Report: Medicaid, Medicare Wasted at Least $55 Billion in 2009
Nov. 18, 2009 – U.S. taxpayers paid at least $55 billion more than necessary for federal Medicare and Medicaid programs during the 2009 federal fiscal year, according to a federal report released yesterday.
The report issued by the U.S. Office of Management and Budget indicates the federal government wasted a total of $98 billion on improper payments to third parties contracted to provide various federal services. Medicare and Medicaid programs accounted for at least $55 billion and more than 56 percent of total funds wasted by the federal government in 2009. The federal government wasted about $72 billion on all programs in 2008, according to the report.
While some might find alarming the reported amount of waste, a federal lawmaker says the actual amount wasted each year could be much greater.
“Unfortunately, these numbers may still be just the tip of the iceberg since they don’t even include estimates for several major programs, including the Medicare prescription drug plan,” U.S. Senator Tom Carper said in a statement. “It goes without saying that these results would be completely unacceptable in the private sector, as they should be in government, especially at a time of record deficits.”
The Office of Management and Budget report comes as federal lawmakers debate various health care reform measures in the U.S. House of Representatives and Senate. Medicare generally provides health care services for elderly U.S. citizens while Medicaid provides health care services for the poor.
The report indicated the error rate for payments made through the federal Medicare Advantage program increased by about 50 percent, rising from a 10 percent error rate in 2008 to a 15 percent rate costing about $12 billion in waste during fiscal year 2009. The Medicare Advantage program allows private insurers to provide Medicare coverage to qualifying individuals.
Some of the increase in wasteful spending is attributed to more stringent reporting requirements and increased government spending on federal programs due to the recent recession partly explain the increased waste in 2009, according to the federal report. Fraud also was cited among reasons for the increased waste, but federal officials said they have no idea to what extent fraud occurs.
Federal lawmakers are weighing various reform measures and penalties to reduce the amount of waste and fraud tied to Medicare, Medicaid and other federal programs. Penalizing individuals and organizations knowingly accepting improper payments for federally contracted services are among reform measures being considered, according to Reuters. Currently, no penalties exist for accepting improper payments, and federal law only requires funds be returned when excess payments are received.