Federal_Employees_Dental_and_Vision_Application_2013.docx

UNITED STATES OFFICE OF PERSONNEL MANAGEMENT

FEDERAL EMPLOYEES DENTAL AND VISION INSURANCE PROGRAM (FEDVIP)

APPLICATION TO PARTICIPATE AS A CARRIER UNDER THE FEDERAL EMPLOYEES DENTAL AND VISION BENEFITS ENHANCEMENT ACT OF 2004, 5 U.S.C. 8903(4)

EFFECTIVE JANUARY 1, 2014

Section A – Application Form

NAME OF DENTAL OR VISION PLAN

____________________________________Mailing Address

Street

City, State, Zip Code

NAME OF LEGAL CONTRACTING ENTITY ("CARRIER")

________________________________Mailing Address

Street

City, State, Zip Code

NAME OF EXECUTING INDIVIDUAL (AUTHORIZED CONTRACTING OFFICIAL)

Title

Telephone/E-Mail

NAME AND TITLE OF CONTACT DURING APPLICATION REVIEW Telephone/E-Mail

MAILING ADDRESS (Street, P.O. Box, City, State, Zip Code)

APPLYING AS SPONSOR OF A [See 5 U.S.C. Section 89A and 89B]:

[ ] Nationwide Plan

DATE DENTAL OR VISION CARE WAS FIRST PROVIDED UNDER THE PLAN TO COMMERCIAL GROUP MEMBERS WHO WERE NEITHER CARRIER EMPLOYEES NOR EMPLOYEES OF A CARRIER AFFILIATE:

FEDERAL TAX STATUS [ ] For Profit [ ] Not for Profit

All information and statements made in this application are true, accurate, and current to the best of my knowledge and belief, and are made in good faith. (See the instructions on the following pages before signing.)

(Signature of Authorized Contracting Official)

SECTION B SUPPLIES OR SERVICES AND PRICE/COSTS

B.1 CONTRACT TYPE

This is a fixed-price with prospective price redetermination type contract.

B.2 PERIOD OF PERFORMANCE

The anticipated base period for this contract is from January 1, 2014, through December 31, 2020, with coverage beginning no later than January 1, 2014. Each option period shall consist of a seven-year term. There is no limit to the number of options the Government may exercise.

B.3 PRICE PROPOSAL

Section C VII, Financial, contains information related to price/cost. Applicants must refer to that section in developing their price proposals.

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SECTION C DESCRIPTION/SPECIFICATIONS/STATEMENT OF WORK

Table of Contents Page Number I. Background …………………………………………………………………..C-3 II. Program Structure ..................................................................................................C-4 III. Definitions …………………………………………………………………… C-9

XIII. Appendices

C-1 C-2 Requirements Summary

I, (Name)_____________________________ , (Title)_______________________________, of

(Firm)______________________________ (Name of firm) notify OPM that (Firm) may submit an application for FEDVIP. In doing so, (Firm_________________________) understands the following conditions are to be incorporated in our proposed fees and services:

1) (Firm) understands that it will be financially responsible for funding education and enrollment activities, and the amount of any claims that exceed the accumulated premium contributions at any time; (Firm) also understands that the first funds from the program will not be received until after January 2014.

2) (Firm) understands that its website must be fully operational, and its call center must be fully operational with toll free lines and trained staff no later than one week prior to the beginning of the initial Open Season, Nov/Dec 2013.

3) (Firm) understands that it will, at all times, hold all funds associated with this program separate and apart from any other funds (Firm) holds; (Firm) also understands that all unclaimed checks shall be voided if the checks have been outstanding for two (2) years. The amounts represented by these checks shall be credited to a designated account no later than the 25th month after issuance and cannot be turned over to the state.

4) (Firm) understands that it may receive claims from every country where the U.S. has eligible employees and will have to be able to convert eligible expenses, and process claims received in other languages.

5) (Firm) understands that prior to the initial Open Season (Nov/Dec 2013), it will be responsible for building and maintaining a HIPAA compliant interface with the BENEFEDS Portal; testing and certifying that transactions are HIPAA compliant; and, certifying that web-based material provided to OPM that relates to the Federal Employees Dental and Vision Insurance Program (FEDVIP) is compliant with section 508 of the Rehabilitation Act of 1973 (as amended by the Workforce Investment Act of 1998).

6) (Firm) understands that if selected, this statement will become part of its contract with the Government.

