By Scott Kupor, Director, U.S. Office of Personnel Management
June 11, 2026

In April the Department of Justice (DOJ) filed fraud charges in Georgia against a licensed therapist and several co-conspirators alleging that these individuals conspired to bill various insurance providers in the Federal Employee Health Benefits Program (FEHBP) for services not rendered. According to the indictment, the therapist billed for mental health sessions that never happened (including billing for more than 24 hours in a single day) and kicked back portions of the insurance reimbursements to the co-conspirators.

The good news – when the charges are proved in court, those charged in the indictment will pay for their alleged crimes.

The bad news – the alleged fraud occurred at various times from 2019-2022. Whether any of the allegedly wrongfully billed amounts can be recovered and returned to the hardworking federal employees, retirees, and taxpayers who pay the premiums to support the FEHBP is anyone’s guess. If past is prologue, the best answer is – not much, if any. Instead, it’s a day late and a dollar short – well, really more like half a decade late and millions of dollars short.

This is not an anomaly.

Far too often, we uncover – after the fact – millions of dollars of fraudulent activity that leads to minimal (or no) recovery. Federal employees, retirees, and the taxpayer are forced to make up that difference through higher premiums, reduced plans, or a combination of both. Fraud, waste, and abuse costs everyone real dollars and affects us all.

We at the Office of Personnel Management (OPM) have an Office of Inspector General (OIG) who investigated this case and many others. But – through no fault of their own – they are always looking in the rearview mirror, trying to address wrongs that have occurred in the past, often years in the past. The General Accounting Office (GAO) acknowledged as much in its 2025 report criticizing OPM for failing to maintain a robust, proactive fraud program.

That is not the best way to protect the American taxpayers – who ultimately fund the FEHBP budget – nor is it fair to the roughly 8.3 million federal employees and retirees who take money from their paychecks or savings to pay for health care coverage for themselves and their dependents. We can, must, and will do better.

A quick diversion on the dollars and cents of FEHBP.

OPM manages two health insurance programs on behalf of federal employees and retirees – the Federal Employees Health Benefits Program (FEHB) and the Postal Services Health Insurance Program (PSHB). These programs are administered by traditional third-party insurance carriers – e.g., Aetna, Blue Cross, etc. – who collect annual premiums from individuals and their employer (the U.S. government – i.e., the taxpayers).

This year, we will spend about $80 billion on these insurance programs. As health care costs broadly have continued to increase, so has the budget for these programs, increasing on average about 10-12% annually. Those higher costs are borne by both the program participants and the American taxpayer. Left unchecked, these costs will continue to an unsustainable point.

So, what should we do it about?

We at OPM have a comprehensive plan to bend the cost curve on health care expenses and put money back in the pockets of taxpayers. Among other things, key to that is ensuring that we not enabling bad actors to take advantage of the program.

As part of last year’s One Big Beautiful Bill, for example, Congress allocated budget dollars for OPM to launch, for the first time, an enrollment verification program for FEHB. This will enable us to ensure that individuals entitled to insurance are receiving it – and to prevent individuals who are not eligible from receiving taxpayer subsidies. While this authority should have been in place long ago, we are grateful to Congress for granting OPM the responsibility and power to finally make this happen.

The second part of protecting the integrity of the program is to root out fraud, waste and abuse – not years later, but proactively and as close to real-time as possible. As noted above, we appreciate our partners at OIG who do a great job of bringing to justice individuals and companies that seek to defraud the federal government. But for far too long, such retrospective prosecutions have been pretty much the only arrow in OPM’s quiver.

Help is on the way.

A properly designed system would also have a front-line approach to addressing bad actors. As the agency that oversees one of the largest insurance programs in the world, OPM ought to be able to identify mis-billings and inappropriate delivery of services by providers when those actions happen. That way, we can recoup any lost dollars immediately and, if necessary, terminate providers who are failing to deliver for the American people. Plus, a robust system of uncovering and punishing such abuses in real-time provides a huge deterrent effect from engaging in such activities in the first place. The best way to stop fraud and abuse is to avoid it in the first place.

This isn’t just the right thing to do, it will also translate into real dollars and cents. Experts estimate that large programs such as FEHBP may see rates of abuse between 3-5%. On an $80 billion annual spend – and growing – that means $2.4-$4 billion in annual savings. And that means for every participant in the programs who is suffering from 10-12% annual premium increases, every dollar saved translates into lower out-of-pocket costs on premiums. Given that health care costs are among the biggest areas of spend for many families, this will be welcome relief.

For example, we will be able to determine if prescribing behaviors for drugs, utilization of durable medical equipment or even the provisioning of medical services vary significantly by provider or geography and can use well-honed analytic methods – and frankly, systems long in place in the private sector – to determine whether those differences reflect true medical reasons or simply bad behavior. This sort of analysis would have revealed the abuses of the opioid pill mills before that ongoing bad behavior killed so many innocent Americans. It would have prevented the recent therapist case I mentioned at the beginning of this post – spotting billings in excess of 24 hours in a day is something that a simple algorithm can detect, but only if fed the data timely.

And we cannot do it alone. We are lucky to partner with the talented members of the Vice President’s Task Force on Fraud, and today we also notified our health insurance carriers that we expect their partnership in helping us drive down the costs of care through their own more vigilant efforts. Ultimately, health care providers are beneficiaries of the premium dollars that the carriers manage so it is incumbent upon them to make sure that care is delivered timely and appropriately. We look forward to this partnership.

Finally, while this power and practice is new to OPM, we are not breaking new ground here. Medicare and Medicaid have long had systems in place to help manage improper health care utilization (in fact, OPM itself has long received direct claims data feeds from Medicare) and virtually every self-insured, employer-sponsored health insurance plan has a formal program to identify waste, abuse, and fraud. As the single largest employer-sponsored health insurance program, we should be no different. We owe it to our employees, retirees, and to all American taxpayers.

An Important word about privacy.

All of us know that fraud, waste, and abuse is a big issue for which we all pay the price. At the same time, we have heard from many people that they are worried about the government having access to patient medical information and records, some of the most private and sensitive data around. This is a very real and legitimate concern – and one that I share. Fortunately, we can data mine these records without having access to the intimate and personal medical records of our plan participants.

How?

In layperson’s terms, OPM’s OIG (who, as noted above, has received this data for many, many years) will provide an encrypted copy of that data to OPM – but only after stripping out names, social security numbers, phone numbers, addresses (except for ZIP codes), and other personally identifiable data. The only member-level PII fields that will remain in the data that OPM receives will be our member’s ZIP codes, year of birth, and their member ID.

To further sanitize these data, OPM will scramble, or pseudonymize, the member ID information using a state-of-the-art cryptographic hashing process, replacing the Member ID with a random set of numbers and characters that is divorced from the real identity of the plan participant. That scrambled dataset will be then used by OPM’s analysts to uncover anomalies that are the classic indicators of fraud, while the stripped, encrypted data from the OIG will remain in a secure, separate environment, encrypted at rest and protected with our IT security best practices. Importantly, the data set that OPM analysts will use cannot be mapped back to any plan participant. And we will take the same approach in analyzing the Medicare data feeds that we have long-received directly at OPM.

This Administration has been very consistent from day one that we are stewards of taxpayer dollars and are obligated to protect the financial integrity of our federal programs. For too long, OPM has not fully delivered on this mission. No longer will we be a day late and a dollar short.