September 17, 2002
Diane S. Witiak
(202) 639-6419

OPM Caves To "Blues" Demands

(Washington, D.C.)—“It seems that when OPM is not busy spreading disinformation in the debate over homeland security, the agency is conspiring with Blue Cross/Blue Shield to undermine the interests of taxpayers and federal employees,” said Bobby L. Harnage, National President of the American Federation of Government Employees (AFGE) in a statement released by the union today.

“OPM's assertion that it is committed to holding the line on FEHBP cost increases is belied by its wholly unjustified refusal to require that all insurance carriers submit accurate bills for their services.

“The use of CAS simply ensures uniformity and consistency in the measurement, assignment, and allocation of the costs of the federal government's contracts with FEHBP carriers.

“Recent corporate accounting scandals are the direct result of allowing firms to make up the accounting rules as they go along. That’s why the House of Representatives recently passed a bipartisan amendment to the Treasury Appropriations bill that removes the provision exempting all FEHBP carriers from the CAS.

“Only Blue Cross/Blue Shield, in its lust for even greater profits, stands between taxpayers and enrollees, and finally making FEHBP's accounting practices honest. Other, more responsible FEHBP carriers have urged the Congress and the Administration to ensure that all carriers submit honest bills and use consistent accounting practices.

“The cost of applying CAS is an allowable cost that would be charged to the program. Ending the sort of accounting chicanery practiced so ruinously by Enron and other firms would not cost Blue Cross/Blue Shield a dime.

“As the costs of FEHBP premiums continue to skyrocket, it is imperative that OPM use the CAS to ensure more accurate accounting. That OPM has chosen to do exactly the opposite, because it is utterly beholden to a particular carrier, is shameful.

“AFGE views with concern OPM’s rush to introduce highly controversial Medical Savings Account (MSA) plans into FEHBP. MSAs are the last thing FEHBP needs, given the well-documented fact that the program is already plagued with higher than necessary costs due to insurance companies’ ability to game its structure to their advantage.

“OPM needs to understand that rubber-stamping double-digit increases in premiums for the sixth year in a row is nothing to brag about. They delivered for their friends, the insurance companies, with MSAs and the waiver from CAS. But they have delivered nothing but bad news for federal employees.”

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