NCJ Number
131842
Date Published
1991
Length
32 pages
Annotation
The General Accounting Office (GAO) reviewed the Federal Employees Health Benefits Program to determine if Office of Personnel Management (OPM) internal controls prevented fraud and abuse.
Abstract
Premiums paid for Federal employee health plans totaled $12.2 billion in fiscal year 1990. The government's share of premiums amounted to $8.9 billion, and enrollees paid the remainder. In 1988, 25 fee-for-service plans covered over 75 percent of enrollees and accounted for about 80 percent of health plan costs. The Federal Managers' Financial Integrity Act (FIA) of 1982 was passed to improve government program management. The GAO review found that OPM has not fully accomplished FIA objectives with respect to the health insurance program. Although the act requires Federal agency managers to evaluate internal controls in programs for which they are responsible, the carriers themselves are not subject to the act's requirements. The OPM determined that health plans are highly vulnerable to fraud and abuse and that misappropriations of carrier funds occurred in 7 of the 25 fee-for-service plans. Misappropriations of carrier funds included embezzlement, using plans to finance union or employee organization activities, improperly charging a plan for expenses not incurred, and improperly charging the health benefits program for Federal income taxes paid on service charges. The GAO review concludes that OPM needs to correct deficiencies and develop an aggressive antifraud policy for both enrollee and provider fraud. Such a policy should focus on better program funds monitoring, improved carrier controls, and expanded carrier oversight. Appendixes contain a list of carrier fraud and abuse cases, an audit report for employee organization plans offered in 1988, and OPM comments.