The federal agency rate of improper payments has dropped from 5.42 percent in 2009 to 4.39 percent in 2015, OMB has said, although within that overall decrease the rates have increased in some programs.
OMB Controller David Mader noted at a House hearing that not all payments deemed improper are fraudulent; the definition also includes situations where required documentation is lacking, even if the payment itself is proper. “While not all improper payments represent a monetary loss to the government, all improper payments do undermine taxpayers’ confidence in program delivery,” he added.
Three programs—the Medicare Fee-for-Service (FFS) program, the IRS Earned Income Tax Credit program and Medicaid—account for two-thirds of the improper payments government-wide, he said.
He said the rate in the first of those is declining due to initiatives such as expansion of prior authorization requirements, new regulatory provisions, and changes in the agency’s provider education strategy. Substantial improvements also have been made in another major program, unemployment insurance, by using an enhanced national directory of new hires and increasing assistance to states with persistently high improper payment rates, he said.
In contrast, rates are increasing in Medicaid, which he largely attributed to states needing more time to bring systems into compliance with new program requirements.
Of other programs with increasing error rates, he singled out the VA’s long term services and support program, where the rate rose from 9 to 59 percent over 2014-2015, and its community care program, up from 9 to 55 percent in that time. He attributed both to changes in the definition of what payments are considered improper.
