5 U.S.C. § 8902 : US Code - Section 8902: Contracting authority

Search 5 U.S.C. § 8902 : US Code - Section 8902: Contracting authority

(a) The Office of Personnel Management may contract with
qualified carriers offering plans described by section 8903 or
8903a of this title, without regard to section 5 of title 41 or
other statute requiring competitive bidding. Each contract shall be
for a uniform term of at least 1 year, but may be made
automatically renewable from term to term in the absence of notice
of termination by either party.
(b) To be eligible as a carrier for the plan described by section
8903(2) of this title, a company must be licensed to issue group
health insurance in all the States and the District of Columbia.
(c) A contract for a plan described by section 8903(1) or (2) of
this title shall require the carrier - 
(1) to reinsure with other companies which elect to
participate, under an equitable formula based on the total amount
of their group health insurance benefit payments in the United
States during the latest year for which the information is
available, to be determined by the carrier and approved by the
Office; or
(2) to allocate its rights and obligations under the contract
among its affiliates which elect to participate, under an
equitable formula to be determined by the carrier and the
affiliates and approved by the Office.
(d) Each contract under this chapter shall contain a detailed
statement of benefits offered and shall include such maximums,
limitations, exclusions, and other definitions of benefits as the
Office considers necessary or desirable.
(e) The Office may prescribe reasonable minimum standards for
health benefits plans described by section 8903 or 8903a of this
title and for carriers offering the plans. Approval of a plan may
be withdrawn only after notice and opportunity for hearing to the
carrier concerned without regard to subchapter II of chapter 5 and
chapter 7 of this title. The Office may terminate the contract of a
carrier effective at the end of the contract term, if the Office
finds that at no time during the preceding two contract terms did
the carrier have 300 or more employees and annuitants, exclusive of
family members, enrolled in the plan.
(f) A contract may not be made or a plan approved which excludes
an individual because of race, sex, health status, or, at the time
of the first opportunity to enroll, because of age.
(g) A contract may not be made or a plan approved which does not
offer to each employee, annuitant, family member, former spouse, or
person having continued coverage under section 8905a of this title
whose enrollment in the plan is ended, except by a cancellation of
enrollment, a temporary extension of coverage during which he may
exercise the option to convert, without evidence of good health, to
a nongroup contract providing health benefits. An employee,
annuitant, family member, former spouse, or person having continued
coverage under section 8905a of this title who exercises this
option shall pay the full periodic charges of the nongroup
contract.
(h) The benefits and coverage made available under subsection (g)
of this section are noncancelable by the carrier except for fraud,
over-insurance, or nonpayment of periodic charges.
(i) Rates charged under health benefits plans described by
section 8903 or 8903a of this title shall reasonably and equitably
reflect the cost of the benefits provided. Rates under health
benefits plans described by section 8903(1) and (2) of this title
shall be determined on a basis which, in the judgment of the
Office, is consistent with the lowest schedule of basic rates
generally charged for new group health benefit plans issued to
large employers. The rates determined for the first contract term
shall be continued for later contract terms, except that they may
be readjusted for any later term, based on past experience and
benefit adjustments under the later contract. Any readjustment in
rates shall be made in advance of the contract term in which they
will apply and on a basis which, in the judgment of the Office, is
consistent with the general practice of carriers which issue group
health benefit plans to large employers.
(j) Each contract under this chapter shall require the carrier to
agree to pay for or provide a health service or supply in an
individual case if the Office finds that the employee, annuitant,
family member, former spouse, or person having continued coverage
under section 8905a of this title is entitled thereto under the
terms of the contract.
(k)(1) When a contract under this chapter requires payment or
reimbursement for services which may be performed by a clinical
psychologist, optometrist, nurse midwife, nursing school
administered clinic, or nurse practitioner/clinical specialist,
licensed or certified as such under Federal or State law, as
applicable, or by a qualified clinical social worker as defined in
section 8901(11), an employee, annuitant, family member, former
spouse, or person having continued coverage under section 8905a of
this title covered by the contract shall be free to select, and
shall have direct access to, such a clinical psychologist,
qualified clinical social worker, optometrist, nurse midwife,
nursing school administered clinic, or nurse practitioner/nurse
clinical specialist without supervision or referral by another
health practitioner and shall be entitled under the contract to
have payment or reimbursement made to him or on his behalf for the
services performed.
(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.
(3) The provisions of this subsection shall not apply to
comprehensive medical plans as described in section 8903(4) of this
title.
(l) The Office shall contract under this chapter for a plan
described in section 8903(4) of this title with any qualified
health maintenance carrier which offers such a plan. For the
purpose of this subsection, "qualified health maintenance carrier"
means any qualified carrier which is a qualified health maintenance
organization within the meaning of section 1310(d)(1) (!1) of title
XIII of the Public Health Service Act (42 U.S.C. 300c-9(d)).
(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.
(2)(A) Notwithstanding the provisions of paragraph (1) of this
subsection, if a contract under this chapter provides for the
provision of, the payment for, or the reimbursement of the cost of
health services for the care and treatment of any particular health
condition, the carrier shall provide, pay, or reimburse up to the
limits of its contract for any such health service properly
provided by any person licensed under State law to provide such
service if such service is provided to an individual covered by
such contract in a State where 25 percent or more of the population
is located in primary medical care manpower shortage areas
designated pursuant to section 332 of the Public Health Service Act
(42 U.S.C. 254e).
(B) The provisions of subparagraph (A) shall not apply to
contracts entered into providing prepayment plans described in
section 8903(4) of this title.
(n) A contract for a plan described by section 8903(1), (2), or
(3), or section 8903a, shall require the carrier - 
(1) to implement hospitalization-cost-containment measures,
such as measures - 
(A) for verifying the medical necessity of any proposed
treatment or surgery;
(B) for determining the feasibility or appropriateness of
providing services on an outpatient rather than on an inpatient
basis;
(C) for determining the appropriate length of stay (through
concurrent review or otherwise) in cases involving inpatient
care; and
(D) involving case management, if the circumstances so
warrant; and
(2) to establish incentives to encourage compliance with
measures under paragraph (1).
(o) A contract may not be made or a plan approved which includes
coverage for any benefit, item, or service for which funds may not
be used under the Assisted Suicide Funding Restriction Act of 1997.