[Federal Register Volume 63, Number 153 (Monday, August 10, 1998)]
[Rules and Regulations]
[Pages 42584-42586]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-21498]
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OFFICE OF PERSONNEL MANAGEMENT
48 CFR Part 1609
RIN 3206-AI27
Prohibition of ``Gag Clauses'' in the Federal Employees Health
Benefits Program
AGENCY: Office of Personnel Management.
ACTION: Final rule making.
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SUMMARY: The Office of Personnel Management (OPM) is issuing a final
regulation amending the Federal Employees Health Benefits Acquisition
Regulations (FEHBAR) to prohibit health benefit carriers participating
in the Federal Employees Health Benefits (FEHB) Program from entering
into contracts or employment agreements with health care providers,
provider groups, or health care workers that would include provisions
or financial incentives that have the effect of limiting or restricting
communication of
[[Page 42585]]
medically necessary services to FEHB enrollees.
DATES: This regulation is effective on September 9, 1998.
ADDRESSES: Comments should be directed to Abby L. Block, Chief,
Insurance Policy and Information Division, OPM, Room 3425, 1900 E
Street, NW., Washington, DC 20415-0001.
FOR FURTHER INFORMATION CONTACT: Michael W. Kaszynski, (202) 606-0004.
You may submit comments and data by sending electronic mail (E-mail)
to: [email protected].
SUPPLEMENTARY INFORMATION: On February 20, 1998, the President signed
an Executive Memorandum directing the Office of Personnel Management
(OPM) to take the necessary steps to bring the FEHB Program into
contractual compliance with the Consumer (Patient) Bill of Rights and
Responsibilities by no later than year end 1999. The Memorandum
specifically directed OPM to propose regulations within 90 days to
prohibit practices that restrict physician-patient communications about
medically necessary treatment options. OPM's regulation prohibits FEHB
participating carriers from placing provisions or financial incentives
in contracts with health care providers, provider groups, or health
care workers that would limit providers' or health care workers'
ability to discuss medically necessary treatment options with Federal
enrollees. We are aware that a proposal to enact a ``gag clause''
regulation raises three broad areas of concern regarding: (1) Potential
impairment of a health plan's ability to review utilization against
appropriate treatment protocols or perform quality assurance functions,
(2) potential conflict with providers' or health plan sponsoring
organizations' ethical, moral, or religious beliefs, and (3) impact on
providers' or workers' ability to discuss non-covered or high cost
treatment options. This regulation is not intended to limit a health
plan's ability to perform utilization review or perform quality
assurance functions, nor is it intended to cause providers, health care
workers, or health plan sponsoring organizations to discuss treatment
options that they would not ordinarily discuss in their customary
course of practice because such options are inconsistent with their
professional judgment or ethical, moral or religious beliefs.
The regulation will ensure that providers and health care workers
are not inhibited from communicating fully and openly with patients
regarding medically necessary treatment options regardless of cost or
whether the benefits are covered by their health plan. Simply stated,
the amended regulation is intended to remove any contractual impediment
to a candid and open physician-patient relationship.
On May 21, 1998, OPM published a proposed regulation in the Federal
Register (63 FR 27902). OPM received comments from three private
citizens, two FEHB carriers, two medical specialty provider
associations, one religious health association, one national
organization for women and families, and two trade associations
representing health maintenance organizations (HMOs), preferred
provider organizations (PPOs), and fee-for-service (FFS) plans. We
appreciate the observations and suggestions and have taken them into
consideration in developing this final rule. The majority of the
comments favored the proposed regulation. We were surprised, however,
given our explicit statement of intent, at a few of the reactions that
assumed that OPM would interpret the regulation in ways that would
clearly be detrimental to the FEHB Program and the people it covers. A
number of issues are addressed below.
Seven commenters expressed their support or endorsement of the
proposed regulation. One commenter indicated support for the rule
because it assured that physicians and other providers participating in
the FEHB Program will not be contractually enjoined from providing
information on all medically appropriate treatment options. The
commenter stated that a health plan's contractual requirements, such as
coverage and cost, should not be an impediment to a candid discussion
between a physician and patient concerning available, medically
appropriate treatment options. One commenter applauded OPM for its work
on improving patient care under the FEHB Program. One commenter
indicated that he fully supports OPM's efforts to prohibit contractual
clauses or incentives that prevent open communication between
physicians and patients because he believes that such restrictions
violate the most basic of rights in a free society.
One commenter pointed out that, based on his experience in the
health care industry, the problem is that HMOs reward physicians for
not delivering care or intimidate physicians from providing care that
would cost the HMO money. This commenter recommended that sanctions be
incorporated into the regulation to prevent health plans from utilizing
prohibited contractual clauses. No change has been made to the rule
since existing regulations provide OPM with the authority to impose
appropriate sanctions for violations, including withdrawal of approval
of the carrier to participate in the FEHB Program.
One commenter recommended that the regulation give adequate notice
to FEHB carriers of the types of contract clauses that are prohibited.
