$36 Billion in Improper Medicaid Payments in 2016

14 Feb $36 Billion in Improper Medicaid Payments in 2016

For the fourth straight year, the federal government increased the amount of money described as improper payments. The Government Accountability Office is reporting that agencies exceeded $144 billion in improper payments in fiscal 2016, up from $137 billion in 2015.

This increase translates to a higher improper payment rate as well, up to 4.67 percent of all outlays from 4.39 percent last year. Despite the increase, the rate still is half a percent lower than when President Barack Obama took office in 2009, GAO said.

“This increase between FY 2015 and FY 2016 can be attributed to percentage and dollar increases in the Medicaid Program, the Direct Loan Program, the Medicare Part C Program, the Pell Grant Program, the VA Community Care Program, and the Earned Income Tax Credit (EITC) Program,” GAO stated in the report released Jan. 12. “For fiscal year 2016, federal entities reported improper payment error rates that exceeded 10 percent for 11 risk-susceptible programs, accounting for more than 70 percent of the governmentwide improper payment estimate.”

GAO says the Medicare Fee for Service (FFS) program accounted for the largest amount of improper payments — $41 billion or 28 percent of the governmentwide total. Medicaid was the second with $36 billion or 25 percent of the governmentwide total while the EITC and Medicare Part C combined account for the third with $33 billion or 23 percent of the governmentwide total.
On the positive side, GAO said the government recovered about $20 billion in overpayments last year. To be clear, an improper payment doesn’t mean the government overpaid a beneficiary or another customer. An improper payment could mean someone was underpaid too.

“Approximately $44 billion of the governmentwide improper payments in fiscal 2016 are caused by insufficient documentation. A lack of supporting documentation could be a situation where there is a lack of supporting documentation necessary to verify the accuracy of a payment identified in the improper payment testing sample such as a program not having the documentation to support a beneficiary’s eligibility for a benefit,” GAO stated. “Approximately $34 billion of the governmentwide improper payments in fiscal 2016 were caused by the inability to authenticate eligibility.”
GAO says the inability to authenticate eligibility is a situation where the agency can’t determine if the citizen is eligible to prevent a payment.

The Office of Management and Budget has been pushing for agencies to use more and better data and other approaches to reduce improper payments.