[Federal Register Volume 59, Number 232 (Monday, December 5, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-29809]


  Federal Register / Vol. 59, No. 232 / Monday, December 5, 1994 /
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[[Page Unknown]]

[Federal Register: December 5, 1994]


                                                   VOL. 59, NO. 232

                                           Monday, December 5, 1994

OFFICE OF PERSONNEL MANAGEMENT

5 CFR Part 890

RIN 3206-AG40

 

Federal Employees Health Benefits Program; HMO Plan Applications

AGENCY: Office of Personnel Management.

ACTION: Interim regulations with request for comments.

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SUMMARY: The Office of Personnel Management (OPM) is issuing interim 
regulations to clarify the policy under which it invites applications 
from comprehensive medical plans (HMO's) after a determination that it 
would be beneficial to enrollees and the Federal Employees Health 
Benefits (FEHB) Program to do so. This clarification is necessary in 
order to ensure that OPM and the HMO's are providing the best possible 
service to FEHB enrollees.

DATES: Interim regulations are effective January 4, 1995. comments must 
be received on or before February 3, 1995.

ADDRESSES: Written comments may be sent to Lucretia F. Myers, Assistant 
Director for Insurance Programs, Retirement and Insurance Group, Office 
of Personnel Management, P.O. Box 57, Washington, DC 20044; delivered 
to OPM, room 4351, 1900 E Street, NW., Washington, DC; or FAXed to 
(202) 606-0633.

FOR FURTHER INFORMATION CONTACT: Mary Ann Mercer, (202) 606-0191.

SUPPLEMENTARY INFORMATION: OPM is issuing interim regulations to 
clarify the policy under which the Director of OPM invites applications 
from HMOs interested in participating in the FEHB Program. As 
administrator of the FEHB Program, it is necessary that OPM consider 
the needs of FEHB enrollees and the FEHB Program in determining whether 
to invite applications from HMOs for a given contract year. 
Consequently, each year, the Director makes a determination whether or 
not it would be beneficial to enrollees and the FEHB Program to invite 
HMOs to apply. This authority parallels OPM's discretion to consider 
changes in the rates and benefits of participating plans when the 
Director of OPM deems it in the best interest of enrollees and the FEHB 
Program (Sec. 890.203(b)).
    With only limited possible exception, OPM does not intend to accept 
HMO applications for the 1996 contract year. We also plan to keep in 
place for the 1996 contract year the benefits that go into effect in 
1995 for plans already participating in the FEHB Program. Further, OPM 
will print no new plan brochures for existing plans or comparison guide 
for contract year 1996.
    On a limited basis, OPM will entertain applications from HMOs where 
it would improve the access to medical care in a medically underserved 
state. That is, we will consider applications from HMOs only in states 
designated as medically underserved areas (MUAs), as determined by OPM 
under the methodology cited in 5 U.S.C. 8902(m)(2)(A), where the choice 
of an HMO is limited or would otherwise be nonexistent. To be 
considered by OPM, the plan must be in a state that qualifies as an MUA 
on January 31 of the year preceding the FEHB Program contract year for 
which the application has been submitted. OPM expects that, under this 
exception, plans will be accepted only under rare and unusual 
circumstances.
    Except in these situations, the information disseminated during the 
November-December 1995 Open Season will be limited to rate change 
information for plans currently participating in the Program. In the 
future, OPM will publish a notice in the Federal Register inviting 
applications from plans interested in participating in the FEHB 
Program. We anticipate considering all applications for contract year 
1997.
    This course of action is necessary so that OPM may utilize its 
resources in the most effective way and in a manner most beneficial to 
enrollees. It is in the best interest of enrollees that OPM ensure that 
FEHB Program contracts are administered so that benefits to enrollees 
are optimum and the costs to enrollees and the FEHB Program are 
minimized. OPM shares the concern of the Congress, the General 
Accounting Office (GAO), and the Office of Management and Budget (OMB) 
about contract administration under the FEHB Program. In order to 
improve standards and oversight of insurance carriers and enhance our 
overall program operations to improve service to OPM's customers, 
additional emphasis needs to be placed on functions that, of necessity, 
are given lower priority when staff are occupied with applications, 
negotiations, and open season materials review.
    During 1995, OPM will redirect resources to projects designed to 
address weaknesses in the oversight of contractor performance as well 
as improve communication with FEHB enrollees to ensure that we and our 
participating carriers are meeting their needs. In future years, we 
will prioritize functions.
    While OPM is not required to issue regulations that clarify 
existing policy, we understand that there is interest in this issue, 
and we wish to give all parties an opportunity to comment. We are 
publishing the regulation at this time before interested HMOs begin the 
time-consuming application process.

