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

16037

Vol. 60, No. 60

Wednesday, March 29, 1995

OFFICE OF PERSONNEL

MANAGEMENT

5 CFR Part 890

RIN 3206–AF18

Federal Employees Health Benefits

Program: Filing Claims; Disputed

Claims Procedures and Court Actions

AGENCY: Office of Personnel

Management.

ACTION: Interim regulations with request

for comments.

SUMMARY: The Office of Personnel

Management (OPM) is issuing interim

regulations to revise the requirement

that legal actions to recover on a claim

under the Federal Employees Health

Benefits (FEHB) Program should be

brought against the health benefits

carrier rather than OPM, and to clarify

the procedures for filing claims for

payment or service under the FEHB

Program. The purpose of these interim

regulations is to clarify that if a covered

individual chooses to bring legal action

pertaining to a denial of an FEHB

benefit, such legal action should be

brought against OPM, and to clarify the

administrative review process that must

precede legal action in the courts.

DATES: These interim regulations are

effective March 29, 1995. Comments

must be received on or before May 30,

1995.

ADDRESSES: Send written comments to

Lucretia F. Myers, Assistant Director for

Insurance Programs, Retirement and

Insurance Service, Office of Personnel

Management, P.O. Box 57, Washington,

DC 20044; or delivery to OPM, Room

3451, 1900 E Street NW., Washington,

DC; or FAX to (202) 606–0633.

FOR FURTHER INFORMATION CONTACT:

Margaret Sears, (202) 606–0004.

SUPPLEMENTARY INFORMATION:

Historically, OPM has required that

covered individuals who want to bring

suit because an FEHB carrier has denied

their claim for health benefits must sue

the carrier, not OPM. These interim

regulations provide that legal actions

arising out of a denial of FEHB benefits

should be brought against OPM rather

than the FEHB carrier that made the

initial denial decision. Because OPM

has the authority under the FEHB law

to order the carrier to pay the claim,

OPM has determined it is appropriate

under current statute for the covered

individual to bring suit against OPM if

OPM declines to order the carrier to pay

the claim. The interim regulations also

clarify the process and circumstances

for bringing legal actions under the

FEHB Program. They clearly state that

the administrative review process set

forth in 5 CFR 890.105 must be

completed before suit is brought. To

further clarify the purpose and intent of

these regulations, we have changed the

title of the regulation at 890.107 from

‘‘Legal actions’’ to ‘‘Court Review.’’

The legislative history of § 8902(j),

title 5, United States Code, shows that

Congress intended OPM (at that time the

Civil Service Commission) to provide an

administrative appeal process, binding

upon the carriers, that would save

covered individuals the expense and

delay of being forced into the courts to

recover on meritorious claims for

benefits. Based upon this directive and

its central role in the administration of

the FEBH Program, OPM established a

detailed administrative review process

for benefits claims leading to a final

decision on such claims by OPM. It is

OPM’s view that this administrative

review process must be followed before

legal action is pursued in the courts.

Further, the matter to be reviewed by a

court upon appeal is the OPM decision

affirming the carrier’s denial of benefits,

with the court’s review being limited to

an examination of OPM’s administrative

decision to deny the claim for payment

or services.

Health insurance contracts under the

FEHB Program are Federal contracts

under 5 U.S.C., chapter 89. Accordingly,

legal actions concerning disputes arising

or relating to those contracts are

controlled by Federal, rather than State

law. Congress, in the FEHB Act,

mandated Federal uniformity for all

matters that relate to (1) the nature or

extent of coverage; (2) benefits; and (3)

payment of benefits under the FEHB

Program. By statute, all health insurance

contracts require the carrier to agree to

pay or provide a health service or

supply in an individual case if OPM

finds that the covered individual is

entitled to the benefit under the terms

of the contract. Congress also directed

OPM to take a central role in

determining whether a health service or

supply should be provided in

individual cases to covered individuals

and, if it should be provided, to require

carriers to pay for such health service or

supply. These interim regulations

reaffirm the principle of uniformity in

the FEHB Program by providing that in

judicial disputes regarding the denial of

a health benefits claim, review is to be

limited to the record that was before

OPM and that was the basis of the OPM

decision to disallow the benefit. In the

event that an appropriate court

concludes that benefits should have

been awarded under the FEBH Act, the

court possesses ample authority to

require OPM to order that such

payments be made to the covered

individual from the carrier. These

interim regulations clarify that OPM

intends for its decision to be upheld

unless the court concludes that the OPM

decision affirming the carrier’s denial of

benefits was inconsistent with the

standard for a final agency action under

applicable Federal law.

