party against whom the penalty or assessment
has been levied.''.
(b) Effective Date.--
(1) In general.--Except as provided in paragraph (2), the
amendments made by this section shall take effect on the date
of the enactment of this Act.
(2) Exceptions.--(A) Paragraphs (2), (3), and (5) of
section 8902a(c) of title 5, United States Code, as amended
by subsection (a)(3), shall apply only to the extent that the
misconduct which is the basis for debarment under such
paragraph (2), (3), or (5), as applicable, occurs after the
date of the enactment of this Act.
(B) Paragraph (1)(B) of section 8902a(d) of title 5, United
States Code, as amended by subsection (a)(4), shall apply
only with respect to charges which violate section 8904(b) of
such title for items or services furnished after the date of
the enactment of this Act.
(C) Paragraph (3) of section 8902a(g) of title 5, United
States Code, as amended by subsection (a)(6)(B), shall apply
only with respect to debarments based on convictions
occurring after the date of the enactment of this Act.
SEC. 3. MISCELLANEOUS AMENDMENTS RELATING TO THE HEALTH
BENEFITS PROGRAM FOR FEDERAL EMPLOYEES.
(a) Definition of a Carrier.--Paragraph (7) of section 8901
of title 5, United States Code, is amended by striking
``organization;'' and inserting ``organization and an
association of organizations or other entities described in
this paragraph sponsoring a health benefits plan;''.
(b) Service Benefit Plan.--Paragraph (1) of section 8903 of
title 5, United States Code, is amended by striking ``plan,''
and inserting ``plan, which may be underwritten by
participating affiliates licensed in any number of States,''.
(c) Preemption.--Section 8902(m) of title 5, United States
Code, is amended by striking ``(m)(1)'' and all that follows
through the end of paragraph (1) and inserting the following:
``(m)(1) The terms of any contract under this chapter which
relate to the nature, provision, or extent of coverage or
benefits (including payments with respect to benefits) shall
supersede and preempt any State or local law, or any
regulation issued thereunder, which relates to health
insurance or plans.''.
SEC. 4. CONTINUED HEALTH INSURANCE COVERAGE FOR CERTAIN
INDIVIDUALS.
(a) Enrollment in Chapter 89 Plan.--For purposes of chapter
89 of title 5, United States Code, any period of enrollment--
(1) in a health benefits plan administered by the Federal
Deposit Insurance Corporation before the termination of such
plan on January 3, 1998, or
(2) subject to subsection (c), in a health benefits plan
(not under chapter 89 of such title) with respect to which
the eligibility of any employees or retired employees of the
Board of Governors of the Federal Reserve System terminates
on January 3, 1998,
shall be deemed to be a period of enrollment in a health
benefits plan under chapter 89 of such title.
(b) Continued Coverage.--(1) Subject to subsection (c), any
individual who, on January 3, 1998, is enrolled in a health
benefits plan described in subsection (a)(1) or (2) may
enroll in an approved health benefits plan under chapter 89
of title 5, United States Code, either as an individual or
for self and family, if, after taking into account the
provisions of subsection (a), such individual--
(A) meets the requirements of such chapter for eligibility
to become so enrolled as an employee, annuitant, or former
spouse (within the meaning of such chapter); or
(B) would meet those requirements if, to the extent such
requirements involve either retirement system under such
title 5, such
[[Page H9916]]
individual satisfies similar requirements or provisions of
the Retirement Plan for Employees of the Federal Reserve
System.
Any determination under subparagraph (B) shall be made under
guidelines which the Office of Personnel Management shall
establish in consultation with the Board of Governors of the
Federal Reserve System.
(2) Subject to subsection (c), any individual who, on
January 3, 1998, is entitled to continued coverage under a
health benefits plan described in subsection (a)(1) or (2)
shall be deemed to be entitled to continued coverage under
section 8905a of title 5, United States Code, but only for
the same remaining period as would have been allowable under
the health benefits plan in which such individual was
enrolled on January 3, 1998, if--
(A) such individual had remained enrolled in such plan; and
(B) such plan did not terminate, or the eligibility of such
individual with respect to such plan did not terminate, as
described in subsection (a).
