OLR Research Report

October 5, 2006




By: Janet L. Kaminski, Associate Legislative Attorney

You asked for information on President George W. Bush's Executive Order No. 13410 regarding health care transparency.


President Bush signed Executive Order No. 13410, Promoting Quality and Efficient Health Care in Federal Government Administered or Sponsored Health Care Programs (“the order”), on August 22, 2006. It requires federal agencies that administer or sponsor a federal health care program to (1) share with beneficiaries information about prices paid to and the quality of services performed by health care providers, (2) use improved health care information technology to make possible the rapid exchange of health information, and (3) develop approaches that facilitate high quality and efficient health care (e.g., pay-for-performance provider reimbursement models, consumer-directed health care insurance products). Agencies must comply by January 1, 2007.

Federal health care programs mean the Federal Employees Health Benefit Program (FEHBP), Medicare, TRICARE, and health care programs operated by the Indian Health Service and Department of Veteran Affairs. The order does not apply to state operated or funded federally subsidized programs such as Medicaid, the State Children's Health Insurance Program (SCHIP), or services provided to Department of Veterans' Affairs beneficiaries.

Federal health care programs cover about one-quarter of Americans covered by health insurance. In Connecticut, the FEHBP offers plans through Aetna and Connecticare.


The order requires each federal agency to measure the quality of services supplied by health care providers to the beneficiaries or enrollees of federal health care programs. It must use standards established by a broad range of stakeholders (e.g., providers, employers, insurers). Each agency must develop its quality measurements in collaboration with similar initiatives in the private and non-federal public sectors. An agency satisfies these requirements if it participates in the aggregation of claims and other appropriate data to measure quality.

Each agency must also make available (or provide for the availability) to the beneficiaries or enrollees of federal health care programs (and, at the agency's option, to the public) the prices that it, its health insurers, or its health insurance plans pay to providers in the health care program with which the agency, insurer, or plan contracts. Each agency must also, in collaboration with multiple stakeholders, participate in the development of information regarding the overall costs of services for common episodes of care and the treatment of common chronic diseases.

OPM Implementation

Price. The U.S. Office of Personnel Management (OPM) is working with insurers participating in the Federal Employees Health Benefit Program (FEHBP) to implement the order. It has asked insurers for proposals on how to make pricing information available to enrollees. OPM also established best practices for insurers to meet if they want to be identified as meeting or exceeding OPM's price transparency goals. OPM will rate each insurer's compliance with the best practices and highlight certain insurers during the November FEHBP open enrollment period.

Quality. Health Plan Employer Data and Information Set (HEDIS) is a set of standardized performance measures designed to ensure that purchasers and consumers have the information they need to reliably compare the performance of managed health care plans. The performance measures in HEDIS are related to many significant public health issues such as cancer, heart disease, smoking, asthma, and diabetes. HEDIS also includes a standardized survey of consumers' experiences that evaluates plan performance in areas such as customer service, access to care, and claims processing. More than 90% of the nations' managed care organizations use HEDIS.

OPM already requires HMOs to submit HEDIS measures as evidence of quality performance. For 2007, OPM will also require fee-for-service plans to collect and report data on certain HEDIS measures and will work with insurers to publish provider quality information for enrollees to review.


The order requires each agency, as it implements, acquires, or upgrades health information technology (HIT) systems used for the direct exchange of health information between agencies and with non-federal entities, to use, where available, systems and products that meet recognized interoperability standards. Each agency must also require in its contracts or agreements with health care providers, health plans, or health insurers that as each provider, plan, or insurer implements, acquires, or upgrades HIT systems, it must use, where available, systems and products that meet recognized interoperability standards.

“Interoperability” means the ability to communicate and exchange data accurately, effectively, securely, and consistently with different information technology systems, software applications, and networks in various settings, and exchange data such that clinical or operational purpose and meaning of the data are preserved and unaltered.

“Recognized interoperability standards” means interoperability standards recognized by the Secretary of Health and Human Services, in accordance with guidance developed by the Secretary, as existing on the date of the HIT system implementation, acquisition, or upgrade.

OPM Implementation

OPM has advised FEHBP insurers to work toward the following short-term objectives:

1. enhance educational efforts to make plan members more aware of how HIT can help improve quality and control costs over the long term;

2. offer personal health records to enrollees based on their claims, medications, and medical history information currently available in carrier healthcare systems;

3. encourage pharmacy benefit managers to provide incentives for ePrescribing;

4. link disease management programs to HIT; and

5. ensure compliance with federal requirements to protect the privacy of individually identifiable health information.

OPM also advised FEHBP insurers that adoption of HIT requirements will be an element of its plan performance review within the next two to four years. The insurers must inform OPM how they expanded on HIT initiatives during 2005 and provide business plans for accelerating HIT in 2006 and 2007, including action items and milestones.

During the November 2006 open enrollment period, OPM will expand its website to provide additional information regarding the HIT capabilities of participating plans so that prospective enrollees can review the information when making their health plan choices for 2007. OPM will highlight plans that are able to provide evidence of state-of-the-art HIT capabilities.


Each agency must develop and identify, for beneficiaries, enrollees, and providers, approaches that encourage and facilitate the provision and receipt of high-quality and efficient health care. Such approaches may include pay-for-performance models of reimbursement. An agency will satisfy the requirements of this subsection if it makes available to beneficiaries or enrollees consumer-directed health care insurance products.

OPM Implementation

Currently, FEHBP enrollees have up to 27 choices of high deductible health plans (HDHP) with Health Savings Accounts (HSA) (or health reimbursement accounts (HRA) for those not eligible for an HSA). OPM first offered HDHPs in 2005 and about 6,500 people have enrolled to date. OPM has encouraged FEHBP insurers to submit proposals to expand the availability of consumer-directed health care insurance products and will offer even more HDHP choices for 2007.