A recent report from the Government Accountability Office says that a lack of oversight from the Office of Personnel Management of the Federal Employees Health Benefits (FEHB) Program could be wasting as much as $1 billion every year.
This is occurring due to a lack of information about the number of ineligible family members receiving payments under the FEHB program.
According to GAO:
OPM does not have a precise estimate of how many ineligible members exist and at what cost to the [FEHB] program. OPM officials told us [GAO] they recognize ineligible individuals may be covered in FEHB, and information from OPM indicates the cost savings from performing a DEVA [audit designed to verify the eligibility of currently covered dependents, such as spouses and children] for all existing family members to be in the estimated range of $360 million to about $1 billion. According to OPM officials, these estimated cost savings would generally be an avoidance of future claims costs as opposed to current return of actual dollars. As mentioned, FEHB premiums paid by the government and enrollees are intended to cover members’ health care costs (including claims), plans’ administrative expenses, and other costs. Thus, these estimates would represent savings to the federal government and enrollees who pay FEHB premiums.
However, due to limitations in OPM’s own estimates, costs could be lower or even higher than these projections. GAO said, “OPM’s OIG [Office of Inspector General] estimates the cost of ineligibles at between $250 million and $3 billion annually. OPM has stated it believes the OPM OIG’s estimate is too high, in part because of the cost of certain family members. GAO did not independently verify the accuracy of the OIG estimate.”
GAO said in its report that although OPM has taken steps to enable a process for employing offices and FEHB carriers to identify and remove ineligible members from the FEHB program, the agency does not plan to establish a means of monitoring to identify and remove ineligible family members who already have FEHB coverage. GAO says that without such oversight, ineligible family members may remain covered and related improper payments may continue to accrue over time, thereby wasting as much as $1 billion per year on improper payments according to OPM’s own estimates.
Consequently, GAO recommends in the report that OPM implement a monitoring mechanism to identify and remove ineligible family members from the FEHB program and assess and document the likelihood and impact of fraud risks associated with ineligible FEHB members.
Specifically, GAO made the following four recommendations to OPM:
- The Director of OPM should implement a monitoring mechanism to ensure employing offices and carriers are verifying family member eligibility as required by OPM’s 2021 guidance.
- The Director of OPM should implement a monitoring mechanism to identify and remove ineligible family members from the FEHB program.
- The Director of OPM should assess the likelihood and impact of the fraud risk related to ineligible FEHB members.
- The Director of OPM should document its assessment of the fraud risk related to ineligible members in its fraud risk profile for the FEHB program.
OPM agreed with three of the four recommendations but only partially agreed with GAO’s first suggestion to implement a monitoring mechanism to ensure that employing offices and carriers are verifying family member eligibility. Regarding this, GAO said:
OPM partially concurred with our first recommendation to implement a monitoring mechanism to ensure employing offices and FEHB carriers are verifying family member eligibility as required by OPM’s 2021 guidance. In its comments, OPM identified steps it has taken to ensure that its 2021 guidance is consistently followed. This included surveying agencies and carriers related to verification practices and providing training. At the same time, OPM agreed that further monitoring through comprehensive audit may be appropriate. The steps described in OPM’s comments are positive actions to help ensure compliance. However, as OPM acknowledged, it may need to take additional action to implement a monitoring mechanism to ensure employing offices and FEHB carriers are verifying family member eligibility going forward. As such, we believe this recommendation is still warranted.
GAO conducted its analysis of the FEHB and issued its report at the behest of Senators Ron Johnson (R-WI) and Rick Scott (R-FL) who asked GAO to review OPM’s efforts to prevent, detect, and remove ineligible family members from the FEHB program.
In response to the GAO report, both Senators issued statements. Johnson said:
OPM’s grotesque mismanagement of the FEHB program is yet another example of the vast dysfunction in our federal agencies. Biden’s OPM has miserably failed to fix this issue, wasting $1 billion taxpayer dollars per year. Unless OPM takes immediate corrective action, even more taxpayer dollars will be carelessly wasted. This Administration’s negligence has resulted in soaring inflation and massive deficit spending. The federal government should answer to the American people instead of mortgaging our children’s future.
Scott said:
I am appalled that OPM is wasting $1 BILLION of taxpayer dollars every year by failing to properly monitor the FEHB program and has no plan to fix it. Federal funds do not belong to Congress or the Executive Branch, they belong to the American people. While too many in Washington seen to forget that it is hardworking taxpayers fund these programs, I won’t. We cannot allow the Biden administration to continue the wasteful spending that’s led to raging inflation and $31 TRILLION in debt. OPM, and every government entity should have zero tolerance for any waste or misuse of tax dollars and should immediately adopt GAO’s recommendations to end this wasteful spending. When I was Governor, I ordered a Dependent Eligibility Verification Audit of Florida’s group health insurance program that resulted in over $20 million saved. I know we can do the same at the federal level.
