Chairman Danny K. Davis Responds to Enrollee Outrage Over BCBS 2009 Changes

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December 3, 2008
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Chairman Danny K. Davis Responds to Enrollee Outrage Over BCBS 2009 Changes


Rep.Davis' (D-IL) and Members of the Subcommittee requested that the Officeof Personnel Management extend the Federal Employees Health BenefitsProgram Open Season for millions of federal employees

Chairman Danny K. Davis Responds to Enrollee Outrage Over BCBS 2009 Changes
Rep.Davis' (D-IL) and Members of the Subcommittee requested that the Officeof Personnel Management extend the Federal Employees Health BenefitsProgram Open Season for millions of federal employees

Washington D.C. - On Wednesday, December 3, 2008 the Subcommitteeon Federal Workforce, Postal Service, and the District of Columbia helda hearing to examine the changes to the 2009 Blue Cross Blue ShieldService (BCBS) Standard Option Benefit Plan.

The most controversial change to the BCBS 2009 Benefit Plan is thefact that beneficiaries will be responsible for paying up to $7,500 forsurgery performed by a non-participating physician, except in the caseof medical emergencies and accidents.  Previously, beneficiaries havebeen responsible for paying 25 percent of the plan's allowance, plus100 percent of any billed amount above the plan allowance.

    The changes were spurred by OPM's concern that patients couldnot predict their out-of-pocket costs when using non-participatingproviders until the health care expenses had been incurred.  BCBSsubscribers filed disputed claims because the balance owed was a largeamount, due to the difference between the allowed amount and the billedamount (balanced billing).

    However, hearing witnesses Walton Francis, Author of theCheckbook's Guide to Health Plan for Federal Employees, and Dr. PeterPetrucci, President of the Medical Staff for Sibley Hospital, testifiedthat the 2009 benefit changes were not adequately publicized and thatthere are solutions to the "balanced billing" problem raised by OPMthat do not include a hefty $7,500 penalty.

    Subcommittee Chairman Danny K. Davis stated during the hearing:

TheOffice of Personnel Management should delay the December 8th openseason deadline. This will allow BCBS and OPM to reach a bettersolution to the "balanced billing" problem and give BCBS subscribersmore time to determine whether or not to opt out of the health plan.

Delegate Eleanor Holmes Norton noted:

OPM was unable toarticulate a good reason for opposing extension of     the deadline. An extension is the least subscribers are entitled to, particularlyconsidering OPM's involvement in the lack of transparency concerningthe change.

Representative Elijah Cummings declared:

We cannot sit idlyby while Blue Cross and Blue Shield tries to pull the wool over theeyes of federal employees and retirees.  People need to know about thedrastic changes that are being made to their health plans-and they needan opportunity to switch plans should they decide to do so. We cannotexpect people to be informed consumers when we have not informed themof the reality of the situation.


For further information on the hearing and the testimonies visit: http://federalworkforce.oversight.house.gov/
   
Background Information

   The Blue Cross Blue Shield Service Benefit Plan (the Blues) standardoption has the largest enrollment of any of the Federal EmployeesBenefit Plans (FEHB).  Changes in the Blues' 2009 plan include; apremium increase, changes in payment for services provided bynon-participating providers (except in cases of medical emergency oraccident), catastrophic limits, copayments and coinsurance for coveredservices, and increases and decreases in coverage.

    While the media has highlighted the Blues changes to thepayment structure for services provided by non-participating providers,beneficiaries can avoid the increased costs by choosing preferred orparticipating providers where possible.  There are other changes thatwill result in increased beneficiary spending that will be morechallenging to avoid.

    Non-emergency surgical benefit by non-participating physicians.What has emerged as the most controversial change to the Blues 2009benefit plan is that beneficiaries will be responsible for paying up to$7,500 for surgery performed by a non-participating physician, exceptin the case of medical emergencies and accidents.  Currently,beneficiaries have been responsible for paying 25 percent of the plan'sallowance, plus 100 percent of any billed amount above the planallowance.  However, the 25 percent counted toward the maximumout-of-pocket limit of $6,500.  Therefore, regardless of the number ofsurgeries performed by non-participating providers, the enrollee wouldnever pay more than $6,500 plus the amount above the plan allowance forthe year.

    The change will result in increased out-of-pocket costs forsome beneficiaries and a decrease for others.  For example, consider acase in which a non-participating surgeon billed $10,000 for a surgeryand the plan allowance is $4,000.  Under the current plan, thebeneficiary would 25 percent of the $4,000 ($1,000), plus 100 percentof the difference between the $10,000 and the $4,000 ($6,000), for atotal out-of-pocket of $7,000. Under the 2009 benefit plan, thebeneficiary would pay the first $7,500.  In this case, thebeneficiary's out-of-pocket cost is higher.