Close Close

Life Health > Health Insurance

How the feds may shop for health benefits

Your article was successfully shared with the contacts you provided.

The agency that manages health benefits and other benefits for federal employees — the U.S. Office of Personnel Management (OPM) — wants to find a way to pay for health benefits based partly on health plan performance.

OPM has described the performance-based approach to paying for Federal Employees Health Benefits (FEHB) program coverage in a batch of draft regulations set to appear in the Federal Register Monday.

The FEHB program is similar in some ways to the Patient Protection and Affordable Care Act (PPACA) public exchange program. Insurers apply for a chance to sell coverage to federal employees through the programs. The employees in a given community can choose from a wide menu of plans supplied by the providers who have been approved to sell coverage in that community.

If OPM goes ahead with the new payment approach, performance-based assessments would start in 2016.

OPM would begin making payments based on performance data in 2017.

Comments on the proposal will be due 30 days after the official publication date.

Although the proposal would have a direct effect only on federal employees, it could have an indirect effect on how other employers buy benefits.

See also: FEHB To Pay For Substance Abuse Screening.

For more about the proposal, read on.


1. OPM would use a different approach to measuring clinical quality

Today, OPM has contracting officers rate “experience-based” plans — plans with charges that vary with enrollees’ claims — based on six factors: contractor performance, contractor cost, federal socioeconomic programs, cost control, independent development and capital investments. OPM officers rely heavily on contractor performance when reviewing charges, officials say.

OPM can withhold payments from another class of plans, “community-rated” plans, if those plans fail to comply with contracts or offer poor service, officials say.

See also: 3 reasons health care costs are still a mystery.

Under the new system, OPM would use more specific clinical criteria, and it would use those criteria both for experienced-based plans and community-rated plans, officials say.

OPM would get the quality data from common quality data programs, such as the Healthcare Effectiveness Data and Information Set (HEDIS) from the National Committee for Quality Assurance (NCQA) and the federal government’s own Consumer Assessment of Healthcare Providers and Systems (CAHPS) program.

Call center worker

2. OPM hopes to use more specific, quantifiable service measures

OPM officials want to be able formally link annual evaluations of the FEHB plans with the profit margins the plans can earn.

The carriers will get technical guidance on revisions of measures, methods and scoring before each plan assessment process starts, officials say. 

See also: Feds rush PPACA exchange plan user survey forms.

U.S. map

3. OPM would update the measures periodically

The system should be dynamic enough to account for changes in clinical guidelines, and to allow for the removal of measures that are irrelevant because almost all plans do well on those measures, officials say.

See also: Exchange plans to get report cards.


© 2023 ALM Global, LLC, All Rights Reserved. Request academic re-use from All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.