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

62987

Vol. 60, No. 236

Friday, December 8, 1995

OFFICE OF PERSONNEL

MANAGEMENT

5 CFR Part 890

RIN 3206–AG40

Federal Employees Health Benefits

Program; HMO Plan Applications

AGENCY: Office of Personnel

Management.

ACTION: Final rule.

SUMMARY: The Office of Personnel

Management (OPM) is issuing final

regulations to clarify the policy under

which it invites applications from

comprehensive medical plans (CMP’s),

commonly referred to as Health

Maintenance Organizations (HMO’s), to

participate in the Federal Employees

Health Benefits (FEHB) Program. This

clarification is necessary in order to

ensure that OPM and the CMP’s

(HMO’s) are providing the best possible

service to FEHB enrollees.

EFFECTIVE DATE: February 6, 1996.

FOR FURTHER INFORMATION CONTACT:

Faith M. Hannon, (202) 606–0004.

SUPPLEMENTARY INFORMATION: On

December 5, 1994, OPM published an

interim regulation in the Federal

Register (59 FR 62283) to clarify the

policy under which it invites

applications from comprehensive

medical plans (CMP’s), commonly

referred to as Health Maintenance

Organizations (HMO’s), to participate in

the FEHB Program. OPM made a

determination not to invite new plan

applications, with a limited exception,

for contract year 1996. In addition, OPM

decided neither to accept benefit change

proposals from plans already in the

FEHB Program nor to print new plan

brochures or a comparison guide for

contract year 1996.

OPM received 15 written comments

and numerous phone calls concerning

the regulation. All of the commenters

objected that OPM did not give HMO’s

sufficient notice of its determination not

to accept applications and benefit

change proposals for the 1996 contract

year. Among other issues, they

contended that many HMO’s had

already expended a substantial amount

of time preparing applications or

developing plan benefit designs and that

OPM’s decision, therefore, caused them

undue hardship. In addition, some

commenters disagreed with OPM’s

position that this regulation clarified

existing policy and that the Director of

OPM had authority to determine when

plan applications would be accepted.

After careful consideration of the

comments received, OPM concluded

that its time frames had, in fact, been

too compressed to allow for a thorough

review of all the consequences of the

decision not to accept applications and

that it had not allowed sufficient time

for comments. As a result, OPM decided

to accept applications and benefit

change proposals for contract year 1996

and to provide the public with a longer

comment period.

Therefore, OPM published a notice in

the Federal Register on March 13, 1995,

(60 FR 13491), which stated that OPM

would accept applications from new

HMO’s for participation in the FEHB

Program, and benefit change proposals

from plans currently participating, for

contract year 1996. In this notice, OPM

extended the deadline for submission of

the completed applications from

January 31 to March 31, 1995, and

allowed for a second extension if OPM

requested additional information from

the applicants. OPM also published the

clarification of the policy under which

it invites applications from HMO’s as a

proposed regulation in the Federal

Register, (60 FR 15074), on March 22,

1995. This issuance was in response to

those commenters who objected to the

length of the comment period of the

interim regulation and other alleged

publication technicalities under the

Administrative Procedure Act (APA).

OPM received seven written

responses to the proposed regulation.

The primary issues mentioned by most

commenters were that closing the FEHB

Program for an unlimited period of time

would limit health plan choices for

Federal employees, and would restrict

competition within the FEHB Program.

Both features are considered to be

hallmarks of the Program. Some

commenters also opined that this

regulation contravenes OPM’s obligation

to contract with federally qualified

HMO’s and the related HMO dual

choice mandate. These comments may

have originated from a

misunderstanding of the extent of the

regulation. It was never OPM’s intention

to close the FEHB Program to new

HMO’s for unlimited periods of time.

Because this misconception appears to

be widespread, the final rule states that

it is OPM’s intention to accept new

HMO applications on an annual basis

except in those rare instances when the

Director decides it is not in the best

interest of the Federal enrollees and the

FEHB Program. If this should occur,

sufficient advance notice would be

given to the HMO industry, i.e., an entry

in the Federal Register at least seven

months prior to the date applications

would be due for the contract year for

which applications will not be accepted,

allowing for a comment period of sixty

days. Generally, there is eleven months

lead time between when applications

are due on January 31, and the start of

the contract year for which the

applications are being accepted.

Several commenters stated that it is

their belief that the Federal Employees

Health Benefits Act (FEHBA) does not

grant the Director of OPM the authority

to determine when it is beneficial to the

FEHB Program to accept applications

from HMO’s for participation in the

Program. It was, and is, the conclusion

of OPM that the Director has always had

this authority and that this regulation

simply clarifies the policy under which

this authority is administered. The final

rule states this conclusion.

Many commenters offered to assist

OPM in streamlining the application

process so that OPM might utilize its

resources in the most effective way to

benefit Program enrollees. OPM is

appreciative of these offers and is

working closely with representatives of

the industry and other knowledgeable

organizations to improve the application

process.

This Final Rule is also updating the

mailing address of the Office of

Insurance Programs listed in the final

sentence of § 890.203(a)(5).

Regulatory Flexibility Act

I certify that these regulations will not

have a significant economic impact on

a substantial number of small entities
62988 Federal Register / Vol. 60, No. 236 / Friday, December 8, 1995 / Rules and Regulations

because they primarily affect OPM’s

administrative procedures.

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.

