[Congressional Record Volume 144, Number 137 (Monday, October 5, 1998)]
[House]
[Pages H9352-H9355]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




          FEDERAL EMPLOYEES HEALTH CARE PROTECTION ACT OF 1997

  Mrs. MORELLA. Mr. Speaker, I move to suspend the rules and concur in 
the Senate amendments to 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.
  The Clerk read as follows:

       Senate amendments:
       Page 2, line 3, strike out ``1997'' and insert ``1998''.
       Page 12, line 8, strike out ``January 3, 1998'' and insert 
     ``or before January 2, 1999''.
       Page 12, lines 13 and 14, strike out ``January 3, 1998'' 
     and insert ``or before January 2, 1999''.
       Page 12, line 18, strike out ``January 3, 1998'' and insert 
     ``or before January 2, 1999''.
       Page 13, line 13, strike out ``January 3, 1998'' and insert 
     ``or before January 2, 1999''.
       Page 13, line 19, strike out ``January 3, 1998'' and insert 
     ``or before January 2, 1999''.
       Page 14, lines 2 and 3, strike out ``January 3, 1998'' and 
     insert ``or before January 2, 1999''.
       Page 14, line 10, strike out ``January 3, 1998'' and insert 
     ``or before January 2, 1999''.
       Page 14, line 16, strike out ``January 4, 1998'' and insert 
     ``January 3, 1999 or such earlier date as established by the 
     Office of Personnel management after consultation with the 
     Federal Deposit Insurance Corporation or the Board of 
     Governors of the Federal Reserve System, as appropriate''.
       Page 14, line 24, strike out ``January 3, 1998'' and insert 
     ``or before January 2, 1999''.
       Page 15, line 13 after ``Office'' insert ``of Personnel 
     Management''.

  The SPEAKER pro tempore. Pursuant to the rule, the gentlewoman from 
Maryland (Mrs. Morella) and the gentleman from Maryland (Mr. Cummings) 
each will control 20 minutes.
  The Chair recognizes the gentlewoman from Maryland (Mrs. Morella).


                             General Leave

  Mrs. MORELLA. Mr. Speaker, I ask unanimous consent that all Members 
may have 5 legislative days within which to revise and extend their 
remarks on the bill, H.R. 1836, as amended by the Senate.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentlewoman from Maryland?
  There was no objection.
  Mrs. MORELLA. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, I want to thank the gentleman from Indiana (Mr. Burton), 
the chairman of the Committee on Government Reform and Oversight, for 
introducing this very important bill. I also want to thank the 
gentleman from Florida (Mr. Mica), chairman of the Subcommittee on 
Civil Service, for his

[[Page H9353]]

assistance in bringing this bill to the floor today; as well as the 
committee's ranking minority member, the gentleman from California (Mr. 
Waxman); and the subcommittee's ranking minority member, the gentleman 
from Maryland (Mr. Cummings), who is going to be handling this bill 
across the aisle, for their support.
  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, and it 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. It is critical 
we continue its success. This legislation will attack fraud and abuse 
in the FEHBP program.
  Turning to section 5 of H.R. 1836, I want to make clear that my 
endorsement of the bill is based upon my understanding that nothing in 
the measure is designed to hinder the types of market forces which have 
made the FEHBP a cost effective health insurance model for other public 
agencies and private industry. This legislation is not intended to tilt 
the competitive playing field in the health insurance marketplace in 
one direction or another.
  Section 5 suggests as its goal the disclosure of certain rate 
agreements which might yield savings to plans and ultimately to 
enrollees in the Federal Employees Health Benefits Program. I agree 
that the FEHBP plan should be held to no less a standard than private 
sector counterparts.
  When H.R. 1836 was originally introduced, I opposed the draft of 
section 5. As originally drafted, section 5 would have cost the FEHBP 
savings and created an administrative burden that would have increased 
administrative costs. These increased costs to FEHBP would have been 
borne jointly by the Federal Government and Federal employees and 
retirees. I appreciate the willingness of the gentleman from Indiana 
(Mr. Burton) to listen to the many stakeholders involved in the issue 
and consent to redrafting section 5, the new draft now part of this 
legislation.
  While the intent of this legislation was in doubt after the report of 
the Committee on Government Reform and Oversight was altered prior to 
filing last year, I believe the Senate has clarified our intentions and 
join my colleagues in recognizing the Senate's report, especially the 
additional views filed by Subcommittee Chairman Cochran of the Senate 
Committee on Governmental Affairs, and Senators Glenn and Levin, as the 
proper memorialization of our congressional intent on section 5. We 
thank them.
  Section 5 of H.R. 1836 will tell the Office of Personnel Management 
to encourage disclosure of certain arrangements in an effort to 
maintain the integrity of FEHBP. I support this effort. At the same 
time, I understand that section 5 would create no additional duties for 
the Office of Personnel Management or have a chilling effect on current 
negotiated arrangements which yield the program savings. I understand 
that this fact is reinforced by the Congressional Budget Office in 
estimating that the section would have no budgetary effect on the 
program.