(3) Subject to subsection (c), any individual (other than
an individual under paragraph (2)) who, on January 3, 1998,
is covered under a health benefits plan described in
subsection (a)(1) or (2) as an unmarried dependent child, but
who does not then qualify for coverage under chapter 89 of
title 5, United States Code, as a family member (within the
meaning of such chapter) shall be deemed to be entitled to
continued coverage under section 8905a of such title, to the
same extent and in the same manner as if such individual had,
on January 3, 1998, ceased to meet the requirements for being
considered an unmarried dependent child of an enrollee under
such chapter.
(4) Coverage under chapter 89 of title 5, United States
Code, pursuant to an enrollment under this section shall
become effective on January 4, 1998.
(c) Eligibility for FEHBP Limited to Individuals Losing
Eligibility Under Former Health Plan.--Nothing in subsection
(a)(2) or any paragraph of subsection (b) (to the extent such
paragraph relates to the plan described in subsection (a)(2))
shall be considered to apply with respect to any individual
whose eligibility for coverage under such plan does not
involuntarily terminate on January 3, 1998.
(d) Transfers to the Employees Health Benefits Fund.--The
Federal Deposit Insurance Corporation and the Board of
Governors of the Federal Reserve System shall transfer to the
Employees Health Benefits Fund under section 8909 of title 5,
United States Code, amounts determined by the Director of the
Office of Personnel Management, after consultation with the
Federal Deposit Insurance Corporation and the Board of
Governors of the Federal Reserve System, to be necessary to
reimburse the Fund for the cost of providing benefits under
this section not otherwise paid for by the individuals
covered by this section. The amounts so transferred shall be
held in the Fund and used by the Office in addition to
amounts available under section 8906(g)(1) of such title.
(e) Administration and Regulations.--The Office of
Personnel Management--
(1) shall administer the provisions of this section to
provide for--
(A) a period of notice and open enrollment for individuals
affected by this section; and
(B) no lapse of health coverage for individuals who enroll
in a health benefits plan under chapter 89 of title 5, United
States Code, in accordance with this section; and
(2) may prescribe regulations to implement this section.
SEC. 5. FULL DISCLOSURE IN HEALTH PLAN CONTRACTS.
The Office of Personnel Management shall encourage carriers
offering health benefits plans described by section 8903 or
section 8903a of title 5, United States Code, with respect to
contractual arrangements made by such carriers with any
person for purposes of obtaining discounts from providers for
health care services or supplies furnished to individuals
enrolled in such plan, to seek assurance that the conditions
for such discounts are fully disclosed to the providers who
grant them.
SEC. 6. PROVISIONS RELATING TO CERTAIN PLANS THAT HAVE
DISCONTINUED THEIR PARTICIPATION IN FEHBP.
(a) Authority to Readmit.--
(1) In general.--Chapter 89 of title 5, United States Code,
is amended by inserting after section 8903a the following:
``Sec. 8903b. Authority to readmit an employee organization
plan
``(a) In the event that a plan described by section 8903(3)
or 8903a is discontinued under this chapter (other than in
the circumstance described in section 8909(d)), that
discontinuation shall be disregarded, for purposes of any
determination as to that plan's eligibility to be considered
an approved plan under this chapter, but only for purposes of
any contract year later than the third contract year
beginning after such plan is so discontinued.
``(b) A contract for a plan approved under this section
shall require the carrier--
``(1) to demonstrate experience in service delivery within
a managed care system (including provider networks)
throughout the United States; and
``(2) if the carrier involved would not otherwise be
subject to the requirement set forth in section 8903a(c)(1),
to satisfy such requirement.''.
(2) Conforming amendment.--The analysis for chapter 89 of
title 5, United States Code, is amended by inserting after
the item relating to section 8903a the following:
``8903b. Authority to readmit an employee organization plan.''.
(3) Applicability.--
(A) In general.--The amendments made by this subsection
shall apply as of the date of enactment of this Act,
including with respect to any plan which has been
discontinued as of such date.
(B) Transition rule.--For purposes of applying section
8903b(a) of title 5, United States Code (as amended by this
subsection) with respect to any plan seeking to be readmitted
for purposes of any contract year beginning before January 1,
2000, such section shall be applied by substituting ``second
contract year'' for ``third contract year''.
