FEDERAL EMPLOYEES HEALTH CARE PROTECTION ACT OF 1997
(House of Representatives - November 04, 1997)

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[Pages H9914-H9920]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




          FEDERAL EMPLOYEES HEALTH CARE PROTECTION ACT OF 1997

  Mr. MICA. Mr. Speaker, I move to suspend the rules and pass the bill 
(H.R. 1836) to amend chapter 89 of title 5, United States Code, to 
improve administration of sanctions against unfit health care providers 
under the Federal Employees Health Benefits Program, and for other 
purposes, as amended.
  The Clerk read as follows:

                               H.R. 1836

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Federal Employees Health 
     Care Protection Act of 1997''.

     SEC. 2. DEBARMENT AND OTHER SANCTIONS.

       (a) Amendments.--Section 8902a of title 5, United States 
     Code, is amended--
       (1) in subsection (a)--
       (A) in paragraph (1)--
       (i) by striking ``and'' at the end of subparagraph (B);
       (ii) by striking the period at the end of subparagraph (C) 
     and inserting ``; and''; and
       (iii) by adding at the end the following:
       ``(D) the term `should know' means that a person, with 
     respect to information, acts in deliberate ignorance of, or 
     in reckless disregard of, the truth or falsity of the 
     information, and no proof of specific intent to defraud is 
     required;''; and
       (B) in paragraph (2)(A), by striking ``subsection (b) or 
     (c)'' and inserting ``subsection (b), (c), or (d)'';
       (2) in subsection (b)--
       (A) by striking ``The Office of Personnel Management may 
     bar'' and inserting ``The Office of Personnel Management 
     shall bar''; and
       (B) by amending paragraph (5) to read as follows:
       ``(5) Any provider that is currently debarred, suspended, 
     or otherwise excluded from any procurement or nonprocurement 
     activity (within the meaning of section 2455 of the Federal 
     Acquisition Streamlining Act of 1994).'';
       (3) by redesignating subsections (c) through (i) as 
     subsections (d) through (j), respectively, and by inserting 
     after subsection (b) the following:
       ``(c) The Office may bar the following providers of health 
     care services from participating in the program under this 
     chapter:
       ``(1) Any provider--
       ``(A) whose license to provide health care services or 
     supplies has been revoked, suspended, restricted, or not 
     renewed, by a State licensing authority for reasons relating 
     to the provider's professional competence, professional 
     performance, or financial integrity; or
       ``(B) that surrendered such a license while a formal 
     disciplinary proceeding was pending before such an authority, 
     if the proceeding concerned the provider's professional 
     competence, professional performance, or financial integrity.

[[Page H9915]]

       ``(2) Any provider that is an entity directly or indirectly 
     owned, or with a control interest of 5 percent or more held, 
     by an individual who has been convicted of any offense 
     described in subsection (b), against whom a civil monetary 
     penalty has been assessed under subsection (d), or who has 
     been debarred from participation under this chapter.
       ``(3) Any individual who directly or indirectly owns or has 
     a control interest in a sanctioned entity and who knows or 
     should know of the action constituting the basis for the 
     entity's conviction of any offense described in subsection 
     (b), assessment with a civil monetary penalty under 
     subsection (d), or debarment from participation under this 
     chapter.
       ``(4) Any provider that the Office determines, in 
     connection with claims presented under this chapter, has 
     charged for health care services or supplies in an amount 
     substantially in excess of such provider's customary charge 
     for such services or supplies (unless the Office finds there 
     is good cause for such charge), or charged for health care 
     services or supplies which are substantially in excess of the 
     needs of the covered individual or which are of a quality 
     that fails to meet professionally recognized standards for 
     such services or supplies.
       ``(5) Any provider that the Office determines has committed 
     acts described in subsection (d).

