Federal Employees Health Benefits Program

Improving the Quality of Healthcare-2006 Foreign Service Benefit Plan

The Foreign Service Benefit Plan (FSBP), with assistance from our underwriter Mutual of Omaha (Mutual), and our Pharmacy Benefit Manager, Medco Health Solutions, Inc. (Medco) is committed to setting standards that encourage best practices and promote and increase patient safety, the reduction of medical errors and ongoing opportunities for member education. We pledge to assist OPM in providing Plan members with information and education regarding patient safety.

Current Patient Safety Initiatives and Expected Outcomes

1. Disease Management Program

   The FSBP disease management program Healthydirections^sm for congestive heart failure, diabetes, asthma, COPD, and coronary artery disease seeks to improve patient outcomes and includes disease and patient monitoring, follow-up, and education. The program manages a patient's symptoms in conjunction with his/her physician's treatment plan. Members enroll in the program voluntarily directly or through Plan contact. All aspects of the patient's disease are coordinated in a team effort between the physician, the patient, and the disease manager.

2. Centers of Excellence/Medical Specialty Network

   Mutual's medical specialty network has contracts with national providers for organ and tissue transplant procedures. These providers meet standards for excellence in the services they provide and the outcomes they achieve. These transplant centers have demonstrated greater-than-average outcomes and less-than-average complication rates and are selected using a strict list of criteria including, but not limited to: Provider Transplant Program, Transplant Team, Facility, Patient Outcomes, Quality Assurance Programs and Data Management.

3. Drug Utilization Review-Medco

   The following programs are in place to address drug safety:

   • Edits that alert pharmacists to serious drug-drug interactions are continually updated.
   • New drugs are proactively marked if the possibility of interaction exists.
   • An independent Pharmacy and Therapeutics Committee updates drug-drug interactions and ensures information accuracy.
   • Drugs without acceptable risk/benefit ratios are excluded from formulary inclusion.
   • In addition, we immediately notify members of drug recalls and work to make appropriate operational changes.

   Medco, serving over 40% of seniors age 65 and older nationwide, is a leader in providing prescription drug care to older adults and is committed to addressing their special needs. Medco's award-winning Partners for Healthy Aging initiative, established in 1995, provides comprehensive information to older adults on safe and appropriate drug use. The program uses extensive geriatric expertise and the technology platforms necessary to help seniors avoid drug complications that can seriously affect their health.

   Here are a few examples of how Partners for Healthy Aging works for seniors:

   • Drug Safety Checks. Prescriptions through Medco's mail service pharmacies and participating retail pharmacies are automatically checked for proper dosage and potential drug interactions.
   • Online Access to Healthcare Information. The Partners for Healthy Aging section of Medco's Web site at www.medco.com provides information about the proper use of prescription drugs and other health-related articles relevant to older adults. Members can also access the content of Medco's Medication Guidebook for Older Adults, a comprehensive reference guide with easy-to-read medical information.
   • Pharmacists and Customer Service Representatives Trained to Address Health Needs. Medco's pharmacists are available to answer member questions 24 hours a day. In addition, Medco's customer service representatives can answer questions related to specific prescription drug plans.
4. Credentialing

   An integral part of developing or expanding a managed care organization is the selection of participating providers. The ability of an organization to attract those physicians who will render quality medical care and will share in the overall objectives of the organization is a principal factor in the success of that organization.

   Credentialing plays a major role in the provider selection process. The information collected about each applicant and the standards used to evaluate this information significantly contribute to the selection of medical practitioners capable of providing quality medical care. Consistent use of the same information, requirements and standards affords the best opportunity for developing quality provider networks.

   The recredentialing process is conducted at least every two years, based on the date the provider was initially approved by the Credentialing Committee, and is ongoing and up-to-date. Subject to any relevant contractual provisions, a provider's participation status may be terminated if Mutual becomes aware of, any infractions of the required credentialing standards.

