Comptroller General Declares Medicaid Waste Worse Than Official Estimates

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Waste in the federal government’s fastest growing programs — Medicaid and Medicare — is probably much worse than anyone knows, U.S. Comptroller General Gene Dodaro told members of the House Committee on Oversight and Government Reform (HOGR) Wednesday.

Medicaid’s improper payment rate — benefits the Centers for Medicare and Medicaid Services (CMS) incorrectly pays recipients — is probably higher than the official estimate of 10 percent or $36 billion the Government Accountability Office (GAO) announced in 2015, GAO head Dodaro said in a Wednesday hearing on high-risk federal programs. GAO placed Medicaid on its list of high-risk programs released Wednesday, as it has every year since 2003.

“I don’t believe, Congressman Walker, that that’s even the true magnitude of the problem, because the managed care portion of Medicaid shows very small improper payment rates, because they’re only measuring what they pay the contractor, not what the contractor pays the beneficiaries,” Dodaro said when North Carolina Republican Rep. Mark Walker asked for Medicaid’s improper payment rate.

Managed care, in which state Medicaid agencies contract with private organizations to provide care, isn’t the only driver of Medicaid improper payments. Medicaid expansion under Obamacare has also likely influenced the program’s improper payment rate, Dodaro said.

“States didn’t have the proper system to determine eligibility under the new Affordable Care Act regulations,” Dodaro said.

Medicare’s improper payment rate of 12 percent or $42 billion in fiscal year 2015 is higher than Medicaid’s, according to GAO.

“I’m very concerned about both Medicaid and Medicare,” Dodaro said. “They’re the fastest-growing programs in the federal government’s portfolio.”

The federal government, Dodaro said, doesn’t have a full estimate of improper payments, although GAO estimated it was at least $137 billion in 2015. Alabama Republican Rep. Gary Palmer called the country’s level of improper payments “maddening.” (RELATED: Government Can’t Stop Wasting $137 Billion On Improper Payments)

GAO’s 2017 high-risk report identified 34 high-risk areas, including three new ones — management of federal programs serving Indian tribes, federal environmental liabilities from contaminated sites, and costs associated with the 2020 census.

GAO said it removed one topic from the list — “managing terrorism-related information, because significant progress has been made to strengthen how intelligence on terrorism, homeland security and law enforcement is shared among federal, state, local, tribal, international and private sector partners.”

GAO, which issued its first high risk report in 1990, estimates agencies have saved $240 billion in the last 10 years as a result of its findings.

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