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John O'BrienDirector Healthcare and Insurance
FY 14-15: Agency Priority Goal
PG3 FEHB Accountability
Priority Goal
Goal Overview
OPM is continuing to focus on ways to optimize pharmacy practices to ensure the safe and clinically effective use of prescription medications while managing drug costs. We continue to monitor carrier performance in several areas of pharmacy benefits management, including overall pharmacy and specialty drug trends as well as generic dispensing rates. We will collect updated data on these measures of pharmacy performance. Most health plans offer programs such as step therapy, medication therapy management programs, and expanded use of prior authorization for selected drugs. Implementing programs of this type and using tiered drug formularies are positively correlated with better performance on overall and specialty drug trends and generic dispensing rates. We will negotiate with FEHB carriers plan to add and expand on these types of drug management programs that control costs and improve quality and patient outcomes.
OPM is implementing an FEHB Health Plan Performance Assessment project to measure and reward all FEHB plan performance (experience-rated and community-rated) through the use of common, objective, and quantifiable performance measures by the 2016 plan year. This will be a new approach to our assessment of the annual performance of health plans contracted under the program. The performance assessment framework will include a discrete set of qualitative and quantifiable performance measures that will be used to assess key aspects of performance. That overall assessment will then be linked to health plan profit factors. There are four primary categories of health plan performance to be assessed: clinical quality, customer service, resource use, and contract oversight.
Industry standards state that, in private employer plans, as much as 10 percent of health claim benefits paid are incurred by family members who are not eligible for coverage. The FEHB Program provides approximately 23 billion dollars in benefits annually for those covered under Self and Family enrollments. This may translate to approximately 23 million dollars for each percent paid in error. Under current FEHB procedures, agencies and the FEHB carriers both have responsibility for family member eligibility determinations. However, there is no evidence that family member eligibility is systematically verified at the time of the initial enrollment, when enrollment is changed during Open Season or upon experiencing a Qualifying Life Event (QLE) (although some agencies do require documentation for QLE changes) or at any time during the employee’s period of coverage. With the advent of electronic enrollment systems, enrollees can make certain FEHB enrollment changes without submitting any proof to their agency benefit officers.
The extent of ineligible family members covered under FEHB Self and Family enrollments is currently unknown. In addition, presently there is no centralized FEHB enrollment system to maintain a database of eligible enrollees and family members. Enrollment systems that currently exist do not require the input of family member dependent information. Thus, there is no centralized database of the FEHB enrollments and consequently, no mechanism to determine who is receiving benefits under any one Self and Family enrollment.
Strategies
For the new FEHB plan performance initiative, OPM is developing the following framework:
- Agreement on the measures. OPM issued FEHB carrier letters in August and December 2014 with detailed guidance measures and held several teleconferences with FEHB carriers for questions and answers.
- Assignment of weighting and scoring. OPM has completed the initial development, review, and testing of a basic performance assessment scoring methodology for attainment of specific benchmark goals using an independent vendor. Work is now underway to establish a supplemental aspect of the methodology to reward substantial year-to-year improvement on specific measures. Emphasis will be placed on rewarding improvement over time as well as actual performance attainment. OPM will publish final regulations that implement a comprehensive performance assessment system for all FEHB plans (draft regulations were published in December 2014 and can be found at http://www.gpo.gov/fdsys/pkg/FR-2014-12-15/pdf/2014-29224.pdf).
OPM is planning to conduct an audit of family members enrolled in the FEHB Program. Ensuring only eligible family members are receiving benefits may result in significant savings for both the Federal Government, which provides a weighted average contribution of 72 percent of premiums with a cap of no more than 75 percent of total program cost, and Federal employees and annuitants who pay approximately 28 percent. In addition, the results of a family member audit will assist in determining if a centralized enrollment system is necessary to maintain an enrollment database of enrollees and only family members whose eligibility is verified; and will help program managers to determine if the scope of the problem warrants changes in the current policies and procedures utilized by Agency Benefit Officers when verifying family member eligibility. Key milestones for this strategy are:
- procure an experienced contractor to perform a family member eligibility audit on a representative sample of FEHB Self and Family enrollments;
- develop regulatory and guidance changes needed to implement enhanced program to verify family member eligibility;
- review results of sample to determine if an audit of the entire FEHB population is necessary; and
- based on results of sample audit , provide recommendations on policies and procedures for agencies and FEHB carriers to follow in verifying family member eligibility.
Progress Update
OPM made strides toward the three components of the goal: optimizing the use of Pharmacy Cost Management Strategies, the implementation of the Plan Performance Assessment and addressing coverage of ineligible family member in the FEHB. Despite OPM’s efforts in these areas, described in more detail below, the average premium increase for FEHB, based on a static population, was 3.2 percent for 2014-15 and 6.4 percent for 2015-16. For 2016, 36.2 percent of plans have an increase of less than 5 percent (19 percent of enrollee share less than 5 percent).
The reason for this is that premium increases since 2012 have been historically low and reflect the first time in the history of the FEHB program that they have remained below 7 percent for a successive five year period. For the 3-year period before that (2009-2011), increases were above 8 percent. Additionally, a major contributing factor to the somewhat higher FEHB premium increase than in the past several years is an uptick in the growth of drug costs. Drug costs are a much larger factor for the FEHB compared to most other employer sponsored programs because annuitants, for whom drugs are the majority of benefits, are included in the FEHB risk pool. Drugs represent 26.5 percent of Program costs (versus 10 percent for a typical employer). Overall the drug trend for the Program last year was more than 10 percent, with the specialty drugs trend in the 25-30 percent range. The outsized role that pharmacy costs have in the FEHB premiums is the reason why OPM has stressed to FEHB carriers the need to seek savings in this area through a variety of means, including Pharmacy Benefit Manager re-contracting to obtain lower costs and active management of drug utilization and benefit design. OPM will continue with these efforts in the upcoming years.
