The Swine Line

The GAO just released its most recent report on estimated improper payments made by federal agencies.  Overall 2007 estimates for improper payments (overpayments or underpayments, but guess which one is most prevalent?) were $55 billion.  The most vulnerable federal program was the Medicaid fee-for-service program, which had an estimated $13 billion in improper payments and that was only for its fee-for-service program and only for six months worth of claims.  Government Executive Magazine reports that:

HHS is not the only agency still working to develop improper payment estimates. GAO reported that the fiscal 2007 estimate did not include data from 14 risk-susceptible programs with outlays of $170 billion. Nine of these fall under the Homeland Security Department and were only recently identified as risk-susceptible. GAO considered the identification of programs as an important step toward proper reporting and prevention of improper payments. Twelve of the 14 programs that did not report estimates aim to do so for 2008. The other two did not report target implementation dates.

I guess the first step toward regaining your financial footing is to inventory the losses, so this is a good step.  CAGW recently wrote about recovery auditing, a sophisticated accounting method commonly used by private sector companies, now being employed by the Centers for Medicare and Medicaid Services (CMS) to identify overpayments and underpayments being made to healthcare providers, mostly in-patient hospitals.  The recovery auditing demonstration project, which has been ongoing in California, Florida, and New York has identified $371.5 million in improper payments and returned $247.4 million of that to the Medicare Trust Fund.  Some of the hospitals in California, which have been pocketing millions in overpayments and have now had to reimburse Medicare, are trying to derail the recovery auditing program, which is slated to roll out nationwide starting in March, 2008.  California Reps. Lois Capps (D) and Devin Nunes (R) have introduced a bill in Congress to freeze the audits for a year.  Very.Bad.Idea.  CMS is taking positive steps to stop the hemorrrhaging.