[Federal Register Volume 60, Number 96 (Thursday, May 18, 1995)]
[Rules and Regulations]
[Pages 26667-26668]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-12169]



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 Rules and Regulations
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  Federal Register / Vol. 60, No. 96 / Thursday, May 18, 1995 / Rules 
and Regulations  

[[Page 26667]]

OFFICE OF PERSONNEL MANAGEMENT

5 CFR Part 890

RIN 3206-AG31


Federal Employees Health Benefits Program: Limitation on 
Physician Charges and FEHB Program Payments

AGENCY: Office of Personnel Management.

ACTION: Interim regulation with request for comments.

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SUMMARY: The Office of Personnel Management (OPM) is issuing an interim 
regulation that amends current Federal Employee Health Benefits (FEHB) 
Program regulations to require that the charges and FEHB fee-for-
service plans' benefit payments for certain physician services 
furnished to retired enrolled individuals do not exceed the limits on 
charges and payments established under the Medicare fee schedule for 
physician services. The regulation authorizes the FEHB plans, under the 
oversight of OPM, to notify the Secretary of Health and Human Services 
(HHS) of a Medicare participating hospital, physician or supplier who 
knowingly and willfully fails to accept, on a repeated basis, the 
Medicare rate as payment in full from an FEHB plan. The regulation also 
authorizes the FEHB plans, under the oversight of OPM, to notify the 
Secretary of HHS of a Medicare nonparticipating physician or supplier 
who knowingly and willfully charges, on a repeated basis, more than the 
Medicare limiting charge amount (115 percent of the Medicare 
Nonparticipating Physician Fee Schedule amount).

DATES: This interim regulation is effective May 18, 1995. Comments must 
be received on or before July 17, 1995.

ADDRESSES: Send written comments to Lucretia F. Myers, Assistant 
Director for Insurance Programs, Retirement and Insurance Group, Office 
of Personnel Management, 1900 E Street, NW., Washington, DC 20415; or 
FAX to (202) 606-0633.

FOR FURTHER INFORMATION CONTACT:
Robert G. Iadicicco (202) 606-0004.

SUPPLEMENTARY INFORMATION: Section 11003 of the Omnibus Budget 
Reconciliation Act (OBRA) of 1993, Pub. L. 103-66, amended the FEHB law 
to limit the charges and FEHB fee-for-service plans' benefit payments 
for certain physician services (as defined in section 1848(j) of the 
Social Security Act) received by retired enrolled individuals.
    The OBRA of 1993 provision is related to section 7002(f) of OBRA of 
1990, Pub. L. 101-508. The OBRA of 1990 provision limited the charges 
and FEHB fee-for-service plans' benefit payments for certain inpatient 
hospital services received by retired enrolled individuals. OPM 
implemented the OBRA of 1990 provision by issuing interim and final 
regulations in the March 27, 1992, and July 20, 1993, issues of the 
Federal Register (57 FR 10609 and 58 FR 38661). This interim regulation 
amends the previous regulations.
    The interim regulation expands the definition of a retired enrolled 
individual to include individuals who are not enrolled in Medicare part 
B.
    The interim regulation specifies the physician services covered by 
the limitation on charges and benefit payments.
    The interim regulation establishes how FEHB fee-for-service plans 
will determine benefit payments for physician services covered by the 
limitation. The plans will base their payment on the lower of the 
actual charge of the provider or the amount determined to be equivalent 
to the Medicare part B payment under the Medicare Participating 
Physician Fee Schedule for Medicare participating physicians and the 
Medicare Nonparticipating Physician Fee Schedule for Medicare 
nonparticipating physicians. Retired enrolled individuals' coinsurance 
payments will be based on the same amount.
    The interim regulation specifies the limits on what providers can 
collect for both inpatient hospital services and physician services.
    OPM has not required fee-for-service plans with an insufficient 
number of affected enrollees to apply the limits on physician services. 
We made this determination in keeping with OBRA of 1993's primary 
objective of reducing expenses.
    The interim regulation authorizes the FEHB plans, under the 
oversight of OPM, to notify the Secretary of Health and Human Services 
(HHS) or the Secretary's designee when a medical provider knowingly and 
willfully collects, on a repeated basis, more than the applicable 
limits for inpatient hospital services or physician services. OPM 
strongly encourages and supports the efforts of FEHB plans to inform 
retired enrolled individuals and medical providers of the limits on 
charges and benefit payments, monitor compliance with the limits, and, 
if necessary, report repeat violators to the Secretary of HHS, or the 
Secretary's designee.

Waiver of Notice of Proposed Rulemaking

    Pursuant to section 553(b)(3)(B) of title 5 of the U.S. Code, I 
find that good cause exists for waiving the general notice of proposed 
rulemaking and making this regulation effective upon publication. The 
notice is being waived because the limitation on FEHB plans' benefit 
payments and providers' charges enacted by Pub. L. 103-66 addressed in 
this regulation was effective with respect to the contract year 
beginning on January 1, 1995.

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 the health care coverage of Federal annuitants and 
former spouses.

E.O. 12866, Regulatory Review

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

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.

[[Page 26668]] 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. The heading of subpart I is revised to read as follows:

Subpart I--Limit on Inpatient Hospital Charges, Physician Charges, 
and FEHB Benefit Payments

    3. Section 890.901 is revised to read as follows:


Sec. 890.901  Purpose.