     Any determination under paragraph (4) relating to whether a 
     charge for health care services or supplies is substantially 
     in excess of the needs of the covered individual shall be 
     made by trained reviewers based on written medical protocols 
     developed by physicians. In the event such a determination 
     cannot be made based on such protocols, a physician in an 
     appropriate specialty shall be consulted.'';
       (4) in subsection (d) (as so redesignated by paragraph (3)) 
     by amending paragraph (1) to read as follows:
       ``(1) in connection with claims presented under this 
     chapter, that a provider has charged for a health care 
     service or supply which the provider knows or should have 
     known involves--
       ``(A) an item or service not provided as claimed,
       ``(B) charges in violation of applicable charge limitations 
     under section 8904(b), or
       ``(C) an item or service furnished during a period in which 
     the provider was debarred from participation under this 
     chapter pursuant to a determination by the Office under this 
     section, other than as permitted under subsection 
     (g)(2)(B);'';
       (5) in subsection (f) (as so redesignated by paragraph (3)) 
     by inserting after ``under this section'' the first place it 
     appears the following: ``(where such debarment is not 
     mandatory)'';
       (6) in subsection (g) (as so redesignated by paragraph 
     (3))--
       (A) by striking ``(g)(1)'' and all that follows through the 
     end of paragraph (1) and inserting the following:
       ``(g)(1)(A) Except as provided in subparagraph (B), 
     debarment of a provider under subsection (b) or (c) shall be 
     effective at such time and upon such reasonable notice to 
     such provider, and to carriers and covered individuals, as 
     shall be specified in regulations prescribed by the Office. 
     Any such provider that is debarred from participation may 
     request a hearing in accordance with subsection (h)(1).
       ``(B) Unless the Office determines that the health or 
     safety of individuals receiving health care services warrants 
     an earlier effective date, the Office shall not make a 
     determination adverse to a provider under subsection (c)(5) 
     or (d) until such provider has been given reasonable notice 
     and an opportunity for the determination to be made after a 
     hearing as provided in accordance with subsection (h)(1).'';
       (B) in paragraph (3)--
       (i) by inserting ``of debarment'' after ``notice''; and
       (ii) by adding at the end the following: ``In the case of a 
     debarment under paragraph (1), (2), (3), or (4) of subsection 
     (b), the minimum period of debarment shall not be less than 3 
     years, except as provided in paragraph (4)(B)(ii).'';
       (C) in paragraph (4)(B)(i)(I) by striking ``subsection (b) 
     or (c)'' and inserting ``subsection (b), (c), or (d)''; and
       (D) by striking paragraph (6);
       (7) in subsection (h) (as so redesignated by paragraph (3)) 
     by striking ``(h)(1)'' and all that follows through the end 
     of paragraph (2) and inserting the following:
       ``(h)(1) Any provider of health care services or supplies 
     that is the subject of an adverse determination by the Office 
     under this section shall be entitled to reasonable notice and 
     an opportunity to request a hearing of record, and to 
     judicial review as provided in this subsection after the 
     Office renders a final decision. The Office shall grant a 
     request for a hearing upon a showing that due process rights 
     have not previously been afforded with respect to any finding 
     of fact which is relied upon as a cause for an adverse 
     determination under this section. Such hearing shall be 
     conducted without regard to subchapter II of chapter 5 and 
     chapter 7 of this title by a hearing officer who shall be 
     designated by the Director of the Office and who shall not 
     otherwise have been involved in the adverse determination 
     being appealed. A request for a hearing under this subsection 
     shall be filed within such period and in accordance with such 
     procedures as the Office shall prescribe by regulation.
       ``(2) Any provider adversely affected by a final decision 
     under paragraph (1) made after a hearing to which such 
     provider was a party may seek review of such decision in the 
     United States District Court for the District of Columbia or 
     for the district in which the plaintiff resides or has his or 
     her principal place of business by filing a notice of appeal 
     in such court within 60 days after the date the decision is 
     issued, and by simultaneously sending copies of such notice 
     by certified mail to the Director of the Office and to the 
     Attorney General. In answer to the appeal, the Director of 
     the Office shall promptly file in such court a certified copy 
     of the transcript of the record, if the Office conducted a 
     hearing, and other evidence upon which the findings and 
     decision complained of are based. The court shall have power 
     to enter, upon the pleadings and evidence of record, a 
     judgment affirming, modifying, or setting aside, in whole or 
     in part, the decision of the Office, with or without 
     remanding the case for a rehearing. The district court shall 
     not set aside or remand the decision of the Office unless 
     there is not substantial evidence on the record, taken as 
     whole, to support the findings by the Office of a cause for 
     action under this section or unless action taken by the 
     Office constitutes an abuse of discretion.''; and
       (8) in subsection (i) (as so redesignated by paragraph 
     (3))--
       (A) by striking ``subsection (c)'' and inserting 
     ``subsection (d)''; and
       (B) by adding at the end the following: ``The amount of a 
     penalty or assessment as finally determined by the Office, or 
     other amount the Office may agree to in compromise, may be 
     deducted from any sum then or later owing by the United 
     States to the party against whom the penalty or assessment 
     has been levied.''.
       (b) Effective Date.--
       (1) In general.--Except as provided in paragraph (2), the 
     amendments made by this section shall take effect on the date 
     of the enactment of this Act.
       (2) Exceptions.--(A) Paragraphs (2), (3), and (5) of 
     section 8902a(c) of title 5, United States Code, as amended 
     by subsection (a)(3), shall apply only to the extent that the 
     misconduct which is the basis for debarment under such 
     paragraph (2), (3), or (5), as applicable, occurs after the 
     date of the enactment of this Act.
       (B) Paragraph (1)(B) of section 8902a(d) of title 5, United 
     States Code, as amended by subsection (a)(4), shall apply 
     only with respect to charges which violate section 8904(b) of 
     such title for items or services furnished after the date of 
     the enactment of this Act.
       (C) Paragraph (3) of section 8902a(g) of title 5, United 
     States Code, as amended by subsection (a)(6)(B), shall apply 
     only with respect to debarments based on convictions 
     occurring after the date of the enactment of this Act.

     SEC. 3. MISCELLANEOUS AMENDMENTS RELATING TO THE HEALTH 
                   BENEFITS PROGRAM FOR FEDERAL EMPLOYEES.

       (a) Definition of a Carrier.--Paragraph (7) of section 8901 
     of title 5, United States Code, is amended by striking 
     ``organization;'' and inserting ``organization and an 
     association of organizations or other entities described in 
     this paragraph sponsoring a health benefits plan;''.
       (b) Service Benefit Plan.--Paragraph (1) of section 8903 of 
     title 5, United States Code, is amended by striking ``plan,'' 
     and inserting ``plan, which may be underwritten by 
     participating affiliates licensed in any number of States,''.
       (c) Preemption.--Section 8902(m) of title 5, United States 
     Code, is amended by striking ``(m)(1)'' and all that follows 
     through the end of paragraph (1) and inserting the following:
       ``(m)(1) The terms of any contract under this chapter which 
     relate to the nature, provision, or extent of coverage or 
     benefits (including payments with respect to benefits) shall 
     supersede and preempt any State or local law, or any 
     regulation issued thereunder, which relates to health 
     insurance or plans.''.

     SEC. 4. CONTINUED HEALTH INSURANCE COVERAGE FOR CERTAIN 
                   INDIVIDUALS.