(b) Treatment of the Contingency Reserve of a Discontinued
Plan.--
(1) In general.--Subsection (e) of section 8909 of title 5,
United States Code, is amended by striking ``(e)'' and
inserting ``(e)(1)'' and by adding at the end the following:
``(2) Any crediting required under paragraph (1) pursuant
to the discontinuation of any plan under this chapter shall
be completed by the end of the second contract year beginning
after such plan is so discontinued.
``(3) The Office shall prescribe regulations in accordance
with which this subsection shall be applied in the case of
any plan which is discontinued before being credited with the
full amount to which it would otherwise be entitled based on
the discontinuation of any other plan.''.
(2) Transition rule.--In the case of any amounts remaining
as of the date of enactment of this Act in the contingency
reserve of a discontinued plan, such amounts shall be
disposed of in accordance with section 8909(e) of title 5,
United States Code, as amended by this subsection, by--
(A) the deadline set forth in section 8909(e) of such title
(as so amended); or
(B) if later, the end of the 6-month period beginning on
such date of enactment.
SEC. 7. MAXIMUM PHYSICIANS COMPARABILITY ALLOWANCE PAYABLE.
(a) In General.--Paragraph (2) of section 5948(a) of title
5, United States Code, is amended by striking ``$20,000'' and
inserting ``$30,000''.
(b) Authority to Modify Existing Agreements.--
(1) In general.--Any service agreement under section 5948
of title 5, United States Code, which is in effect on the
date of enactment of this Act may, with respect to any period
of service remaining in such agreement, be modified based on
the amendment made by subsection (a).
(2) Limitation.--A modification taking effect under this
subsection in any year shall not cause an allowance to be
increased to a rate which, if applied throughout such year,
would cause the limitation under section 5948(a)(2) of such
title (as amended by this section), or any other applicable
limitation, to be exceeded.
(c) Rule of Construction.--Nothing in this section shall be
considered to authorize additional or supplemental
appropriations for the fiscal year in which occurs the date
of enactment of this Act.
SEC. 8. CLARIFICATION RELATING TO SECTION 8902(K).
Section 8902(k) of title 5, United States Code, is
amended--
(1) by redesignating paragraph (2) as paragraph (3); and
(2) by inserting after paragraph (1) the following:
``(2) Nothing in this subsection shall be considered to
preclude a health benefits plan from providing direct access
or direct payment or reimbursement to a provider in a health
care practice or profession other than a practice or
profession listed in paragraph (1), if such provider is
licensed or certified as such under Federal or State law.''.
The SPEAKER pro tempore. Pursuant to the rule, the gentleman from
Florida [Mr. Mica] and the gentleman from Maryland [Mr. Cummings] each
will control 20 minutes.
The Chair recognizes the gentleman from Florida [Mr. Mica].
Mr. MICA. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, the Federal Government Employees Health Care Protection
Act of 1997, H.R. 1836, makes some very significant improvements in the
Federal Employees Health Benefit Program. It was introduced by the
distinguished chairman of the full Committee on Government Reform and
Oversight, the gentleman from Indiana [Mr. Burton], in order to protect
the integrity of the Federal Employees Health Benefit Program.
This is truly a bipartisan piece of legislation. The Office of
Personnel Management, which administers this health benefits program,
asked for many of the specific changes this bill proposes and suggested
much of the language incorporated in this measure.
Additionally, some provisions in this bill are substantially similar
to those in a bill which was introduced by the distinguished gentleman
from Maryland, [Mr. Cummings], who is the ranking member of our
Subcommittee on Civil Service. I want to take this opportunity to
commend the gentleman
[[Page H9917]]
from Indiana [Mr. Burton] for his leadership on this important piece of
legislation and these issues, and thank the gentleman from Maryland
[Mr. Cummings] for his leadership and for his close cooperation on this
particular piece of legislation.
Mr. Speaker, almost 9 million Federal employees, postal workers,
retirees, and their families depend on the Federal Employee Health
Benefit Program. They rely on this program to obtain high quality
health care at affordable prices. For the most part, the program has
been a great success story. It is widely considered to be a model
employer-sponsored health care plan, and many have suggested that its
model should be copied so others in need of coverage could have access
to a similar program.
Key to the success is in fact the market orientation of the program.
It provides Federal employees and retirees with the opportunity to
choose from among numerous competing health care plans. Consumer choice
and competition have kept premiums in check.