The administrative review process is

set forth in 15 CFR 890.105, Filing

claims for payment or service. Section

890.105 outlines the procedures for

filing claims for payment or service

when there is a disagreement over

payment or service between the carrier

and the covered individual. In addition,

the regulations make minor changes in

the time limits for carrier

reconsideration and OPM review of

claims in 890.105 to make the language

easier to read.

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 rulemaking because these

interim regulations remove a restriction

on the actions of Federal employees and

annuitants.

Regulatory Flexibility Act

I certify that this regulation will not

have a significant economic impact on

a substantial number of small entities

because the regulations primarily affect
16038 Federal Register / Vol. 60, No. 60 / Wednesday, March 29, 1995 / Rules and Regulations

individuals enrolled under the Federal

Employees Health Benefits Program.

List of Subjects in 5 CFR Part 890

Administrative practice and

procedure, Government employees

Health facilities, Health insurance,

Health professions, Hostages, Iraq,

Kuwait, Lebanon, Reports and

recordkeeping requirements,

Retirement.

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 § 890.101 paragraph (a) is

amended by adding a definition of

‘‘covered individual’’ to read as follows:

§ 890.101 Definitions; time computations.

(a) * * *

Covered individual means an enrollee

or a covered family member.

* * * * *

3. Section 890.105 is revised to read

as follows:

§ 890.105 Filing claims for payment or

service.

(a) General. Each health benefits

carrier resolves claims filed under the

plan. All health benefits claims must be

submitted initially to the carrier of the

claimant’s health benefits plan. If the

carrier denies a claim (or a portion of a

claim), the covered individual may ask

the carrier to reconsider its denial. If the

carrier affirms its denial or fails to

respond as required by paragraph (b) of

this section, the covered individual may

ask OPM to review the claim. A covered

individual must exhaust both the carrier

and OPM review processes specified in

this section before seeking judicial

review of the denied claim.

(b) Time limits for reconsidering a

claim. (1) The covered individual has 1

year from the date of the notice to the

covered individual that a claim (or a

portion of a claim) was denied by the

carrier in which to submit a written

request for reconsideration to the

carrier.

(2) The carrier has 30 days after the

date of receipt of a timely-filed request

for reconsideration to:

(i) Affirm the denial in writing to the

covered individual;

(ii) Pay the bill or provide the service;

or

(iii) Request from the covered

individual or provider additional

information needed to make a decision

on the claim. The carrier must

simultaneously notify the covered

individual of the information requested

if it requests additional information

from a provider. The carrier has 30 days

after the date the information is received

to affirm the denial in writing to the

covered individual or pay the bill or

provide the service. The carrier must

make its decision based on the evidence

it has if the covered individual or

provider does not respond within 60

days after the date of the carrier’s notice

requesting additional information. The

carrier must then send written notice to

the covered individual of its decision on

the claim. The covered individual may

request OPM review as provided in

paragraph (b)(3) of this section if the

carrier fails to act within 30 days after

the covered individual’s request for

reconsideration or the carrier’s receipt

of additional information.

(3) The covered individual may write

to OPM and request that OPM review

the carrier’s decision if the carrier either

affirms its denial of a claim or fails to

respond to a covered individual’s

written request for reconsideration

within 30 days after the date it receives

the request or within 30 days after the

date it receives the additional

information requested. The covered

individual must submit the request for

OPM review within the time limit

specified in paragraph (e)(1) of this

section.

(4) The carrier may extend the time

limit for a covered individual’s

submission of additional information to

the carrier when the covered individual

shows he or she was not notified of the

time limit or was prevented by

circumstances beyond his or her control

from submitting the additional

information.