       (a) Enrollment in Chapter 89 Plan.--For purposes of chapter 
     89 of title 5, United States Code, any period of enrollment--
       (1) in a health benefits plan administered by the Federal 
     Deposit Insurance Corporation before the termination of such 
     plan on January 3, 1998, or
       (2) subject to subsection (c), in a health benefits plan 
     (not under chapter 89 of such title) with respect to which 
     the eligibility of any employees or retired employees of the 
     Board of Governors of the Federal Reserve System terminates 
     on January 3, 1998,

     shall be deemed to be a period of enrollment in a health 
     benefits plan under chapter 89 of such title.
       (b) Continued Coverage.--(1) Subject to subsection (c), any 
     individual who, on January 3, 1998, is enrolled in a health 
     benefits plan described in subsection (a)(1) or (2) may 
     enroll in an approved health benefits plan under chapter 89 
     of title 5, United States Code, either as an individual or 
     for self and family, if, after taking into account the 
     provisions of subsection (a), such individual--
       (A) meets the requirements of such chapter for eligibility 
     to become so enrolled as an employee, annuitant, or former 
     spouse (within the meaning of such chapter); or
       (B) would meet those requirements if, to the extent such 
     requirements involve either retirement system under such 
     title 5, such

[[Page H9916]]

     individual satisfies similar requirements or provisions of 
     the Retirement Plan for Employees of the Federal Reserve 
     System.

     Any determination under subparagraph (B) shall be made under 
     guidelines which the Office of Personnel Management shall 
     establish in consultation with the Board of Governors of the 
     Federal Reserve System.
       (2) Subject to subsection (c), any individual who, on 
     January 3, 1998, is entitled to continued coverage under a 
     health benefits plan described in subsection (a)(1) or (2) 
     shall be deemed to be entitled to continued coverage under 
     section 8905a of title 5, United States Code, but only for 
     the same remaining period as would have been allowable under 
     the health benefits plan in which such individual was 
     enrolled on January 3, 1998, if--
       (A) such individual had remained enrolled in such plan; and
       (B) such plan did not terminate, or the eligibility of such 
     individual with respect to such plan did not terminate, as 
     described in subsection (a).
       (3) Subject to subsection (c), any individual (other than 
     an individual under paragraph (2)) who, on January 3, 1998, 
     is covered under a health benefits plan described in 
     subsection (a)(1) or (2) as an unmarried dependent child, but 
     who does not then qualify for coverage under chapter 89 of 
     title 5, United States Code, as a family member (within the 
     meaning of such chapter) shall be deemed to be entitled to 
     continued coverage under section 8905a of such title, to the 
     same extent and in the same manner as if such individual had, 
     on January 3, 1998, ceased to meet the requirements for being 
     considered an unmarried dependent child of an enrollee under 
     such chapter.
       (4) Coverage under chapter 89 of title 5, United States 
     Code, pursuant to an enrollment under this section shall 
     become effective on January 4, 1998.
       (c) Eligibility for FEHBP Limited to Individuals Losing 
     Eligibility Under Former Health Plan.--Nothing in subsection 
     (a)(2) or any paragraph of subsection (b) (to the extent such 
     paragraph relates to the plan described in subsection (a)(2)) 
     shall be considered to apply with respect to any individual 
     whose eligibility for coverage under such plan does not 
     involuntarily terminate on January 3, 1998.
       (d) Transfers to the Employees Health Benefits Fund.--The 
     Federal Deposit Insurance Corporation and the Board of 
     Governors of the Federal Reserve System shall transfer to the 
     Employees Health Benefits Fund under section 8909 of title 5, 
     United States Code, amounts determined by the Director of the 
     Office of Personnel Management, after consultation with the 
     Federal Deposit Insurance Corporation and the Board of 
     Governors of the Federal Reserve System, to be necessary to 
     reimburse the Fund for the cost of providing benefits under 
     this section not otherwise paid for by the individuals 
     covered by this section. The amounts so transferred shall be 
     held in the Fund and used by the Office in addition to 
     amounts available under section 8906(g)(1) of such title.
       (e) Administration and Regulations.--The Office of 
     Personnel Management--
       (1) shall administer the provisions of this section to 
     provide for--
       (A) a period of notice and open enrollment for individuals 
     affected by this section; and
       (B) no lapse of health coverage for individuals who enroll 
     in a health benefits plan under chapter 89 of title 5, United 
     States Code, in accordance with this section; and
       (2) may prescribe regulations to implement this section.

     SEC. 5. FULL DISCLOSURE IN HEALTH PLAN CONTRACTS.

       The Office of Personnel Management shall encourage carriers 
     offering health benefits plans described by section 8903 or 
     section 8903a of title 5, United States Code, with respect to 
     contractual arrangements made by such carriers with any 
     person for purposes of obtaining discounts from providers for 
     health care services or supplies furnished to individuals 
     enrolled in such plan, to seek assurance that the conditions 
     for such discounts are fully disclosed to the providers who 
     grant them.

     SEC. 6. PROVISIONS RELATING TO CERTAIN PLANS THAT HAVE 
                   DISCONTINUED THEIR PARTICIPATION IN FEHBP.

       (a) Authority to Readmit.--
       (1) In general.--Chapter 89 of title 5, United States Code, 
     is amended by inserting after section 8903a the following:

     ``Sec. 8903b. Authority to readmit an employee organization 
       plan

       ``(a) In the event that a plan described by section 8903(3) 
     or 8903a is discontinued under this chapter (other than in 
     the circumstance described in section 8909(d)), that 
     discontinuation shall be disregarded, for purposes of any 
     determination as to that plan's eligibility to be considered 
     an approved plan under this chapter, but only for purposes of 
     any contract year later than the third contract year 
     beginning after such plan is so discontinued.
       ``(b) A contract for a plan approved under this section 
     shall require the carrier--
       ``(1) to demonstrate experience in service delivery within 
     a managed care system (including provider networks) 
     throughout the United States; and
       ``(2) if the carrier involved would not otherwise be 
     subject to the requirement set forth in section 8903a(c)(1), 
     to satisfy such requirement.''.
       (2) Conforming amendment.--The analysis for chapter 89 of 
     title 5, United States Code, is amended by inserting after 
     the item relating to section 8903a the following:

``8903b. Authority to readmit an employee organization plan.''.

