10 percent of Medicare payments are fraudulent

John Lott by John Lott on March 3rd, 2011

This is article 6 of 8 in the topic Entitlement Programs

The estimate of fraud leaves out certain obvious instances of fraud from the nearly 10 percent claim.

Nearly 10 percent of all Medicare payments are fraudulent or otherwise improper, and the government isn’t doing enough to stop them.

That’s the conclusion of a Government Accountability Office report released Wednesday. The report, issued at the request of a House subcommittee investigating Medicare and Medicaid fraud, estimates that the federal government is losing $48 billion on the improper payments – a significant amount for a program that “is fiscally unsustainable in the long term” unless action is taken.

The report, prepared for a House Energy and Commerce Oversight Subcommittee hearing, said “CMS needs a plan with clear measures and benchmarks for reducing Medicare’s risk for improper payments, inefficient payment methods and issues in program management and patient care and safety.”

CMS estimates that $48 billion of estimated Medicare outlays of $509 billion in fiscal 2010 went to improper payments, including fraudulent ones. “However, this improper payment estimate did not include all of the program’s risk since it did not include improper payments in its Part D prescription drug benefit, for which the agency has not yet estimated a total amount,” said Kathleen King, director of GAO’s health care team. . . .

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