Accounting Standards Raises FEHB Concern

The House’s action to impose uniform “cost accounting standards” on all FEHB plans has raised concerns that the largest FEHB carrier, Blue Cross/Blue Shield might decide to pull out of the program rather than comply with the rules. The House in amending its version of the Treasury-Postal spending bill during floor voting, acted to rescind a three-year-old exemption from applying standard government accounting practices in the health program. Advocates of the change said they wanted to boost confidence in FEHB accounting practices at a time of controversy over those practices among many private sector companies. But concerns have been raised that some Blue Cross/Blue Shield affiliates would find it too expensive to change their practices to comply with that set of rules, potentially causing the carrier to withdraw, since its participation in FEHB is an all-or-none choice. Opponents of applying the standards to the FEHB say those standards are written for procurement settings and say the practices Blue Cross/Blue Shield currently uses provide adequate controls.