       (3) Applicability.--
       (A) In general.--The amendments made by this subsection 
     shall apply as of the date of enactment of this Act, 
     including with respect to any plan which has been 
     discontinued as of such date.
       (B) Transition rule.--For purposes of applying section 
     8903b(a) of title 5, United States Code (as amended by this 
     subsection) with respect to any plan seeking to be readmitted 
     for purposes of any contract year beginning before January 1, 
     2000, such section shall be applied by substituting ``second 
     contract year'' for ``third contract year''.
       (b) Treatment of the Contingency Reserve of a Discontinued 
     Plan.--
       (1) In general.--Subsection (e) of section 8909 of title 5, 
     United States Code, is amended by striking ``(e)'' and 
     inserting ``(e)(1)'' and by adding at the end the following:
       ``(2) Any crediting required under paragraph (1) pursuant 
     to the discontinuation of any plan under this chapter shall 
     be completed by the end of the second contract year beginning 
     after such plan is so discontinued.
       ``(3) The Office shall prescribe regulations in accordance 
     with which this subsection shall be applied in the case of 
     any plan which is discontinued before being credited with the 
     full amount to which it would otherwise be entitled based on 
     the discontinuation of any other plan.''.
       (2) Transition rule.--In the case of any amounts remaining 
     as of the date of enactment of this Act in the contingency 
     reserve of a discontinued plan, such amounts shall be 
     disposed of in accordance with section 8909(e) of title 5, 
     United States Code, as amended by this subsection, by--
       (A) the deadline set forth in section 8909(e) of such title 
     (as so amended); or
       (B) if later, the end of the 6-month period beginning on 
     such date of enactment.

     SEC. 7. MAXIMUM PHYSICIANS COMPARABILITY ALLOWANCE PAYABLE.

       (a) In General.--Paragraph (2) of section 5948(a) of title 
     5, United States Code, is amended by striking ``$20,000'' and 
     inserting ``$30,000''.
       (b) Authority to Modify Existing Agreements.--
       (1) In general.--Any service agreement under section 5948 
     of title 5, United States Code, which is in effect on the 
     date of enactment of this Act may, with respect to any period 
     of service remaining in such agreement, be modified based on 
     the amendment made by subsection (a).
       (2) Limitation.--A modification taking effect under this 
     subsection in any year shall not cause an allowance to be 
     increased to a rate which, if applied throughout such year, 
     would cause the limitation under section 5948(a)(2) of such 
     title (as amended by this section), or any other applicable 
     limitation, to be exceeded.
       (c) Rule of Construction.--Nothing in this section shall be 
     considered to authorize additional or supplemental 
     appropriations for the fiscal year in which occurs the date 
     of enactment of this Act.

     SEC. 8. CLARIFICATION RELATING TO SECTION 8902(K).

       Section 8902(k) of title 5, United States Code, is 
     amended--
       (1) by redesignating paragraph (2) as paragraph (3); and
       (2) by inserting after paragraph (1) the following:
       ``(2) Nothing in this subsection shall be considered to 
     preclude a health benefits plan from providing direct access 
     or direct payment or reimbursement to a provider in a health 
     care practice or profession other than a practice or 
     profession listed in paragraph (1), if such provider is 
     licensed or certified as such under Federal or State law.''.

  The SPEAKER pro tempore. Pursuant to the rule, the gentleman from 
Florida [Mr. Mica] and the gentleman from Maryland [Mr. Cummings] each 
will control 20 minutes.
  The Chair recognizes the gentleman from Florida [Mr. Mica].
  Mr. MICA. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, the Federal Government Employees Health Care Protection 
Act of 1997, H.R. 1836, makes some very significant improvements in the 
Federal Employees Health Benefit Program. It was introduced by the 
distinguished chairman of the full Committee on Government Reform and 
Oversight, the gentleman from Indiana [Mr. Burton], in order to protect 
the integrity of the Federal Employees Health Benefit Program.
  This is truly a bipartisan piece of legislation. The Office of 
Personnel Management, which administers this health benefits program, 
asked for many of the specific changes this bill proposes and suggested 
much of the language incorporated in this measure.
  Additionally, some provisions in this bill are substantially similar 
to those in a bill which was introduced by the distinguished gentleman 
from Maryland, [Mr. Cummings], who is the ranking member of our 
Subcommittee on Civil Service. I want to take this opportunity to 
commend the gentleman

