By Joe Davidson
The Washington Post
Saturday, December 6, 2008; D01

The Office of Personnel Management has done what it said it did not want to do and now will allow federal employees to change their health insurance selections through January.

OPM also has asked the 269 insurance providers to submit new fee schedules for out-of-network surgeries by Monday, the official close of Open Season. A change in the surgical fee structure by physicians who do not participate with Blue Cross/Blue Shield outraged employees, as the Federal Diary reported last week.

That led to a hearing Wednesday by the House subcommittee on the federal workforce, postal service and the District of Columbia, where members criticized OPM's reluctance to extend the Open Season deadline. The Blues insure more than half of the 8 million federal retirees, staff members and their dependents.

In a letter yesterday to the insurance companies, OPM said: "Based on a review of benefit changes for services performed by out-of-network providers and concerns raised by enrollees and stakeholders, OPM has determined that some represent an undue burden for plan members. Therefore, OPM is requesting all carriers with out-of-network benefits to re-evaluate their benefits for nonparticipating providers."

OPM said in a news release that it will not permit changes to premiums or other benefits.

Subcommittee chairman Danny K. Davis (D-Ill.), who had made his displeasure with OPM clear, now says: "OPM is doing the right thing. I am delighted that OPM will be working with BCBS, and the other Federal Employees Health Benefits carriers, to take a second look at how to address the payment of surgical claims billed by nonparticipating providers."

Under the current 2009 plan for Blue Cross/Blue Shield standard option members, next year they will pay 100 percent for surgery by an out-of-network physician, up to a maximum of $7,500, per surgeon, per surgical day. Currently, the rate is 25 percent of what Blue Cross/Blue Shield sets for a procedure, plus any difference between that and the billed amount.

OPM said it negotiated the fee change to protect patients from paying huge fees that could result in the current system.

The new plan was made worse because the Blues define surgery much more broadly than surgeons do, according to Peter E. Petrucci, who is one. Petrucci, who also is president of the medical staff at Sibley Memorial Hospital, told the subcommittee that the insurance company considers setting fractures and dislocations, obstetrical care including childbirth and diagnostic colonoscopies to be surgery.

Yesterday, Petrucci said OPM's new course "sounds great. Both of those things obviously are what we think should be done." But he also questioned how employees will be informed and what the final language in the plans will say.

Employees who want to change plans after Monday must go to their agency's human resources office and request a "belated open season enrollment/change," Davis's office said. Retirees will go through OPM.

Extending the Open Season and requesting the insurance companies to refigure their plans was rejected by Nancy Kichak, an OPM associate director, when she testified. To the consternation of the representatives questioning her, she said:

"OPM stands behind the contract as agreed to. Continuous negotiations and benefit changes would create confusion in the program and make it virtually impossible to provide sufficient information for enrollees to make an informed Open Season decision. . . . Also, from a competitive standpoint it would be unfair to reopen negotiations with a single plan without making the same opportunity available to competitors."

District Del. Eleanor Holmes Norton (D), who represents a city filled with federal employees, was particularly critical of Kichak during the hearing. But yesterday Norton said "I applaud Associate Director Nancy Kichak for apparently being willing to agree to an extension and a review of the underlying issue of extra costs to subscribers."

The work of the subcommittee members was praised by Colleen M. Kelley, president of the National Treasury Employees Union, who said they "should be commended for their outstanding advocacy on behalf of federal employees, retirees and their families."