The Office of Personnel Management (OPM) is pushing back against criticism of its proposal to obtain more detailed health claims data from Federal Employees Health Benefits (FEHB) and Postal Service Health Benefits (PSHB) insurance carriers.
After months of concern from federal employee organizations, lawmakers, and privacy advocates, OPM Director Scott Kupor published a blog post explaining why the agency believes the data is necessary and assuring federal employees that individual medical records will remain protected.
Why OPM Wants More Health Data
According to OPM, the agency currently receives only limited, aggregated information from FEHB carriers. Kupor argues that this prevents OPM from effectively identifying healthcare fraud, evaluating the quality of health plans, controlling costs, and ensuring taxpayers receive value from one of the nation’s largest employer-sponsored health insurance programs.
In his blog post, Kupor points to a recent healthcare fraud case involving the FEHB Program as an example of why more detailed claims information is needed. He argues that OPM has historically lacked the tools available to many large private-sector employers that routinely analyze healthcare claims to improve benefit design and detect waste, fraud, and abuse.
According to Kupor, the proposed data collection would allow OPM to:
- Detect healthcare fraud and improper billing more effectively.
- Improve oversight of FEHB and PSHB insurance carriers.
- Better evaluate healthcare quality and outcomes.
- Identify cost trends that drive insurance premiums.
- Help negotiate more competitive and affordable health benefits for federal employees and retirees.
What Sparked the Privacy Concerns?
The controversy began after OPM published a Federal Register notice proposing that FEHB and PSHB carriers submit monthly service-use and cost data, including:
- Medical claims
- Pharmacy claims
- Provider data
- Healthcare encounter data
The proposal did not explicitly state that personally identifiable information would be removed before OPM received the data. As a result, federal employee organizations warned that OPM could potentially obtain sensitive medical information for more than 8 million federal employees, retirees, postal employees, and eligible family members.
Critics questioned:
- Whether names or other identifying information would be included.
- How the data would be secured.
- Who would have access to the information.
- Whether the data could be shared with other federal agencies.
- Whether OPM had sufficiently explained why it needed the information.
OPM: Individual Enrollees Cannot Be Identified
Kupor directly addressed those concerns writing that the data OPM receives will be processed using privacy-preserving techniques so that it cannot be mapped back to any plan participant. According to OPM, neither agency personnel offices nor OPM analysts will be able to identify individual FEHB or PSHB enrollees from the data used for analysis.
Kupor also noted that OPM has experience working with similar de-identified Medicare data and intends to apply the same approach to FEHB claims data. Rather than reviewing individual medical records, OPM says its objective is to analyze overall healthcare utilization, quality, and spending patterns across the FEHB Program.
Employee Organizations Remain Cautiously Optimistic
The National Active and Retired Federal Employees Association (NARFE), which had criticized the original proposal for lacking sufficient privacy safeguards, welcomed OPM’s clarification that the data would be de-identified before analysis. FEDweek reported that NARFE considers OPM’s response a positive step but believes additional transparency is still needed before many federal employees will be fully reassured.
While OPM’s public explanation has answered some of the questions raised earlier this year, federal employee organizations and lawmakers are likely to continue scrutinizing the proposal until the agency fully documents how participant privacy will be protected.