OPM reports on the FEHBP

The U.S. Office of Personnel Management ("OPM") recently posted on its website its FY 2008 Performance and Accountability Report which includes the following FEHB Program discussion on page 120.

Challenge -- FEHBP

Action:

OPM issued a request for proposal to acquire a health benefits carrier to offer a nationwide Indemnity Benefit Plan under the FEHBP beginning January 2010. The primary purpose of adding the Indemnity Benefit Plan is to mitigate the risk should any carrier with a sizeable share of the market leave the FEHBP for any reason.

OPM established a working group to develop steps to strengthen the controls and oversight of the FEHBP pharmacy benefits. To help formulate a better understanding of this area, the group has completed or planned the following activities:

* Conducted a literature search on bestpractices in managing drug programs

* Met with officials that run pharmacy programs for other large government sponsored health care programs (i.e., TRICARE, Centers for Medicare and Medicaid Services (CMS), and U.S. Department of Veterans Affairs) to understand the controls they have established

* Obtained consulting contract with industry experts on drug pricing and Pharmaceutical Benefits Manager (PBM) contract management/oversight to review FEHB carriers PBM contracts.

The long-term goal is to develop options for future enhancements of FEHBP pharmacy programs based on the results for the literature search, CMS/TRICARE benchmark evaluations, and recommendations from the expert consultant. Further, OPM will have responsibilities and challenges as insurance carriers begin to implement Health Information Technology (HIT) initiatives. HIT (or e-health) covers a broad range of initiatives, including electronic personal health records, e-Prescriptions, and disease-management programs.

OPM issued the Federal Employees Health Benefit (FEHB) Program Carrier Letter 2007-07 that states OPM expects all FEHB carriers to be committed to these four cornerstones: standards for information technology, quality care reporting, transparency of health services costs, and providing incentives for quality care at competitive prices. The Program Carrier Letter reiterates OPM's commitment to the cornerstones and to promoting state-of-the-art health information technology. In 2008, OPM issued a second carrier letter (2008-06) in which it restated the expectation that all FEHB carriers need to continue their important efforts to make fundamental information about health care quality and costs available to consumers.

Progress: Moderate

Next Steps:

The long-term goal is to develop options for future enhancements of FEHBP pharmacy programs based on the results for the literature search, CMS/TRICARE benchmark evaluations, and recommendations from the expert consultant. Further, OPM will have responsibilities and challenges as insurance carriers begin to implement Health Information Technology (HIT) initiatives. HIT (or e-health) covers a broad range of initiatives, including electronic personal health records, e-Prescriptions, and disease-management programs.

OPM will continue working with insurance carriers to implement and improve upon HIT initiatives as well as with OMB on its related scorecard initiatives.

See also the discussion of Improper Payments in the FEHBP found on pages 132 - 133.