                              {time}  1415

  I am including the Senate committee report's description at this 
point in the Record to clarify our mutual intent.

       Based upon concerns raised to the House Government Reform 
     and Oversight Committee by the American Medical Association 
     and the American Hospital Association that certain payers 
     were taking advantage of discounts to which they were not 
     entitled, the Office of Personnel Management Inspector 
     General was requested to conduct a review ``to determine 
     whether silent PPOs were used by FEHBP carriers to capture 
     discounts to which they were not entitled.''

  The additional views of Senators Cochran, Glenn and Levin in the 
Record further clarify our mutual intent:

       In brief the Office of Personnel Management Inspector 
     General found no evidence that health care providers were 
     being victimized by FEHBP carriers, nor any evidence of 
     schemes allowing payers to capture discounts they are not 
     contractually entitled to receive. Although we support 
     inclusion in H.R. 1836 of section 5 bill language, we believe 
     Congress should be careful to avoid interjecting the Federal 
     Government into contractual issues between health care 
     providers and health plans.
       A recent audit by the OPM IG defined ``Silent'' PPOs as a 
     health care provider discount taken by an FEHBP carrier 
     without a contract existing between the PPO and the health 
     care provider. This is the type of unethical practice that 
     the FEHBP carriers should avoid.
       Further, PPOs, both directed and nondirected, provide 
     various incentives to health care providers which contract 
     with PPOs for the benefit of FEHBP; i.e, to reduce health 
     care costs. The FEHBP must continue to benefit from these 
     relationships, recognizing that the PPOs must always have a 
     contract with the health care provider.

  During our committee deliberations, issues were raised with respect 
to activities of ``silent PPOs'' and the potential adverse impact their 
discounts could have on cost initiatives within the FEHBP.
  PPOs play an important role in today's health care market. Both 
directed and nondirected PPOs provide legitimate and valuable benefits 
to health care providers, carriers, and patients. Nondirected discounts 
are currently saving the government and FEHBP enrollees millions of 
dollars a year through their legitimate utilization by 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.
  Section 7 of H.R. 1836 resulted from an amendment I offered to the 
bill in subcommittee to increase the Physicians Comparability 
Allowance, a critically important tool to recruit and retain Federal 
physicians. Last fall, I commissioned a GAO study to review the PCA and 
its usefulness. The September 1997 GAO report confirms that the PCA is 
critical. Since I requested the GAO study, I have heard from hundreds 
of Federal physicians from across the country who 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. The 
Physicians Comparability Act has not been increased in 10 years. This 
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.'' I had also hoped to 
include a provision in legislation that I introduced, H.R. 2541, that 
would include a physician's PCA in his or her average pay for purposes 
of computing retirement.
  I understood the cost concerns of the chairman, the gentleman from 
Florida (Mr. Mica), and I requested a CBO score. Now that we have 
received the CBO score demonstrating that this provision does not 
impose any significant cost on the Federal Government, I am hopeful 
that we can move this piece forward as well.
  The over 2,700 Federal physicians eligible for the PCA are working on 
cures for AIDS, cancer, and 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, 
and Federal prisons.
  The Government cannot pay physicians on the same scale as physicians 
employed in hospitals, HMOs, and universities. Consequently, the PCA 
provides some compensation to offset this loss of income for Federal 
physicians to ensure that the Government can recruit and retain highly-
trained and well-qualified physicians.
  I urge my colleagues, Mr. Speaker, to join me in supporting this 
important measure.
  Mr. Speaker, I reserve the balance of my time.
  Mr. CUMMINGS. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, H.R. 1836, the Federal Employees Health Care Protection 
Act of 1998, 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 perpetuated by unscrupulous 
health care providers.
  By strengthening OPM's administrative powers and giving it the 
authority to impose monetary sanctions on health care providers who 
engage in professional and financial misconduct, OPM will be able to 
assure Federal employees that they are being provided