To keep the cost of health care affordable for our Federal employees,
retirees, and other dependents, Mr. Speaker, it is important to protect
their health benefits from those few unscrupulous health care providers
that attempt to defraud the system or engage in other improper
practices.
H.R. 1836 strengthens the Office of Personnel Management's ability to
debar health care providers who commit such misconduct, and it also
allows OPM to impose civil monetary penalties.
Fraudulent and abusive practices drive up the costs of our health
care. Under this bill, OPM will better be able to protect the taxpayers
and Federal health care consumers by acting swiftly against unethical
providers.
This bill also contains other provisions that are very important, Mr.
Speaker. For the first time, this bill establishes rules under which
employee organizations-sponsored health care plans may reenter the
Federal Employee Health Benefit Program after previously discontinuing
their participation. It also requires the Office of Personnel
Management to distribute the reserves of such plans that withdraw from
the FEHB to plans that remain in the program.
Another feature of this legislation makes clear that the FEHB
contracts preempt State and local laws. This is a necessary provision
which will permit nationwide plans in the program to provide uniform
benefits throughout our country.
Another important problem this bill addresses is the use of so-called
silent PPOs. Mr. Speaker, PPOs, preferred provider organizations,
negotiate lower rates from medical care providers. In exchange, the
PPOs provide certain incentives to the providers. Directed PPOs promise
to direct patients to the provider. Nondirected PPOs may promise
financial incentives such as prepayment or prompt payment. Both
directed PPOs and nondirected PPOs are in fact legitimate business
arrangements, but silent PPOs are not. Silent PPOs arrange for carriers
to pay discounted rates when they are not, in fact, entitled to them.
They violate the terms of the discounted rate arrangements the
providers have entered into with networks or carriers. Unfortunately,
many people believe the Office of Personnel Management has tacitly
encouraged the use of silent PPOs in a shortsighted effort to obtain
lower rates from providers under any circumstances.
Hospitals and doctors are the first victims of silent PPOs, but in
the end, the practice in fact drives up health care costs for all
consumers, just as shoplifters drive up the cost of retail purchases
for everyone.
Everyone agrees, Mr. Speaker, that full disclosure is the answer to
this problem. This legislation, H.R. 1836, requires OPM to encourage
carriers who enter into discount arrangements with third parties to
seek assurances that the third party has fully disclosed the terms of
the discount to the health care provider. This solution protects the
sanctity of contracts and the integrity of the FEHB program without
hindering legitimate PPOs, whether they are directed or nondirected.
Finally, Mr. Speaker, this bill permits certain employees and
retirees from the Fed and also the FDIC to participate in our Federal
Employees Health Benefit Program. Unless both Houses of Congress pass
this bill during this session, some employees at these agencies will
not be able to participate in the government's health care benefit
program next year. These agencies in fact will be forced to find more
costly alternatives to cover those employees.
I urge all Members to support this bill and the many improvements it
offers us and our Federal employees today.
Mr. Speaker, I reserve the balance of my time.
Mr. CUMMINGS. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, I first of all want to take a moment to compliment the
gentleman from Florida [Mr. Mica], the subcommittee chairman, who has
worked very closely with this side of the aisle to make sure that we
came up with a very, very good bill. I would also like to take a moment
to recognize the ranking member of our full committee, Mr. Waxman, and
to recognize the gentleman from Indiana, Mr. Burton, our chairman, for
this excellent piece of legislation. Furthermore, I would like to
recognize two of our Members on our side, the gentlewoman from
Washington, DC [Ms. Norton] and the gentleman from Tennessee (Mr.
Ford), who have worked very, very hard, and of course the gentlewoman
from Maryland [Mrs. Morella], my colleague, who has played a very
significant role with this legislation. I want to thank all of my
colleagues for what we have been able to do together to make life a
little bit easier for our Federal employees.
Mr. Speaker, H.R. 1836, the Federal Employees Health Care Protection
Act of 1997, is a good bill that has won strong bipartisan support. It
has at its core a provision that would enable the Office of Personnel
Management to effectively use administrative sanctions to protect our
health care program from fraud and abuse perpetrated by unscrupulous
health care providers.
The enactment of this particular reform was requested by OPM earlier
this year. I support it, and in fact, introduced a narrow bill to
achieve the same result. H.R. 1836, however, contains some additional
provisions that would improve the administration of the Federal
Employees Health Benefits Program. I will highlight just a few of them.