(c) Information required to process

requests for reconsideration. (1) The

covered individual must put the request

to the carrier to reconsider a claim in

writing and give the reasons, in terms of

applicable brochure provisions, that the

denied claim should have been

approved.

(2) If the carrier needs additional

information from the covered individual

to make a decision, it must:

(i) Specifically identify the

information needed;

(ii) State the reason the information is

required to make a decision on the

claim;

(iii) Specify the time limit (60 days

after the date of the carrier’s request) for

submitting the information; and

(iv) State the consequences of failure

to respond within the time limit

specified, as set out in paragraph (b)(2)

of this section.

(d) Carrier determinations. The carrier

must provide written notice to the

covered individual of its determination.

If the carrier affirms the initial denial,

the notice must inform the covered

individual of:

(1) The specific and detailed reasons

for the denial;

(2) The covered individual’s right to

request a review by OPM; and

(3) The requirement that requests for

OPM review must be received within 90

days after the date of the carrier’s denial

notice and include a copy of the denial

notice as well as documents to support

the covered individual’s position.

(e) OPM review. (1) If the covered

individual seeks further review of the

denied claim, the covered individual

must make a request to OPM to review

the carrier’s decision. Such a request to

OPM must be made:

(i) Within 90 days after the date of the

carrier’s notice to the covered

individual that the denial was affirmed;

or

(ii) If the carrier fails to respond to the

covered individual as provided in

paragraph (b)(2) of this section, within

120 days after the date of the covered

individual’s timely request for

reconsideration by the carrier; or

(iii) Within 120 days after the date the

carrier requests additional information

from the covered individual, or the date

the covered individual is notified that

the carrier is requesting additional

information from a provider. OPM may

extend the time limit for a covered

individual’s request for OPM review

when the covered individual shows he

or she was not notified of the time limit

or was prevented by circumstances

beyond his or her control from

submitting the request for OPM review

within the time limit.

(2) In reviewing a claim denied by the

carrier, OPM may:

(i) Request that the covered individual

submit additional information;

(ii) Obtain an advisory opinion from

an independent physician;

(iii) Obtain any other information as

may in its judgment be required to make

a determination; or

(iv) Make its decision based solely on

the information the covered individual

provided with his or her request for

review.

(3) When OPM requests information

from the carrier, the carrier must release

the information within 30 days after the
Federal Register / Vol. 60, No. 60 / Wednesday, March 29, 1995 / Rules and Regulations 16039

date of OPM’s written request unless a

different time limit is specified by OPM

in its request.

(4) Within 90 days after receipt of the

request for review, OPM will either:

(i) Give a written notice of its decision

to the covered individual and the

carrier; or

(ii) Notify the individual of the status

of the review. If OPM does not receive

requested evidence within 15 days after

expiration of the applicable time limit

in paragraph (e)(3) of this section, OPM

may make its decision based solely on

information available to it at that time

and give a written notice of its decision

to the covered individual and to the

carrier.

4. Section 890.107 is revised to read

as follows:

§ 890.107 Court Review.

(a) A suit to compel enrollment under

§ 890.102 of this part must be brought

against the employing office that made

the enrollment decision.

(b) A suit to review the legality of

OPM’s regulations under this part must

be brought against the Office of

Personnel Management.

(c) Federal Employees Health Benefits

(FEHB) carriers resolve FEHB claims

under authority of State statute (chapter

89, title 5, United States Code). A

covered individual may seek judicial

review of OPM’s final action on the

denial of a health benefits claim. A legal

action to review final action by OPM

involving such denial of health benefits

must be brought against OPM. The

recovery in such a suit will be limited

to the amount of benefits in dispute.

(d) An action under paragraph (c) of

this section to recover on a claim for

health benefits:

(1) May not be brought prior to

exhaustion of the administrative

remedies provided in § 890.105;

(2) May not be brought later than

December 31 of the 3rd year after the

year in which the care or service was

provided; and

(3) Will be limited to the record that

was before OPM when it rendered its

decision affirming the carrier’s denial of

benefits.

