This section of the FEDERAL REGISTER

contains regulatory documents having general

applicability and legal effect, most of which

are keyed to and codified in the Code of

Federal Regulations, which is published under

50 titles pursuant to 44 U.S.C. 1510.

The Code of Federal Regulations is sold by

the Superintendent of Documents. Prices of

new books are listed in the first FEDERAL

REGISTER issue of each week.

Rules and Regulations Federal Register

26667

Vol. 60, No. 96

Thursday, May 18, 1995

OFFICE OF PERSONNEL

MANAGEMENT

5 CFR Part 890

RIN 3206–AG31

Federal Employees Health Benefits

Program: Limitation on Physician

Charges and FEHB Program Payments

AGENCY: Office of Personnel

Management.

ACTION: Interim regulation with request

for comments.

SUMMARY: The Office of Personnel

Management (OPM) is issuing an

interim regulation that amends current

Federal Employee Health Benefits

(FEHB) Program regulations to require

that the charges and FEHB fee-forservice plans’ benefit payments for

certain physician services furnished to

retired enrolled individuals do not

exceed the limits on charges and

payments established under the

Medicare fee schedule for physician

services. The regulation authorizes the

FEHB plans, under the oversight of

OPM, to notify the Secretary of Health

and Human Services (HHS) of a

Medicare participating hospital,

physician or supplier who knowingly

and willfully fails to accept, on a

repeated basis, the Medicare rate as

payment in full from an FEHB plan. The

regulation also authorizes the FEHB

plans, under the oversight of OPM, to

notify the Secretary of HHS of a

Medicare nonparticipating physician or

supplier who knowingly and willfully

charges, on a repeated basis, more than

the Medicare limiting charge amount

(115 percent of the Medicare

Nonparticipating Physician Fee

Schedule amount).

DATES: This interim regulation is

effective May 18, 1995. Comments must

be received on or before July 17, 1995.

ADDRESSES: Send written comments to

Lucretia F. Myers, Assistant Director for

Insurance Programs, Retirement and

Insurance Group, Office of Personnel

Management, 1900 E Street, NW.,

Washington, DC 20415; or FAX to (202)

606–0633.

FOR FURTHER INFORMATION CONTACT:

Robert G. Iadicicco (202) 606–0004.

SUPPLEMENTARY INFORMATION: Section

11003 of the Omnibus Budget

Reconciliation Act (OBRA) of 1993, Pub.

L. 103–66, amended the FEHB law to

limit the charges and FEHB fee-forservice plans’ benefit payments for

certain physician services (as defined in

section 1848(j) of the Social Security

Act) received by retired enrolled

individuals.

The OBRA of 1993 provision is

related to section 7002(f) of OBRA of

1990, Pub. L. 101–508. The OBRA of

1990 provision limited the charges and

FEHB fee-for-service plans’ benefit

payments for certain inpatient hospital

services received by retired enrolled

individuals. OPM implemented the

OBRA of 1990 provision by issuing

interim and final regulations in the

March 27, 1992, and July 20, 1993,

issues of the Federal Register (57 FR

10609 and 58 FR 38661). This interim

regulation amends the previous

regulations.

The interim regulation expands the

definition of a retired enrolled

individual to include individuals who

are not enrolled in Medicare part B.

The interim regulation specifies the

physician services covered by the

limitation on charges and benefit

payments.

The interim regulation establishes

how FEHB fee-for-service plans will

determine benefit payments for

physician services covered by the

limitation. The plans will base their

payment on the lower of the actual

charge of the provider or the amount

determined to be equivalent to the

Medicare part B payment under the

Medicare Participating Physician Fee

Schedule for Medicare participating

physicians and the Medicare

Nonparticipating Physician Fee

Schedule for Medicare nonparticipating

physicians. Retired enrolled

individuals’ coinsurance payments will

be based on the same amount.

The interim regulation specifies the

limits on what providers can collect for

both inpatient hospital services and

physician services.

