(Washington, D.C.) – Today, Citizens Against Government Waste (CAGW) reacted with exasperation at the dramatic rise in improper payments that was described during Comptroller General Gene L. Dodaro’s October 1, 2015 testimony before the Senate Finance Committee.  The hearing was called to review the Government Accountability Office (GAO) report “Addressing Improper Payments and the Tax Gap Would Improve the Government's Fiscal Position.” 

The report revealed that in fiscal year (FY) 2014 the amount of improper payments rose to $124.7 billion, which was an $18.9 billion increase from the FY 2013 total of $105.8 billion.  GAO found that three programs were primarily responsible for the continued growth:  Medicare, Medicaid, and the Earned Income Tax Credit.  GAO also warned that unless proactive measures are taken, improper payments are poised to continue escalating, as Medicare and Medicaid spending are both projected to increase in the coming years.

Comptroller Dodaro repeatedly emphasized the need for Congress and the executive branch to behave as effective stewards of the taxpayers’ money.  When asked what actions could stem the rise in wasteful improper payments, he asked Congress to hold each agency accountable for implementing the laws regarding improper payment reporting and for the timely adoption of GAO’s recommendations to eliminate them.

However, Congress and the executive branch are actively, albeit quietly, nullifying the most effective tool at their disposal to attack improper payments in Medicare, the Recovery Audit Contractor (RAC) program.  Since it was implemented nationwide in January 2010, the RAC program has properly identified and clawed back more than $9.7 billion to the Medicare Trust Fund.  The program has been in limbo since October 2013, when the Centers for Medicare and Medicaid Services suspended most RAC audits under intense pressure from the provider community.  The suspension means that very few hospital claims in Medicare fee-for-service are being scrutinized for overpayments, and the Trust Fund is losing at least $1 billion per quarter that would normally have been recovered on behalf of taxpayers and beneficiaries under the RAC program.

“The GAO’s dogged documentation of $124.7 billion in improper payments is a great service to the country, but measuring wasteful spending is only useful if Congress has the political will to force executive branch agencies to change their culture and recoup overpayments.  It is unconscionable that members of Congress continually complain about waste, fraud, and abuse, while they quietly sanction the destruction of the RAC program,” said CAGW Vice President for Policy and Communications Leslie Paige.  “Members of Congress needs to stop talking about waste when it suits them politically, and instead start holding agencies’ feet to the fire, which certainly includes putting RACs back to work and even expanding their portfolio as soon as possible.”

Citizens Against Government Waste is a nonpartisan, nonprofit organization dedicated to eliminating waste, fraud, mismanagement and abuse in government.

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