48 CFR Part 1602 — Definitions of Words and Terms

PART 1602—DEFINITIONS OF WORDS AND TERMS Authority: 5 U.S.C. 8903c and 8913; 40 U.S.C. 486(c); 48 CFR 1.301. Source: 52 FR 16038, May 1, 1987, unless otherwise noted. 1602.000-70 Scope of part. This part defines words and terms commonly used in this regulation. Subpart 1602.1—Definitions of FEHBP Terms 1602.170 Definition of terms. In this chapter, unless otherwise indicated, the following terms have the meaning set forth in this subpart. 1602.170-1 Carrier. Carrier [62 FR 47573, Sept. 10, 1997] 1602.170-2 Community rate. (a) Community rate (b) Adjusted community rate [55 FR 27414, July 2, 1990, as amended at 62 FR 47573, Sept. 10, 1997; 76 FR 38284, June 29, 2011] 1602.170-3 Comprehensive medical plan. Comprehensive Medical Plan 1602.170-4 Contractor. Contractor 1602.170-5 Cost or pricing data. (a) Experience-rated carriers. (1) Information such as claims data; (2) Actual or negotiated benefits payments made to providers of medical services for the provision of healthcare, such as capitation not adjusted for specific groups, including mental health benefits capitation rates, per diems, and Diagnostic Related Group (DRG) payments; (3) Cost data; (4) Utilization data; and (5) Administrative expenses and retentions, including capitated administrative expenses and retentions. (b) Community rated carriers. [62 FR 47574, Sept. 10, 1997, as amended at 70 FR 31378, June 1, 2005; 76 FR 38285, June 29, 2011] 1602.170-6 Director. Director [52 FR 16038, May 1, 1987. Redesignated at 62 FR 47574, Sept. 10, 1997] 1602.170-7 Experience-rate. Experience-rate [70 FR 31378, June 1, 2005] 1602.170-8 FEHBP. FEHBP [52 FR 16038, May 1, 1987. Redesignated at 62 FR 47574, Sept. 10, 1997] 1602.170-9 Health benefits plan. Health benefits plan [62 FR 47574, Sept. 10, 1997] 1602.170-10 Letter of credit. Letter of credit [53 FR 51783, Dec. 23, 1988, as amended at 57 FR 14359, Apr. 20, 1992. Redesignated at 62 FR 47574, Sept. 10, 1997] 1602.170-11 Negotiated benefits contracts. Negotiated benefits contracts [62 FR 47574, Sept. 10, 1997] 1602.170-12 OPM. OPM [52 FR 16038, May 1, 1987. Redesignated at 53 FR 51783, Dec. 23, 1988 and further redesignated at 62 FR 47574, Sept. 10, 1997] 1602.170-13 Similarly sized subscriber groups. (a) A Similarly sized subscriber group (1) As of the date specified by OPM in the rate instructions, has a subscriber enrollment closest to the FEHBP subscriber enrollment; (2) Uses traditional community rating; and, (3) Meets the criteria specified in the rate instructions issued by OPM. (b) Any group with which an entity enters into an agreement to provide health care services is a potential SSSG (including groups that are traditional community rated and covered by separate lines of business, government entities, groups that have multi-year contracts, and groups having point-of-service products) except as specified in paragraph (c) of this section. (1) An entity's subscriber groups may be included as an SSSG if the entity is any of the following: (i) The carrier; (ii) A division or subsidiary of the carrier; (iii) A separate line of business or qualified separate line of business of the carrier; or (iv) An entity that maintains a contractual arrangement with the carrier to provide healthcare benefits. (2) A subscriber group covered by an entity meeting any of the criteria under paragraph (b)(1) of this section may be included for comparison as a SSSG if the entity meets any of the following criteria: (i) It reports financial statements on a consolidated basis with the carrier; or (ii) Shares, delegates, or otherwise contracts with the carrier, any portion of its workforce that involves the management, design, pricing, or marketing of the healthcare product. (c) The following groups must be excluded from SSSG consideration: (1) Groups the carrier rates by the method of retrospective experience rating; (2) Groups consisting of the carrier's own employees; (3) Medicaid groups, Medicare-only