Waste of the Day: CMS Was Overstaffed
Topline: The federal office overseeing Medicare hearings and appeals was significantly overstaffed, leading to $30 million in wasted resources in 2023 and 2024, according to a whistleblower complaint substantiated by the U.S. Office of Special Counsel.
The Office of Medicare Hearings and Appeals has since laid off 185 employees.
Key facts: In 2018, the office had 672 employees making $62.6 million, according to data obtained from the U.S. Office of Personnel Management.
That was not enough to deal with a massive backlog of claims from seniors arguing Medicare had wrongfully denied them coverage. Federal law requires appeals to be resolved within 90 days, but it typically took more than 1,000 days. The American Hospital Association sued the Office of Medicare Hearings and Appeals, and in 2018, a federal judge ordered the office to resolve the backlog.
The office responded by hiring 471 new employees and boosting its payroll by $35.4 million in 2019, records show, for a total payroll of $98 million.
The backlog was eliminated in a few years, but staffing levels never returned to pre-ruling levels. By 2023, “the expanded workforce far exceeded operational needs,” and roughly a third of employees did not have “sufficient work,” according to the Office of Special Counsel.
The White House announced in March that the Office of Medicare Hearings and Appeals has now reduced staffing by 23% “through retirements, resignations, reassignments, separations, and other attrition.”
Records obtained by Open the Books confirm the number is accurate. Its annual payroll for 565 employees was $67 million as of late 2025, down from, 712 employees making $81 million in 2024.
So far, the layoffs have not impacted efficiency. Medicare appeals in 2026 have been resolved in 69 days on average, which would be the fastest rate on record if it lasts the entire year.
The full federal payroll, not including the Pentagon or Post Office, decreased by $1.9 billion in 2025.
Search all federal, state and local salaries and vendor spending with the world’s largest government spending database at OpenTheBooks.com.
Summary: The Office of Medicare Hearings and Appeals appears to be a good example of successful government downsizing, where taxpayers can save money without affecting the agency’s operations.
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