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I. BACKGROUND

The Federal Employees Dental and Vision Insurance Program (FEDVIP) is offered under the authority of Public Law 108-496, The Federal Employees Dental and Vision Benefits Enhancement Act of 2004 (Chapter 89 of title 5 of the U.S. Code) and is administered by the Office of Personnel Management (OPM) in accordance with 5 CFR, Parts 89A and 89B. The requirements that must be met by carriers seeking to participate in the FEDVIP Program are set forth in the law. The link to the Act can be found in Appendix A.

Dental and Vision benefits will be available through this application process to the eligible Federal population on January 1, 2014. Each carrier will be expected to offer a uniform set of benefits for all eligible Federal enrollees. OPM expects there will be market-based competition at the enrollee level with consumer choice among plans and benefit designs.

We will consider applications for a variety of dental and vision benefit and plan designs, including Preferred Provider Organization (PPO) plans, indemnity fee-for-service plans, and qualified DHMOs for dental coverage, as well as reduced fee or discount products. Competition to participate in FEDVIP will be based on cost and value. We will entertain applications for limited variations in rates based on region.

OPM needs nationwide coverage and therefore encourages applications from nationwide insurance carriers. Nationwide plans can provide access to members regardless of location and maintain continuity of coverage. The Federal population is subject to transfers, temporary duty assignments, business travel and other circumstances that place enrollees away from their primary residence. In addition, factors such as family travel, permanent moves, and dependents away at school could place members outside the service area of a regional carrier. All nationwide plans must also provide international coverage.

We recognize that regional carriers may offer excellent value within their respective markets. Therefore, we will entertain applications from regional organizations. We would expect any regional carriers we may select to bring added value to our members, such as greater access and lower costs. With regional carriers, OPM would allow members to switch plans within the contract year, if they or their qualified dependents move outside the geographic area serviced by the plan. This would add administrative complexity and costs to the Program for actions such as enrollment and payroll changes, administration of benefit deductibles and maximum limits, etc. Therefore, we will consider applications from regional carriers subject to an equitable administrative cost allocation methodology as indicated below.

OPM’s administrative costs will be paid from premiums. OPM will employ a mechanism to equitably offset the administrative costs required to negotiate and administer the contracts. This will result in an administrative cost loading, under which, each carrier will bear an equal share of OPM’s costs based on program type, regardless of enrollment size.

We believe that FEDVIP should offer benefits that provide reasonably comparable coverage for eligible individuals residing outside the continental United States. While domestic plans may have an out-of-network benefit that offers reimbursement for overseas services, it is doubtful they will offer a network that includes international providers. However, there are specialized international plans that have the capability to offer more extensive provider networks to members located outside the continental United States. All proposed plan designs should, at a minimum, have the capability of processing overseas claims, offering currency conversions/translation services, maintaining a secure online claim submission system and offering a provider referral process. In addition, OPM may consider applications for dental and/or vision benefit programs that are directed solely at international plan operations.

While current Federal Employees Health Benefits (FEHB) Program plans generally do not offer comprehensive dental and vision benefits, most offer limited coverage. Approximately one-third of FEHB Program plans, covering over 70 percent of enrollees, currently offer some preventive dental care for all ages, less than one-third offer minor restorative dental care, and less than one-fourth offer some major restorative dental care. Several plans offer some orthodontic care. A small percentage of FEHB plans also offer limited vision care benefits. Additionally, several plans offer discount dental and/or vision discount affinity products to their enrollees. Carriers under the dental and vision program will be secondary payors and will be responsible for facilitating the first payor process with FEHB plans, which will provide primary benefits. See the FEHB brochures for information regarding the dental and vision benefits currently offered by FEHB plans: http://www.opm.gov/insure/health/planinfo/index.asp.

Applicants must provide a copy of their Plan Design in their response to the Financial Section. In addition, there are questions or information requests throughout this document that must be included in the response to the Financial Section.

Finally, throughout this application, you have the opportunity to differ with our assumptions and requirements, and to propose alternative arrangements so long as they are justified and you clearly describe why they are more favorable to the Government and the Federal population.

II. PROGRAM STRUCTURE

A. Eligible Population

Section 8951 of the Act defines “eligible population” as including employees eligible for the FEHB Program, but they do not have to be actually enrolled. It also includes annuitants without regard to FEHB Program eligibility. OPM will allow annuitants to enroll and dis-enroll in FEDVIP, the same as employees. There are approximately 8.2 million employees, retirees and dependents covered by the FEHB Program.

C-3 C-4 The Office of Personnel Management (OPM) does not provide eligibility files of Federal employees and annuitants. In addition, the BENEFEDS Portal (see Section J below) will not have eligibility files. Appendix B contains demographic information for Federal employees, retirees and their eligible dependents.