[[Page H9354]]

with health care services free of mismanagement and abuse.
  The enactment of this reform was requested by the Office of Personnel 
Management last year because they found imposing administrative 
sanctions under current law was time-consuming and expensive. The House 
passed H.R. 1836 last November, and the Senate passed a bill last week 
after making necessary technical changes to update the dates on which 
certain sections of the bill are to be implemented.
  H.R. 1836, however, contains some additional provisions that will 
also improve the administration of the Federal Employees Health Benefit 
Program. I would like to highlight just a few of them.
  The bill contains a provision to strengthen the current preemption 
statute in title 5 so as to ensure FEHBP's 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 reenter FEHBP. This will save both agencies several millions 
of dollars in future premium cost.
  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 a condition surrounding those 
discounts had been fully disclosed.
  Finally, H.R. 1836 clarifies a provision of existing law concerning 
direct access and reimbursement to health care providers in the 
program.
  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 it their support.
  Mr. Speaker, I reserve the balance of my time.
  Mrs. MORELLA. Mr. Speaker, I yield such time as he may consume to the 
distinguished gentleman from Virginia (Mr. Davis).
  Mr. DAVIS of Virginia. Mr. Speaker, I thank my friend, the 
gentlewoman from Maryland (Mrs. Morella) for yielding.
  Mr. Speaker, I appreciate her work on the bill and the work of the 
gentleman from Maryland (Mr. Cummings) on this bill as it moves forward 
to what will hopefully be a successful passage today.
  This bill, H.R. 1826, does amend the FEHBP to expand the power of the 
Office of Personnel Management to sanction fraudulent health care 
providers. The bill authorizes OPM to debar and fine fraudulent health 
providers that are participating in the FEHBP, and I think my 
colleagues have spoken about some of the specifics of this earlier.
  One of the important things this does is it takes about 5,000 
employees and annuitants from the Federal Deposit Insurance Corporation 
and the Federal Reserve Board who are currently ineligible for the 
FEHBP. Because of a change in their coverage, they can now be covered 
by the Federal Employees Health Benefit Plan.
  This is very, very helpful to them. This in no way, shape or form 
reduces the rates that other Federal employees are paying for this. I 
think it is a very critical point that needs to be made, and it will 
give adequate protection and health care to people who are generally 
under the Federal envelope in these two areas.
  I want to thank the gentlewoman from Maryland (Mrs. Morella) for her 
assistance in increasing from $20,000 to $30,000 the maximum amount 
that Federal agencies can pay for the physicians' comparability 
allowance. The comparability allowance was created in 1978 by the 
Physicians' Comparability Act to ease the burden of a critical shortage 
of doctors and vast salary differences between military doctors and 
other Federal doctors, as well as the overall differences between 
Federal and private sector doctors.
  I think both of these provisions are well worth while, I think are 
