Of $236B in 'improper payments,' $100B was from Medicare, Medicaid
This is despite payment errors under Medicaid dropping by $30 billion from the previous year.
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The federal government reported an estimated $236 billion in "improper payments" during fiscal year 2023, and of that amount, more than $100 billion came from Medicare and Medicaid, according to the U.S. Government Accountability Office.
Such payments are essentially payment errors that can be the result of many things – including overpayments, inaccurate record keeping or in some cases fraud.
The $236 billion in improper payments were reported by 14 agencies across 71 programs. More than $175 billion (74%) of errors were overpayments – for example, payments to deceased individuals or those no longer eligible for government programs. $11.5 billion were underpayments; $44.6 billion were unknown payments (meaning it's unclear whether the payment was an error); and $4.6 billion were cases where a recipient was entitled to a payment, but the payment failed to follow proper statutes or regulations.
There was some good news: Payment errors have declined since last fiscal year by about $11 billion. Eight program areas saw substantial declines in improper payments this past year. For example, payment errors under Medicaid dropped by $30 billion from the previous year. Program areas that reported substantial declines in payment errors said the decreases were due to mitigation strategies that they had implemented, among other things.
But there was also some bad news: Five programs saw substantial increases in payment errors. For example, the Department of Labor's Pandemic Unemployment Insurance program saw an increase of $44 billion in errors.
Overall, while improper payments were down from last year, they remain higher than before the COVID-19 pandemic.
WHAT'S THE IMPACT
About $186 billion (79%) of payment errors were concentrated in five program areas: Medicare, Medicaid, Pandemic Unemployment Assistance, the Earned Income Tax Credit, and Paycheck Protection Program Loan forgiveness.
Some of these program areas have consistently been among those with the highest payment errors – including Medicaid, Medicare and the Earned Income Tax Credit. These are also federal program areas that issue the most payments to individuals and, as a result, may be more vulnerable to these sorts of errors, GAO found.
The agency recommended that Medicare could improve communication around its prior authorization program, which requires that beneficiaries get approval before receiving certain items like powered wheelchairs. GAO said this could reduce expenses and improper payments.
Medicaid, meanwhile, could improve oversight to ensure that claims aren't paid to ineligible medical providers, including those who have suspended or revoked medical licenses, the agency said.
THE LARGER TREND
Payment errors are a long-standing issue for the federal government. Over the last 20 fiscal years, it has made an estimated $2.7 trillion in such improper payments, according to GAO.
The agency's recommendations for federal agencies include those that would call for better monitoring of federal programs and planning that would help identify risks. For Congress, GAO thinks agencies could use help identifying susceptible programs, developing reliable methods for estimating errors, and implementing effective corrective action.
Jeff Lagasse is editor of Healthcare Finance News.
Email: jlagasse@himss.org
Healthcare Finance News is a HIMSS Media publication.
