October 23, 2014

Improper Payments Are Down But Still Troubling

  • The federal budget is an expression of our country's values. Where we choose to spend and at what levels, how and who we tax, and the borrowing we...

The government made an estimated $105.7 billion in improper payments last year, including $62.2 billion for health care, the Government Accountability Office (GAO) says.

Beryl Davis, a GAO official, discussed the problem before a House sub-committee last week. Officials from the Office of Management and Budget, IRS, Defense, and Health and Human Services also testified.

Administration efforts to correct the problems have reduced improper payments from their $121 billion peak in 2010. Further improvements, however, are clearly needed.

The government, excluding Defense, has an overall error rate of 4 percent. In health care, the GAO says, error rates were 5.8 percent for Medicaid, 9.5 percent for Medicare Advantage, and 10.1 percent for Medicare fee-for-service.

“It is important to note that reported improper payment estimates may or may not represent a loss to the government," Davis said. "For example, errors consisting of insufficient or lack of documentation for a payment are included in the improper payment estimates."

The Pentagon’s Inspector General found that defense agencies are still allowing themselves to be significantly overcharged. For instance, the Pentagon paid $8,123 each for helicopter gears that should have cost $445.