    This subpart identifies the individuals whose charges and FEHB 
benefit payments for inpatient hospital services and/or physician 
services may be limited and sets forth the circumstances of the limit.
    4. Section 890.902 is amended by revising paragraphs (c) and (d) to 
read as follows:


Sec. 890.902  Definition.

* * * * *
    (c) Is age 65 or older or becomes age 65 while receiving inpatient 
hospital services or physician services; and
    (d) Is not covered by Medicare part A and/or part B.
    5. Section 890.903 is revised to read as follows:


Sec. 890.903  Covered services.

    (a) The limitation on the charges and FEHB benefit payments for 
inpatient hospital services apply to inpatient hospital services which 
are:
    (1) Covered under both Medicare part A and the retired enrolled 
individual's FEHB plan; and
    (2) Supplied to a retired enrolled individual who does not have 
Medicare part A; and
    (3) Provided by hospital providers who have in force participation 
agreements with the Secretary of Health and Human Services (HHS) 
consistent with sections 1814(a) and 1866 of the Social Security Act, 
and receive Medicare part A payments in accordance with the diagnosis 
related group (DRG) based prospective payment system (PPS).
    (b) The limitation on the charges and FEHB benefit payments for 
physician services apply to physician services, (as defined in section 
1848(j) of the Social Security Act), which are:
    (1) Covered under both Medicare part B and the retired enrolled 
individual's FEHB plan; and
    (2) Supplied to a retired enrolled individual who does not have 
Medicare part B.
    6. Section 890.904 is amended by designating the current paragraph 
as paragraph (a), amending newly designated paragraph (a) by adding the 
words ``for inpatient hospital services'' after the words ``FEHB plan's 
benefit payment'', and by adding paragraph (b) to read as follows:


Sec. 890.904  Determination of FEHB benefit payment.

* * * * *
    (b) The FEHB plan's benefit payment for physician services under 
this subpart is determined by taking the lower of the following 
amounts:
    (1) The amount determined by the FEHB plan, which is equivalent to 
the Medicare part B payment under the Medicare Participating Physician 
Fee Schedule for Medicare participating physicians and the Medicare 
Nonparticipating Physician Fee Schedule for Medicare nonparticipating 
physicians (the amount payable before the Medicare deductible and 
coinsurance are applied); or
    (2) The actual billed charges; and
    (3) Reducing the lower amount by any FEHB plan deductible, 
coinsurance, or copayment that is the responsibility of the retired 
enrolled individual.
    7. Section 890.905 is revised to read as follows:


Sec. 890.905  Limits on inpatient hospital and physician charges.

    (a) Hospitals may not collect from FEHB plans and retired enrolled 
individuals for inpatient hospital services more than the amount 
determined to be equivalent to the Medicare part A payment under the 
DRG-based PPS.
    (b) Medicare participating providers may not collect for FEHB plans 
and retired enrolled individuals for physician services more than the 
amount determined to be equivalent to the Medicare part B payment under 
the Medicare Participating Physician Fee Schedule.
    (c) Medicare nonparticipating providers may not collect from FEHB 
plans and retired enrolled individuals for physician services more than 
the amount to be equivalent to the Medicare limiting charge amount.
    8. Section 890.906 is redesignated as Sec. 890.909 and a new 
Sec. 890.906 is added to read as follows:


Sec. 890.906  Retired enrolled individuals coinsurance payments.

    (a) A retired enrolled individual's coinsurance responsibility for 
inpatient hospital services is calculated in accordance with the plan's 
contractual benefit structure and is based on the amount determined to 
be equivalent to the Medicare part A payment under the DRG-based PPS.
    (b) A retired enrolled individual's coinsurance responsibility for 
physician services is calculated in accordance with the plan's 
contractual benefit structure and is based on the lower of the actual 
charges or the amount determined to be equivalent to the Medicare part 
B payment under the Medicare Participating Physician Fee Schedule for 
Medicare participating physicians and the Medicare Nonparticipating 
Physician Fee Schedule for Medicare nonparticipating physicians.
    9. Section 890.907 is redesignated as Sec. 890.910 and a new 
Sec. 890.907 is added to read as follows:


Sec. 890.907  Effective dates.

    (a) The limitation specified in this subpart applies to inpatient 
hospital admissions commencing on or after January 1, 1992.
    (b) The limitation specified in this subpart applies to physician 
services supplied on or after January 1, 1995.
    10. Section 890.908 is added to read as follows:


Sec. 890.908  Notification of HHS.

    An FEHB plan, under the oversight of OPM, will notify the Secretary 
of HHS, or the Secretary's designee, if the plan finds that:
    (a) A hospital knowingly and willfully collects, on a repeated 
basis, more than the amount determined to be equivalent to the Medicare 
part A payment under the DRG-based PPS.
    (b) A Medicare participating physician or supplier knowingly and 
willfully collects, on a repeated basis, more than the amount 
determined to be equivalent to the Medicare part B payment under the 
Medicare Participating Physician Fee Schedule.
    (c) A Medicare nonparticipating physician or supplier knowingly and 
willfully charges, on a repeated basis, more than the amount determined 
to be equivalent to the Medicare limiting charge amount.

[FR Doc. 95-12169 Filed 5-17-95; 8:45 am]
BILLING CODE 6325-01-M