The bill contains a provision that would strengthen the current
preemption statute in title V so as to ensure that FEHB's programs and
national plans can continue to provide uniform benefits and rates to
enrollees regardless of where they live.
Another provision would permit active and retired employees of the
Federal Deposit Insurance Corporation and the Federal Reserve System to
enter the FEHB Program. This will save both agencies several millions
of dollars in future premium costs.
{time} 1515
This bill also requires OPM to encourage participating health plans
that contract with third parties to obtain discounted rates from health
care providers to seek assurances that the conditions surrounding those
discounts have been fully disclosed.
This proposal had proven to be somewhat controversial. I am pleased
to say, however, that the majority worked cooperatively with our side
and with the Office of Personnel Management to reach agreement on the
language in the bill.
Finally, H.R. 1836 clarifies a provision of an existing law
concerning direct access and reimbursement to health care providers in
the program. The inclusion of that provision had also stirred some
controversy; however, a compromise was reached on it as well.
Mr. Speaker, I believe that H.R. 1836 makes important and needed
improvements in the Federal Employees Health Benefits Program. I urge
all Members to give their support to this very, very significant piece
of legislation. Again, I thank the subcommittee chairman for his
cooperation.
Mr. Speaker, I reserve the balance of my time.
Mr. MICA. Mr. Speaker, I am pleased to yield 5 minutes to the
distinguished gentleman from Indiana [Mr. Burton], the chairman of our
full Committee on Government Reform and Oversight.
Mr. BURTON of Indiana. Mr. Speaker, I thank the gentleman for
yielding time to me.
[[Page H9918]]
Mr. Speaker, earlier this year I introduced H.R. 1836, the Federal
Employees Health Protection Act of 1997, to protect Federal employees
and taxpayers by helping to reduce fraud in the Federal Employees
Health Benefit Program. This bill will help strengthen the integrity
and the standards of the FEHBP and continue its reputation as one of
the strongest, most cost-effective and comprehensive programs in the
United States.
I want to commend the chairman of the Subcommittee on Civil Service,
the gentleman from Florida [Mr. Mica], for his diligence in getting
this bill before the Committee on Government Reform and Oversight for
consideration. Last week the full committee unanimously approved H.R.
1836.
This is a pro-Federal employee bill and is supported by all Members
of the Congress from the D.C. metropolitan area. H.R. 1836 is a
noncontroversial, bipartisan bill cosponsored by the ranking minority
member of the Subcommittee on Civil Service, the gentleman from
Maryland, Mr. Cummings, and the ranking minority member of the full
committee, the gentleman from California, Mr. Henry Waxman.
H.R. 1836 is supported by the major hospital and health care
associations, the National Association of Postmasters, the National
Treasury Employees Union, the National Association of Retired Federal
Employees, the Federal Managers Association, a number of health benefit
carriers, the Federal Deposit Insurance Corporation, and the Federal
Reserve. In fact, the only opposition to this bill is likely to come
from health care providers and brokers who engage in unethical business
practices.
The FEHB Program is the largest employer-sponsored health system in
this country. It insures approximately 9 million Federal employees,
annuitants, and their dependents at a cost of $16 billion a year. It is
often cited as the model health care program that the private sector
and public sector should attempt to replicate.
Through private sector competition with limited governmental
intervention, this program has effectively and efficiently contained
costs and continued to provide quality health care. The benefits have
been very well explained by the gentleman from Florida [Mr. Mica] and
the gentleman from Maryland [Mr. Cummings], so I will not go into all
those, but I would like to say that I urge support of all of my
colleagues for this pro-Federal employee legislation.
Through the changes included in this bill, the integrity and the
standards of the FEHB Program will be strengthened and protected. It is
also my sincere hope that once this legislation is approved by the full
House of Representatives, the Senate will move expeditiously and pass
this very important bill.
I urge all of my colleagues to support this legislation that will
help reduce fraud in the Federal Employees Health Benefit Program. Once
again, congratulations on a job well done to the gentleman from Florida
[Mr. Mica] and the gentleman from Maryland [Mr. Cummings].
Mr. CUMMINGS. Mr. Speaker, I reserve the balance of my time.
Mr. MICA. Mr. Speaker, I am pleased to yield 5 minutes to the
gentlewoman from Maryland [Mrs. Morella], another distinguished member
of the Committee on Government Reform and Oversight.
