Summary: Pursuant to a congressional request, GAO reviewed the Office of Personnel Management's (OPM) internal controls over the Federal Employees Health Benefits Program, focusing on whether those controls adequately protected funds from fraud and abuse within the context of the Federal Managers' Financial Integrity Act of 1982 (FMFIA).
GAO found that: (1) OPM has not fully accomplished the objectives of FMFIA with respect to the health insurance program; (2) the OPM Retirement and Insurance Group (RIG) continues to rely almost entirely on the OPM Inspector General audit reports to perform the oversight role, although information provided by those audits covered carriers' activities that occurred 5 to 10 years ago; (3) during the past 13 years, misappropriation of funds occurred in 7 of the 25 fee-for-service plans; (4) although regulatory and contractual requirements establish control objectives for the carriers, the activities or procedures for accomplishing the objectives have been left to the discretion of the carriers until abuses are identified through audits or other means; (5) RIG does not conduct adequate program oversight of plan operations to identify internal control deficiencies or hold the carriers accountable for correcting such deficiencies; (6) RIG did not determine if the carriers timely or effectively corrected the problems identified in audits; (7) RIG did not provide the carriers adequate leadership or direction concerning the pursuit of provider fraud and abuse, and OPM did not implement its authority to administratively penalize fraudulent or abusive providers; (8) health insurance companies claim that the high cost of enrollee and provider fraud has been offset by their antifraud programs; and (9) OPM did not include program control weaknesses in its annual FMFIA reports.
