FEHB Plan Cost Controls

In the national PPO and FFS plans, there is a $500 penalty for any non-emergency hospital admission without a "preadmission certification." HMOs normally refuse to pay for unauthorized admissions. This means that you must obtain permission from the plan, not just your doctor, before you enter a hospital. Likewise, with the major exceptions of routine visits and emergencies, many plans do not pay for expensive care that is not approved in advance by the plan. Such requirements have often been expanded to "specialty" drugs for cancer or other diseases. Plans also use "case management" to reduce expenses in costly cases. For example, if you have a stroke, the plan may authorize extra home health benefits in lieu of prolonged hospitalization. This can benefit you as well as the plan, but you must use the procedure specified by the plan.