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Copyright 1999 Federal News Service, Inc.  
Federal News Service

MAY 13, 1999, THURSDAY


LENGTH: 542 words



Mr. Chairman, today's hearing has been convened so that the Subcommittee can continue its close oversight of the Federal Employee Health Benefits Program (FEHBP) -- an essential benefit program for federal employees and retirees. Specifically, we will seek to determine the nature of the guidance to be provided to participating health insurance plans by the Office of Personnel Management (OPM) through its Call Letter for the 2000 Contract Year. In addition, the Subcommittee will seek to determine the impact on FEHBP of President Clinton's Executive Memorandum mandating compliance with the Patients' Bill of Rights.
Much has occurred, however, since we held a similar hearing last March. This year's Call Letter requiting full disclosure m the use of provider discounts effectively implements, H.R. 1836, the "Federal Employees Health Care Protections Act," enacted by Congress last year. Though OPM's Inspector General found no unethical conduct on the part of plans who arrange for provider discounts, the implementation of the Act strengthens OPM's ability to use administrative sanctions against health care providers who seek to defraud and abuse the government's health benefits program.
In 1998, FEHB plans supported and implemented important consumer protections outlined in the Patients' Bill of Rights. These included information disclosure, access to emergency care, access to obstetricians and gynecologists and access to specialists for people with special care needs. At last year's hearing, I stated that I applauded the expansion of these important benefits and protections, but that it must be understood that expansion does not come without a cost. I am pleased that the cost of implementing these protections, to date, is less than 25 cents per enrollee.
Finally, I understand that there is some controversy over the application of Cost Accounting Standards (CAS) to FEHBP contracts. Cost accounting standards are designed to increase the uniformity and consistency with which cost accounting data is supplied by contractors to the government for the purposes of assisting in either negotiation, pricing, or administration of contracts. CAS are applied to all contractors that perform under negotiated, cost-based pricing arrangements with the federal government in order to ensure that costs are properly allocated.
Blue Cross-Blue Shield has raised concerns about the difficulties of implementation of CAS on FEHBP plan contracts and would like to extend section 518 of the Ommbus Appropriations Act of 1998 which exempts cartier contracts from the application of CAS. The American Federation of Government Employees (AFGE) believes that FEHB contracts should be subject to CAS so agencies can ensure the accuracy of bills submitted by contractors. There is also a concern that premiums will increase if CAS are not applied to FEHBP contracts.
I am looking forward to testimony from OPM, Blue Cross-Blue Shield, and AFGE on the pros and cons of applying CAS to FEHBP contracts, and to ultimately do what is in the best interest of enrollees.
I thank all of the witnesses for coming this morning to testify before the Subcommittee and I hope that you can shed some light on these very important issues.

LOAD-DATE: May 18, 1999

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