OPM has not required fee-for-service

plans with an insufficient number of

affected enrollees to apply the limits on

physician services. We made this

determination in keeping with OBRA of

1993’s primary objective of reducing

expenses.

The interim regulation authorizes the

FEHB plans, under the oversight of

OPM, to notify the Secretary of Health

and Human Services (HHS) or the

Secretary’s designee when a medical

provider knowingly and willfully

collects, on a repeated basis, more than

the applicable limits for inpatient

hospital services or physician services.

OPM strongly encourages and supports

the efforts of FEHB plans to inform

retired enrolled individuals and medical

providers of the limits on charges and

benefit payments, monitor compliance

with the limits, and, if necessary, report

repeat violators to the Secretary of HHS,

or the Secretary’s designee.

Waiver of Notice of Proposed

Rulemaking

Pursuant to section 553(b)(3)(B) of

title 5 of the U.S. Code, I find that good

cause exists for waiving the general

notice of proposed rulemaking and

making this regulation effective upon

publication. The notice is being waived

because the limitation on FEHB plans’

benefit payments and providers’ charges

enacted by Pub. L. 103–66 addressed in

this regulation was effective with

respect to the contract year beginning on

January 1, 1995.

Regulatory Flexibility Act

I certify that these regulations will not

have a significant economic impact on

a substantial number of small entities

because they primarily affect the health

care coverage of Federal annuitants and

former spouses.

E.O. 12866, Regulatory Review

This rule has been reviewed by OMB

in accordance with E.O. 12866.

List of Subjects in 5 CFR Part 890

Administrative practice and

procedure, Government employees,

Health facilities, Health insurance,

Health professions, Hostages, Iraq,

Kuwait, Lebanon, Reporting and

recordkeeping requirements,

Retirement.
26668 Federal Register / Vol. 60, No. 96 / Thursday, May 18, 1995 / Rules and Regulations

Office of Personnel Management.

James B. King,

Director.

Accordingly, OPM is amending 5 CFR

part 890 as follows:

PART 890—FEDERAL EMPLOYEES

HEALTH BENEFITS PROGRAM

1. The authority citation for part 890

continues to read as follows:

Authority: 5 U.S.C. 8913; § 890.803 also

issued under 50 U.S.C. 403p, 22 U.S.C. 4069c

and 4069c–1; subpart L also issued under

sec. 599C of Pub. L. 101–513, 104 Stat. 2064,

as amended.

2. The heading of subpart I is revised

to read as follows:

Subpart I—Limit on Inpatient Hospital

Charges, Physician Charges, and

FEHB Benefit Payments

3. Section 890.901 is revised to read

as follows:

§ 890.901 Purpose.

This subpart identifies the individuals

whose charges and FEHB benefit

payments for inpatient hospital services

and/or physician services may be

limited and sets forth the circumstances

of the limit.

4. Section 890.902 is amended by

revising paragraphs (c) and (d) to read

as follows:

§ 890.902 Definition.

* * * * *

(c) Is age 65 or older or becomes age

65 while receiving inpatient hospital

services or physician services; and

(d) Is not covered by Medicare part A

and/or part B.

5. Section 890.903 is revised to read

as follows:

§ 890.903 Covered services.

(a) The limitation on the charges and

FEHB benefit payments for inpatient

hospital services apply to inpatient

hospital services which are:

(1) Covered under both Medicare part

A and the retired enrolled individual’s

FEHB plan; and

(2) Supplied to a retired enrolled

individual who does not have Medicare

part A; and

(3) Provided by hospital providers

who have in force participation

agreements with the Secretary of Health

and Human Services (HHS) consistent

with sections 1814(a) and 1866 of the

Social Security Act, and receive

Medicare part A payments in

accordance with the diagnosis related

group (DRG) based prospective payment

system (PPS).