groups, and groups that receive only excepted benefits as defined at 26 U.S.C. 9832(c); (4) A purchasing alliance whose rate-setting is mandated by the State or local government; (5) Administrative Service Organizations (ASOs); (6) Any other group excluded from consideration as specified in the rate instructions issued by OPM. (d) OPM shall determine the FEHBP rate by selecting the lowest rate derived by using rating methods consistent with those used to derive the SSSG rate. (e) In the event that a State-mandated TCR carrier has no SSSG, then it will be subject to the FEHB specific MLR requirement. [80 FR 32859, June 10, 2015] 1602.170-14 FEHB-specific medical loss ratio threshold calculation. (a) Medical Loss Ratio (b) The FEHB-specific MLR will be calculated on an annual basis. This FEHB-specific MLR will be measured against an FEHB-specific MLR threshold to be put forth by OPM no later than 12 calendar months before the beginning of plan years 2014 and beyond. OPM will publish the FEHB-specific MLR threshold no later than 8 months before the beginning of plan year 2013. (c) In place of the credibility adjustment at 45 CFR 158.230-158.232, OPM will set a separate credibility adjustment to account for the special circumstances of small FEHB plans in annual rate instructions to carriers. [77 FR 19524, Apr. 2, 2012, as amended at 80 FR 32860, June 10, 2015] 1602.170-15 Subcontractor. Subcontractor [52 FR 16038, May 1, 1987. Redesignated at 53 FR 51783, Dec. 23, 1988, and further redesignated at 55 FR 27414, July 2, 1990; 62 FR 47574, Sept. 10, 1997 and 76 FR 38285, June 29, 2011] 1602.170-16 Large Provider Agreement. (a) Large Provider Agreement (1) An FEHB carrier, at least 25 percent of which total contracts are FEHB enrollee contracts, and (2) A vendor of services or supplies such as mail order pharmacy services, pharmacy benefit management services, mental health and/or substance abuse management services, preferred provider organization services, utilization review services, and/or large case or disease management services. This representative list includes organizations that own or contract with direct providers of healthcare or supplies, or organizations that process claims or manage patient care. A hospital is not considered to be a vendor for purposes of this chapter. (i) Where the total costs charged to the FEHB carrier for a contract term for FEHB members, including benefits and services, are reasonably expected to exceed 5 percent of the carrier's total FEHB benefits costs, or (ii) Where the total administrative costs charged to the FEHB carrier for the contract term for FEHB members are reasonably expected to exceed 5 percent of the carrier's total FEHB administrative costs (applicable to agreements where the provider is not responsible for FEHB benefits costs). (3) As used in this section, the term “carrier” does not include local health plans that serve under an umbrella arrangement with an FEHB carrier. (b) The FEHB Program Annual Accounting Statement for the FEHB Plan for the prior contract year will be used to determine the 5 percent threshold under Large Provider Agreements. (c) Large Provider Agreements based on cost analysis are subject to the provisions of FAR 52.215-2, “Audit and Records-Negotiation.” (d) Large Provider Agreements based on price analysis are subject to the provisions of 48 CFR 1646.301 and 1652.246-70. [70 FR 31379, June 1, 2005. Redesignated at 76 FR 38285, June 29, 2011] 1602.170-17 Postal Service. Postal Service [88 FR 20408, Apr. 6, 2023] 1602.170-18 Postal Service annuitant. Postal Service annuitant [88 FR 20408, Apr. 6, 2023] 1602.170-19 Postal Service employee. Postal Service employee [88 FR 20408, Apr. 6, 2023] 1602.170-20 PSHB Carrier. PSHB Carrier [88 FR 20408, Apr. 6, 2023] 1602.170-21 PSHB plan. PSHB plan [88 FR 20408, Apr. 6, 2023] 1602.170-22 PSHB Program. Postal Service Health Benefits (PSHB) Program [88 FR 20408, Apr. 6, 2023]

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