Whistleblower report about waste leads to downsizing at one agency, OSC reports

The Office of Special Counsel said Thursday that a whistleblower complaint within the Health and Human Services Department has led one agency to slash staffing due to findings of government waste. 

An individual alleged to OSC, which can receive whistleblower complaints, that the Office of Medicare Hearings and Appeals was overstaffed following an increase in headcount at that agency in recent years to help process a backlog of appeals. 

In 2014, the American Hospital Association sued HHS because officials were missing statutory deadlines for reviewing denials of claims for Medicare reimbursement. A federal court in 2018 ordered HHS to adhere to such required timelines, after which the department increased staffing at OMHA. By 2022, the appeals backlog was mostly resolved. 

While case levels decreased, according to an OSC press release, the agency’s expanded workforce remained the same size. Workloads went from around 1,000 cases per agency legal team to roughly 50. 

HHS investigators found that this led to approximately $30 million in wasteful personnel spending between 2023 and 2024. In response, OMHA, as of August 2025, cut its staff by 185 employees, or about 23%, “through retirements, resignations, reassignments, separations and other attrition.”

“This disclosure brought needed attention to OMHA's serious overstaffing challenges,” said OSC senior counsel Charles Baldis in a statement. “OSC also appreciates HHS's decisive and substantive actions to prevent the waste of taxpayer dollars."

Baldis is the designated leader of the agency by Acting Special Counsel Jamieson Greer, who is also U.S. trade representative. President Donald Trump fired the previous special counsel —  Hampton Dellinger, who was appointed by Joe Biden — before the end of his term. 

The Trump administration has prioritized downsizing the federal workforce, arguing that doing so will improve agency efficiency.