[FR Doc. 95–7793 Filed 3–28–95; 8:45 am]

BILLING CODE 6325–01–M

DEPARTMENT OF JUSTICE

Immigration and Naturalization Service

8 CFR Parts 103, 286, and 299

[INS No. 1312–93]

RIN 1115–AB78

Establishment of Pilot Programs To

Charge a Commuter User Fee at

Selected Ports of Entry

AGENCY: Immigration and Naturalization

Service, Justice.

ACTION: Final rule.

SUMMARY: This rule amends the

Immigration and Naturalization Service

(Service) regulations to implement pilot

programs to charge fees for inspection

service provided to selected land border

Ports-of-Entry (POEs). Limited resources

and increasing commuter traffic over the

land borders has resulted in costly

delays to transborder travelers. Pilot

projects, such as the Dedicated

Commuter Lanes (DCLs), in which

eligible groups may expeditiously enter

the United States through designated

lanes, will enabled the Service to

increase staffing, enhance inspection

services, and reduce delays in crossing

the border.

EFFECTIVE DATE: March 29, 1995.

FOR FURTHER INFORMATION CONTACT:

Robert A. Mocny, Assistant Chief

Inspector, Inspections Division,

Immigration and Naturalization Service,

425 I Street NW., Room 7228,

Washington, DC 20536, Telephone (202)

514–3275.

SUPPLEMENTARY INFORMATION: Commuter

traffic over our land borders has

increased significantly each year over

the past decade, and in fiscal year 1992

accounted for approximately 90 percent

of all inspections completed. At certain

locations, traffic backups sometimes last

several hours. Such delays are both

irritating and costly to the traveling

public. Through automation and an

increase in the inspection force, the

Service could significantly reduce these

delays. However, the appropriated

funds have not kept up with the rapid

growth in land border traffic. Although

revenue from the Immigration User Fee

Account, authorized by Congress in

1986 and covering commercial air and

sea arrivals of POEs, has enabled the

Service to more than triple the number

of available air and seaport inspectors,

these funds may not, by statute, be used

to staff land border POEs.

Provisions of Public Laws 101–515 and

103–121

In the Departments of Commerce,

Justice, and State, the Judiciary, and

Related Agencies Appropriations Act,

1991, Pub. L. 101–515, dated November

5, 1990, Congress included language

which allows for pilot programs on the

inspection fee concept on the land

borders. This law, added as section

286(q) of the Immigration and

Naturalization Act (Act), and amended

by section 309(a)(2) of the

Miscellaneous and Technical

Immigration and Naturalization

Amendments of 1991, Pub. L. 102–232,

dated December 12, 1991, authorizes the

Attorney General to establish pilot

projects which include the charging of

a fee and provides that the fee collected

may be used only to enhance inspection

services. Pursuant to this law, such pilot

projects are to be developed by the

Attorney General after consultation with

the Secretary of the Treasury and with

Congress. All such pilot projects were

scheduled to terminate on September

30, 1993, but were extended by

Congress until September 30, 1996, by

the Departments of Commerce, Justice,

and State, the Judiciary, and Related

Agencies Appropriations Act, 1994 Pub.

L. 103–121, dated October 27, 1993.

This law also limited these projects only

to the northern border of the United

States. However, in the Departments of

Commerce, Justice, and State, the

Judiciary, and Related Agencies

Appropriations Act, 1995, Pub. L. 103–

317, dated August 28, 1994, Congress

authorized the expansion of the

commuter lane pilot project to land

border crossings in California.

Discussion of Comments

The Service Published an interim

Regulation on May 13, 1991, at 56 FR

21917–21920, amending 8 CFR Parts

103, 286, and 299. In this rule, the

Service sought to use DCLs to enhance

services to those border crossers who

most frequently enter the United States

over the land borders. The interim rule

also contained a provision for the

establishment of a per vehicle user fee

at selected POEs. The interim rule

included a request for comments by

August 12, 1991. The Service received

three responses, each discussing several

issues.

Use of Funds

One commenter expressed concern

that the revenues generated from the

projects will be channeled to the

General Fund and not used for the

specific purpose of aiding border

congestion and delays. The revenues

generated by the DCL implementation

are controlled by section 286(q) of the

Act, which states that such funds will

be used to provide land border

inspection services. A separate land