(Washington, D.C.) – Citizens Against Government Waste (CAGW) was outraged, if not surprised, at the report from the Department of Health and Human Services (HHS) Office of Inspector General (OIG) showing the ongoing failure of HHS executives to accurately report and prevent improper payments.  With the government-wide improper payment total at a staggering $137 billion in fiscal year (FY) 2015 (and rising), the OIG outlines some of the steps that agency has taken to stem the tide of red ink, but finds significant operational failures, in both its reporting of improper payments and implementing corrective action plans. 

The OIG’s performance audit is meant to determine if HHS is in compliance with the reporting standards required under the Improper Payments Information Act of 2002.  The report found that HHS failed to achieve its goal of less than 10 percent improper payment rate in FY 2015 for Medicare Fee-For-Service, which is the program most responsible for the government-wide explosion in improper payments.  The error rate for that program stood at 12.1 percent in FY 2015, which translates into losses of $43.3 billion.    

The report further noted the failure of HHS to “meet improper payment rate reduction targets” for Medicare Advantage (Part C), Medicaid, Children’s Health Insurance Program (CHIP), and the Child Care Development Fund.  More disturbingly, HHS was unable to publish an estimate of improper payments for the TANF (Temporary Assistance for Needy Families) program because the program fails to even measure them.    

In 2013, the Centers for Medicare and Medicaid Services (CMS), under pressure from providers (predominantly hospitals, which are responsible for the vast majority of erroneous Medicare Part A claims), virtually suspended its most effective tool for identifying and recovering improper payments, the Recovery Audit Contractor (RAC) Program.  The RAC program, which operates at no cost to taxpayers, was recovering $1 billion per quarter in erroneous overpayments to Medicare Fee-For-Service providers, the proceeds of which went directly back into the Trust Fund.  RACs had consistently received 90 percent or higher accuracy ratings from CMS.

CAGW Vice President for Policy and Communications Leslie Paige said, “No wonder taxpayers aren’t seeing a decline in improper payments.  HHS seems content to keep its collective head in the sand and refuse to implement the necessary reforms that will stem this unacceptable tide of bogus payments.  The fact that the improper payment rate for credit cards in the private sector stands at 0.04 percent is proof that it is possible to effectively control these errors.  Until the federal agencies, particularly HHS, begin to take these cues and institute reforms, this egregious waste of taxpayer money will continue."

“It’s no coincidence that improper payments are skyrocketing at the same time that the RAC program has come under sustained attack by providers,” said Paige.  “While we’re shaking our collective heads at the spectacle of CMS officials bowing to provider pressure, it is more alarming to see the government waste watchdogs on Capitol Hill failing to hold CMS accountable and demanding that the agency enforce the RAC laws as written to help salvage the struggling Medicare program for seniors.”  

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

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