B. Enrollment Options

Section 8956 and Section 8986 of the Act provide the following options for dental and vision benefits, respectively: An eligible individual may enroll in a benefits plan for self-only, self plus one, or self and family. If an eligible individual has a spouse who is also eligible to enroll, either spouse, but not both, may enroll for self plus one or self and family. An individual may not be enrolled both as an employee, annuitant, or other individual eligible to enroll and as a member of the family.

Additionally, if an eligible individual or one of their family members is enrolled in or covered by one FEDVIP plan, that person cannot be enrolled in or covered as a family member by another FEDVIP plan offering the same type of coverage; i.e., the eligible individual (or covered family members) cannot be covered by two FEDVIP dental plans or two FEDVIP vision plans.

C. Communications

A number of means are available to communicate with Federal employees and annuitants about FEDVIP. Appendix C includes this information.

D. Access Requirements

Section VI describes the network and access requirements. Appendix D describes Zip Code information for Federal employees and annuitants.

E. Waiting Periods

OPM recognizes that carriers may wish to impose waiting periods or lower payment percentages for new enrollees to discourage adverse selection. We prefer to mitigate adverse selection through quality, price, and innovative benefit design. Enrollees must be immediately eligible to receive all benefits with the exception of orthodontia. At a minimum, enrollees must be eligible to receive the full level of orthodontia benefits after twelve (12) months of continuous enrollment in a participating plan/option. Section IV and Appendix E and H describes the minimum benefit design requirements for dental coverage.

There are no waiting periods for services under vision plans or discount plans arrangements.

F. Enrollment Elections

While eligible individuals can join or change plans during each open season, most active employees will pay premiums with pre-tax dollars, which are withheld directly from salaries (premium conversion). As described in Section 125 of the Internal Revenue Code, the election to join a benefits program with pre-tax funds is an irrevocable election for the calendar year for which it is made. Federal retirees, like other retirees, are not eligible for pre-tax benefits. However, we intend to regulate this “lock-in” provision for all enrollees. Therefore, active employees and annuitants who voluntarily join FEDVIP will not be able to dis-enroll during a contract year. Changes will not be allowed unless the change coincides with a Qualifying Life Event (QLE) as established by OPM regulations. New Hires will be eligible to enroll at any time within 60-days of their service entrance date. This is a one-time enrollment opportunity during the 60-day period.

G. BENEFEDS Portal

The BENEFEDS Portal (see Appendix J) is used for enrollment and payroll deductions for voluntary benefit programs. BENEFEDS will perform the following functions:

· administer a web-based enrollment system for dental/vision plan enrollments.

· notify dental/vision plans of enrollments, including demographic and family member information.

· request payroll or annuity deductions for dental/vision plan enrollees.

· remit deductions and enrollee identifying information to dental/vision plans.

· take action with payroll offices to resolve instances in which requested deductions were not remitted.

· staff a call center to answer enrollment and premium questions and refer benefit questions to the appropriate plan.

Carriers accepted for participation in FEDVIP must use the BENEFEDS Portal and will pay a reasonable fee approved by OPM for the services that BENEFEDS provides. This fee is in the form of a load added to the premium.

H. Premium Negotiation

During the contract period, premiums can be adjusted only by mutual agreement between OPM and the Contractor. Section VII, Financial, describes the prospective experience rating methodology used to set premiums during annual contract negotiations. Section L.14.3, provides information regarding submitting your premium proposal. Premiums are based on 26 pay periods.

I. Administrative Cost Requirements

Each plan will include its administrative costs in the premium. Administrative costs must be reported to OPM as described in Section VIII, Reporting Requirements.

C-5 C-6 In addition, there will be a loading on the premium to pay for FEDVIP’s ongoing administrative expenses incurred by the Federal Government as described in Section VII, and a loading for BENEFEDS’ expenses as mentioned above.

J. Types and Number of Participating Plans

The Program is expected to offer approximately up to ten total choices for dental benefits and up to four choices for vision benefits per geographic area. This will be achieved either through contracting with nationwide carriers exclusively or by some mix of nationwide and regional carriers. We may contract with fully insured or discount dental and vision plans. Our goal is to provide the Federal population with affordable choices and maximum value. Discount dental and vision plans must offer published fee schedules for all services and make them available to enrollees.

K. International Plan Operations

OPM may consider applications for dental and/or vision benefit programs that are directed solely at international plan operations, or solely at US Territories, irrespective of the percentage of the overall Federal population served by the plan.

