Report: Feds failing to fully address fraud in govt health insurance program

(The Center Square) – The federal government is losing up to a billion dollars a year to fraud in its Federal Employees Health Benefits program, but the agency responsible has failed to take stronger measures to stop it, according to a new report.

The FEHB program, which provides health care coverage to 8.2 million federal employees at the cost of about $70 billion annually, is the largest employer-sponsored health insurance plan in the U.S.

A report released Thursday by the Government Accountability Office shows that the Office of Personnel Management, which contracts with health insurance carriers to help administer the program, has neglected to assess major program fraud risks.

Specifically, the OPM has not established monitoring systems to either verify program eligibility or identify and remove ineligible family members from the FEHB program. These omissions cost the federal government up to $1 billion a year while also contributing to higher program costs and higher premiums for enrollees.

Nine other FEHB program fraud risks that GAO identified are not even included on the OPM's fraud risk profile. Some of the most alarming oversights include insurance provider ineligibility, fraudulent reimbursement claims, physician self-referrals and improper documentation of payment claims.

While the OPM has performed some noncomprehensive fraud risk assessments, it failed to involve key stakeholders, such as FEHB insurance carriers. Additionally, the agency does not conduct fraud recovery audits for the FEHB program because it is "not cost effective."

"As the country's largest employer-sponsored health insurance program, effective fraud risk management is critical to help safeguard the FEHB program's billions in federal funding and to help ensure the program fulfills its intended purpose," GAO wrote.

Currently, the OPM has paused its fraud risk management activities due to institutional transitions. GAO says the agency has agreed to implement the report's recommendations.