I

104TH CONGRESS

2D SESSION H. R. 3462

To amend title 5, United States Code, to require that written notice be

furnished by the Office of Personnel Management before making any

substantial change in the health benefits program for Federal employees.

IN THE HOUSE OF REPRESENTATIVES

MAY 15, 1996

Mr. CARDIN (for himself, Mr. WATTS of Oklahoma, Mr. GILMAN, Mr. HOYER,

Mrs. MORELLA, Mr. LAFALCE, Mr. PICKETT, Mr. CRAMER, Mr.

POMEROY, Mr. BREWSTER, Mr. MORAN, Mr. JOHNSON of South Dakota,

Mrs. MEEK of Florida, and Mr. EHRLICH) introduced the following bill;

which was referred to the Committee on Government Reform and Oversight

A BILL

To amend title 5, United States Code, to require that written

notice be furnished by the Office of Personnel Management before making any substantial change in the health

benefits program for Federal employees.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE; FINDINGS.

4 (a) SHORT TITLE.—This Act may be cited as the

5 ‘‘Federal Health Program Benefit Change Accountability

6 Act’’.
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1 (b) FINDINGS.—The Congress finds that—

2 (1) effective beginning in 1996, Federal retirees

3 enrolled in the Governmentwide service benefit plan

4 under chapter 89 of title 5, United States Code, are

5 subject to a copayment for prescription drugs ob6 tained from a retail pharmacy, but are exempt from

7 such copayment if they instead use a plan’s mail

8 order pharmacy;

9 (2) that difference in policy—

10 (A) increases out-of-pocket health care

11 costs for and imposes financial penalties on the

12 large majority of Federal retirees who use their

13 local pharmacies to have prescriptions filled;

14 (B) fails to recognize the integral role of

15 local pharmacies in contributing to the health of

16 their patrons, such as through face-to-face

17 counseling;

18 (C) unfairly discriminates in favor of out19 of-state mail order pharmacies at the expense of

20 local retail pharmacies;

21 (D) transfers millions of dollars in wages

22 and tax revenues out of State, and therefore

23 hurts local economies and small businesses; and
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1 (E) reduces the accessibility of local phar2 macies for all individuals, particularly those liv3 ing in rural areas;

4 (3) in making this major change, it appears

5 that the Office of Personnel Management—

6 (A) did not determine the impact on the

7 quality of pharmacy care provided to Federal

8 retirees, who use a disproportionate share of

9 prescription medications, but instead focused

10 primarily on economic considerations;

11 (B) did not consider alternative cost con12 tainment options in the prescription drug pro13 gram, which has disproportionately focused its

14 cost containment approaches on retail phar15 macies;

16 (C) did not determine, and has not yet

17 demonstrated, whether the anticipated savings

18 result from lower costs of mail order drug prod19 ucts or because retirees are simply paying more

20 in copayments for their prescription at local

21 pharmacies;

22 (D) did not determine whether such

23 change was consistent with the structure of cur24 rent private market prescription drug programs,

25 which traditionally give retirees a fair economic
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1 choice of using mail order pharmacies or retail

2 pharmacies;

3 (E) did not assess the ability of the con4 tractor to fulfill the terms of the contract for

5 mail order prescriptions, given that thousands

6 of retirees were inconvenienced when the mail

7 order pharmacies were unable to meet the de8 mand for prescriptions; and

9 (F) did not assess the impact of the

10 change on the overall health care marketplace,

11 given that the Office of Personnel Management

12 is a major payor of health care services and

13 products; and

14 (4) the Office of Personnel Management should

15 be held more accountable for major changes made in

16 Federal health care program benefit designs, and

17 should be required to justify the impact of such

18 changes in terms of cost savings, access, and quality

19 of care, before such changes are implemented.

20 SEC. 2. REPORTING REQUIREMENT.

21 (a) IN GENERAL.—Section 8910 of title 5, United

22 States Code, is amended by adding at the end the follow23 ing:

24 ‘‘(e)(1) The Office shall prepare an annual report in

25 which it shall describe, to the extent practicable, any sub-
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1 stantial changes in maximums, limitations, exclusions, or

2 other definitions of benefits that it intends to propose for

3 implementation in the upcoming contract year.

4 ‘‘(2) Included in a report under this subsection shall

5 be, with respect to each such change—

6 ‘‘(A) a statement of justification for the change;

7 ‘‘(B) an analysis of the anticipated savings, to

8 the extent that the change would be justified on the

9 basis of cost savings, as well as any alternative op10 tions considered and the reasons why the proposed

11 change is considered preferable;

12 ‘‘(C) a description of the anticipated impact of

13 the proposed change on access to and quality of

14 care, and on costs to enrollees likely to be affected;

15 ‘‘(D) an assessment of the ability of carriers to

16 implement the proposed change in a manner that is

17 efficient and that promotes the interests referred to

18 in subparagraph (C); and

19 ‘‘(E) an analysis of the anticipated economic

20 impact of the proposed change with respect to pro21 viders and enrollees, respectively.

22 ‘‘(3) The Office shall have each report under this sub23 section published in the Federal Register, and shall submit

24 a copy of each such report to both Houses of Congress,

25 as early in the year as possible, consistent with the goal
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1 of affording interested persons a meaningful opportunity

2 to comment.’’.

3 (b) EFFECTIVE DATE.—The amendment made by

4 subsection (a) shall apply with respect to changes taking

5 effect in any contract year beginning later than 6 months

6 after the date of the enactment of this Act.

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