Whistleblowers Needed: FEHB Fraud Oversight Lags Behind Medicare and Medicaid
A recent GAO report has cast a spotlight on persistent fraud vulnerabilities within the Federal Employees Health Benefits (FEHB) program, revealing that the Office of Personnel Management (OPM) has yet to take decisive action to protect that program. This stands in stark contrast to the comparatively robust fraud prevention mechanisms in place for other federal health programs like Medicare and Medicaid, which benefit from stronger agency oversight and more aggressive use of data analytics, audits, and whistleblower-initiated False Claims Act enforcement.
GAO Report: The Federal Employees Health Benefits (FEHB) Program
What’s Different About FEHB?
Compared to Medicare and Medicaid, FEHB is a much smaller program and has little to no name recognition with the broader American public. However, a “small” federal health program still has a budget of billions of dollars. FEHB provides health care coverage for approximately 8.2 million federal workers, at a cost of about $70 billion per year. That makes it the largest employer-sponsored health insurance plan in the United States by a considerable margin.
While OPM has made some strides in increasing enforcement, such as conducting limited fraud risk assessments and identifying some major vulnerabilities, it has not kept up with the broader array of fraud schemes that are well-documented in other federal health programs. These include schemes such as phantom billing, kickbacks, and identity theft. According to the GAO report, OPM has also paused its agency-wide fraud risk management activities and seems to lack clarity on which internal entity is responsible for leading this effort going forward.
What the GAO Report Claims
The GAO report criticizes OPM for not engaging key stakeholders like its own Office of Inspector General or the health insurance carriers that administer FEHB plans. Unlike the Centers for Medicare & Medicaid Services, which actively integrates fraud detection into its operations and collaborates with external actors, OPM has yet to harness the full potential of its oversight network.
In short, the FEHB program remains an under-policed corner of federal health spending—despite evidence that fraud, waste, and abuse could be costing the program up to $1 billion per year.
FEHB’s lack of proactive fraud controls presents an opportunity for whistleblowers. As the False Claims Act allows private individuals to bring fraud cases on the government’s behalf, increased qui tam activity targeting FEHB fraud could serve as a critical backstop.
Read the full GAO report here.
Barrett Johnston Martin & Garrison, PLLC, is committed to representing whistleblowers throughout the country. If you have information or questions regarding a potential case of health care fraud, FCA violations, or kickback schemes, schedule a free and confidential consultation with our firm.
