U.S. Agencies Sent Record High $125 Billion in 'Improper' Benefits, Tax Credits

U.S. Agencies  Sent  Record High $125 Billion in 'Improper' Benefits, Tax Credits, GAO ReportsIf you’ve wondered how many taxpayer dollars in benefits are wasted by the federal government, a new report by the Government Accountability Office sheds some light, putting that figure at a new high of $124.7 billion in fiscal year 2014.
The GAO, the investigative arm of Congress, calls them “improper payments.”  Government-wide, improper payment estimates totaled $124.7 billion in fiscal year 2014, a significant increase of approximately $19 billion from the prior year’s estimate of $105.8 billion, the GAO says.
The estimated improper payments for fiscal year 2014 were attributable to 124 programs, spread among 22 agencies. The reported government-wide error rate was 4.5 percent of benefits spending, compared to 4.0 percent reported in fiscal year 2013.

Examples of improper payments include tax credits for families that didn’t qualify, Medicare payments for treatments that may not have been necessary, unemployment benefits for people who were still working, and sending out Social Security benefits for individuals who are deceased.
The increase in the 2014 estimate is due in large part to increased error rates in three major programs: the Department of Health and Human Services’ (HHS) Medicare Fee-for-Service and Medicaid programs, and the Department of the Treasury’s Earned Income Tax Credit program.
These three programs accounted for $80.9 billion in improper payment estimates, or approximately 65 percent of the government-wide total for fiscal year 2014.
“Implementing strong preventive controls can serve as the frontline defense against improper payments,” the GAO says. “One example of a preventive control is verifying eligibility through data sharing, which can allow agencies that make payments to compare information ―such as death data― from different sources to help ensure that payments are appropriate before they are made.”
Medicare’s payments to doctors and hospitals had the most improper payments, at $46 billion.
The Earned Income Tax Credit provides payments to qualifying low-income families. The program had nearly $18 billion in improper payments, for an error rate of more than 27 percent. The GAO  cited problems verifying incomes before the payments were issued.
Other programs with improper payments included Medicaid, the health insurance program for the poor, with $17.5 billion, and Medicare Advantage, which allows older Americans to get their Medicare benefits through private health plans, with $12.2 billion.
Supplemental Security Income, a disability program for the poor, tallied $5 billion in improper payments. Social Security registered $3 billion in improper payments.

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