The U.S. Office of Special Counsel (OSC) has accepted the Department of Health and Human Services' (HHS's) investigative findings of approximately $30 million in waste reported by a whistleblower. Disclosures made to OSC revealed significant waste within the Office of Medicare Hearings and Appeals (OMHA) stemming from the agency's failure to adequately address overstaffing of approximately 150 employees. OSC directed HHS to review the alleged waste, which has since been addressed and corrected, resulting in meaningful improvements to the agency's stewardship of taxpayer dollars and in the whistleblower's expressed satisfaction with the agency's progress.
As background, the whistleblower had reported to OSC that OMHA carried unnecessary personnel for years beyond what was needed to meet a temporary surge in appeals cases, leaving staff short of work and costing the agency nearly $30 million. In 2019, OMHA substantially expanded its workforce and geographic footprint to address an unprecedented surge in appeals cases between 2012 and 2015. That surge created delays of three to four years, prompting litigation from the American Hospital Association and a court order requiring OMHA to meet the statutory 90-day processing deadline. Congress subsequently increased OMHA's funding, enabling the rapid staffing expansion intended to clear the temporary backlog.
Once the backlog returned to typical levels – approximately 40,000 appeals annually – the expanded workforce far exceeded operational needs. Workloads within OMHA legal teams fell from roughly 1,000 cases per team to about 50, leaving approximately 40 teams of the agency's 120 without sufficient work. This imbalance resulted in approximately $30 million in unnecessary personnel costs over the course of 2023 and 2024.
OSC acknowledges and appreciates that HHS corrective actions have resulted in significant progress in addressing the overstaffing issue. As of August 2025, OMHA has reduced its workforce by 185 employees – approximately 23 percent of its staff—through retirements, resignations, reassignments, separations, and other attrition.
“OSC thanks the whistleblower for bringing forward the information that revealed nearly $30 million in waste of taxpayer funds," said Senior Counsel Charles Baldis. “This disclosure brought needed attention to OMHA's serious overstaffing challenges. OSC also appreciates HHS's decisive and substantive actions to prevent the waste of taxpayer dollars."
Baldis continued, “a major part of OSC's mission is to help prevent waste, fraud, and abuse in the federal government. We're always pleased when we can contribute to a successful resolution like this one."