[Code of Federal Regulations]
[Title 48, Volume 6]
[Revised as of October 1, 2005]
From the U.S. Government Printing Office via GPO Access
[CITE: 48CFR1615.402]

[Page 130]
 
            TITLE 48--FEDERAL ACQUISITION REGULATIONS SYSTEM
 
  CHAPTER 16--OFFICE OF PERSONNEL MANAGEMENT FEDERAL EMPLOYEES HEALTH 
                     BENEFITS ACQUISITION REGULATION
 
PART 1615_CONTRACTING BY NEGOTIATION--Table of Contents
 
                     Subpart 1615.4_Contract Pricing
 
Sec. 1615.402  Pricing policy.

    Authority: 5 U.S.C. 8913; 40 U.S.C. 486(c); 48 CFR 1.301.

    Source: 70 FR 31380, June 1, 2005, unless otherwise noted.


    Pricing of FEHB contracts is governed by 5 U.S.C. 8902(i), 5 U.S.C. 
8906, and other applicable law. FAR subpart 15.4 will be implemented by 
applying its policies and procedures--to the extent practicable--as 
follows:
    (a) For both experience-rated and community-rated contracts for 
which the FEHB Program premiums for the contract term will be less than 
the threshold at FAR 15.403-4(a)(1), OPM will not require the carrier to 
provide cost or pricing data in the rate proposal for the following 
contract term.
    (b) Cost analysis will be used for contracts where premiums and 
subscription income are determined on the basis of experience rating.
    (c)(1) A combination of cost and price analysis will be used for 
contracts where premiums and subscription income are based on community-
rates. For contracts for which the FEHB Program premiums for the 
contract term will be less than the threshold at FAR 15.403-4(a)(1), OPM 
will not require the carrier to provide cost or pricing data. The 
carrier is required to submit only a rate proposal and abbreviated 
utilization data for the applicable contract year. OPM will evaluate the 
proposed rates by performing a basic reasonableness test on the 
information submitted. Rates failing this test will be subject to 
further review.
    (2) For contracts with fewer than 1,500 enrollee contracts for which 
the FEHB Program premiums for the contract term will be at or above the 
threshold at FAR 15.403-4(a)(1), OPM will require the carrier to submit 
its rate proposal, utilization data, and the certificate of accurate 
cost or pricing data required in 1615.406-2. In addition, OPM will 
require the carrier to complete the proposed rates form containing cost 
and pricing data, and the Community-Rate Questionnaire, but will not 
require the carrier to send these documents to OPM. The carrier will 
keep the documents on file for periodic auditor and actuarial review in 
accordance with 1652.204-70. OPM will perform a basic reasonableness 
test on the data submitted. Rates that do not pass this test will be 
subject to further OPM review.
    (3) For contracts with 1,500 or more enrollee contracts for which 
the FEHB Program premiums for the contract term will be at or above the 
threshold at FAR 15.403-4(a)(1), OPM will require the carrier to provide 
the data and methodology used to determine the FEHB Program rates. OPM 
will also require the data and methodology used to determine the rates 
for the carrier's similarly sized subscriber groups. The carrier will 
provide cost or pricing data required by OPM in its rate instructions 
for the applicable contract period. OPM will evaluate the data to ensure 
that the rate is reasonable and consistent with the requirements in this 
chapter. If necessary, OPM may require the carrier to provide additional 
documentation.
    (4) Contracts will be subject to a downward price adjustment if OPM 
determines that the Federal group was charged more than it would have 
been charged using a methodology consistent with that used for the 
similarly-sized subscriber groups (SSSGs). Such adjustments will be 
based on the lower of the two rates determined by using the methodology 
(including discounts) the carrier used for the two SSSGs.
    (5) FEHB Program community-rated carriers will comply with SSSG 
criteria provided by OPM in the rate instructions for the applicable 
contract period.
    (d) The application of FAR 15.402(b)(2) should not be construed to 
prohibit the consideration of preceding year surpluses or deficits in 
carrier-held reserves in the rate adjustments for subsequent year 
renewals of contracts based, in whole or in part, on cost analysis.