GAO: Health programs distributed billions in improper payments

Medicare and Medicaid accounted for the majority of the estimated $105 billion in improper payments distributed by the government last year, federal investigators said Wednesday in a report.

Traditional Medicare, Medicare Advantage and Medicaid paid out a total of $62.2 billion in improper payments in 2013, the Government Accountability Office (GAO) told Congress in prepared testimony.

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An improper payment is defined by law as a payment that should not have been made or was made in an incorrect amount.

Error rates at the Department of Health and Human Services ranged from 10 percent in Medicare fee-for-service to 5.8 percent in Medicaid. The vast majority of errors were overpayments.

An official with the Centers for Medicare and Medicaid Services said most of the agency's improper payments were the result of money dispersed without the right documentation.

The problem was the subject of an Oversight subcommittee hearing on Wednesday, where Rep. John Mica (R-Fla.) slammed the errors as destructive to the federal budget.

"In sheer dollars alone, one of the areas that concerns me and every American is healthcare and the staggering cost of healthcare," said Mica, chairman of the Oversight Subcommittee on Government Operations, which held the hearing.

"And here we have improper payments to the tune of over $60 billion in those programs."

The GAO numbers, revealed in prepared witness testimony, sought to describe the scope of improper payments across federal agencies.

In addition to healthcare programs, the Earned Income Tax Credit also received blame for $14.5 billion in improper payments last year with an error rate of almost one in four.

Officials from the Obama administration pointed to an overall decline in improper payments since 2010, when they peaked at $121 billion.

Medicaid alone has lowered its improper payments from $23 billion that year to $14.4 billion last year, according to the GAO.