Office of Personnel Management uncovers $500M in fraud and waste in federal health benefits programs

FIRST ON FOX: The Trump administration announced $500 million in waste and fraud findings at the Office of Personnel Management – revealing a recovery of potentially fraudulent funds for federal health benefits programs.

Health insurance carriers in the Federal Employees Health Benefits and Postal Service Health Benefits programs reported preventing nearly $510 million in losses before or during payment and recovering an additional $21.9 million after claims were paid, according to the Office of Personnel Management.

“OPM runs health insurance for about 8.9 million retirees and federal employees, and we spend about $80 billion a year,” Office of Personnel Management Director Scott Kupor told Fox News Digital. “The $500 million, a little more than half percent, is a good number, but certainly we have a long way to go here to root out more fraud, waste and abuse.”

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The White House anti-fraud task force led by Vice President JD Vance has reported $260.7 billion in fraud uncovered since Trump took office, and $72 billion in fraud stopped on an annualized basis.

Kupor said his agency is conducting its own review of health insurance claims data for the first time, allowing the agency to analyze billing patterns across providers and health plans to identify unusual prescribing habits, surgery rates and other anomalies that could signal overuse, misuse or potential fraud.

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He said the agency will use those findings to remove providers from federal health programs when warranted and will refer cases involving suspected criminal conduct to the agency’s Office of Inspector General and the Justice Department for further investigation.

Kupor leads the agency responsible for overseeing the federal workforce while managing key employment and benefits programs for millions of current and former federal employees. One of the most prominent examples of his work stems from Elon Musk and the Department of Government Efficiency’s (DOGE) targeting of a mine in Pennsylvania.

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Last April, Fox News Digital first reported that the United States government applied the use of artificial intelligence for federal employee recordkeeping – the first time the federal government implemented AI at scale.

The movement was led by Kupor and Musk, and Musk didn’t hide his shock that federal records were being stored and managed solely on paper at the time.

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“The speed at which the mine shaft elevator can move determines how many people can retire… And the elevator breaks down and then nobody can retire,” Musk said last February. “Doesn’t that sound crazy?”

When asked for an update on progress made on modernizing the mine, Kupor said it is now fully operational on an electronic system.

“This past year, we did 180,000 electronic online applications for retirement, which is just unprecedented,” he said. “That’s almost double the production that we’ve had in any prior year. Electronic applications can get solved in less than half the time today that a paper one does.”

“We will take something that has been a six-month, nine-month, 12-month horrendous process for retirees, and I think we will be able to do it in as little as 15 days with the continued development of technology.”

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Kupor’s previous experience working with artificial intelligence has led to his name being floated to serve as the AI czar in the Trump administration – a role cast into the spotlight as data center development and artificial intelligence have become midterm election talking points.

After working as an investment banker at Credit Suisse, Kupor worked at Loudcloud, which was co-founded by Marc Andreessen and Ben Horowitz, in 1999. He was then hired as the first employee by Andreessen and Horowitz at the duo’s venture capital firm. Kupor also served as the chair of the National Venture Capital Association from May 2017 to May 2018.

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When asked about whether he has had any conversations with the White House about the role, Kupor said he had seen the reports he was being floated, and discussed President Donald Trump’s views on artificial intelligence broadly.

“I’ve read all the same reports you’ve read and don’t have anything to add there,” he said. “What the president has said is exactly 100% right, which is that AI is the most important piece of technology that will determine economic growth for us, national security, sovereignty for our country.”

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“One of the things that I know, again, having spent all my life in the venture world, is there is no limit to the intellect and inventiveness of entrepreneurs in this country. And we just need to make sure that the conditions around, you know, regulatory controls and others continue to allow the U.S. to flourish in the way that it’s always done.”

Kupor did not rule out accepting the role if Trump should offer it to him, saying that while he is focused on his job as director of the agency, he serves “at the will of the president.”

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Reports had suggested that Treasury Secretary Scott Bessent was being considered for the AI czar position, but last week Trump said he would not be selecting him for the role.