L. Audits of Plan Costs

The Federal Government maintains a right to audit contracts that are initiated based on The Federal Employee Dental and Vision Benefits Enhancement Act of 2004. FAR 52-215-2, Audit and Records—Negotiation, is incorporated by reference. The Federal Government shall have the right to examine and audit all records and other evidence sufficient to reflect properly all costs claimed to have been incurred or anticipated to be incurred directly or indirectly in performance of the contract. This right of examination shall include inspection at all reasonable times of the Contractor’s plants, or parts of them, engaged in performing the contract.

Contractors will be required to identify a location for OPM to perform on-site evaluations of their records and facilities.

M. First Payor

The Act requires that if an individual has dental or vision coverage under a health benefits plan under chapter 89 of title 5 of the United States Code and has coverage under FEDVIP, the health benefits plan under chapter 89 will be the first payor of any benefit payments. As described above, OPM expects plans that are chosen to participate in FEDVIP to provide coverage at the point of service. The plan, not the enrollee, should be responsible for facilitating the First Payor process with FEHB carriers.

Most FEHB plans offer dental and/or vision coverage as part of their health plan. All options presented through the Federal Employees Dental and Vision Insurance Program would be secondary to the coverage currently offered by the FEHB plans. For specific information C-7 regarding the dental and/or vision benefits offered by an FEHB Program Carrier or in a specific program area, you may visit, http://www.opm.gov/insure/health/planinfo/index.asp.

In the evaluation of application responses, additional points will be awarded to plans that demonstrate that no burden will be placed on enrollees regarding facilitating the First Payor process with the primary payor. If an enrollee has coverage under both FEHB and FEDVIP and the provider is a participating provider of both plans, then the allowable expense will be up to but not to exceed the FEDVIP plan allowance.

N. Timeline

Below is the timeline that leads up to the January 2014 effective date.

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III. DEFINITIONS

Note: These definitions are only for the purpose of this Application.

IV. PLAN DESIGN

Federal employees and annuitants, at a minimum, should have access to the following services (see appendices E, F and H for details).

We will select applicants on the basis of best overall value, including benefit offerings and best price offerings. Benefit levels offered above the minimum level at a higher premium will be given appropriate consideration. We encourage you to propose a benefit design or benefit designs that you offer in the commercial market. We plan to contract with a variety of plans featuring a variety of benefit designs to provide a market-based choice to Federal consumers.

We will consider applications for insured and discount products. As a caveat, however, we will not accept products that do not feature published fee schedules/allowances and provide for routine auditing. In addition, we will not accept products where enrollees pay all charges in excess of a published fee schedule/allowance. The fee schedule must be updated routinely to ensure that an adequate level of coverage is provided. They must also meet the minimally acceptable cost sharing structure located in Appendix E, F and H.

The following shows the types of services that must be covered and the minimally acceptable cost sharing structure. We will accept applications for more than one benefit level within a plan (i.e., High and Standard options). However, an applicant’s lowest proposed level of benefits may not be lower than the minimum benefit level.

Dental Benefits Preventive and diagnostic services covered in full or with a small copay (fully insured plans) and at least 50 percent member discount (discount plans), such as:

(1) Prophylaxis

(2) Oral evaluations

(3) Topical fluoride treatment

(4) Sealants

(5) Cancer screening

(6) Periodontal evaluation

(7) Periodontal charting

(8) Radiographs/Diagnostic Imaging

Intermediate services and periodontal and endodontic services with no more than 50 percent member cost sharing (fully insured plans) and at least 40 percent member discount (discount plans) such as:

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(1) Amalgam restoration

(2) Resin based composite restorations

(3) Routine Extractions

(4) Non-surgical periodontal services

Major services including restorative dentistry and prosthetics, with no more than 70 percent member cost sharing (fully insured plans) and at least 20 percent member discount (discount plans) such as:

(1) Permanent Crowns

(2) Bridges

(3) Dentures

(4) Implants

(5) Root Canal Therapy

Orthodontia services with no more than 65 percent member cost sharing (fully insured plans) and at least 15 percent (flat discount) member discount (discount plans); 0-12 month waiting period for fully insured plans. Carriers may also propose a lifetime maximum for this benefit.

Incidental charges including:

(1) Anesthesia

(2) Out-of-network emergency care

Emergency services including:

(1) Pain relief

(2) Injury

A. Fully Insured Dental Benefits Intermediate and major services should be subject to an annual deductible of no more than $75 in total. The minimum annual benefit for dental services excluding orthodontia should be at least $1500. The minimum lifetime benefit for orthodontia should be at least $2000. The cost sharing percentages listed above are inclusive of all deductibles and maximums.

Plans should offer an alternate benefit provision when more than one dental service could provide suitable treatment based on common dental standards. Benefits must be provided for the least expensive professionally acceptable treatment.

