2016 FEHB Call Letter

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Notice from OPM to insurance carriers seeking benefit and rate proposals for the federal employee health insurance program (FEHB)
    FEHB Program Carrier Letter All Carriers U.S. Office of Personnel Management Healthcare and Insurance   Letter No. 2015-02   Date: March 13, 2015   Fee-for-service [2] Experience-rated HMO [2] Community-rated HMO [1] SUBJECT: Federal Employees Health Benefits Program Call Letter SUBMISSION OF PROPOSALS This is our annual call for benefit and rate proposals from Federal Employees Health Benefits (FEHB) Program carriers. Your benefit and rate proposals for the contract term beginning January 1, 2016 should be submitted on or before Sunday, May 31, 2015 . Please send your  proposals by overnight mail, FAX, or email  to your contract specialist. We expect to complete  benefit and rate negotiations by mid-August to ensure a timely Open Season. As a reminder, your Contracting Officer will consider responses to the topics in the Call Letter in evaluating your responsiveness to OPM. Responsiveness to OPM will remain an important element as we implement the new Plan Performance Assessment program. FEHB PROGRAM BENEFITS AND INITIATIVES I.   Introduction The annual call for benefit and rate proposals sets forth the policy goals and initiatives for the FEHB Program for 2016 and beyond. We encourage all FEHB carriers to thoroughly evaluate their health plan options to find ways to improve affordability, reduce the cost and improve the quality of care, and improve the health of the enrolled population.   Benefit proposals must be cost neutral in that proposed benefit enhancements must be offset by proposed reductions so that  premiums are not increased due to benefit changes. OPM will make exceptions to this requirement for proposed benefit changes in response to the Medicare and Applied Behavior Analysis (ABA) initiatives described below. This year, we are focusing on several areas:    implementing Self Plus One coverage;    encouraging participation in Medicare Part B;    expanding access to care;    optimizing delivery of prescription drug benefits;     promoting preventive care and wellness;    advancing quality and value of care; and     preparing for the Excise Tax in 2018. Specific initiatives are discussed below.   2 II.   Implementation of Self Plus One Coverage Section 706 of the Bipartisan Budget Act of 2013 adds to chapter 89 of title 5 United States Code a Self Plus One enrollment type for Federal employees and retirees under the FEHB Program. As FEHB plans prepare their proposals for 2016 rates and benefits including Self Plus One enrollment types, we expect proposals for Self Plus One rates to be lower than Self and Family rates. In no event can Self Plus One rates be higher than Self and Family rates. Likewise, benefits that vary between enrollment type, such as catastrophic maximum, deductibles and wellness incentives should be for dollar amounts that are less than or equal to corresponding benefits in Self and Family enrollment. All other benefits, such as copays and coinsurance amounts, should be the same regardless of enrollment type. FEHB plans with High Deductible Health Plans must be cognizant of Treasury/IRS - 26 U.S. Code § 223 which for deductibles, catastrophic maximums and premium pass-through contributions require twice the dollar amount for Self Plus One or Self Plus Family than for Self Only coverage. Note that family coverage is defined under 26 CFR 54.4980G-1 as including the Self Plus One coverage category. III.   Medicare Population Programs and Benefits  Newly Medicare-eligible Federal retirees are enrolling in Medicare Part B in declining rates. In the past 15 years, the participation rate in Part B for newly eligible annuitants has declined  by twenty percent among fee for service plans and by ten percent for HMOs. FEHB is experiencing declining participation rates because members often do not have a clear enough incentive to enroll. Plans should propose benefit changes that allow members to maximize their benefits under FEHB and Medicare, such as reduced cost sharing under hospital, medical or pharmacy benefits for members with Part B. We also encourage plans to improve their coordination activities for pharmacy benefits covered under Part B and FEHB. As noted earlier, enhancements to benefits that encourage Medicare participation will not need to be offset by decreases in other benefits. IV.   Access to Care OPM strongly encourages plans to reassess their benefit offerings as the needs of our  population evolve. In recent years, FEHB has welcomed young adults up to the age of 26 and same sex spouses as covered family members. To further ensure that members can access appropriate care, we provide the following guidance: Applied Behavior Analysis (ABA) - OPM has encouraged FEHB plans to offer ABA  benefits for children with autism spectrum disorders since 2013. Since then, the availability of appropriate credentialed and/or licensed providers has greatly increased, and the Agency   3 for Healthcare Research and Quality (AHRQ) 1  has summarized new research linking  behavioral interventions with positive outcomes. We appreciate efforts some FEHB plans have made to provide ABA services. However, many Federal families still have no FEHB  plan option that includes ABA. To increase access to ABA services, we will pursue active negotiations with all plans that have not yet added this benefit. We are prepared to allow an exception to cost neutrality if ABA is included as a new service. Consistent with each plan’s benefit design, OPM will consider proposals for ABA as a fully case managed