Mrs. MORELLA. I thank the gentleman for yielding me the time, Mr.
Speaker.
Mr. Speaker, I rise in strong support of H.R. 1836, the Federal
Employees Health Care Protection Act of 1997. Again, I offer my thanks
to the gentleman from Indiana [Chairman Burton] and the Subcommittee on
Civil Service Chair, the gentleman from Florida [Mr. Mica] for working
with me and the other Members to fine-tune this legislation as it moves
through committee. My commendation also to the ranking member, the
gentleman from Maryland [Mr. Cummings], my colleague. As he mentioned,
this legislation has bipartisan support.
Mr. Speaker, FEHBP is an outstanding program. But even among the best
programs there is always room for improvement. The FEHBP is critically
important to my constituents. Every year I hold a symposium for Federal
employees and retirees in my district. The turnout is enormously high.
The comments about FEHBP are generally very positive. FEHBP is the
country's largest employer-based health insurance program, serving the
health care needs of almost 10 million Federal employees, retirees and
their families. In fact, when Congress considered health care reform
in 1994, FEHBP was touted as a model.
FEHBP enjoys high customer satisfaction. Over 85 percent of
participants in fee-for-service plans and HMO's are satisfied with
their FEHBP plan. It is critical that we ensure that its success
continues.
One important way Congress has ensured the continued success of FEHBP
was by adopting an amendment that I offered to the budget
reconciliation bill to prevent an annual increase of $276 per person in
the program beginning in 1999. The new formula I offered as an
amendment is derived from taking a weighted average of all the plans
and setting the maximum Government contribution at 72 percent. It will
ensure that Federal employees' premiums do not rise. Thus, the
Government's share and the employees' share will remain the same.
The legislation before us is another opportunity to improve FEHBP.
This legislation attacks fraud and abuse in the FEHB Program. It
provides OPM with better tools to swiftly penalize fraudulent health
care providers. The legislation will also enable OPM to bar fraudulent
providers from FEHBP participation and impose monetary penalties on
providers who engage in misconduct.
I want to, again, thank the gentleman from Florida [Chairman Mica]
and the ranking member, the gentleman from Maryland [Mr. Cummings], for
their leadership on this issue.
H.R. 1836 extends FEHBP to the Federal Deposit Insurance Corporation
and Federal Reserve Board employees. Without this legislation, the FDIC
and the FED will be forced to establish a non-FEHB plan, costing both
these agencies and the taxpayers a considerable amount of money and
imposing unnecessary administrative burdens on the FDIC and FED. As the
calendar year comes to a close, it is critical we move this legislation
quickly.
The legislation also contains important language in section 5
concerning the disclosure of silent PPO's. While I opposed section 5 as
it was originally drafted, I am pleased with the language that is in
this legislation and the report language which will not restrict the
competitive relationship between directed and nondirected PPO's.
There is a clear distinction between silent PPO's and the legitimate
directed and non-directed PPO's. This section will not prohibit OPM
from continuing to encourage FEHBP carriers to seek out the lowest
prices possible for goods and services. Millions of dollars each year
in savings accrue to Federal employees and the Government through the
use of various savings initiatives, including both directed and
nondirected PPO efforts. I am pleased that this legislation will not
impede this activity.
Today I want to thank both the gentleman from Florida [Mr. Mica] and
the gentleman from Indiana [Mr. Burton] for ensuring that we move
forward in a positive direction without increasing the costs to FEHBP
that would have been borne jointly by the Federal Government and
Federal employees.
Section 7 of H.R. 1836 was added by an amendment that I offered to
the bill in subcommittee to increase the physician's comparability
allowance, a critically important tool used to recruit and retain
Federal physicians. I recently commissioned a GAO study to review the
PCA and its usefulness. This September 1997 GAO report confirms that
PCA is critical. Since I requested the GAO study, I have heard from
hundreds of Federal physicians across the country who have stated very
clearly that, without the PCA, they would have chosen a different
career. This section would increase the PCA from $20,000 to $30,000,
and it has not been increased for 10 years.
The increase, however, would not result in an increase in
appropriations. It simply allows agencies to pay an additional PCA from
their own budgets based on their recruitment and retention needs.
According to the Office of Personnel Management, the PCA constitutes a
declining percentage of income.