B. Discount Dental Benefits

The applicant may propose a minimally acceptable percentage based on FEDVIP’s four dental classes other than what is listed above.

Class A (Basic)

Class B (Intermediate)

Class C (Major)

Class D (Orthodontia)

C. Vision Benefits Vision benefits may include: diagnostic (including refractive services), preventive, and eyewear.

We would like to see applications for vision benefits that provide full coverage for annual eye examinations, including comprehensive eye examinations for children under age 3, and high-risk patients such as those with glaucoma, diabetes, ocular hypertension, etc. We do not want to set up a barrier to employees or their dependents receiving this service. Our goal is to improve employee health through greater access to care. We believe vision benefits can be provided with a low cost premium and still provide full coverage for annual eye examinations.

We would like to see applications for fully insured products that include the following:

(1) Annual vision screening services covered in full,

(2) Vision testing services, as indicated, on a 12 month basis,

(3) Frames and lenses, as indicated on a 12-24 month basis.

We would like to see applications for discount products that include the following:

(1) Annual vision screening services,

(2) Vision testing services,

(3) Frames and lenses.

Additional plan features may include tinting of lenses, polycarbonate lenses, progressive lenses, photosensitive lenses or LASIK surgery. You may propose to offer these and/or additional services as a discount arrangement for enrollees.

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V. CONTRACTOR INFORMATION

A. Requirements

1. Each Contractor may be a single company or be comprised of more than one company, or other entities, aligned together to respond to this Application.

2. By the time of contract award, successful nationwide Contractors must be licensed, approved, or certified to conduct business under applicable state laws in all 50 states and the District of Columbia. In the case of a Contractor comprised of more than one company, the companies can meet the requirement collectively. A successful regional Contractor must fulfill this requirement in all States in which it operates.

3. Relationships with subcontractors, partners, or members of a joint contracting entity cannot be exclusive. This means that each company is free to enter into more than one negotiating relationship and/or contracting arrangement with us at the outset of this contract.

4. The Contractor must demonstrate adequate financial resources to perform the prospective contract or demonstrate an ability to obtain adequate financial resources.

B. Questions/Information

Part 1

Each contracting entity must complete this part in relation to the entire entity.

1. Identify each company that will play a significant role in meeting the requirements of this application and the specific responsibilities that each will have.

2. Specify the legal relationship that each will have, one to another, if applicable, and/or each to the contracting entity, including the extent of the legal commitment that existed at the time you responded to this request and current or prior relationships that have existed in the delivery of a dental/vision program.

3. Discuss each company’s respective strengths and capabilities to deliver the services and meet the responsibilities identified.

4. Describe how the entity responsible for meeting the requirements of this application will be managed at the corporate level, e.g. board of directors, partnership etc. Where will the contracting entity be legally domiciled?

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5. Provide the names, experience, education, and accomplishments of the key personnel who will be responsible for the overall management of the Program as well as various components of the Program, such as education, enrollment, care management, claims, customer service, overall project, etc. If you have not designated an individual yet, identify and describe the company(ies) from which you will seek that individual.

6. Is the contracting entity or any of the organizations identified in (1) owned by, affiliated with, or sponsored by another organization that provides management and/or financial support? If yes, identify the organization and answer the next three questions regarding each sponsored company and its sponsor.

(a) Does the sponsoring organization sponsor more than one dental and/or vision plan? If yes, identify each by name and location.

(b) What administrative, management, financial or other services does the sponsor provide?

(c) To what extent does the sponsor provide financial support to the sponsored company?

(d) Explain the legal relationship between the sponsoring organization and the carrier of the plan and state whether this relationship creates any financial liability on the part of the sponsor.

Part 2

Each company financially at risk in the contracting entity must answer the following questions and provide the following information separately for each individual company:

1. What is your company’s name and State of domicile?

2. What is the nature and extent of the risk you propose to assume for FEDVIP?

3. What services will you be providing to the Federal Employees Dental and Vision Insurance Program?

4. Provide proof of your financial capacity and capabilities to undertake and successfully complete your portion of the contract. An audited financial statement, including management reports, and annual reports for the three most recent years and current bank reference(s) are acceptable. Include a copy of the most recent certified audit by an independent outside auditor. Disclose your current and two prior financial ratings from A.M.Best, Moody’s, Standard and Poors, or Weiss, as applicable. If your rating(s) deteriorated, explain why. In addition, include a copy of your National Association of Insurance Commissioner (NAIC) filings (including form B along with your proof of financial capabilities), or applicable state filings in the States where you are conducting business.

5. Provide the outcome, year, jurisdiction and case citations of any lawsuits that have been filed against your company for any aspects of your dental and/or vision insurance or discount programs over the last five years.