Waiver of Notice of Proposed Rulemaking

    Pursuant to section 553(b)(3)(A) of title 5 of the U.S. Code, I 
find that good cause exists for waiving the general notice of proposed 
rulemaking. The interim regulations simply clarify OPM's policy under 
which it invites applications from HMO's interested in participating in 
the FEHB Program.

E.O. 12866, Regulatory Review

    This rule has been reviewed by OMB in accordance with E.O. 12866.

Regulatory Flexibility Act

    I certify that these regulations will not have a significant 
economic impact on a substantial number of small entities because they 
primarily affect OPM's administrative procedures.

List of Subjects in 5 CFR Part 890

    Administrative practice and procedure, Government employees, Health 
facilities, Health insurance, Health professions, Hostages, Iraq, 
Kuwait, Lebanon, Reporting and recordkeeping requirements, Retirement.

Office of Personnel Management.
James B. King,
Director.
    Accordingly, OPM is amending 5 CFR part 890 as follows:

PART 890--FEDERAL EMPLOYEES HEALTH BENEFITS PROGRAM

    1. The authority citation for part 890 continues to read as 
follows:

    Authority: 5 U.S.C. 8913; Sec. 890.803 also issued under 50 
U.S.C. 403p, 22 U.S.C. 4069c and 4069c-1; Subpart L also issued 
under sec. 599C of Pub. L. 101-513, 104 Stat. 2064, as amended.

    2. In Sec. 890.203, paragraph (a)(1) is revised, paragraphs (a)(2) 
through (a)(4) are redesignated as paragraphs (a)(3) through (a)(5) 
respectively, the last sentence in newly designated paragraph (a)(5) is 
revised, a new paragraph (a)(2) is added, and a heading is added for 
paragraph (b) to read as follows:


Sec. 890.203  Application for approval of, and proposal of amendments 
to, health benefits plans.

    (a) New plan applications. (1) The Director of OPM shall consider 
applications to participate in the FEHB Program from comprehensive 
medical plans (CMP's) at his or her discretion. If the Director of OPM 
determines that it is beneficial to enrollees and the Federal Employees 
Health Benefits Program to invite new plans to join the Program, OPM 
will publish a notice in the Federal Register.
    (2) When invited to participate, CMP's should apply for approval by 
writing to the Office of Personnel Management, Washington, DC 20415. 
Application letters must be accompanied by any descriptive material, 
financial data, or other documentation required by OPM. Plans must 
submit the letter and attachments in the OPM-specified format by 
January 31 of the year preceding the contract year for which 
applications are being accepted. Plans must submit evidence 
demonstrating they meet all requirements for approval by March 31 of 
the year preceding the contract year for which applications are being 
accepted. Plans that miss either deadline cannot be considered for 
participation in the next contract year. All newly approved plans must 
submit benefit and rate proposals to OPM by May 31 of the year 
preceding the contract year for which applications are being accepted 
to be considered for participation in that contract year. OPM may make 
counter-proposals at any time.
* * * * *
    (5) * * * The extent of the data and documentation to be submitted 
by a plan so certified by HHS, as well as by a non-certified plan, for 
a particular review cycle may be obtained by writing directly to the 
Office of Insurance Programs, Retirement and Insurance Group, Office of 
Personnel Management, Washington, DC 20415.
* * * * *
    (b) Participating plans. * * *
[FR Doc. 94-29809 Filed 12-2-94; 8:45 am]
BILLING CODE 6325-01-M