NCPA - National Center for Policy Analysis

Improper Medicare Payments Rise

March 16, 2000

Fraudulent or erroneous payouts within the Medicare system shrank during 1997 and 1998, but rose again in 1999, according to the Department of Health and Human Services' Office of Inspector General.

  • Erroneous payments jumped by an estimated $900 million last year -- from $12.6 billion in 1998 to $13.5 billion in 1999.
  • That represents a payment error rate of nearly 8 percent last year -- or eight cents wasted on every dollar paid out.
  • Between 1996 and 1998, the improper payment total had declined from $23.2 billion to the $12.6 billion figure.

The administrator of the Health Care Financing Administration, Nancy-Ann DeParle, called the difference between the 1998 and 1999 error rates "not statistically significant" and said they demonstrated that "our progress is not a one-time phenomenon, but something sustainable on which we can build."

Source: Joyce Howard Price, "Medicare Fraud Eludes Even Tougher Measures," Washington Times, March 12, 2000; "Medicare Financial Management: Further Improvements Needed to Establish Adequate Financial Control and Accountability," AIMD-00-66, March 15, 2000, General Accounting Office.


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