Medicaid wasted $37B on improper payments in 2017, CMS shrugs off GAO advice

A stethoscope and paper money.
Fraud and waste spending in Medicaid continue to increase, seeing major jumps since 2015. (Getty/utah778)

Medicaid improper payments, including fraud, have spiked in recent years, reaching $37 billion in 2017, according to a government watchdog agency. 

And the Centers for Medicare & Medicaid Services (CMS) might only have itself to blame. 

The government-run healthcare program, which covers over 70 million Americans, cost taxpayers about $596 billion in last year, with more than 6% going to improper payments, according to a new report from the Government Accountability Office (GAO). The $37 billion total is up from $36 billion in 2016 and from $29.1 billion in 2015, representing a 27% increase over the three-year period.


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The report follows recent news that the Department of Health and Human Services (HHS) is recovering less money through fraud investigations, with fraud recovery totals down 21% last year. 

The GAO said CMS must take additional actions to improve oversight and prevent improper payments. Suggestions include gathering more accurate data on patient care and enhancing federal-state collaboration. Other agencies joined in the calls. 

RELATED: HHS recovered $2.6B from healthcare fraud in 2017, down 21% from the previous year

"Complete and reliable data are critical to identifying improper payments and to Federal and State enforcement efforts to keep fraudulent and harmful providers out of Medicaid and hold bad actors accountable," Megan Tinker, senior adviser for legal review at the HHS Office of Inspector General, said April 12 in testimony (PDF) to the House Committee on Oversight and Government Reform.

She also added that states have not fully enacted enhanced provider screening to keep bad actors out of the program. 

The GAO pointed the finger at Medicaid for failing to act on prior recommendations that would have reduced fraud in the system. 

Between May 2015 and December 2017, the GAO made 11 recommendations to help Medicaid assess the risk of fraud, but the agency has done little to follow through on those suggestions, GAO noted. 

Additionally, from August 2017 to January 2018, the office made eight recommendations to promote care for patients with limited ability to care for themselves, who could be at risk. Medicaid agreed with the recommendations but once again did not act on them. 

CMS could not be reached for comment on the GAO's report. 

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