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

HRD-76-174: Published: Jan 14, 1977. Publicly Released: Jan 14, 1977.

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GAO was requested to determine what the two governmentwide carriers, Blue Cross and Blue Shield and the Aetna Life Insurance Company, and the Civil Service Commission (CSC) are doing to control health care costs under the Federal Employees Health Benefits program.

Benefit payments have been made without conforming to contract or policy requirements and without enough information to determine whether payments were allowable. The contracts negotiated by CSC provide no incentives for the carriers to control benefit payments, and contain no provisions under which CSC, either through audit or other means, can exercise sufficient control over the allowability of benefits paid by the carriers.

Recommendation for Executive Action

  1. Status: Closed

    Comments: Please call 202/512-6100 for additional information.

    Recommendation: CSC should: (1) revise its health insurance contracts to provide incentives for compliance with CSC contract requirements; (2) it should include in its contracts specific cost-control programs that the carriers must follow; and (3) should clarify its audit authority, expand its audits, and act more effectively on its audit findings. If CSC does not adopt these recommendations, the Subcommittee on Retirement and Employee Benefits should consider developing legislation to this end.

    Agency Affected:


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