Tighter management can help to reduce the growth of FEHB costs, according to IG.

According to an inspector general study, more stringent management in several FEHB program areas can help reduce premium increases for enrollees and the government under control. This analysis comes as subscribers deal with an average 8.7% increase, the biggest in over a decade.
“The rising cost of healthcare, remarkably the price of prescription pharmaceuticals, is a national concern that affects not only OPM but the whole US healthcare system. The study notes that it is difficult for OPM to control premium rate increases without lowering the quality of services provided.
The report notes that the average age of FEHBP members is rising, and as a result, prescription drug utilization and costs will continue to increase. Prescription drugs also account for nearly a third of the program’s fees, and most insurance companies report an increase in drug costs per member every year.
OPM does not actively negotiate prescription pricing; instead, it defers to carriers, most of whom utilize pharmacy benefit managers. The likelihood that the FEHBP is maximizing prescription drug savings in a $59 billion annual program is decreased, according to the report, which noted that a prior audit had found that discounts and other financial terms varied significantly among carriers, with those having higher enrollments receiving the best deals.
OPM “has not been able to get full funding for this research,” according to the report, despite favoring a study of various strategies for lowering such costs, such as implementing a program-wide negotiation for prescription medications.
Additionally, the IG stated that it has already issued several warnings on fraud and waste brought on by ineligible people enrolling, which “may occur for years before finding.” Although OPM claimed it had given instructions increasing monitoring, verification is still up to carriers and individual agencies because there is no centralized enrollment database.
It was also said that during the yearly open seasons, when the majority of enrollment changes are made, agencies may, but are not compelled to, check family members’ eligibility. However, it added that it also leaves an apparent vacuum in OPM’s protections for ensuring that ineligible beneficiaries are not registered in the FEHB. “This verification exemption prevents employing offices from being overloaded by the number of changes,” it said.
Additionally, although individual carriers are generally in line with OPM’s requirements and are in charge of preventing fraud, waste, and abuse, doing so “would help OPM adopt a more global approach to coordinating fraud, waste, and abuse actions,” according to the OPM.
Although OPM accepts that the problem exists, it has stated that it cannot establish such an office owing to “constraints on its present resources.”

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I grew up in Dubuque, Iowa, where I learned the concepts of hard work and the value of a dollar. I spent years in Boy Scouts and achieved the honor of Eagle Scout. I graduated from Iowa State University and moved to Chicago and spent a few years managing restaurants. I then started working in financial services and insurance helping families prepare for the high cost of college for their children. After spending years in the insurance industry, I moved to Arizona and started working with Federal Employees offing education and options on their benefits. I became a Financial Advisor / Fiduciary to further help people properly plan for the future. I enjoy cooking and traveling in my free time.

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