GAO: Government misspent billions on Medicare/Medicaid

Last year, Medicare financed health services for approximately 54 million elderly and disabled beneficiaries at a total cost of $603 billion. Of that, approximately $60 billion went toward improper payments, according to a report issued last week by the Government Accountability Office (GAO)

Most of that misspent money, about $45.8 billion, went toward the Medicare fee-for-service program. Another $12 billion provided coverage to senior citizens who are enrolled in private Medicare Advantage plans. The rest of the misspent Medicare dollars, nearly $2 billion, went toward prescription drug benefits.

Of the $304 billion spent on Medicaid in 2014, $17.5 billion was paid out improperly, according to the report.

So, how is all of this federal money being misspent? GAO offered some insight and recommendations including improved fiscal oversight.

“For example the Centers for Medicare & Medicaid Services … could save billions of dollars by improving the accuracy of its payments to Medicare Advantage programs, such as through methodology adjustments to account for diagnostic coding differences between Medicare Advantage and traditional Medicare,” the GAO report states.

The GAO also suggested there be more oversight of Medicaid managed care programs.

“To help improve the efficiency and effectiveness of program integrity efforts, we recommend that CMS require states to conduct audits of payments to and by managed care organizations, update managed care guidance on program integrity practices and provide states with additional support in overseeing managed care program integrity,” the report states.

Although the GAO acknowledged that CMS has taken some steps at better oversight, it noted that not all of the recommendations have been fully implemented.

“With outlays for major programs, such as Medicare and Medicaid, expected to increase over the next few years, it is critical that actions are taken to reduce improper payments,” the report states.

The GAO report, which also looked at the Earned Income Tax Credit for the working poor, shows improper payments by the federal government hit $124.7 billion in fiscal 2014; up from $105.8 billion the previous year.

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The Health Law Offices of Anthony C. Vitale