(b) The limitation on the charges and

FEHB benefit payments for physician

services apply to physician services, (as

defined in section 1848(j) of the Social

Security Act), which are:

(1) Covered under both Medicare part

B and the retired enrolled individual’s

FEHB plan; and

(2) Supplied to a retired enrolled

individual who does not have Medicare

part B.

6. Section 890.904 is amended by

designating the current paragraph as

paragraph (a), amending newly

designated paragraph (a) by adding the

words ‘‘for inpatient hospital services’’

after the words ‘‘FEHB plan’s benefit

payment’’, and by adding paragraph (b)

to read as follows:

§ 890.904 Determination of FEHB benefit

payment.

* * * * *

(b) The FEHB plan’s benefit payment

for physician services under this

subpart is determined by taking the

lower of the following amounts:

(1) The amount determined by the

FEHB plan, which is equivalent to the

Medicare part B payment under the

Medicare Participating Physician Fee

Schedule for Medicare participating

physicians and the Medicare

Nonparticipating Physician Fee

Schedule for Medicare nonparticipating

physicians (the amount payable before

the Medicare deductible and

coinsurance are applied); or

(2) The actual billed charges; and

(3) Reducing the lower amount by any

FEHB plan deductible, coinsurance, or

copayment that is the responsibility of

the retired enrolled individual.

7. Section 890.905 is revised to read

as follows:

§ 890.905 Limits on inpatient hospital and

physician charges.

(a) Hospitals may not collect from

FEHB plans and retired enrolled

individuals for inpatient hospital

services more than the amount

determined to be equivalent to the

Medicare part A payment under the

DRG-based PPS.

(b) Medicare participating providers

may not collect for FEHB plans and

retired enrolled individuals for

physician services more than the

amount determined to be equivalent to

the Medicare part B payment under the

Medicare Participating Physician Fee

Schedule.

(c) Medicare nonparticipating

providers may not collect from FEHB

plans and retired enrolled individuals

for physician services more than the

amount to be equivalent to the Medicare

limiting charge amount.

8. Section 890.906 is redesignated as

§ 890.909 and a new § 890.906 is added

to read as follows:

§ 890.906 Retired enrolled individuals

coinsurance payments.

(a) A retired enrolled individual’s

coinsurance responsibility for inpatient

hospital services is calculated in

accordance with the plan’s contractual

benefit structure and is based on the

amount determined to be equivalent to

the Medicare part A payment under the

DRG-based PPS.

(b) A retired enrolled individual’s

coinsurance responsibility for physician

services is calculated in accordance

with the plan’s contractual benefit

structure and is based on the lower of

the actual charges or the amount

determined to be equivalent to the

Medicare part B payment under the

Medicare Participating Physician Fee

Schedule for Medicare participating

physicians and the Medicare

Nonparticipating Physician Fee

Schedule for Medicare nonparticipating

physicians.

9. Section 890.907 is redesignated as

§ 890.910 and a new § 890.907 is added

to read as follows:

§ 890.907 Effective dates.

(a) The limitation specified in this

subpart applies to inpatient hospital

admissions commencing on or after

January 1, 1992.

(b) The limitation specified in this

subpart applies to physician services

supplied on or after January 1, 1995.

10. Section 890.908 is added to read

as follows:

§ 890.908 Notification of HHS.

An FEHB plan, under the oversight of

OPM, will notify the Secretary of HHS,

or the Secretary’s designee, if the plan

finds that:

(a) A hospital knowingly and willfully

collects, on a repeated basis, more than

the amount determined to be equivalent

to the Medicare part A payment under

the DRG-based PPS.

(b) A Medicare participating

physician or supplier knowingly and

willfully collects, on a repeated basis,

more than the amount determined to be

equivalent to the Medicare part B

payment under the Medicare

Participating Physician Fee Schedule.

(c) A Medicare nonparticipating

physician or supplier knowingly and

willfully charges, on a repeated basis,

more than the amount determined to be

equivalent to the Medicare limiting

charge amount.

[FR Doc. 95–12169 Filed 5–17–95; 8:45 am]

BILLING CODE 6325–01–M