OPM proposes new metrics for FEHBP

The Office of Personnel Management wants a new approach to measuring the effectiveness of the Federal Employees Health Benefits Program.

OPM issued a notice of proposed rulemaking in Monday’s Federal Register asking for comments on the way it wants to measure the FEHBP’s effectiveness.

“OPM is developing a framework that will utilize a discrete set of quantifiable measures examining key aspects of contract performance and specific criteria for performance factors which will then be linked to health plan premium disbursements,” OPM stated in the notice. “This regulation proposes to replace the current methods of plan assessment with a new framework, in which both experience-rated and community-rated plans utilize the same measurement criteria.”

Today, OPM analyzes FEHBP contracts using either a community rating, which is where performance is assessed according to specific elements that can result in a percentage of premium withheld from payment to the carrier, or an experience rating, which is based on profit analysis factors that are weighted to create a service charge that OPM pays to carriers. The metrics are different, meaning comparing two different plans under the different ratings system is difficult.

OPM stated it wants to use the same criteria for rating both types of plans.

“For experience-rated plans, the performance-based service charge will be administered similarly to the current service charge process,” OPM stated. “For community-rated plans, the performance adjustment will be administered similarly to the current process using an adjustment to net-to-carrier premium payments made during the first quarter of the following contract period. OPM proposes the new assessment system will impact service charge and performance adjustment premium disbursements made in 2017.”

OPM proposes four measurement categories for both experience-rated and community-rated plans aimed at improving standards of accountability and transparency.

  • Clinical quality
  • Customer service
  • Resource use
  • Contract oversight

“Three of the performance areas, clinical quality, customer service and resource use, will contain one or more domains that reflect priorities within each area, and each domain will be comprised of one or more performance areas. The fourth category, contract oversight, will be based upon the contracting officer’s evaluation of contractor performance such as audit findings, fraud/waste/abuse, responsiveness to OPM, benefits/network management, contract compliance, technology management, data security and federal socio- economic programs,” OPM stated. “OPM expects to update the measures over time, and therefore the regulation lists representative examples of the domains and measures within each category. OPM will issue and periodically update technical guidance describing the measures and methods/formulae for performance scoring. FEHB carriers will receive technical guidance updating measures, methods and scoring in advance of their use in the plan assessment process.”

FEHBP carriers will receive more specifics in OPM’s annual carrier letter, where the agency will detail the categories, domains, measures and weights for the new metrics system. OPM plans to begin using the performance assessment system in 2016.

Comments are due by Jan. 14.

Over the last few years, Congress and OPM have been trying to modernize the federal health insurance system. For instance, OPM in December proposed updates to the FEBHP in May 2013 as well, focusing on three major changes such as opening up the plan to regional insurers instead of just national ones and giving OPM the ability to negotiate prescription drug prices to take advantage of bulk buying.

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