Medicaid Wasted $14.4 Billion in Improper Payments

June 27, 2014

At least $14.4 billion in improper payments were made last year through Medicaid's managed care program, reports the Fiscal Times.

According to a new report from the Government Accountability Office (GAO), the government failed to "closely examine" Medicaid payments that went to managed care organizations (MCOs - organizations which contract with states to provide services to Medicaid beneficiaries). As such, billions of dollars in payments were made for treatments that were never provided or services that were not covered by the Medicaid program.

According to the report:

  • Of the $430 billion in federal Medicaid spending each year, 27 percent goes to MCO spending.
  • MCO-provided care is growing at an incredibly fast rate, and the expansion of Medicaid in 25 states under the Affordable Care Act is likely to increase the use of MCO services.
  • According to auditors, the more the system is used, the more vulnerable it is to fraud, as the government is not in a position to identify improper payments due to the size of the program.

Medicaid is not the only program costing billions in improper payments every year -- Medicare's private fee-for-service plans overpaid $34.6 billion in 2013. According to a 2012 report from the Office of Management and Budget, the federal government pays $100 billion annually in improper payments.

Source: Brianna Ehley, "Medicaid Money Wasted in 2013: $14.4 Billion," Fiscal Times, June 23, 2014

 

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