6. Describe any regulatory or administrative actions taken against your company with respect to any aspects of your dental and/or vision or other insurance programs for the last five years.

7. Provide information related to your organization and other information demonstrating your capability of assuming this risk. This should include, but is not limited to:

a. Names and telephone numbers of references evidencing your qualifications and capabilities.

b. An organizational chart showing your entire organizational structure, highlighting which part of that structure would be involved with FEDVIP. If known, identify the names and titles of management, supervisory and other key personnel or account team members that will be assigned to this contract. Identify the percentage of time that each will dedicate to FEDVIP.

c. If known, a list of support staff who may work on the FEDVIP contract to help or replace key individuals assigned to service and manage the account.

d. Net assets, stop loss, reinsurance, and/or parent company arrangements that have been made to assure that funds will be available to meet the obligations incurred under this contract.

8. List all dental and/or vision contracts you have lost in the last five years and the reason, if available.

Part 3

For the entire entity, provide the following information:

1. For your largest group dental and/or vision contract in force, describe how you implemented and are managing administration, education, customer service, reporting, and claim processing. Be specific in all descriptions. For example, who did the marketing? What outside resources were called upon?

2. Provide the following information about the total number of active dental and/or vision enrollees being serviced by your company and the number of enrollees, as specified in the following chart, for calendar years ending 2009, 2010, 2011 and current 2012 data.

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a. Total Employer Group Dental and/or Vision Insurance

(i) Premiums or premium equivalents in force

(ii) Number of covered lives

b. Total OTHER Group Dental and/or Vision Insurance

(i) Premiums in force

(ii) Number of covered lives

c. Total Individual Dental and/or Vision Insurance

(i) Premiums in force

(ii) Number of covered lives

d. Total Group and Individual Dental and/or Vision Insurance

(i) Premiums in force

(ii) Number of covered lives

3. List your top five group contracts for dental and/or vision coverage by enrollment and provide the total annual premium for each contract. List the name of each company or public sector entity and provide a point of contact who is an officer of the company or a public sector contracting officer. Please provide this person’s name, address, telephone number and e-mail address. These individuals may be contacted for references.

1.

2.

3.

4.

5.

VI. NETWORKS

The Contractor must provide a stable, high-quality network or networks of general dental and/or vision care participating providers that are available to all enrolled Federal employees. The dental network should include appropriate specialty care providers such as pediatric dentists, oral surgeons, endodontists, and orthodontists. The Contractor may own and/or lease the network(s).

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2. The Contractor must ensure that nearly all enrollees have access to a general dentistry participating network provider and/or vision care provider and are able to obtain an appointment. Specialty dentistry services must also be provided. Adequate access to network providers will be determined for each 5-digit ZIP Code. All Federal eligibles whose primary residence is in a particular ZIP Code will be considered either to have adequate access or not.

The determination of network adequacy will be based on a ratio of Federal eligibles to network general dentistry and/or vision care providers. Pediatric dentists are included as general dentists. The ratio of all Federal eligibles to in-network providers within each network access area must be less than or equal to 2000:1 and carriers will be scored progressively higher for better access ratios. For each ZIP Code, we define the network access area as the area encompassed within a maximum distance, set at

· 15 driving miles for urban ZIP Codes, and

· 35 driving miles for rural ZIP Codes.

(“Urban” and “rural” assignment for ZIP Codes is based on Federal government “local” and “non-local” pay scale designations.)

Network adequacy must also include specialty dentistry services. Our goal is to select carriers with network access areas that provide adequate access for at least 90 percent of all Federal employees and annuitants in their service area. For nationwide carriers, the service area with respect to network access is defined as the U.S. and Puerto Rico. For regional carriers, the service area is all rating regions, as defined in Section VII, Financial, the carrier proposes to cover. The service area of a regional carrier must cover an area with an eligible population of at least 4% of the total eligible population. Any rating region, as defined in Section VII Financial, must be covered in its entirety. Additionally, all rating regions covered by a regional carrier must be contiguous.

A carrier may be selected either on a nationwide basis or in the case of regional carriers, for only one service area. Carriers with a higher percentage of members living in areas with network access will be scored progressively higher. Additionally, carriers will be scored according to the amount of the eligible population they serve. Regional carriers serving a smaller population than a nationwide carrier should be able to offset the lower scoring on total population served with better access and lower cost. The Contractor must ensure this access standard at the start of dental care delivery.

