Weekend update

The House of Representatives will be in session for a shortened week while the Senate will be on a district work break for this week which begins with a federal holiday, Columbus Day. Here’s a link to the Week in Congress’s report on last week’s actions on Capitol Hill.

In other news

  • OPM released advice to federal employees on the opioid abuse crisis.  
  • The Society for Human Resource Management discussed the latest IRS guidance on large employer and insurer ACA reporting for calendar year 2017 required to be issued in early 2018.
  • It’s worth noting that United Healthcare prevailed last week in a False Claims Act lawsuit in which the federal government alleged that UHC and other insurers had misrepresented Medicare Advantage risk adjustment scores. The FEHBlog noted this lawsuit last year in a post noting that the FEHBlog was glad that the FEHBP did not have complicating factors like risk adjustment. Indeed the House Ways and Means Committee is sponsored a Medicare Red Tape Relief Project.  But all health care payers and providers continue to have their regulatory crosses to bear. 
Last week, the FEHBlog outlined the experience rating financing mechanism used by FEHBP government wide, employee organization and electing HMOs.  The default financing mechanism for FEHB HMOs is known as community rating. While the FEHBA Sec. 8902(i) mentions experience rating, the Act does not discuss community rating at all. Instead, that provision generally states that 

Rates charged under [FEHB] health benefits plans *** shall reasonably and equitably reflect the cost of the benefits provided.

OPM has developed the community rating policy by regulation and contract.  Essentially, community rated FEHB HMOs must price their plans to achieve an 85% medical loss ratio for their FEHBP contract in a contract year (including a three month claim run out period). In contrast, the ACA requires insurers in the large group market to achieve an 85% medical loss ratio market wide over a three year period. Community rated HMOs that fail to reach the 85% threshold must pay the surplus to a penalty fund that is distributed pro-rata among the FEHB community rated plans. OPM indicated in the latest semi-annual regulatory agenda that it plans to propose a new community rating rule in the near future.

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