[[Page H9917]]

from Indiana [Mr. Burton] for his leadership on this important piece of 
legislation and these issues, and thank the gentleman from Maryland 
[Mr. Cummings] for his leadership and for his close cooperation on this 
particular piece of legislation.
  Mr. Speaker, almost 9 million Federal employees, postal workers, 
retirees, and their families depend on the Federal Employee Health 
Benefit Program. They rely on this program to obtain high quality 
health care at affordable prices. For the most part, the program has 
been a great success story. It is widely considered to be a model 
employer-sponsored health care plan, and many have suggested that its 
model should be copied so others in need of coverage could have access 
to a similar program.
  Key to the success is in fact the market orientation of the program. 
It provides Federal employees and retirees with the opportunity to 
choose from among numerous competing health care plans. Consumer choice 
and competition have kept premiums in check.
  To keep the cost of health care affordable for our Federal employees, 
retirees, and other dependents, Mr. Speaker, it is important to protect 
their health benefits from those few unscrupulous health care providers 
that attempt to defraud the system or engage in other improper 
practices.
  H.R. 1836 strengthens the Office of Personnel Management's ability to 
debar health care providers who commit such misconduct, and it also 
allows OPM to impose civil monetary penalties.
  Fraudulent and abusive practices drive up the costs of our health 
care. Under this bill, OPM will better be able to protect the taxpayers 
and Federal health care consumers by acting swiftly against unethical 
providers.
  This bill also contains other provisions that are very important, Mr. 
Speaker. For the first time, this bill establishes rules under which 
employee organizations-sponsored health care plans may reenter the 
Federal Employee Health Benefit Program after previously discontinuing 
their participation. It also requires the Office of Personnel 
Management to distribute the reserves of such plans that withdraw from 
the FEHB to plans that remain in the program.
  Another feature of this legislation makes clear that the FEHB 
contracts preempt State and local laws. This is a necessary provision 
which will permit nationwide plans in the program to provide uniform 
benefits throughout our country.
  Another important problem this bill addresses is the use of so-called 
silent PPOs. Mr. Speaker, PPOs, preferred provider organizations, 
negotiate lower rates from medical care providers. In exchange, the 
PPOs provide certain incentives to the providers. Directed PPOs promise 
to direct patients to the provider. Nondirected PPOs may promise 
financial incentives such as prepayment or prompt payment. Both 
directed PPOs and nondirected PPOs are in fact legitimate business 
arrangements, but silent PPOs are not. Silent PPOs arrange for carriers 
to pay discounted rates when they are not, in fact, entitled to them. 
They violate the terms of the discounted rate arrangements the 
providers have entered into with networks or carriers. Unfortunately, 
many people believe the Office of Personnel Management has tacitly 
encouraged the use of silent PPOs in a shortsighted effort to obtain 
lower rates from providers under any circumstances.
  Hospitals and doctors are the first victims of silent PPOs, but in 
the end, the practice in fact drives up health care costs for all 
consumers, just as shoplifters drive up the cost of retail purchases 
for everyone.
  Everyone agrees, Mr. Speaker, that full disclosure is the answer to 
this problem. This legislation, H.R. 1836, requires OPM to encourage 
carriers who enter into discount arrangements with third parties to 
seek assurances that the third party has fully disclosed the terms of 
the discount to the health care provider. This solution protects the 
sanctity of contracts and the integrity of the FEHB program without 
hindering legitimate PPOs, whether they are directed or nondirected.
  Finally, Mr. Speaker, this bill permits certain employees and 
retirees from the Fed and also the FDIC to participate in our Federal 
Employees Health Benefit Program. Unless both Houses of Congress pass 
this bill during this session, some employees at these agencies will 
not be able to participate in the government's health care benefit 
program next year. These agencies in fact will be forced to find more 
costly alternatives to cover those employees.
  I urge all Members to support this bill and the many improvements it 
offers us and our Federal employees today.
  Mr. Speaker, I reserve the balance of my time.
  Mr. CUMMINGS. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, I first of all want to take a moment to compliment the 
gentleman from Florida [Mr. Mica], the subcommittee chairman, who has 
worked very closely with this side of the aisle to make sure that we 
came up with a very, very good bill. I would also like to take a moment 
to recognize the ranking member of our full committee, Mr. Waxman, and 
to recognize the gentleman from Indiana, Mr. Burton, our chairman, for 
this excellent piece of legislation. Furthermore, I would like to 
recognize two of our Members on our side, the gentlewoman from 
Washington, DC [Ms. Norton] and the gentleman from Tennessee (Mr. 
Ford), who have worked very, very hard, and of course the gentlewoman 
from Maryland [Mrs. Morella], my colleague, who has played a very 
significant role with this legislation. I want to thank all of my 
colleagues for what we have been able to do together to make life a 
little bit easier for our Federal employees.
  Mr. Speaker, H.R. 1836, the Federal Employees Health Care Protection 
Act of 1997, is a good bill that has won strong bipartisan support. It 
has at its core a provision that would enable the Office of Personnel 
Management to effectively use administrative sanctions to protect our 
health care program from fraud and abuse perpetrated by unscrupulous 
health care providers.
  The enactment of this particular reform was requested by OPM earlier 
this year. I support it, and in fact, introduced a narrow bill to 
achieve the same result. H.R. 1836, however, contains some additional 
provisions that would improve the administration of the Federal 
Employees Health Benefits Program. I will highlight just a few of them.
  The bill contains a provision that would strengthen the current 
preemption statute in title V so as to ensure that FEHB's programs and 
national plans can continue to provide uniform benefits and rates to 
enrollees regardless of where they live.
  Another provision would permit active and retired employees of the 
Federal Deposit Insurance Corporation and the Federal Reserve System to 
enter the FEHB Program. This will save both agencies several millions 
of dollars in future premium costs.