   Mutual will verify that each of the health delivery organizations and institutions with which it contracts, i.e., hospitals, skilled nursing facilities, home health care agencies, free-standing surgical centers, and others, has met the required credentialing standards.

5. Total Care Management (TCM)

   Mutual's Total Care Management program, utilizing an integrated medical management philosophy, provides a comprehensive spectrum of specialty services that can manage health care expenses and improve the quality of life for our members. We manage the full spectrum of our members by taking a proactive approach to produce the best clinical and financial outcomes. We guide our Plan members into the appropriate service as necessary and provide health and wellness tools to help them become better consumers of health care. These services complement the Plan with an integrated wellness focus:

   • Utilization Management, which ensures only necessary medical services are provided and reimbursed;
   • Behavioral Health Services, which reviews mental health/substance abuse services to determine if they are necessary and appropriate and also manages Plan benefits for these services;
   • Healthydirections^® Disease Management Program, which offers a collaborative approach of prevention, education and ongoing support between the Plan member, physician and case managers for members with certain chronic conditions;
   • Healthy Pregnancy Program, which promotes healthy pregnancies through education and coordination of specialized care;
   • Medical Specialty Network, which provides access to a nationwide network of organ and soft-tissue transplant medical centers that are recognized as "Centers of Excellence";
   • National Ancillary Network, which delivers seamless care through a team of independent ancillary providers, including home health care, durable medical equipment, home infusion therapy, hospice, medical supply and orthotics/prosthetics services; and
   • Case management, which assures that better outcomes for Plan members with conditions that lead to extended, highly specialized or resource-intensive care, can effectively manage member benefits and medical care. Members are referred to our Case Management program based upon an identification process by our utilization management, claims and customer service areas and predictive modeling system. Our case management program navigates members through the continuum of care, facilitates an appropriate use of Plan benefits, minimizes a member's out-of-pocket costs, and ensures better compliance with treatment. The end result is reduced claim costs by managing care in the appropriate setting, integrating our services and education our members on how to manage their illness and maintain a healthy lifestyle.
6. Utilization/Medical Management Programs

   The Mutual Corporate Utilization Management (UM) Program is a formal process that evaluates necessity, appropriateness, efficiency, quality, and efficacy of medical services provided for Plan members. Mutual, through their Web site and upon request, has evidence based criteria available to physicians.

7. Independent Accreditation Agencies and Other Associations

   Mutual is very dedicated in supporting efforts for affordable quality healthcare by eliminating redundancies and inefficiencies. Mutual is an active participant in the American Hospital Insurance Plans (AHIP).

   Mutual continues to be accredited by URAC (also known as the American Accreditation Healthcare Commission) for Health Utilization Management Standards. Mutual's disease management vendor, American Healthways, has accreditation for disease management programs from URAC, the Joint Commission on Accreditation of Healthcare Organizations (JCAHO) and the National Committee for Quality Assurance (NCQA). The Private Healthcare System PPO Network has NCQA accreditation for Credentialing and Recredentialing.

   Medco has full accreditation for its mail order pharmacy network through JCAHO. The recognition applies to all services offered by Medco through its entire network of mail-order pharmacies. Medco's pharmaceutical management programs meet all applicable National Committee for Quality Assurance ("NCQA") standards, as well as any applicable federal or state laws and regulations.

   Goals and Outcomes of Patient Safety Initiatives
   Through the above initiatives, and under the direction of Mutual's patient safety officer, James Bowden, M.D., Senior Vice President, Medical Management, our goals are to increase member awareness and provide safety measures for their healthcare. Through our programs, we strive for a total care management approach for our members that provides for consistent and coordinated care. These programs provide education to our members, which allows for a more informed consumer who can actively participate in their healthcare decisions.

   Measurement of Patient Safety Initiatives
   Measurement of these activities is monitored through our utilization reports, patient surveys and overall member activity. We continue to monitor and evaluate additional opportunities for patient safety and education.