Each rating region will be evaluated for whether or not the access standard is met. Urban areas must have 90% of enrollees in the rating region with adequate access. If less than 90% of urban enrollees have adequate access then all urban enrollees without adequate access will be eligible to see any provider. Rural areas must have 80% of enrollees in the rating region with adequate access. If less than 80% of rural enrollees have adequate access then all rural enrollees without adequate access will be eligible to see any provider.

C-17 For areas that do not meet the minimum access standard, allowed charges for out-of-network providers will be 100 percent of the usual, customary, and reasonable charges for the area (75th percentile charged in the region according to the American Dental Association (ADA) surveys) or another appropriate survey tool. For areas that do meet the minimum access standard, there is no requirement for the carrier to offer an out of network benefit, except in the case of emergency care, or in exceptional cases where no network provider is available to provide a covered service.

3. The Contractor will provide OPM with written notification of improvements in participating provider network access standards by five-digit ZIP Code, every quarter or as requested by OPM. The Contractor may submit a detailed plan to expand its network in its response to this application, if its current network is not adequate. Such a plan must be detailed to the 5-digit ZIP Code level and be consistent with the actual supply of dentists in each ZIP Code.

4. The Contractor will submit a file listing all network dentists by name, specialty, address, and ZIP Code, and/or a file listing all network vision care providers. The file must use the Microsoft Access Database format.

5. The Contractor will submit a file that lists the ratio of eligible members to dentists within the access mileage standard for every ZIP Code. The Contractor must use the “zipdist.csv” file available as an attachment to this application, and include an additional field specifying the ratio.

6. All preferred providers must accept the member cost sharing as payment in full at the point of service.

7. All provider contracts must indicate that the provider cannot bill the member for covered services provided during a period for which premiums have been paid for other than the stated member cost sharing or discounted price. Alternately, an applicant may provide proof of reinsurance to protect members in the event of plan insolvency.

B. Questions/Information

1. Provide number of providers in preferred dental and/or vision network broken down by geographic area.

2. If there are areas of limited access, please identify these areas by five-digit ZIP Code and provide your proposed plan to bring these areas up to the required standard.

3. Is the network owned or leased, or a combination? Please explain. If using a leased network, what is the frequency of reports on provider terminations and recruiting?

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4. Provide detailed information regarding your credentialing process, or detailed information regarding your administrator’s credentialing process for both new and current providers, including who conducts credentialing and recredentialing.

5. What types of providers and facilities participate in your network?

6. Does your initial dentist or ophthalmologist, or other covered provider credentialing and recredentialing criteria vary by location? If yes, how do they vary?

7. How often are network providers recredentialed?

8. Provide a description of the process for removing providers from the network that do not meet the requirements for malpractice coverage, malpractice history, cleanliness, quality of charting, access (i.e., availability of chair hours), sterilization, emergency training etc.

9. Under what terms may providers withdraw from networks?

10. When are provider contract renewals conducted?

11. Please provide a sample of your standard provider contract.

12. What is the average waiting time to get an appointment with a primary care dentist?

a. How is this measured?

13. Must an employee select a primary care dentist within your PPO program in areas that meet the access standards?

14. In areas that do not meet the access standards, how will you notify network participants if a provider is no longer in the network?

a. When does this notification occur?

b. Are patients reassigned to a remaining preferred provider automatically?

15. Are there instances when a member may receive preferred level benefits for services provided by non-participating providers? If so, please describe.

16. Please provide a description of your process for guaranteeing a continuum of care and First Payor processing to individuals that have some vision and or dental coverage within their FEHB plans.

17. Please provide a description of your process for guaranteeing a continuum of care and coordination of coverage to individuals that have some vision and or dental coverage within their non-FEHB medical or standalone dental/vision plans.

C-19

18. Please provide statistics on your provider network(s) for the past two years related to the addition of new providers, voluntary terminations and involuntary terminations, including any leased networks you may utilize.

19. Are provider directories available online?

20. How often are provider directories, including online directories, updated?

21. Do your provider directories show individual provider health information technology abilities (i.e., electronic patient records, seamless electronic claims processing, etc.)?

22. Do you have requirements for your preferred providers for claim filing timeliness?

a. If so, what are they?

23. How often are network-wide patient satisfaction surveys conducted?

a. Who administers these surveys?

b. How are the surveys conducted?

c. Can patient satisfaction results be reported on a client-specific basis?

24. What percentage of all network participants typically is surveyed each year?

25. What were your 2011 (or most recent) patient satisfaction survey results?

26. Are network dentists surveyed for their satisfaction levels with network administration? If so, how often do you survey them?

27. What percentage of your network providers is accepting new members?

28. Please describe your provider incentives for utilizing paperless claims processing, electronic patient records, or other aspects of health information technology.