                              {time}  1515

  This bill also requires OPM to encourage participating health plans 
that contract with third parties to obtain discounted rates from health 
care providers to seek assurances that the conditions surrounding those 
discounts have been fully disclosed.
  This proposal had proven to be somewhat controversial. I am pleased 
to say, however, that the majority worked cooperatively with our side 
and with the Office of Personnel Management to reach agreement on the 
language in the bill.
  Finally, H.R. 1836 clarifies a provision of an existing law 
concerning direct access and reimbursement to health care providers in 
the program. The inclusion of that provision had also stirred some 
controversy; however, a compromise was reached on it as well.
  Mr. Speaker, I believe that H.R. 1836 makes important and needed 
improvements in the Federal Employees Health Benefits Program. I urge 
all Members to give their support to this very, very significant piece 
of legislation. Again, I thank the subcommittee chairman for his 
cooperation.
  Mr. Speaker, I reserve the balance of my time.
  Mr. MICA. Mr. Speaker, I am pleased to yield 5 minutes to the 
distinguished gentleman from Indiana [Mr. Burton], the chairman of our 
full Committee on Government Reform and Oversight.
  Mr. BURTON of Indiana. Mr. Speaker, I thank the gentleman for 
yielding time to me.

[[Page H9918]]

  Mr. Speaker, earlier this year I introduced H.R. 1836, the Federal 
Employees Health Protection Act of 1997, to protect Federal employees 
and taxpayers by helping to reduce fraud in the Federal Employees 
Health Benefit Program. This bill will help strengthen the integrity 
and the standards of the FEHBP and continue its reputation as one of 
the strongest, most cost-effective and comprehensive programs in the 
United States.
  I want to commend the chairman of the Subcommittee on Civil Service, 
the gentleman from Florida [Mr. Mica], for his diligence in getting 
this bill before the Committee on Government Reform and Oversight for 
consideration. Last week the full committee unanimously approved H.R. 
1836.
  This is a pro-Federal employee bill and is supported by all Members 
of the Congress from the D.C. metropolitan area. H.R. 1836 is a 
noncontroversial, bipartisan bill cosponsored by the ranking minority 
member of the Subcommittee on Civil Service, the gentleman from 
Maryland, Mr. Cummings, and the ranking minority member of the full 
committee, the gentleman from California, Mr. Henry Waxman.
  H.R. 1836 is supported by the major hospital and health care 
associations, the National Association of Postmasters, the National 
Treasury Employees Union, the National Association of Retired Federal 
Employees, the Federal Managers Association, a number of health benefit 
carriers, the Federal Deposit Insurance Corporation, and the Federal 
Reserve. In fact, the only opposition to this bill is likely to come 
from health care providers and brokers who engage in unethical business 
practices.
  The FEHB Program is the largest employer-sponsored health system in 
this country. It insures approximately 9 million Federal employees, 
annuitants, and their dependents at a cost of $16 billion a year. It is 
often cited as the model health care program that the private sector 
and public sector should attempt to replicate.
  Through private sector competition with limited governmental 
intervention, this program has effectively and efficiently contained 
costs and continued to provide quality health care. The benefits have 
been very well explained by the gentleman from Florida [Mr. Mica] and 
the gentleman from Maryland [Mr. Cummings], so I will not go into all 
those, but I would like to say that I urge support of all of my 
colleagues for this pro-Federal employee legislation.
  Through the changes included in this bill, the integrity and the 
standards of the FEHB Program will be strengthened and protected. It is 
also my sincere hope that once this legislation is approved by the full 
House of Representatives, the Senate will move expeditiously and pass 
this very important bill.
  I urge all of my colleagues to support this legislation that will 
help reduce fraud in the Federal Employees Health Benefit Program. Once 
again, congratulations on a job well done to the gentleman from Florida 
[Mr. Mica] and the gentleman from Maryland [Mr. Cummings].
  Mr. CUMMINGS. Mr. Speaker, I reserve the balance of my time.
  Mr. MICA. Mr. Speaker, I am pleased to yield 5 minutes to the 
gentlewoman from Maryland [Mrs. Morella], another distinguished member 
of the Committee on Government Reform and Oversight.
  Mrs. MORELLA. I thank the gentleman for yielding me the time, Mr. 
Speaker.
  Mr. Speaker, I rise in strong support of H.R. 1836, the Federal 
Employees Health Care Protection Act of 1997. Again, I offer my thanks 
to the gentleman from Indiana [Chairman Burton] and the Subcommittee on 
Civil Service Chair, the gentleman from Florida [Mr. Mica] for working 
with me and the other Members to fine-tune this legislation as it moves 
through committee. My commendation also to the ranking member, the 
gentleman from Maryland [Mr. Cummings], my colleague. As he mentioned, 
this legislation has bipartisan support.
  Mr. Speaker, FEHBP is an outstanding program. But even among the best 
programs there is always room for improvement. The FEHBP is critically 
important to my constituents. Every year I hold a symposium for Federal 
employees and retirees in my district. The turnout is enormously high. 
The comments about FEHBP are generally very positive. FEHBP is the 
country's largest employer-based health insurance program, serving the 
health care needs of almost 10 million Federal employees, retirees and 
their families. In fact, when Congress considered health care reform 
in 1994, FEHBP was touted as a model.

