Good news

While no one would expect to find good news in a federal agency’s annual financial report, the FEHBlog found good news in OPM’s fiscal year 2017 financial report which was posted today.  The report (p. 104) customarily includes recommendations from acting OPM’s Inspector General. One of the Inspector General’s standard recommendations during this decade has been to recommend that OPM advocate for carving out prescription drug benefit plan contracting from the health plans to OPM similar to TRICARE.  In a day when the government generally has been advocating coordination of care, the FEHBlog has found this idea to be counterproductive to say the least.  

In today’s financial report, OPM’s Chief Financial Officer Dennis Coleman (p. 129) responded to this recommendation as follows:

OPM does not concur with OIG’s suggestion that OPM continue to pursue efforts towards a prescription carve-out program. The FEHB Program is a market-based program that provides  complete health benefits within each FEHB plan. The FEHB Program is not a self-funded plan and its statutory framework does not contemplate it to be the direct payer of benefits. Each FEHB Program plan offers comprehensive medical services including services provided by physicians and other health care professionals, hospital services, surgical services, prescription medications, medical supplies and devices, and mental health services. FEHB Program plans compete to offer all of these benefits in a high quality manner at the most competitive price possible.

Carving out pharmacy benefits or any of the other services normally covered under an FEHB Program contract and administering the benefit as a separate contract or program could undermine the fundamental market-based nature of the FEHB Program. It would be disruptive and could lead to a reduction in plan participation and limit the ability of FEHB carriers to focus on comprehensively improving the health of the population. There would likely be less effective coordination of medical and pharmacy claims, and potentially less effective, one-size-fits-all pharmacy utilization and disease management programs. OPM is now assessing carrier performance on the basis of clinical quality measures that require tight coordination between medical and pharmacy benefits. A carved out pharmacy benefit is not consistent with or  supportive of plan performance assessment, and may impair achievement of OPM’s long term population health goals. As an example, carriers being held accountable for controlling diabetes and hypertension in the population they serve cannot do so readily if they do not have control over pharmacy benefit design and real time access to adherence data.

Regarding controlling the cost of prescription drugs, OPM works with carriers to better manage pharmacy networks, focus on drug utilization techniques, coordinate coverage of specialty drugs between the medical and pharmacy benefit, optimize the prescription drug benefit via formulary design and implement effective cost comparison tools for members and prospective enrollees.

Bravo. The FEHBlog could not made this point better himself.  

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