29. How are in-progress services administered after the end of the contract?

30. Provide your national performance goals and 2012 performance results for the following indicators, this does not apply to discount plans:

Claims payment accuracy

Claim processing accuracy

Financial accuracy

C-20 Average claims turnaround time

· Percentage in 5 working days

· Percentage in 10 working days

· Percentage in 14 calendar days

· Percentage in 21 calendar days

We define the above performance measures as follows:

· Claims payment accuracy equals the number of correct payments divided by the total number of payments.

· Claims processing accuracy equals number of claims processed with 100% accuracy divided by the total number of claims processed.

· Financial accuracy equals dollars paid correctly divided by the total dollars paid.

· If you define these performance metrics differently than defined above, please provide your definition.

· For average claims turnaround time, if you have data for both electronic and paper claims and for provider and beneficiary filed claims, please provide the data broken down in this manner. Give percentage of total claims for each method.

Please note: Average turnaround time is measured from the date the claim is received in the mail room or electronically until the date the claim is adjudicated.

VII. FINANCIAL

Premium Structure Requirements

OPM will give carriers flexibility regarding area-based premiums within guidelines specified by OPM. We will allow 1 or 5 different premium levels nationwide. Rating regions will be based on States and Locality Pay Areas as defined in Appendix I. Each distinct rating region must fit into a single premium level. There should be a meaningful rate differential between each premium level and the total rate differential from the lowest premium to the highest premium should be no more than 50 percent.

We will allow 1 or 5 different premium levels nationwide with a total rate differential of up to 50 percent between the lowest and highest premiums.

Each rating region should encompass an entire State with the exception of allowing any Locality Pay Area (LPA) within the State to be charged a premium level different from the rest of the State. Additionally, each LPA should only have one rate even if a single LPA is located in two or more States. For regional carriers, any rating region in the service area must be covered in its entirety and all rating regions covered must be contiguous.

There are currently 31 LPAs, which equate to 79 rating regions, including the 50 States and Puerto Rico (Rhode Island, New Jersey, and Connecticut are entirely contained within Locality Pay Areas). Areas outside of these regions would not be subject to the same rating requirements.

Additionally the program will have a three-tier premium structure: Self, Self plus One, and Self and Family. The Self plus One premium should be no more than two times the Self-premium and the Self and Family premium should be no more than three times the Self-premium.

Proposed premiums should be submitted as described in the Instructions for the Preparation of Application, Section L.14.3. Premiums are based on 26 pay periods.

Locality Pay Area Definitions – See Appendix I

Premium Rating Methodology

OPM will use a prospective experience rating method to negotiate future premium rates. You must be able to track FEDVIP experience separately from the experience for other groups. You must be capable of allocating the administrative costs separately for the Federal group. In order to take into account actual experience in the rate setting process, Plans must make annual submissions of their experience. Initial submissions will be due on May 31 each year on claims incurred through December 31 of the prior year and paid through April 30 of the current year.

The proposed biweekly premium shall be based on a benefit that meets or exceeds the minimum required benefit level (as described in Section IV and appendices E, F and H) and the applicant’s actuarial assumptions underlying its development. Section L.14.3 lists expected elements that should be included in the rate development. Carriers will be assessed on the quality and rigor of their rate development.

We will accept proposals for more than one benefit level within a plan (i.e., High and Standard Options). Experience assumptions and premium should be stated separately for each benefit level proposed. The applicant should specify if they would like to be considered for each benefit level proposed individually or if they would only like to be considered for all benefit levels proposed. The applicant may wish to specify different premiums for each benefit level depending on whether only a single benefit level is selected or if more than one benefit level is selected. Premiums are based on 26 pay periods.

Retention

The premium shall include all carrier administrative costs allocable to FEDVIP, including but not limited to, beneficiary and enrollee services, advertising and education, recoupments of overpayments, appeals, program integrity, and all other costs necessary for plan operations. Proposed monthly premiums should be based on the proposed benefits; profit expressed on a per member per month (PMPM) basis, and as a percentage of overall premiums, and a loading for carrier administrative costs expressed on PMPM basis, and as a percentage of overall premiums. In addition, in accordance with the Act, a loading will be added to the carrier’s proposed premium to fund OPM’s costs in administering FEDVIP. OPM currently estimates its overall budget for administrative expenses for FEDVIP to be approximately $2,000,000 per annum. A loading will also be added for costs associated with the BENEFEDS Portal. See Appendix J, Section 6 for information regarding costs associated with the BENEFEDS Portal.

VIII. REPORTING REQUIREMENTS

A. Requirements

1. The Contractor will furnish reports that OPM determines to be necessary to assess the success of FEDVIP.