Administration says improper payments have decreased

The Obama administration says it has prevented $17.6 billing from going out the door as improper payments.

The government lowered its overall error rate for issuing improper payments to 4.7 percent. In 2009, the government sent out 5.42 percent of its payments to the wrong place or person, according to the Office of Management and Budget. The decreases in the percentage since 2009 have saved roughly $20 billion, officials said.


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For the first time in six years, the total amount of improper payments reported declined from the previous year, according to OMB.

Agencies are scrutinizing their payments more than in the past, officials said. There are more audits, and agencies are using technology to help as well. The administration set up paymentaccuracy.gov to bring more attention to the problem and point out weak points. Federal agencies are also partnering with states to help curb the problems.

For example, the Medicare fee-for-service error rate fell from 9.1 percent in 2010 to 8.6 percent in 2011. The Supplemental Nutrition Assistance Program, formerly the food stamps program, reached an all-time low of 3.8 percent this year. OMB said the new low potentially saved $800 million compared to 2009. The error rate for Pell Grants went down to 2.7 percent. OMB said it potentially saved $300 million compared to 2009.

The government took back more than $1.2 billion in overpayments to contractors last year as well. In 2010, the government recovered $700 million. OMB said it’s on track to reach President Barack Obama’s $2 billion mandate.

The administration is launching new pilot programs in the Health and Human Services Department to continue cutting waste and fraud in Medicare and Medicaid. HHS is having private recovery audit contractors screen certain hospital payments before they are made, not after the payment is sent.

HHS will allow some claims that are incorrectly made under the inpatient program to be resubmitted under the outpatient program. HHS plans to change its process for approving payments for medical equipment that has high error rates.

Working with states, HHS is testing an automated tool to screen providers for the risk of fraud. Currently, HHS and states lack standardized Medicaid provider data, and officials say it hampers fraud detection. The new plan could pinpoint improper payments and fraudulent providers. The change may even help states focus on areas where the fraud is most prevalent, officials said.

In addition, OMB is also stepping up efforts to bar contractors if needed for waste or fraud. OMB Director Jack Lew issued a memo today that requires agencies to strengthen their suspension and debarment resources, while also putting the authority to use as often as is necessary.

About the Author

Matthew Weigelt is a freelance journalist who writes about acquisition and procurement.

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