going to be advantageous to all concerned, and I just want to 
congratulate my colleagues in bringing this to a vote today.
  Mr. CUMMINGS. Mr. Speaker, I yield 3 minutes to the gentlewoman from 
the District of Columbia (Ms. Norton), a distinguished Member who has 
consistently fought hard for Federal employees and been at the 
forefront of just about every battle that I have seen with regard to 
this House and Federal employees.
  Ms. NORTON. Mr. Speaker, I very much thank the gentleman from 
Maryland (Mr. Cummings) for yielding and for his kind words, and I want 
to thank the gentlewoman from Maryland (Mrs. Morella) and the gentleman 
from Maryland (Mr. Cummings) for their leadership on this very 
important issue.
  Mr. Speaker, I also want to congratulate the Office of Personnel 
Management for bringing this matter to the attention of the Congress so 
that we could take action that is corrective of this problem. Delay in 
correcting fraud and abuse at a time when premiums for Federal 
employees are on the rise should not be tolerated, and I am very 
appreciative that this bill has come to the floor before we adjourn.
  By moving to allow the OPM to sanction providers who engage in 
misconduct, we are sending a strong message that being a provider of 
health care for Federal employees is not a right but a privilege. Those 
who abuse that privilege will lose that privilege or be sanctioned for 
their abuse of that privilege.
  Over and over again, Mr. Speaker, the FEHBP is cited as a model for 
health care in the country, and in a number of important ways it has 
proved to be that over time. It will lose its place in that regard 
unless we are willing to step up and do what this bill does, and that 
essentially is to wipe away some of the causes of administrative delay 
which have been responsible for the fact that OPM has not been able to 
move promptly in some instances where misconduct was brought to its 
attention.
  Mr. Speaker, may I also speak in favor of the increase in the 
physicians' comparability allowance. This is a period in which vast 
disparities are found in the location and the willingness of physicians 
to serve. When those disparities can be traced back to income, we must 
look closely at the effect. Here we are not talking about an increase 
in budget. We are talking about allowing an increase in comparability 
pay where that is necessary. This provision attends to a real shortage 
of physicians willing to serve as we need them.
  For these two provisions and for the others in this bill, I am 
personally grateful to the gentlewoman from Maryland (Mrs. Morella) and 
the gentleman from Maryland (Mr. Cummings), and I once again thank them 
for their very diligent and excellent work on this bill.
  Mrs. MORELLA. Mr. Speaker, I have no further speakers on this side. 
Perhaps the gentleman from Maryland (Mr. Cummings) has further 
speakers.
  Mr. CUMMINGS. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, I just wanted to add on to something that the 
distinguished lady from the District of Columbia (Ms. Norton) was just 
speaking about. Back in 1998, the FEHBP amendment has not been an 
effective tool because it mandates exhaustive due process in every 
case, requiring a hearing on the record to be offered before any 
adverse determination takes effect.

