The Need for More Civil Service Commission Supervision To Control Health Insurance Costs for Federal Employees

Efforts are needed to control health insurance costs for federal employees. GAO reviewed the operations of 20 health plans and 2 life insurance paying offices to determine how effectively they were complying with the contracts between the carriers and the Civil Service Commission (CSC) and with the cost control policies developed by their home offices. GAO also evaluated the effectiveness of CSC efforts for ensuring that the carriers complied with cost-control policies. GAO projected that 13.5 percent of all claims paid during 1975 at 19 of the 20 health plans were questionable. A number of variations were disclosed in benefit payments and cost-control systems. Evaluation of one plan found 68 questionable claims out of 569 reviewed and some contractual discrepancies in the plan itself. CSC should deal more aggressively with the carriers of health insurance both in the negotiation of its contracts and in its reviews of the carriers' benefit payment activities. If not, legislation should be developed which would: (1) require CSC to include specific cost-control and/or incentive provisions in carrier contracts; (2) give CSC the specific authority to audit the carriers; and (3) provide CSC with some flexibility in contracting for the service benefit plan.