A proposal that initially received little attention has become one of the most closely watched federal benefits issues of the year. At the center of the debate is a simple question: should OPM have access to detailed health claims data from federal employees and retirees enrolled in FEHB and PSHB?
OPM believes the answer is yes.
In a June 11 blog post, OPM Director Scott Kupor defended the agency’s proposal by pointing to a fraud case filed earlier this year against a Georgia therapist accused of billing FEHB for mental health sessions that allegedly never occurred. According to the Department of Justice, some claims included more than 24 hours of services billed in a single day. The alleged fraud took place between 2019 and 2022 before it was ultimately detected.
Kupor argues that OPM needs better access to health claims data in order to identify potential fraud sooner rather than years after the fact. The FEHB and PSHB programs collectively spend roughly $80 billion annually, and OPM estimates that fraud and abuse in programs of that size could account for billions of dollars in unnecessary costs each year.
The proposal would give OPM access to health claims and related data maintained by FEHB and PSHB carriers. Supporters view the move as a way to strengthen oversight and reduce waste. Critics see it as a significant expansion of the government’s access to sensitive healthcare information.
Privacy concerns emerged shortly after details of the proposal became public. The National Active and Retired Federal Employees Association (NARFE) questioned why OPM needed the information and what safeguards would be in place to protect participants. The American Federation of Government Employees (AFGE) raised concerns that health claims data could potentially be used to identify employees receiving treatment in politically sensitive areas such as reproductive healthcare or gender-affirming care.
In response, Kupor emphasized that OPM would not receive names, Social Security numbers, addresses, or other direct identifiers. According to the agency, the data would first be stripped of identifying information and encrypted before being shared. OPM says the remaining information would be used to identify unusual claims patterns and potential fraud.
Critics, however, argue that de-identified healthcare data can still present privacy concerns, particularly when combined with other information. They have called for additional transparency regarding how the data would be stored, protected, and ultimately used.
NARFE described Kupor’s recent explanation as a significant improvement over the brief description originally provided in the Federal Register, while stopping short of endorsing the proposal.
The debate highlights the challenge of balancing two competing priorities. On one hand, few would argue against reducing fraud in a program that covers millions of federal employees, retirees, and family members. On the other, many participants remain concerned about how much access the government should have to healthcare information, even when identifying details have been removed.
Whether OPM’s proposed safeguards ultimately satisfy those concerns remains to be seen.
A Federal Retirement Consultant (FRC®) can help you understand how FEHB fits into your overall benefits picture and stay informed about changes that may affect your coverage in retirement. Schedule your complimentary benefits review today.
