Office of Personnel Management's Comprehensive Medical Plans Network Experiment

HRD-80-89: Published: May 30, 1980. Publicly Released: May 30, 1980.

Additional Materials:

Contact:

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

The Office of Personnel Management's (OPM) administration of the Blue Cross and Blue Shield Comprehensive Medical Plans Network experiment in the Federal Employees Health Benefits (FEHB) program was reviewed. The Network, operated by the Blue Cross and Blue Shield Associations (Associations), was intended to provide new options for health benefits coverage to Federal employees and to relieve OPM of the administrative costs associated with contracting with a number of comprehensive plans.

There is no specific reference in the FEHB Act to a network of comprehensive plans; OPM has not sought specific legislative guidance for conducting the Network experiment, but has amended its Health Benefits Plan regulations to provide for admission of comprehensive plan networks into the FEHB program. OPM failed to enforce certain basic statutory and other requirements of the FEHB program to permit new developing comprehensive plans to participate in the Network experiment. A 1978 OPM preliminary review of the 18 Network comprehensive plans indicated that 10 of the 18 did not meet one or more of the requirements of the FEHB Act, FEHB program regulations, or OPM admissions criteria. OPM did not adequately monitor the Associations' administration of the Network to ensure that individual plans conformed with FEHB program requirements, and the Associations did not advise OPM that two Network plans in one State did not have State certificates of authority required by the State to legally operate and thus were not eligible under Federal regulations to participate in the Network. The uniform premium rate has resulted in marketing problems for low-cost Network plans, subsidization of high-cost Netwok plans, and an expressed desire by some plans to disengage from the Network and apply individually for the FEHB program. Because the uniform premium rate is inconsistent with the community-rating concept, Network enrollees in low-cost areas pay higher premiums than they would if the plans had been offered individually through the FEBH program.

Matter for Congressional Consideration

  1. Status: Closed

    Comments: Please call 202/512-6100 for additional information.

    Matter: Congress should decide whether continuation of a comprehensive medical plans network is appropriate. If it is determined that continuation is appropriate, it is recommended that specific legislation be enacted detailing financial, admission, and administrative requirements to be applied to this unique health care delivery system.

Recommendation for Executive Action

  1. Status: Closed

    Comments: Please call 202/512-6100 for additional information.

    Recommendation: Pending congressional action, OPM should (1) improve monitoring to insure that FEHB program requirements are applied to all comprehensive plans in Networks; (2) develop an alternative to the present uniform rate system that is more closely tied to prevailing local costs in an individual plan's service area; (3) terminate from the Network plans that do not individually qualify for admission to the FEHB program; and (4) arrange for the orderly transfer of enrollees in terminated plans to other FEHB program plans.

    Agency Affected:

 

Explore the full database of GAO's Open Recommendations »

Sep 28, 2016

Sep 27, 2016

Sep 26, 2016

Sep 23, 2016

Sep 21, 2016

Sep 7, 2016

Aug 30, 2016

Aug 11, 2016

Jul 22, 2016

Looking for more? Browse all our products here