Further cost controls sought in federal employee health-care plan

March 25

The Office of Personnel Management has urged companies participating in the Federal Employees Health Benefits Program to boost their efforts to hold down the cost of prescription drugs, which it has often cited as a major driver of premium increases, as well as to encourage enrollees to participate in wellness programs.

Although the FEHBP program “has traditionally covered all drugs that require a prescription by federal law,” OPM said in a letter dated March 20, “as the cost of prescription drugs escalates, OPM has noted an emerging trend among employment-based benefit plans to more closely manage their formularies, or lists of covered drugs.”

OPM encouraged carriers to consider similar controls that, with certain exceptions, could exclude coverage of drugs considered less effective or less safe than other available drugs for the same condition, or that provide “little incremental clinical value at substantial additional cost.”

Previous steps on prescription drugs include moving to a standard definition of drug categories across all plans with an emphasis on using generics, and steering toward less expensive ways of fulfilling prescriptions, such as mail delivery of maintenance drugs.

The instructions came in the annual “call letter” to health carriers in advance of a conference starting later this week. The letter and conference kick off negotiations over coverage and premium levels that lead to a late-year open season for electing coverage for the upcoming calendar year.

OPM said that while carriers offer a variety of wellness programs – in particular aimed at obesity and tobacco use – “the overall member participation rate remains low. To achieve a greater impact on enrollee health, we strongly encourage carriers to re-examine the scope of their programs, outreach efforts, and incentives.” It said that plans may offer cash or gift cards to encourage participation, in addition to health related goods and services.

The personnel agency called for a greater focus on controlling high blood pressure and told plans to cover certain types of health screening recently added to a standard list, including one for those at high risk for lung cancer.

The letter also reiterated previous initiatives in areas including mental health benefits and coordinating FEHBP with Medicare for retirees who have both.

It made no mention of a significant change approved to the program last year, creating a self-plus-one option in addition to the current self-only and self-and-family options. However, OPM sent a separate memo to agencies Monday telling them to prepare to make that option available beginning in calendar year 2016. OPM said previously that it could not make that option available before then due to the complexities involved.

Several initiatives contained in the White House’s recent budget proposal regarding the FEHBP would require legislation. These include allowing coverage of domestic partners, adding new types of plan designs, centralizing purchasing of prescription drugs, and allowing higher premiums for enrollees who use tobacco. The Obama administration’s similar proposals last year did not advance in Congress beyond a House hearing.

The FEHBP program covers about 8.2 million active and retired federal employees and certain family members in more than 250 individual plans, most of them local health maintenance organizations. The government pays about 70 percent of the total premium for a plan.

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