[[Page H9919]]
I had also hoped to include a provision of legislation that I
introduced to H.R. 2541 that would include a physician's PCA in his or
her average pay in order to compute retirement. I understand Chairman
Mica's cost concerns, and I have requested a CBO score so we can move
this piece forward at a later date.
The over 2,700 Federal physicians eligible for the PCA are working on
cures for HIV/AIDS, cancer, heart disease, protecting the safety of
food and drugs, providing medical care to Defense and State Department
employees and dependents, airline pilots, astronauts, Native Americans,
Federal prisoners. Indeed, it is critically important that we have this
PCA in this particular bill.
Again, I want to thank the chairman of the subcommittee and ranking
member, and the chairman of the full committee and ranking member of
the full committee. This is good legislation.
Mr. CUMMINGS. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, I just wanted to close by saying, again, that this is a
very excellent piece of legislation. I would recommend that all the
Members of this great House vote in favor of it.
Mr. Speaker, I have no further requests for time, and I yield back
the balance of my time.
Mr. MICA. Mr. Speaker, I yield myself the balance of my time.
Mr. Speaker, the Federal Employees Health Care Protection Act of 1997
deserves the support of every Member. This bill provides the Office of
Personnel Management the tools to deal swiftly with health care
providers who defraud the program or who engage in similar misconduct.
The bill protects the integrity of the FEHBP in other ways as well.
First, it makes it abundantly clear that carriers and preferred
provider networks are expected to live up to the terms of their
agreements with doctors and hospitals. Also, it establishes rules for
the reentry into plans that have been discontinued as far as
participation in the program. Finally, it levels the playing field for
certain health care providers by clarifying that carriers may provide
direct access and direct payment to those providers, even though they
are not named in the relevant statute.
Very finally, in closing, Mr. Speaker, a provision of this bill
improves the Federal Government's ability to compete for highly
qualified doctors by raising the maximum physician comparability
allowance.
I want to take this final moment to thank the gentleman from Indiana,
Chairman Burton, for his introduction of the legislation, the gentleman
from Maryland [Mr. Cummings], the ranking member, and the gentlewoman
who worked so hard on behalf of our civil servants, the gentlewoman
from Maryland [Mrs. Morella], and Members and staff who have helped put
this bill together.
This is a good bill, Mr. Speaker. I urge all Members to support this
legislation.
Mr. SOUDER. Mr. Speaker, I wish to congratulate you on this important
bipartisan legislation to protect the Federal Employees Health Benefits
Program [FEHBP] from fraud. I strongly support this legislation, which
protects taxpayers from the misuse of their tax dollars.
One provision that is particularly meritorious is section 5 of the
bill, which attempts to limit the growth of a group of health care
brokers, known as silent preferred providers organizations, or silent
PPO's. Through silent PPO's payors are obtaining preferred-provider
discounts without physician, hospital, or other health system
providers' knowledge or consent. These silent PPO's undermine
legitimate PPO's by causing health care providers to question the
utility of entering into legitimate contracts with health benefit
carriers if fraudulent discounts are taken elsewhere. This fraudulent
discounting is particularly insidious because it's so hard to track.
Unfortunately, the Federal Government, through the Office of Personnel
Management [OPM], has encouraged the use of these silent PPO's in the
FEHBP.
Mr. Speaker, I believe the compromise language included in the
Chairman's mark, which was proposed by the Office of Personnel
Management, represents a substantial change in the administration's
attitude toward silent PPO's. As I indicated OPM had previously
encouraged the proliferation of these brokers of health care discounts.
I commend the administration for recognizing the error of its ways and
now moving to eliminate silent PPO's in the program.
Mr. Speaker, I again commend you for raising this issue by including
section 5 in your legislation, and while the provision has been altered
I believe the new language, which garnered the support of the
administration, is a direct reflection of your leadership on this
issue. It is only through your commitment to eliminating the fraudulent
use of discounts that we are here today with a bipartisan bill that
will substantially benefit all Federal employees and taxpayers.
It has been brought to my attention that the inspector general [IG]
at OPM is investigating the activities of these silent PPO's, and I
urge that this Committee should work with the IG to keep a close eye on
these health care discounting practices. Furthermore, States are
beginning to examine the activities of silent PPO's and North Carolina
has recently passed legislation designating such discounting activities
as unfair trade practices thereby subjecting violators to treble
damages and attorney fees.
