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News Release

Thursday, September 23, 2004
Contact: Edmund Byrnes
Tel: 202-606-2402


Pittsburgh, PA - During testimony last week before the House Subcommittee on Civil Service and Agency Organization Committee on Government Reform in Pittsburgh, Pennsylvania, U.S. Office of Personnel Management Deputy Director Dan G. Blair explained the importance of the Federal Employees Health Benefits (FEHB) program and why it continues to serve as a model for employer sponsored health insurance programs.

"I'm pleased to comment on the role of the FEHB Program in relation to cutting edge health care issues that could impact the delivery of health care services across the nation," said Blair. "OPM, under the direction of OPM Director Kay Coles James, has an enormous interest in these issues and we work in these areas by encouraging and collaborating with our health plans and with other purchasers of healthcare services."

The FEHB program provides federal employees with a number of health plan options that offer competitive health benefits products for federal workers, much like large employer purchasers in the private sector. OPM Director James has steadfastly refused to impose mandates on the system during her tenure and has encouraged carriers to be responsive to reservists, emergency personnel, and federal health education and prevention efforts.

OPM administers the FEHB program by contracting with private sector health plans, offering over 200 choices to federal employees, retirees and their dependents. However, OPM does not contract with providers, does not process claims, does not do independent clinical research and does not mandate specific program initiatives.

"OPM Director James has consistently encouraged participating health plans to be creative and responsive to consumer interests and to be innovative in developing plan-specific programs that benefit patients while also controlling costs," said Blair. "By working closely with the health plans to constantly improve the quality of services they offer our enrollees, OPM has moved the program forward in many critical areas without locking the health plans into predetermined solutions."

Six cutting edge topics in the health care arena that Blair discussed included: ways to encourage plans to focus on high value services including preventive services and comprehensive care for common chronic conditions; the impact of good health practices on premiums; a reimbursement component that allows plans to receive a premium for meeting certain high standards of quality; ways to promote the use of information technology to create cost savings; ways that the FEHB program can measure comparative efficacy and value of alternative preventives and treatments in a systematic way; and, possible avenues on how the FEHB program can better stress health literacy.

In summary, Blair said: "While the primary role of OPM as administrator of the FEHB Program is to contract with health plans to provide healthcare coverage for federal employees, retirees and their families, we have used our leverage as a major purchaser to facilitate meaningful efforts by the health plans to improve the quality of services they provide. Within the framework of this mission, we believe we can and should contribute to the overall efforts to make and keep the American healthcare system one of the best in the world."

The FEHB program operates under a statutory framework enacted in 1959 which permits OPM to contract with multiple health plans to provide coverage for about eight and a half million federal employees and retirees and their dependents. Each spring, OPM notifies carriers via a Call Letter that provides broad outlines for upcoming negotiations. Benefits are offered on a self and a self and family basis, with no distinction between active employees and retirees.

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OPM leads and serves the Federal Government in enterprise human resources management by delivering policies and services to achieve a trusted, effective civilian workforce. By Empowering Excellence in Government through Great People, we provide leadership and support to U.S. agencies on issues including human resources policy and oversight, background investigations, federal employee benefits, retirement services, guidance on labor-management relations, and programs to improve workforce performance. For more information, visit or follow OPM on Twitter, Facebook, or LinkedIn.

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