Billions Wasted

Improper Medicare spending


The federal government spent $509 billion on Medicare payments in 2010, nearly one-tenth of which was improper, according to a March report from the Government Accountability Office (GAO).

Medicare, a federal health insurance program for seniors, is already on an "unsustainable" long-run path, according to the GAO report. In 2010, it says, the system shelled out an estimated $48 billion in payments that were fraudulent or otherwise "improper," and those in charge of the program aren't doing nearly enough to avoid making similar mistakes in the future. The $48 billion figure is lower than the full total, because it does not include improper payments under Medicare Part D, which covers prescription drugs. An estimate for that part of the program had not been calculated yet when the report was issued.

This is not the first time the GAO has sounded the alarm about Medicare payments. In 2007 the office found similarly problematic patterns, recommending changes such as developing provider management systems that weed out inefficient payments. But according to the new report, Medicare's administrators have failed to effectively follow up on many of the GAO's suggestions.

That failure led the GAO to declare that Medicare suffers from "pervasive internal control deficiencies." The GAO calls Medicare a "high risk" program, noting that "its complexity and susceptibility to improper payments, combined with its size, have led to serious management challenges."