FEHBP Provisions of President’s FY 2008 Budget

The President’s massive FY 2008 budget was released today. It includes the following Federal Employees Health Benefit Program nuggets:

From OPM’s Budget:

The Budget reflects savings from a proposed technical change to the FEHB statute that will permit the program’s Service Benefit Plan and Indemnity Benefit Plan to offer more than two coverage options and from a proposal to reduce the amount of the Government contribution for new annuitants with fewer than 10 years of Federal service. These and other cost-neutral proposals will be transmitted separately. Finally, the Budget also proposes that the PTO [Patent and Trademark Office] will fund the accruing costs associated with post-retirement health benefits for PTO’s employees.

From the OPM Inspector General’s Budget:

In 2008, the Office of the Inspector General (OIG) will continue to develop its prescription drug audit program, which includes audits of pharmacy benefit managers. It is estimated that $6 billion is paid annually for prescription drug premiums by both the Federal Government and employees combined. This represents approximately 26 percent of the total premiums for health benefit coverage for Federal employees and annuitants. By performing these audits, OIG assists FEHB recover inappropriate expenses charged in previous years, negotiate more favorable contracts, and positively affect the future costs and benefits provided to program enrollees. OIG will also continue its FEHB data warehouse initiative. This project streamlines and enhances the various administrative and analytical procedures involved in overseeing FEHB. The purpose of the project is to capture data from experience-rated insurance carriers in a data warehouse of health care information. Software tools are available to support a variety of analytical procedures, including data mining, using the data in the warehouse. The data warehouse project has facilitated more efficient and effective oversight of FEHB by enhancing the ability of our auditors and investigators to identify improper payments.