OPM needs to do more to stop improper FEHBP payments.

According to a report released by the Government Accountability Office on Monday, OPM lacks a comprehensive system for keeping track of participants’ eligibility in the Federal Employee Health Benefits Program.

Despite the Office of Personnel Management’s recent implementation of a new system to lower the risk of fraud within the Federal Employees Health Benefits Program, a government watchdog agency reported on Monday that additional steps are required to monitor participants’ eligibility.

According to the Government Accountability Office, from the FEHBP’s inception until 2018, OPM was charged with determining whether relatives of federal employees qualified for coverage under the federal government’s health insurance program, which currently provides coverage to about 8 million people through 276 different insurance plans. Regulations published in 2018 permits federal agencies or OPM to ask for documentation of a family member’s program eligibility, such as a birth certificate.

Furthermore, in 2021, OPM issued instructions to agencies and insurance providers requiring them to confirm the eligibility of family members of federal employees upon hiring as well as upon enrollment changes brought on by significant life events, such as getting married or having a child.  However, according to GAO, the requirement does not apply when federal employees modify their enrollment during the annual open season.

Employing offices may, but are not required to, confirm family member eligibility during the FEHB open season, according to OPM’s 2021 guidance and OPM officials, the GAO reported. “In a similar vein, FEHB health insurance providers are not required to confirm the eligibility of family members during open season. OPM representatives informed us that due to the large volume of enrollment transactions that take place during the roughly four to five-week open season, it is currently not possible to verify eligibility.

A system to track how or whether agencies are adhering to the 2021 guidance is also lacking at OPM. Five agencies were surveyed by GAO regarding the guidance, and one of them admitted they were not yet in compliance with it, though they were collaborating with OPM to do so “in the future.”

The report states, “OPM cannot be certain of how many employing offices and carriers are not meeting OPM’s eligibility verification requirements because of information technology or staffing limitations, high transaction volume, or other reasons, without monitoring the population of FEHB employing offices and carriers responsible for verifying family members’ FEHB eligibility during a new hire or [qualifying life event].” The FEHB program could continue to be vulnerable to erroneous payments brought on by ineligible family member participation unless OPM establishes a mechanism to monitor employing offices and carriers to make sure they are implementing requirements to verify family members’ eligibility.

Because of this, OPM does not have a “precise estimate” of how many people covered by the FEHBP are actually ineligible for the program. Cost savings from conducting an audit of dependents’ eligibility across the program could total between $360 million and $1 billion in future expenditure. The agency asserted that it lacks sufficient funding to carry out the audit, either all at once or over a period of several years.

In the course of a review, OPM officials expressed their opinion that, given the size and scope of the FEHB program membership, executing a one-time audit of all FEHB members was not practical. They also pointed out that [dependent eligibility verification audits] could be set up using various approaches and scopes.

Instead, OPM is creating and pursuing funds for a federally-funded initiative that would standardize FEHBP enrollment across the board. The creation of a system to keep track of participants’ family members’ eligibility is not, however, part of the existing plans.

In order to ensure agencies are checking participants’ eligibility for the program, to remove ineligible enrollees, and to evaluate the likelihood and potential effects of the fraud risk associated with ineligible people receiving coverage through FEHBP, GAO recommended that OPM establish a monitoring mechanism. OPM largely agreed with the suggestions, but with a few caveats.

OPM acknowledged that additional oversight through a thorough audit might be necessary, according to the GAO report. “The measures outlined in OPM’s remarks are effective measures to support ensuring compliance. However, as OPM acknowledged, it might be necessary to take further steps to implement a monitoring system to guarantee employing offices and FEHB carriers are moving forward with the verification of family member eligibility.