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End Rampant Fraud in Federal Health Programs

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Sally Pipes By Friday, 24 May 2024 02:57 PM EDT Current | Bio | Archive

The facts are astonishing: an estimated $1 billion a year in fraudulent payments, untold thousands of ineligible beneficiaries, and a public agency that refuses to conduct an audit.

Welcome to the $60 billion-a-year Federal Employees Health Benefits Program, which provides insurance coverage for more than 8 million federal workers and their families. A recent report from the Government Accountability Office has found that the program is rife with fraud and abuse.

Take the case of the federal employee who claimed spousal benefits for his ex-wife to the tune of more than $150,000 over a 14-year period. The employee was found out only when he remarried and tried to enroll his new wife on the same health insurance plan.

Despite years of GAO recommendations to do so, the Office of Personnel Management, which administers the program, has never audited it to verify the eligibility of beneficiaries.

Deeming an audit "too expensive," OPM has sought to delegate its way out of its responsibilities. In 2021, OPM began mandating that hiring agencies and insurance carriers verify the eligibility of those newly enrolled in the program.

Unfortunately, OPM has no mechanism in place to monitor whether or how well agencies and third parties are complying with its verification mandate. Nor does the agency have plans to develop one.

The GAO report calls out OPM for "passivity in its oversight role" and concludes, in a masterclass on under-statement, that "program integrity and managing risk are not apparent priorities."

In fact, in its 2020 annual fraud risk assessment, OPM designated the overall risk "low." The agency was able to reach its conclusion only by excluding all evidence related to the thousands of ineligible beneficiaries receiving coverage.

No doubt the fraudsters currently ripping off taxpayers welcomed OPM's risk assessment of "low." Meanwhile, eligible participants are likely absorbing the estimated $1 billion in annual fraud losses via higher premiums.

Unfortunately for the American taxpayer, OPM's tolerance of waste and fraud is hardly unique among federal healthcare programs.

Take Medicaid, the $800 billion joint federal-state program intended to provide health coverage to the poorest Americans. More than one in five Americans is covered by Medicaid. Since at least 1990, the GAO has identified Medicaid as a "high risk area" for fraud due to its massive size and scope.

During the COVID-19 pandemic, the federal government forbade states from reviewing or removing anyone from the program. As a result, Medicaid enrollment skyrocketed by more than 22 million to a historic high of nearly 95 million people. This expansion cost the federal government an estimated $117 billion.

A December 2022 Urban Institute report projected that the Medicaid rolls would include 18 million people who were ineligible for coverage by the end of March 2023. Many of them already had employer-sponsored health insurance. So taxpayers were sending insurers that manage Medicaid plans huge sums to cover premiums for millions of people who didn't actually need public coverage.

Democratic leaders in Washington have fought tooth and nail against resuming Medicaid requirements for redetermination of eligibility. They want to turn a temporary policy adopted in a time of crisis into a permanent expansion.

Thankfully, many states pressed ahead with redetermining eligibility — and have removed ineligible beneficiaries from the program. Since the process began in April last year, nearly 22 million people have been found ineligible and disenrolled.

While Democrats are calling this a tragedy, we should be celebrating the fact that so many Americans are now above the income level required for Medicaid coverage. And with a nearly trillion-dollar federal budget deficit, lawmakers should be searching for every opportunity to cut waste and reduce fraud in federal programs..

As the recent GAO report on malfeasance in the Federal Employees Health Benefits Program and the ongoing fight over keeping ineligible people on Medicaid remind us, government healthcare programs are plagued by waste, fraud and abuse. Taxpayers should expect better from their government.

Sally C. Pipes is president, CEO, and the Thomas W. Smith fellow in healthcare policy at the Pacific Research Institute. Her latest book is "False Premise, False Promise: The Disastrous Reality of Medicare for All," (Encounter Books 2020). Follow her on Twitter @sallypipes. Read Sally Pipes' Reports — More Here.

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The facts are astonishing: an estimated $1 billion a year in fraudulent payments, untold thousands of ineligible beneficiaries, and a public agency that refuses to conduct an audit.
fraud, health programs
Friday, 24 May 2024 02:57 PM
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