II

104TH CONGRESS

2D SESSION S. 1759

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 SENATE OF THE UNITED STATES

MAY 15, 1996

Ms. MIKULSKI (for herself and Mr. SARBANES) introduced the following bill;

which was read twice and referred to the Committee on Governmental Affairs

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’’.

7 (b) FINDINGS.—The Congress finds that—
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1 (1) effective beginning in 1996, Federal retirees

2 enrolled in the Governmentwide service benefit plan

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

4 subject to a copayment for prescription drugs ob5 tained from a retail pharmacy, but are exempt from

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

7 order pharmacy;

8 (2) that difference in policy—

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

10 costs for and imposes financial penalties on the

11 large majority of Federal retirees who use their

12 local pharmacies to have prescriptions filled;

13 (B) fails to recognize the integral role of

14 local pharmacies in contributing to the health of

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

16 counseling;

17 (C) unfairly discriminates in favor of out18 of-state mail order pharmacies at the expense of

19 local retail pharmacies;

20 (D) transfers millions of dollars in wages

21 and tax revenues out of State, and therefore

22 hurts local economies and small businesses; and

23 (E) reduces the accessibility of local phar24 macies for all individuals, particularly those liv25 ing in rural areas;
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1 (3) in making this major change, it appears

2 that the Office of Personnel Management—

3 (A) did not determine the impact on the

4 quality of pharmacy care provided to Federal

5 retirees, who use a disproportionate share of

6 prescription medications, but instead focused

7 primarily on economic considerations;

8 (B) did not consider alternative cost con9 tainment options in the prescription drug pro10 gram, which has disproportionately focused its

11 cost containment approaches on retail phar12 macies;

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

14 demonstrated, whether the anticipated savings

15 result from lower costs of mail order drug prod16 ucts or because retirees are simply paying more

17 in copayments for their prescription at local

18 pharmacies;

19 (D) did not determine whether such

20 change was consistent with the structure of cur21 rent private market prescription drug programs,

22 which traditionally give retirees a fair economic

23 choice of using mail order pharmacies or retail

24 pharmacies;
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1 (E) did not assess the ability of the con2 tractor to fulfill the terms of the contract for

3 mail order prescriptions, given that thousands

4 of retirees were inconvenienced when the mail

5 order pharmacies were unable to meet the de6 mand for prescriptions; and

7 (F) did not assess the impact of the

8 change on the overall health care marketplace,

9 given that the Office of Personnel Management

10 is a major payor of health care services and

11 products; and

12 (4) the Office of Personnel Management should

13 be held more accountable for major changes made in

14 Federal health care program benefit designs, and

15 should be required to justify the impact of such

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

17 of care, before such changes are implemented.

18 SEC. 2. REPORTING REQUIREMENT.

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

20 States Code, is amended by adding at the end the follow21 ing:

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

23 which it shall describe, to the extent practicable, any sub24 stantial changes in maximums, limitations, exclusions, or
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1 other definitions of benefits that it intends to propose for

2 implementation in the upcoming contract year.

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

4 be, with respect to each such change—

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

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

7 the extent that the change would be justified on the

8 basis of cost savings, as well as any alternative op9 tions considered and the reasons why the proposed

10 change is considered preferable;

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

12 the proposed change on access to and quality of

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

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

15 implement the proposed change in a manner that is

16 efficient and that promotes the interests referred to

17 in subparagraph (C); and

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

19 impact of the proposed change with respect to pro20 viders and enrollees, respectively.

21 ‘‘(3) The Office shall have each report under this sub22 section published in the Federal Register, and shall submit

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

24 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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