                              {time}  1430

  This precludes OPM's use of less formal administrative procedures to 
deny health care providers access to the FEHB program, even where a 
court or State licensing authority previously has found a provider 
guilty of misconduct.
  I just want to say that this law that we are passing today makes that 
process much more practical. I think it is good government. I take a 
moment to thank the other side, particularly my colleague from Maryland 
for all her work that she has done with regard to this legislation and 
other pieces of legislation which we will be considering today. It is 
truly a bipartisan effort and is about lifting up the people of our 
great Nation, those people day in and day out, hour after hour who work 
to make this Nation the best that it can be. Mr. Speaker, I urge my 
colleagues to support this legislation.
  Mr. Speaker, I yield back the balance of my time.
  Mrs. MORELLA. Mr. Speaker, I include for the Record a letter from 
Chairman Mica and myself to Chairman Cochran.
  The text of the letter is as follows:


[[Page H9355]]




                                      House of Representatives

                                    Washington, DC, July 29, 1998.
     Senator Thad Cochran,
     Chairman, Subcommittee on International Security, 
         Proliferation and Federal Services, Washington, DC.
       Dear Chairman Cochran: In response to the Senate's 
     anticipated action in favorably considering H.R. 1836, the 
     Federal Employees Health Benefits Protection Act, and in 
     anticipation of having the measure cleared for the President 
     without need of a conference, we write to clarify the purpose 
     of one element of the bill: Section 5 dealing with preferred 
     provider organizations.
       As your additional views accurately represent, recent audit 
     activity by the OPM Inspector General in response to 
     complaints from provider associations (AMA and AHA) found no 
     evidence that health care providers were being victimized by 
     FEHBP carriers, nor evidence of schemes allowing payers to 
     capture discounts to which they were not contractually 
     entitled.
       Both directed and non-directed PPOs provide various 
     incentives to health care providers which contract with PPOs 
     for the benefit of FEHBP--reducing health care costs. The 
     FEHBP must continue to benefit from these relationships, 
     recognizing that the PPOs must always have a contract with 
     the health care provider. Silent PPO activity, as described 
     by the OPM Inspector General, represents the type of 
     unethical practices that FEHBP carriers should avoid. 
     Further, we understand that the IG found no evidence of 
     ``silent PPO'' activity within the FEHBP.
       We look forward to continuing our close work in sustaining 
     the Federal Employees Health Benefits Program as a model for 
     others to follow.
           Sincerely,
     John Mica,
       Chairman, Subcommittee on Civil Service.
     Connie Morella.

  Mrs. MORELLA. Mr. Speaker, I yield myself such time as I may consume. 
I want to thank my colleagues for their support of this important 
legislation. I would pick up and echo the comments of my colleague from 
Maryland. Indeed this is a bipartisan piece of legislation that will 
help all Federal employees and help us to recruit and retain physicians 
and others into public service which is so very, very important.
  I want to again reiterate my thanks to the gentleman from Indiana 
(Mr. Burton), the gentleman from California (Mr. Waxman), the gentleman 
from Florida (Mr. Mica) chairman of the Subcommittee on Civil Service; 
and the gentleman from Maryland (Mr. Cummings). He is right. We work in 
a very nonpartisan way on the Subcommittee on Civil Service. This 
legislation is evidence of that. I thank him also for his leadership. I 
ask my colleagues to support this legislation.
  Mr. PAPPAS. Mr. Speaker, I rise in support of H.R. 1836, the 
``Federal Employees Health Care Protection Act.''
  While the legislation sets out laudable goals, I want to make clear 
that my endorsement of the bill is based upon my understanding that 
nothing in the measure is designed to hinder the types of market forces 
which have made the FEHBP a cost-effective health insurance model for 
the public agencies and private industry. This legislation is not 
intended to tilt the competitiveness in the health insurance 
marketplace in one direction or another.
  One element of the legislation, Section 5, suggests as its goal the 
disclosure of certain rate agreements which might yield savings to 
plans and enrollees in the Federal Health benefits Program. I agree 
that FEHBP plans should be held to no lesser standard than their 
private sector counterparts and I agree with the clarification of 
Congressional intent in the drafting of Section 5 as set forth in the 
Senate Report's additional views filed by Senate Subcommittee chairman, 
Senator Cochran.
  During our committee deliberations, issues were raised concerning the 
activities of ``silent PPO's'' and the potential of adverse impact 
their discounts could have on cost saving initiatives within the FEHBP. 
Some even speculated that a variety of unethical and perhaps fraudulent 
activities related to ``silent PPOs'' were rampant in the federal 
health program.
  The Inspector General of the Office of Personnel Management dispelled 
these allegations in a report issued on February 26, 1998. The 
Inspector General audit found that the practices alleged are not 
currently prevalent in the FEHBP. The Inspector General further 
asserted that networks of non-directed PPOs operate within a 
contractually authorized environment.
  PPO's play an important role in today's health care market. Both 
directed and non-directed PPO's provide legitimate and valuable 
benefits to health care providers.
  I remain committed to improving the quality of health care offered to 
our federal employees as well as committed to ensuring a diverse and 
competitive environment for health plans and providers.
  Mr. Speaker, I yield back the balance of my time.
  The SPEAKER pro tempore (Mr. Barrett of Nebraska). The question is on 
the motion offered by the gentlewoman from Maryland (Mrs. Morella) that 
the House suspend the rules and concur in the Senate amendments to the 
bill, H.R. 1836.
  The question was taken; and (two-thirds having voted in favor 
thereof) the rules were suspended and the Senate amendments were 
concurred in.
  A motion to reconsider was laid on the table.

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