Office of Personnel Management

Retirement and Insurance Group

1920 1954 1959 1986 

 

Benefits Administration Letter

Number: 96-402 Date: September 10, 1996 

SUBJECT: FEHB Open Season - Changes to the FEHB Guide

_________________________________________________________________

Purpose

The purpose of this letter is to let you know of some important changes we're making to the

FEHB Guide in order to make it more useful to Federal employees during the 1996 Open

Season.

Why change?

For many years FEHB plans have been described as being either fee-for-service (FFS) plans

or prepaid plans. FFS plans were further broken down into Government-wide Plans (e.g., the

Blue Cross and Blue Shield Service Benefit Plan), and employee organization plans either

open to all employees (e.g., the Mail Handlers Benefit Plan) or restricted to specific groups

(e.g., the Foreign Service Benefit Plan). Enrollees in prepaid plans had to use medical

providers designated by their plans, while FFS enrollees could choose whichever providers

they wished.

Recent changes in the health insurance industry have made these descriptions and distinctions

relatively obsolete. FFS plans have incorporated a number of managed care initiatives,

including precertification and preferred provider organizations, and are beginning to add

health maintenance-type features in some locations. Many prepaid plans now offer benefits

for services provided by non-plan doctors. As a result, we needed to come up with plan

descriptions that reflect current insurance industry reality.

New descriptions

This year's FEHB Guide will break the plans down into three general categories: 1)

nationwide managed Fee-for-Service plans, 2) plans offering a Point of Service product, and

3) Health Maintenance Organization plans (HMOs).

Nationwide Managed Fee-for-Service plans. This category contains the Government-wide

plan and the employee organization plans and is further broken down between plans open to

all and plans open only to specific groups. These plans are "nationwide" in the sense that they

are available to employees regardless of where they live, and "managed" in that all contain

features such as precertification of hospital admissions and utilization review. Many also

contain a Preferred Provider Organization (PPO) feature.
Health Maintenance Organizations (HMOs). These are the prepaid plans that, except for

emergency care, require their enrollees to use providers that are affiliated with the plans.

Plans offering a Point of Service product. As we noted above, different kinds of plans are

beginning to blend their features. A number of FFS and HMO plans now offer both forms of

health care delivery, known as "in network" and "out of network." 

In an HMO with a Point of Service (POS) product, the POS product acts like a Fee-forService plan: The HMO's enrollees may use non-affiliated (out of network) providers if they

wish, but the services will cost them more--in terms of deductibles and coinsurance--than if

they used plan providers. 

In a Fee-for-Service plan with a POS product, the POS product acts like an HMO: If they

agree to let their medical care be managed by a plan-affiliated gatekeeper physician (in

network), plan enrollees will get a better benefit, usually in the form of richer benefits and

lower copays or coinsurance. 

Listing the plans in the Guide

Plans with a POS product will be listed in the FEHB Guide separately from other plans. 

HMOs will be listed in either the HMO section or the Plans Offering a POS Product section,

depending upon whether they contain a POS product. For example, if a State has two HMOs

and only one HMO has a POS product, that plan will be listed only in the Plans Offering a

POS Product section. The other plan will be listed only in the HMO section. Employees will

need to be cautioned to look at both sections to find the plans available to them.

FFS plans will be listed on the Managed Fee-for-Service Plans page. In addition, those FFS

plans that offer a POS product will also be listed in the Plans Offering a POS Product section

under the States where the POS product is available.

Also...

Quality Assurance. In addition to redesignating the plans, we will show which plans are

accredited by the National Committee for Quality Assurance (NCQA), a nationallyrecognized leader in evaluating managed care plans, such as HMOs. NCQA evaluates how

well a health plan manages both its administrative services and health care delivery system,

including physicians, hospitals, and other providers. 

Survey Results. The Customer Satisfaction Survey Results, formerly shown separately in the

back of the FEHB Guide, have been expanded and incorporated with the plan information

described above into a "report card" on plan performance. In addition to the NCQA

information noted above and the overall ratings achieved by plans, ratings on specific

questions will be highlighted, and plans with overall ratings that are significantly better than

average for that plan type will earn a star.

 

 Abby L. Block, Chief

 Insurance Policy 

 and Information Division