  FEHBP enjoys high customer satisfaction. Over 85 percent of 
participants in fee-for-service plans and HMO's are satisfied with 
their FEHBP plan. It is critical that we ensure that its success 
continues.
  One important way Congress has ensured the continued success of FEHBP 
was by adopting an amendment that I offered to the budget 
reconciliation bill to prevent an annual increase of $276 per person in 
the program beginning in 1999. The new formula I offered as an 
amendment is derived from taking a weighted average of all the plans 
and setting the maximum Government contribution at 72 percent. It will 
ensure that Federal employees' premiums do not rise. Thus, the 
Government's share and the employees' share will remain the same.
  The legislation before us is another opportunity to improve FEHBP. 
This legislation attacks fraud and abuse in the FEHB Program. It 
provides OPM with better tools to swiftly penalize fraudulent health 
care providers. The legislation will also enable OPM to bar fraudulent 
providers from FEHBP participation and impose monetary penalties on 
providers who engage in misconduct.
  I want to, again, thank the gentleman from Florida [Chairman Mica] 
and the ranking member, the gentleman from Maryland [Mr. Cummings], for 
their leadership on this issue.
  H.R. 1836 extends FEHBP to the Federal Deposit Insurance Corporation 
and Federal Reserve Board employees. Without this legislation, the FDIC 
and the FED will be forced to establish a non-FEHB plan, costing both 
these agencies and the taxpayers a considerable amount of money and 
imposing unnecessary administrative burdens on the FDIC and FED. As the 
calendar year comes to a close, it is critical we move this legislation 
quickly.
  The legislation also contains important language in section 5 
concerning the disclosure of silent PPO's. While I opposed section 5 as 
it was originally drafted, I am pleased with the language that is in 
this legislation and the report language which will not restrict the 
competitive relationship between directed and nondirected PPO's.
  There is a clear distinction between silent PPO's and the legitimate 
directed and non-directed PPO's. This section will not prohibit OPM 
from continuing to encourage FEHBP carriers to seek out the lowest 
prices possible for goods and services. Millions of dollars each year 
in savings accrue to Federal employees and the Government through the 
use of various savings initiatives, including both directed and 
nondirected PPO efforts. I am pleased that this legislation will not 
impede this activity.
  Today I want to thank both the gentleman from Florida [Mr. Mica] and 
the gentleman from Indiana [Mr. Burton] for ensuring that we move 
forward in a positive direction without increasing the costs to FEHBP 
that would have been borne jointly by the Federal Government and 
Federal employees.
  Section 7 of H.R. 1836 was added by an amendment that I offered to 
the bill in subcommittee to increase the physician's comparability 
allowance, a critically important tool used to recruit and retain 
Federal physicians. I recently commissioned a GAO study to review the 
PCA and its usefulness. This September 1997 GAO report confirms that 
PCA is critical. Since I requested the GAO study, I have heard from 
hundreds of Federal physicians across the country who have stated very 
clearly that, without the PCA, they would have chosen a different 
career. This section would increase the PCA from $20,000 to $30,000, 
and it has not been increased for 10 years.
  The increase, however, would not result in an increase in 
appropriations. It simply allows agencies to pay an additional PCA from 
their own budgets based on their recruitment and retention needs. 
According to the Office of Personnel Management, the PCA constitutes a 
declining percentage of income.

[[Page H9919]]