U.S. 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. In § 890.203, paragraphs (a)(1) and

(a)(2), and the last sentence in paragraph

(a)(5) are revised to read as follows:

§ 890.203 Application for approval of, and

proposal of amendments to, health benefits

plans.

(a) New plan applications. (1) The

Director of OPM shall consider

applications to participate in the FEHB

Program from comprehensive medical

plans (CMP’s) at his or her discretion.

CMP’s are automatically invited to

submit applications annually to

participate in the FEHB Program unless

otherwise notified by OPM. If the

Director should determine that it is not

beneficial to the enrollees and the

Program to consider applications for a

specific contract year, OPM will publish

a notice with a 60 day comment period

in the Federal Register no less than 7

months prior to the date applications

would be due for the specific contract

year for which applications will not be

accepted.

(2) When applications are considered,

CMP’s should apply for approval by

writing to the Office of Personnel

Management, Washington, DC 20415.

Application letters must be

accompanied by any descriptive

material, financial data, or other

documentation required by OPM. Plans

must submit the letter and attachments

in the OPM-specified format by January

31, or another date specified by OPM, of

the year preceding the contract year for

which applications are being accepted.

Plans must submit evidence

demonstrating they meet all

requirements for approval by March 31

of the year preceding the contract year

for which applications are being

accepted. Plans that miss either

deadline cannot be considered for

participation in the next contract year.

All newly approved plans must submit

benefit and rate proposals to OPM by

May 31 of the year preceding the

contract year for which applications are

being accepted in order to be considered

for participation in that contract year.

OPM may make counter-proposals at

any time.

* * * * *

(5) * * * The extent of the data and

documentation to be submitted by a

plan so qualified by HHS, as well as by

a non-qualified plan, for a particular

review cycle may be obtained by writing

directly to the Office of Insurance

Programs, Retirement and Insurance

Service, Office of Personnel

Management, Washington, DC 20415.

* * * * *

[FR Doc. 95–29882 Filed 12–7–95; 8:45 am]

BILLING CODE 6325–01–P

DEPARTMENT OF AGRICULTURE

Animal and Plant Health Inspection

Service

9 CFR Part 77

[Docket No. 95–072–1]

Tuberculosis in Cattle and Bison; State

Designation

AGENCY: Animal and Plant Health

Inspection Service, USDA.

ACTION: Interim rule and request for

comments.

SUMMARY: We are amending the

tuberculosis regulations concerning the

interstate movement of cattle and bison

by reducing the designation of

Wisconsin from an accredited-free State

to an accredited-free (suspended) State.

We have determined that Wisconsin no

longer meets the criteria for designation

as an accredited-free State but meets the

criteria for designation as an accreditedfree (suspended) State. This change is

necessary to prevent the spread of

tuberculosis in cattle and bison.

DATES: Interim rule effective December

8, 1995. Consideration will be given

only to comments received on or before

February 6, 1996.

ADDRESSES: Please send an original and

three copies of your comments to

Docket No. 95–072–1, Regulatory

Analysis and Development, PPD,

APHIS, Suite 3C03, 4700 River Road

Unit 118, Riverdale, MD 20737–1238.

Please state that your comments refer to

Docket No. 95–072–1. Comments

received may be inspected at USDA,

room 1141, South Building, 14th Street

and Independence Avenue SW.,

Washington, DC, between 8 a.m. and

4:30 p.m., Monday through Friday,

except holidays. Persons wishing to

inspect comments are requested to call

ahead on (202) 690–2817 to facilitate

entry into the comment reading room.

FOR FURTHER INFORMATION CONTACT: Dr.

Mitchell Essey, Senior Staff

Veterinarian, Cattle Diseases and

Surveillance, VS, APHIS, Suite 3B08,

4700 River Road Unit 36, Riverdale, MD

20737–1231, (301) 734–7727.

SUPPLEMENTARY INFORMATION:

Background

Bovine tuberculosis is the contagious,

infectious, and communicable disease

caused by Mycobacterium bovis. The

tuberculosis regulations contained in 9

CFR part 77 (referred to below as the

regulations), regulate the interstate

movement of cattle and bison because of

tuberculosis. Cattle and bison not

known to be affected with or exposed to

tuberculosis are eligible for interstate

movement without restriction if those

cattle or bison are moved from

jurisdictions designated as accreditedfree States, accredited-free (suspended)

States, or modified accredited States.

The regulations restrict the interstate

movement of cattle or bison not known

to be affected with or exposed to

tuberculosis if those cattle or bison are

moved from jurisdictions designated as

nonmodified accredited States.

The status of a State is based on its

freedom from evidence of tuberculosis,

the effectiveness of the State’s

tuberculosis eradication program, and

the degree of the State’s compliance

with the standards contained in a

document captioned ‘‘Uniform Methods

and Rules—Bovine Tuberculosis

Eradication,’’ which is incorporated by

reference into the regulations.

An accredited-free State, as defined in

§ 77.1 of the regulations, is a State that

has no findings of tuberculosis in any

cattle or bison in the State for at least

5 years. The State must also comply

with all the provisions of the ‘‘Uniform

Methods and Rules—Bovine

Tuberculosis Eradication’’ regarding

accredited-free States.

An accredited-free (suspended) State

is defined as a State with accredited-free

status in which tuberculosis has been

detected in any cattle or bison in the

State. A State with accredited-free

(suspended) status is qualified for

redesignation of accredited-free status

after the herd in which tuberculosis is

detected has been quarantined, an