benefit, a pre-authorized service, or an in-network benefit only. Additionally, national plans may present proposals that phase in coverage beginning in 2016. Please consult the Technical Guidance for additional details regarding ABA benefit implementation. Infertility Benefits - FEHB eligibility includes same-sex spouses. Accordingly, while plans are not required to offer infertility benefits, if they do, they must ensure that benefit definitions and coverage descriptions use terms that are relationship neutral. We also note that OPM no longer requires plans to comply with benefit requirements for federally qualified Health Maintenance Organizations 2 . All brochures should clearly describe how members qualify for any available diagnostic and therapeutic infertility benefits; examples of updated brochure language are included in the Technical Guidance. Transgender Services - In June 2014, OPM recognized the evolving professional consensus that treatment may be medically necessary for gender dysphoria, and removed the FEHB requirement to exclude services, drugs, or supplies directly related to transition 3 . Due to the short timeframe for network development and benefit design, OPM permitted plans to retain the general exclusion of these services for the 2015 plan year. For 2016, plans may propose services for members with gender dysphoria as they do for all other medical conditions. Plans offering surgical services must include details of preauthorization or case management requirements to facilitate referrals to qualified providers of this specialized care. In-Network Benefits  – FEHB members still receive bills from non-network providers who render services in network hospitals, such as anesthesiologists, radiologists, pathologists, and neonatologists. We encourage all plans to work with their contracting institutional providers to address this issue, which can have a significant cost-sharing impact on members, and to ensure that consumers are provided in-network options whenever practicable and sufficient notice before non-network services are delivered. Please include a description of how you are addressing this concern in your proposal. V.   Prescription Drugs 1  http://effectivehealthcare.ahrq.gov/ehc/products/544/1945/autism-update-report-140806.pdf , AHRQ Publication  No. 14-EHC036-EF, August 2014   2  HMO Act of 1973, 42 U.S. Code Section 300e. 3  http://www.opm.gov/healthcare-insurance/healthcare/carriers/2014/2014-17.pdf   4 OPM continues to emphasize ways to ensure the effective use of prescription medications while managing drug costs. Your proposals should highlight how you will achieve these goals through benefit structure changes, program initiatives, and outreach. Key strategies include tiering, managed formularies, tailored networks, and utilization management techniques. Managed Formularies  - FEHB has traditionally covered all drugs that require a prescription  by Federal law, with few exceptions. As the cost of prescription drugs has increased, a larger number of drug benefit plans now manage their formularies to exclude certain drugs. OPM encourages plans to consider a managed formulary for the 2016 plan year. Such a formulary may exclude drugs that are less efficacious or less safe than other available drugs for the same indication, as well as those that provide little incremental clinical value at substantial additional cost when compared to other available drugs for the same indication. Plans  proposing a managed formulary should include a description of their communication plan to ensure appropriate outreach to members and providers. Formulary Tiers -  By the 2016 plan year, all plans must offer a prescription drug benefit that includes at least four tiers: Generics, Preferred Brands, Non-preferred Brands, and Specialty Drugs. Formulary tiers may also include additional categories, such as preferred and non-preferred specialty drugs. As biosimilar specialty products find their way to market, it will be important to differentiate between preferred and non-preferred specialty products. Transparency  - Both current and  prospective  enrollees should have easy and convenient access to user friendly information about the formulary tier and member cost-share for  prescription drugs. As described in Carrier Letter 2014-03, we expect all FEHB plans to make available such a cost comparison tool by this year’s Open Season. Pharmacy Networks - There are more than 65,000 licensed pharmacy outlets in the United States. Many FEHB plans include nearly all of them in their participating provider network. Evidence suggests that reductions in the size of the network can result in significantly enhanced discounts while pharmacy access is maintained, and member disruption is minimized. We encourage plans to consider savings opportunities related to pharmacy network management. Any proposals to implement a managed network should be accompanied by an assessment of the impact on members and a robust communication plan. Utilization Management - We expect plans to implement, operate, and reinforce drug utilization management strategies that have been shown to be effective in assuring high quality care and clinically appropriate cost savings. These include prior approval, step therapy, quantity limits, and medication therapy management as follows:    Last year, fewer than half of FEHB members were enrolled in a plan using step therapy. Additional opportunities exist to reduce costs by more broadly utilizing step-therapy.    Most FEHB plans have quantity limits for narcotics and sleep medications. We encourage plans to consider quantity limits for stimulants.
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