  I had also hoped to include a provision of legislation that I 
introduced to H.R. 2541 that would include a physician's PCA in his or 
her average pay in order to compute retirement. I understand Chairman 
Mica's cost concerns, and I have requested a CBO score so we can move 
this piece forward at a later date.
  The over 2,700 Federal physicians eligible for the PCA are working on 
cures for HIV/AIDS, cancer, heart disease, protecting the safety of 
food and drugs, providing medical care to Defense and State Department 
employees and dependents, airline pilots, astronauts, Native Americans, 
Federal prisoners. Indeed, it is critically important that we have this 
PCA in this particular bill.
  Again, I want to thank the chairman of the subcommittee and ranking 
member, and the chairman of the full committee and ranking member of 
the full committee. This is good legislation.
  Mr. CUMMINGS. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, I just wanted to close by saying, again, that this is a 
very excellent piece of legislation. I would recommend that all the 
Members of this great House vote in favor of it.
  Mr. Speaker, I have no further requests for time, and I yield back 
the balance of my time.
  Mr. MICA. Mr. Speaker, I yield myself the balance of my time.
  Mr. Speaker, the Federal Employees Health Care Protection Act of 1997 
deserves the support of every Member. This bill provides the Office of 
Personnel Management the tools to deal swiftly with health care 
providers who defraud the program or who engage in similar misconduct.
  The bill protects the integrity of the FEHBP in other ways as well. 
First, it makes it abundantly clear that carriers and preferred 
provider networks are expected to live up to the terms of their 
agreements with doctors and hospitals. Also, it establishes rules for 
the reentry into plans that have been discontinued as far as 
participation in the program. Finally, it levels the playing field for 
certain health care providers by clarifying that carriers may provide 
direct access and direct payment to those providers, even though they 
are not named in the relevant statute.
  Very finally, in closing, Mr. Speaker, a provision of this bill 
improves the Federal Government's ability to compete for highly 
qualified doctors by raising the maximum physician comparability 
allowance.
  I want to take this final moment to thank the gentleman from Indiana, 
Chairman Burton, for his introduction of the legislation, the gentleman 
from Maryland [Mr. Cummings], the ranking member, and the gentlewoman 
who worked so hard on behalf of our civil servants, the gentlewoman 
from Maryland [Mrs. Morella], and Members and staff who have helped put 
this bill together.
  This is a good bill, Mr. Speaker. I urge all Members to support this 
legislation.
  Mr. SOUDER. Mr. Speaker, I wish to congratulate you on this important 
bipartisan legislation to protect the Federal Employees Health Benefits 
Program [FEHBP] from fraud. I strongly support this legislation, which 
protects taxpayers from the misuse of their tax dollars.
  One provision that is particularly meritorious is section 5 of the 
bill, which attempts to limit the growth of a group of health care 
brokers, known as silent preferred providers organizations, or silent 
PPO's. Through silent PPO's payors are obtaining preferred-provider 
discounts without physician, hospital, or other health system 
providers' knowledge or consent. These silent PPO's undermine 
legitimate PPO's by causing health care providers to question the 
utility of entering into legitimate contracts with health benefit 
carriers if fraudulent discounts are taken elsewhere. This fraudulent 
discounting is particularly insidious because it's so hard to track. 
Unfortunately, the Federal Government, through the Office of Personnel 
Management [OPM], has encouraged the use of these silent PPO's in the 
FEHBP.
  Mr. Speaker, I believe the compromise language included in the 
Chairman's mark, which was proposed by the Office of Personnel 
Management, represents a substantial change in the administration's 
attitude toward silent PPO's. As I indicated OPM had previously 
encouraged the proliferation of these brokers of health care discounts. 
I commend the administration for recognizing the error of its ways and 
now moving to eliminate silent PPO's in the program.
  Mr. Speaker, I again commend you for raising this issue by including 
section 5 in your legislation, and while the provision has been altered 
I believe the new language, which garnered the support of the 
administration, is a direct reflection of your leadership on this 
issue. It is only through your commitment to eliminating the fraudulent 
use of discounts that we are here today with a bipartisan bill that 
will substantially benefit all Federal employees and taxpayers.
  It has been brought to my attention that the inspector general [IG] 
at OPM is investigating the activities of these silent PPO's, and I 
urge that this Committee should work with the IG to keep a close eye on 
these health care discounting practices. Furthermore, States are 
beginning to examine the activities of silent PPO's and North Carolina 
has recently passed legislation designating such discounting activities 
as unfair trade practices thereby subjecting violators to treble 
damages and attorney fees.
  I urge support for H.R. 1836.
  Mr. DAVIS of Virginia. Mr. Speaker, I rise today in support of H.R. 
1836, and I want to compliment Mr. Burton, the chairman of the 
Government Reform and Oversight Committee, for his sponsorship of this 
important bill. I had expressed concern regarding the original language 
in section 5 of this bill and I commend both Mr. Mica, chairman of the 
Civil Service Subcommittee, and Mr. Burton for ensuring through 
redrafting that the concerns about potential increased costs to the 
Federal Employees Health Benefits Program [FEHBP] were addressed. The 
redrafting of section 5 allows the FEHBP to continue to benefit from 
the flexibility of being able to adapt quickly to ever-changing health 
care marketplace dynamics. This flexibility has been an enduring 
strength of the FEHBP and I am pleased to see that it will not be 
adversely impacted.
  Mr. Speaker, section 5 of H.R. 1836 focuses on the use of silent 
PPO's in the FEHBP and is intended to address the inappropriate use of 
such discounts and, in so doing, protect plan enrollees and taxpayers 
in a manner consistent with the other provisions in the Federal 
Employees Health Care Protection Act of 1997. There is no clear 
distinction between silent PPO's and legitimate directed and 
nondirected PPO's. Directed and nondirected PPO's provide legitimate 
valuable benefits to health care providers, carriers, and patients. 
Nondirected PPO's are currently saving the Government and the FEHBP 
millions of dollars a year through their legitimate utilization of a 
number of fee-for-service carriers. Examples of nondirected discounts 
are those given by participating providers in return for incentives 
other than steerage, such as prompt payment, prepayment, claim audit 
assistance, and negotiated provider settlements.
  Many of us believed that the original language of section 5 would 
increase costs to the FEHBP by placing nondirected PPO's at a market 
disadvantage which would have killed the savings they generate for the 
FEHBP. The Congressional Budget Office [CBO] agreed and scored the 
original language at a cost to the FEHBP of $10 to $50 million per 
year. CBO's initial estimates regarding the rewrite of section 5 is 
that it should now be neutral. I appreciate the efforts of Mr. Mica and 
Mr. Burton to redraft this section so that it accomplishes their stated 
goal of shedding light on silent PPO's without adversely impacting the 
program savings direct and nondirect PPO's have been generating for 
many years now.
  Mr. Speaker, I urge my colleagues to support this important 
legislation.
  Mr. DeLAY. Mr. Speaker, I rise today in support of H.R. 1836, the 
Federal Employee Health Care Protection Act of 1997. I want to commend 
the chairman of the Civil Service Subcommittee, Mr. Mica, and the 
chairman of the Government Reform and Oversight Committee, Mr. Burton, 
for all of their efforts to bring this bill before the House today.
  Virtually everyone agrees that vigorous competition among providers 
and carriers has been critical to the success of the Federal Employees 
Health Benefit Program. While Congress has provided the Office of 
Personnel Management with the broad authority to referee this 
competition, we have wisely chosen to allow the marketplace to sort out 
many related issues.
  I was initially concerned that the original language in section 5 of 
the bill would have veered away from our reliance on the marketplace by 
imposing an unnecessary Federal mandate. This mandate would have 
unfairly tilted the playing field between directed and nondirected 
PPO's and resulted in significantly higher costs for the FEHBP.
  I am pleased that section 5 has now been rewritten so that OPM may 
continue to allow FEHBP carriers to seek out appropriate provider 
discounts in a competitive marketplace.
  I appreciate the efforts of Mr. Mica and Mr. Burton to redraft 
section 5 so that it accomplishes their stated goal of shedding light 
on silent PPO's without adversely impacting the program savings that 
both direct and nondirect PPO's have been able to achieve. I encourage 
my colleagues to support final passage of this bill.

[[Page H9920]]

  The SPEAKER pro tempore [Mr. Kingston]. The question is on the motion 
offered by the gentleman from California [Mr. Gallegly] that the House 
suspend the rules and pass the bill, H.R. 1836, as amended.
  The question was taken.
  Mr. CUMMINGS. Mr. Speaker, I object to the vote on the ground that a 
quorum is not present and make the point of order that a quorum is not 
present.
  The SPEAKER pro tempore. Pursuant to clause 5 of rule I and the 
Chair's prior announcement, further proceedings on this motion will be 
postponed.
  The point of no quorum is considered withdrawn.

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