OPM advocates for innovations to FEHB

Friday - 3/25/2011, 7:31am EDT

WFED's Jason Miller

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By Jason Miller
Executive Editor
Federal News Radio

The Office of Personnel Management will give federal employee health insurance carriers a gentle push Friday to make changes to their plans.

OPM Director John Berry said he will issue the 2011 Call Letter detailing specific new services carriers should consider over the next year.

"We are asking you to continue encouraging people to adopt healthy lifestyles by providing concrete incentives to participate in wellness and prevention activities," Berry said Thursday at the American Health insurance Plans conference in Washington. "Your efforts through FEHB and ours in the workplace should combine to provide powerful messages to employees. The letter also gives support to integrated health care systems, reducing obesity and addressing racial and ethnic disparities in health status and care. The call letter is a concrete multi-pronged approach moving to a future we all know is possible."

OPM issues Call Letters several times during the year to update insurance providers on policy and legislative changes to insurance coverage.

Walt Francis, a FEHB expert and principal author of Checkbook's Guide for health plans for federal employees, said most Call Letters are pretty basic.

OPM has used them in the past to ask carriers to offer pre-preventive health care benefits to enrollees at no cost or offer coverage for hearing aids.

"OPM normally asks for one or two things new each year," Francis said. "Last year they told health plans to get ready for the new medical data warehouse they are launching this year. It's usually about management improvement or coverage improvements."

Francis said one likely candidate in this year's Call Letter would be offering affinity coverage to domestic partners of federal employees. Berry said he is encouraging carriers to do so as a pre-cursor to getting the law changed.

"This is a matter of recruitment and retention," Berry said. "We are competing with the Fortune 500 companies and three-quarters of them already offer this as a benefit. Affinity coverage doesn't cost the government any money."

Berry added he's hopeful to get a law passed this year to give domestic partners of federal employees full benefits, including health insurance, dental and vision benefits, retirement and disability, medical, family and emergency leave as well as long term care insurance and other benefits.

"We will work with both Republicans and Democrats to get this done," he said. "I don't look at this as a partisan issue."

Along with the Call Letter, Berry detailed several other changes coming to FEHB.

Berry wants to open the FEHB up to employees of Native American tribes. OPM also will stop requiring carriers to mail plan brochures to federal employees.

"We expect to save roughly $5 million in premiums," he said. "The full brochures will be accessible online and they can still be mailed upon request if someone doesn't have access to a computer. This will save us a heck of a lot of money and certainly a lot of trees."

These changes are part of how Berry wants to add innovative ideas to improve FEHB.

He said OPM will use two new types of data analysis to better understand trends across the insurance plans.

One way is through a new centralized data warehouse of medical claims. Berry said OPM will launch the repository with more than 8 million users in 2011.

"FEHB operates on a simple principle: that competition drives better performance and lower prices," Berry said. "To maintain a robust market and honor that principle, we need a greater understanding of plan performance and the factors driving cost."

OPM announced the claims data warehouse in October. Privacy and security groups immediately expressed concern over the centralized database.

Center for Democracy and Technology led a group of 15 privacy and security groups that sent a letter to OPM asking for more details on how the agency will secure the information.

Harley Geiger, policy counsel with CDT, said there were two major concerns the coalition outlined.

He said one is the increased risk OPM is putting federal employees under by creating a centralized data warehouse instead of a system that pulls from all the existing databases, known as a federated database.

Geiger said CDT and others met with OPM to try to explain why a federated approach makes more sense.

"We think there is less risk with a federated database," he said. "By having the information in a centralized format it increases the severity of the risk because the number of people who access the data increases. In many ways, a central database is unnecessary."