I urge support for H.R. 1836.
Mr. DAVIS of Virginia. Mr. Speaker, I rise today in support of H.R.
1836, and I want to compliment Mr. Burton, the chairman of the
Government Reform and Oversight Committee, for his sponsorship of this
important bill. I had expressed concern regarding the original language
in section 5 of this bill and I commend both Mr. Mica, chairman of the
Civil Service Subcommittee, and Mr. Burton for ensuring through
redrafting that the concerns about potential increased costs to the
Federal Employees Health Benefits Program [FEHBP] were addressed. The
redrafting of section 5 allows the FEHBP to continue to benefit from
the flexibility of being able to adapt quickly to ever-changing health
care marketplace dynamics. This flexibility has been an enduring
strength of the FEHBP and I am pleased to see that it will not be
adversely impacted.
Mr. Speaker, section 5 of H.R. 1836 focuses on the use of silent
PPO's in the FEHBP and is intended to address the inappropriate use of
such discounts and, in so doing, protect plan enrollees and taxpayers
in a manner consistent with the other provisions in the Federal
Employees Health Care Protection Act of 1997. There is no clear
distinction between silent PPO's and legitimate directed and
nondirected PPO's. Directed and nondirected PPO's provide legitimate
valuable benefits to health care providers, carriers, and patients.
Nondirected PPO's are currently saving the Government and the FEHBP
millions of dollars a year through their legitimate utilization of a
number of fee-for-service carriers. Examples of nondirected discounts
are those given by participating providers in return for incentives
other than steerage, such as prompt payment, prepayment, claim audit
assistance, and negotiated provider settlements.
Many of us believed that the original language of section 5 would
increase costs to the FEHBP by placing nondirected PPO's at a market
disadvantage which would have killed the savings they generate for the
FEHBP. The Congressional Budget Office [CBO] agreed and scored the
original language at a cost to the FEHBP of $10 to $50 million per
year. CBO's initial estimates regarding the rewrite of section 5 is
that it should now be neutral. I appreciate the efforts of Mr. Mica and
Mr. Burton to redraft this section so that it accomplishes their stated
goal of shedding light on silent PPO's without adversely impacting the
program savings direct and nondirect PPO's have been generating for
many years now.
Mr. Speaker, I urge my colleagues to support this important
legislation.
Mr. DeLAY. Mr. Speaker, I rise today in support of H.R. 1836, the
Federal Employee Health Care Protection Act of 1997. I want to commend
the chairman of the Civil Service Subcommittee, Mr. Mica, and the
chairman of the Government Reform and Oversight Committee, Mr. Burton,
for all of their efforts to bring this bill before the House today.
Virtually everyone agrees that vigorous competition among providers
and carriers has been critical to the success of the Federal Employees
Health Benefit Program. While Congress has provided the Office of
Personnel Management with the broad authority to referee this
competition, we have wisely chosen to allow the marketplace to sort out
many related issues.
I was initially concerned that the original language in section 5 of
the bill would have veered away from our reliance on the marketplace by
imposing an unnecessary Federal mandate. This mandate would have
unfairly tilted the playing field between directed and nondirected
PPO's and resulted in significantly higher costs for the FEHBP.
I am pleased that section 5 has now been rewritten so that OPM may
continue to allow FEHBP carriers to seek out appropriate provider
discounts in a competitive marketplace.
I appreciate the efforts of Mr. Mica and Mr. Burton to redraft
section 5 so that it accomplishes their stated goal of shedding light
on silent PPO's without adversely impacting the program savings that
both direct and nondirect PPO's have been able to achieve. I encourage
my colleagues to support final passage of this bill.
[[Page H9920]]
The SPEAKER pro tempore [Mr. Kingston]. The question is on the motion
offered by the gentleman from California [Mr. Gallegly] that the House
suspend the rules and pass the bill, H.R. 1836, as amended.
The question was taken.
Mr. CUMMINGS. Mr. Speaker, I object to the vote on the ground that a
quorum is not present and make the point of order that a quorum is not
present.
The SPEAKER pro tempore. Pursuant to clause 5 of rule I and the
Chair's prior announcement, further proceedings on this motion will be
postponed.
The point of no quorum is considered withdrawn.
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