Government Accountability Office: Federal Employee Health Plan Sees Billions in Waste

Fraudulent enrollees in the Federal Employees Health Benefits (FEHB) Program may be costing taxpayers as much as $3 billion annually, as per a report from the Government Accountability Office (GAO).

According to the report, the Office of Personnel Management (OPM) is responsible for the health insurance of 8 million federal workers and their families but has never conducted an eligibility audit.

The OPM’s Office of Inspector General estimates that the cost of ineligible enrollees in the health benefits program ranges from $250 million to $3 billion each year.

GAO reports that in fiscal year 2021, the FEHB program’s operational cost was around $59 billion.

Sen. Rick Scott, R-Fla., finds this unacceptable and intends to introduce a bill requiring OPM to conduct member audits.

“OPM is neglecting fraud prevention. It’s not a difficult task,” Scott stated in an interview with Politico. “Companies and states routinely conduct audits. If OPM refuses to act, it implies support for fraud.”

An OPM spokesperson contradicted Scott’s claims, emphasizing the agency’s commitment to FEHB Program integrity and collaboration with agencies to curb improper enrollments within resource limitations.

Despite GAO’s recommendations to conduct an audit, OPM relies on government employment offices and health insurer contracts to verify FEHB member eligibility, citing cost concerns to justify the absence of an audit.

OPM reasons that the $120 million cost of an audit would impact its budget, with savings accruing to enrolling agencies instead. The agency is prioritizing a centralized enrollment system for FEHB, aiming to address improper enrollments. However, it did not comment on funding or implementation details.

During Scott’s tenure as governor, Florida conducted a health benefits plan audit in 2018, revealing 3% of enrollees as ineligible and leading to annual savings of over $20 million.