The Department of Health and Human Services (HHS) initially dismissed warnings about tens of millions of dollars in wasted taxpayer funds before reversing course under new leadership, following pressure from the U.S. Office of Special Counsel (OSC), administration sources told the Washington Reporter.
OSC confirmed approximately $30 million in unnecessary personnel costs at the Office of Medicare Hearings and Appeals (OMHA). The waste stemmed from the agency’s failure to draw down a temporary staffing expansion long after workloads had returned to normal.
HHS’s first formal response, under former Secretary Xavier Becerra in November 2024, asserted that no further action was needed — despite acknowledging awareness of the concerns. The department relied on the Inspector General’s decision not to investigate, framing the matter as routine operational management.
After OSC pressed the issue in late 2025, HHS, under Secretary Robert F. Kennedy, Jr., submitted a supplemental response in January 2026 outlining major corrective actions, including a 23 percent overall reduction in OMHA staffing between 2023 and 2025.
OSC credited the whistleblower for identifying the waste and noted that the agency’s final response was “decisive and substantive,” a marked departure from earlier inaction.
Senior Counsel Charles Baldis, who leads OSC on behalf of Acting Special Counsel Jamieson Greer, thanked“the whistleblower for bringing forward the information that revealed nearly $30 million in waste of taxpayer funds”; Baldis also noted that OSC was satisfied with the corrective actions taken by HHS.
Baldis further indicated to the Reporter that “this seemed like one of those classic situations where the federal government started spending extra money to deal with a problem, the problem went away, but the money kept flowing because there was no incentive to care about accountability to the taxpayer.”
Baldis added that “it’s a great example of how federal whistleblowers can play a really important role because they might be aware of the details of waste, fraud, or abuse going on that most of us would never be able to know about otherwise.”