Pharmacy Cost Management Strategies: The number of plans that have implemented various cost management strategies continues to increase. Specifically, distinct cost-share tiers for generic, preferred brands, and specialty drugs has increased by approximately 35 percent in 2015, as compared to 2013. The agency has continued to encourage FEHB carriers to consider a variety of cost containment strategies in the design of their pharmacy benefit to help assure safe, efficacious, and cost-effective benefits. OPM has instructed carriers to ensure that their pharmacy product offering for 2016 allows for more consumer transparency and ease of use and understanding of the pharmacy benefit. Specifically, OPM is requiring carriers to provide interactive systems that permit members, and prospective members, to review the level of member cost-share for their particular medications.
Plan Performance Assessment: OPM fully implemented the Plan Performance Assessment through FY 2014 and 2015. OPM developed a methodology, identified measures to use, and performed high level data analysis to inform this new initiative. OPM will continue to focus on efforts related to the Plan Performance Assessment as a 2016-2017 Agency Priority Goal by specifically looking at high priority measures and encouraging plans to improve through various methods. Improvement in these measures denotes providing high quality care to FEHB enrollees and the Federal employee population at large.
Coverage of Ineligible Family Members: OPM secured a contractor to perform a sample audit and is currently overseeing the administration of the audit. OPM will analyze the results and use it to inform future FEHB policy regarding ineligible family members. OPM is also developing rulemaking authority to make changes to existing FEHB regulations.
Pharmacy cost management strategies
- For plan year 2015, many FEHB plans implemented or maintained recommended pharmacy cost management strategies.
- For plan year 2015, the weighted average of all FEHB plans indicates that 68 percent of FEHB enrollees are in plans that have implemented a distinct cost-share tier for non-preferred specialty drugs.
- For plan year 2015, about 21 percent of all plans use either a managed or tiered network, one that excludes certain pharmacy providers.
- For plan year 2015, a strong majority of members are enrolled in plans that have prior approval of specific drugs ranging from 82 percent to 93 percent, depending on the type of drug.
- OPM has also encouraged FEHB plans to coordinate with Pharmacy Benefit Managers to offer managed formularies allowing for better discounts and reductions in cost-sharing for members.
FEHB Plan Performance Assessment
- OPM received the 2015 measure results and is in the process of analyzing results.
- OPM published Frequently Asked Questions from FEHB Carriers on the Plan Performance Methodology.
- OPM published measures for the 2017 evaluation via Carrier Letter. The agency made two changes from the 2016 measure set:
- Under the Chronic Disease Management domain, OPM will replace the “Comprehensive Diabetes Care: HbA1c Testing Rate” with the “Comprehensive Diabetes Care: HbA1c Control” measure to emphasize comprehensive management of this common health condition, rather than the rate of testing alone.
- Under the Medication Use domain, OPM added “Avoiding Antibiotics in Adults with Acute Bronchitis”. The overuse of antibiotics for uncomplicated conditions can contribute to the development of antibiotic resistant bacteria. This supports the National Action Plan for Combatting Antibiotic-Resistant Bacteria at https://www.whitehouse.gov/sites/default/files/docs/national_action_plan_for_combating_antibotic-resistant_bacteria.pdf
Family Member Audit contract:
- OPM issued a contract for the family member audit
- OPM is working with the contractor on the letters that will be sent to enrollees selected for the audit and a handbook of the appropriate documentation that can be used to verify eligibility.
- OPM issued a Benefits Administration Letter to update agencies on the status of the audit, including FastFacts to address enrollee questions.
Next Steps
No Data Available
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Performance Indicators
Reduce the rate of growth in per capita spending
Percent of FEHBP enrollees satisfied
Percent of adults receiving flu shots based on Consumer Assessment of Healthcare Providers and Systems Effective Care
Other Indicators
Percent of plans with timely prenatal care above the national commercial 50th percentile
Contributing Programs & Other Factors
The offices of Planning and Policy Analysis (PPA) and Healthcare and Insurance (HI) collaborate to offer the Federal Employees Health Benefits (FEHB) to ensure Federal employees’ needs are met and available benefits align with best practices. Specifically, PPA provides policy guidance and actuarial support by reviewing the cost of contracts under Federal benefits programs, conducts rate negotiations with carriers, and determines the amount the Government contributes towards employees’ benefits. HI oversees Federal benefits programs, which includes contracting with insurance carriers as well as operating an annual open season for Federal employees and retirees to review and consider changing their current health choices. HI and PPA also work with the OPM Office of Inspector General, which conducts audits of FEHB carriers. The Office of Inspector General conducts on-site and desk audits of carriers, issues preliminary audit findings, draft, and final audit reports.
OPM works closely with benefits officers across the Federal Government to provide guidance on the FEHB Program. Benefits officers then relay this information to employees within their agency to ensure Federal employees are educated on their FEHB benefits. OPM also works with insurance carriers participating in the FEHB Program to negotiate the best rates and value of benefits for Federal employees.
No Data Available