This commenter expressed support for ``gag clause'' prohibitions that
prohibit practices, including contract clauses, that restrict patient-
provider communications, but stated that there is no compelling reason
for prohibiting provider incentive plans in the FEHB Program since
enrollees have the remedy of the disputed claims process or can change
health plans annually if they find that their plan is limiting their
access to medically necessary services. OPM believes that free and open
communication between a provider or health care worker and a patient
should be a basic right of all FEHB enrollees and should not be a
matter left solely to the disputed claims process or be a variable
matter for consideration in the enrollment decision making process.
Therefore, all carriers under the FEHB Program will be held accountable
to the same standard. The regulation has been revised to more
specifically indicate the types of contract clauses that are
prohibited.
Three commenters expressed a concern that the regulation is broader
in scope than required by the Patient Bill of Rights or the President's
Executive Memorandum of February 20, 1998, and could be interpreted to
prohibit capitation thereby limiting certain carriers' abilities to
develop managed care arrangements. Specifically, one commenter thought
that the regulation should not address ``incentive plans.'' Another
commenter indicated that the regulation could have unintended
consequences which could have a significant economic impact if it were
interpreted to bar all incentive programs, capitation and withhold
agreements in particular, from the FEHB Program. This commenter
recommended that OPM allow the use of incentive plans but to adopt
substantially the same rules in effect for Medicare to assure that such
plans are reasonable. The intent of the OPM regulation is not to bar
all incentive plans, capitation, or withhold agreements from inclusion
in provider contracts. The intent of the regulation is to ensure that
providers and health care workers are not inhibited in any way from
communicating fully and openly with patients regarding medically
necessary treatment options. OPM did not incorporate the same rules
that
[[Page 42586]]
Medicare uses in regulating incentive plans since we are not trying to
broadly regulate incentive plans, only those specific financial
incentives that create an inducement to prevent full and open
communication between providers and patients. OPM does not believe it
is necessary to replicate the complexity of the Medicare regulation in
the FEHB Program in order to meet the goals of the Patient Bill of
Rights.
One commenter expressed support for the principle that providers
and workers have the ability to communicate fully and openly with
patients regarding medically necessary treatment options regardless of
cost or plan coverage. However, the commenter cautioned OPM not to
interpret the rule to extend beyond communications to regulate broadly
compensation arrangements between plans and providers. The commenter
also suggested that we include a reference in the preamble that the
proposed regulation is not intended to limit the ability of a health
plan to operate its quality assurance program. While we believe that
the proposed regulation made clear that OPM did not intend to regulate
broadly compensation arrangements between plans and providers, we have
reiterated that the provision only applies to open communication. The
preamble has been revised to specify that the intent of the regulation
is not to limit the ability of a health plan to operate its quality
assurance program.
One commenter asked that we specify in the regulation that nothing
in the regulation should be construed to cause providers or carriers to
violate their ethical, moral or religious beliefs. The regulation has
been modified accordingly.
One commenter indicated that if OPM believes that an exception for
ethical or moral beliefs is necessary, the exception should be
available to individuals only and not to health plans or insurance
carriers. We have modified the regulation so that the exception for
ethical, moral, or religious beliefs applies only to providers, health
care workers, or health plan sponsoring organizations.
Regulatory Flexibility Act
I certify that this regulation will not have a significant economic
impact on a substantial number of small entities because the regulation
will only affect health insurance carriers under the Federal Employees
Health Benefits Program. Executive Order 12866, Regulatory Review
This rule has been reviewed by the Office of Management and Budget
in accordance with Executive Order 12866.
List of Subjects in 48 CFR Part 1609
Administrative practice and procedure, Government employees, Health
facilities, Health insurance, Health professionals, Hostages, Iraq,
Kuwait, Lebanon, Reporting and record keeping requirements, Retirement.
Office of Personnel Management.
Janice R. Lachance,
Director.
For the reasons set forth in the preamble OPM is amending 48 CFR
Part 1609 as follows:
PART 1609--[AMENDED]
Subpart 1609.70--Minimum Standards for Health Benefits Carriers
1. The authority citation for 48 CFR Part 1609 continues to read as
follows:
Authority: 5 U.S.C. 8913; 40 U.S.C. 486(c); 48 CFR 1.301.
2. In Sec. 1609.7001 new paragraph (c)(7) is added to read as
follows:
Sec. 1609.7001 Minimum Standards for Health Benefits Carriers
* * * * *
(c) * * *
(7) Entering into contracts or employment agreements with
providers, provider groups, or health care workers that include
provisions or financial incentives that directly or indirectly create
an inducement to limit or restrict communication about medically
necessary services to any individual covered under the FEHB Program.
Financial incentives are defined as bonuses, withholds, commissions,
profit sharing or other similar adjustments to basic compensation
(e.g., service fee, capitation, salary) which have the effect of
limiting or reducing communication about appropriate medically
necessary services. Providers, health care workers, or health plan
sponsoring organizations are not required to discuss treatment options
that they would not ordinarily discuss in their customary course of
practice because such options are inconsistent with their professional
judgment or ethical, moral or religious beliefs.
[FR Doc. 98-21498 Filed 8-6-98; 2:53 pm]
BILLING CODE 6325-01-P