Federal Employees Health Benefits Program; HMO Plan Applications

summary: The Office of Personnel Management (OPM) is issuing proposed

regulations that would clarify the policy under which it invites

applications from comprehensive medical plans (HMO's) to participate in

the Federal Employees Health Benefits (FEHB) Program. This

clarification is necessary in order to ensure that OPM and the HMO's

are providing the best possible service to FEHB enrollees.

dates: Comments must be received on or before May 22, 1995.

addresses: Written comments may be sent to Lucretia F. Myers, Assistant

Director for Insurance Programs, Retirement and Insurance Group, Office

of Personnel Management, P.O. Box 57, Washington, DC 20044; delivered

to OPM, Room 4351, 1900 E Street NW., Washington, DC.; or FAXed to

(202) 606-0633.

for further information contact: Mary Ann Mercer, (202) 606-0004.

supplementary information: On December 5, 1994, OPM published an

interim regulation in the Federal Register (59 FR 62283) to clarify the

policy under which it invites applications from comprehensive medical

plans (HMO's) to participate in the FEHB Program. This year, OPM made a

determination not to invite new plan applications, with a limited

exception, for contract year 1996.

OPM received numerous written comments and phone calls concerning

the regulation. All of the commenters object that OPM did not give

HMO's sufficient notice of its determination not to accept applications

for the 1996 contract year. They contend that many HMO's had already

expended a substantial amount of time in preparation for the

application process and that OPM's decision, therefore, has caused them

undue hardship.

After careful consideration of the comments received, OPM has

concluded that its timeframes had, in fact, been too compressed to

allow for a thorough review of all the consequences of the decision not

to invite applications. As a result, OPM has decided to accept both

applications and benefit change proposals for contract year 1996. In

addition, OPM is issuing this regulation as proposed rulemaking in

order to provide the public with a longer comment period. Because the

deadline for submission of applications is already past, OPM is

extending the application due date for the 1996 contract year from

January 31 to March 31, 1995.

E.O. 12866, Regulatory Review

This rule has been reviewed by OMB in accordance with E.O. 12866.

Regulatory Flexibility Act

I certify that these regulations will not have a significant

economic impact on a substantial number of small entities because they

primarily affect OPM's administrative procedures.

List of Subjects in 5 CFR Part 890

Administrative practice and procedure, Government employees, Health

facilities, Health insurance, Health professions, Hostages, Iraq,

Kuwait, Lebanon, Reporting and recordkeeping requirements, Retirement.

Office of Personnel Management.

James B. King,

Director.

Accordingly, OPM proposes to amend 5 CFR part 890 as follows:

PART 890--FEDERAL EMPLOYEES HEALTH BENEFITS PROGRAM

1. The authority citation for part 890 continues to read as

follows:

Authority: 5 U.S.C. 8913; Sec. 890.803 also issued under 50

U.S.C. 403p, 22 U.S.C. 4069c and 4069c-1; subpart L also issued

under sec. 599C of Pub. L. 101-513, 104 Stat. 2064, as amended.

2. In Sec. 890.203, paragraph (a)(1) is revised, paragraphs (a)(2)

through (a)(4) are redesignated as paragraphs (a)(3) through (a)(5)

respectively; newly designated paragraph (a)(5) is amended by revising

the last sentence; a new paragraph (a)(2) is added; and a heading is

added for paragraph (b) to read as follows:

Sec. 890.203 Application for approval of, and proposal of amendments

to, health benefits plans.

(a) New plan applications. (1) The Director of OPM shall consider

applications to participate in the FEHB Program from comprehensive

medical plans (CMP's) at his or her discretion. If the Director of OPM

determines that it is beneficial to enrollees and the Federal Employees

Health Benefits Program to invite new plans to join the Program, OPM

will publish a notice in the Federal Register.

(2) When invited to participate, CMP's should apply for approval by

writing to the Office of Personnel Management, Washington, DC 20415.

Application letters must be accompanied by any descriptive material,

financial data, or other documentation required by OPM. Plans must

submit the letter and attachments in the OPM-specified format by

January 31, or another date specified by OPM, of the year preceding the

contract year for which applications are being accepted. Plans must

submit evidence demonstrating they meet all requirements for approval

by March 31 of the year preceding the contract year for which

applications are being accepted. Plans that miss either deadline cannot

be considered for participation in the next contract year. All newly

approved plans must submit benefit and rate proposals to OPM by May 31

of the year preceding the contract year for which applications are

being accepted in order to be considered for participation in that

contract year. OPM may make counter-proposals at any time.

* * * * *

(5) * * * The extent of the data and documentation to be submitted

by a plan so certified by HHS, as well as by a non-certified plan, for

a particular review cycle may be obtained by writing directly to the

Office of Insurance Programs, Retirement and Insurance Group, Office of

Personnel Management, Washington, DC 20415. [[Page 15075]]

(b) Participating plans. * * *

[FR Doc. 95-7031 Filed 3-21-95; 8:45 am]

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