Supplemental payments and demonstration programs could be the source of improper payments coming out of the Medicaid program.
And the Department of Health and Human Services (HHS) needs to do much more to stop the flow, witnesses said in Senate hearing.
Sen. Ron Johnson, R-Wis., chairman of the Senate Committee on Homeland Security and Government Affairs, began the Wednesday hearing by highlighting the increase in government spending on healthcare.
"If Americans are spending their own money on healthcare, I'd be OK with that," but they're not, he said. "We have to be very careful with taxpayer dollars."
He added that Medicaid spending will climb to $723 billion per year within the next 10 years, requiring greater oversight. Johnson also noted that Medicaid wasted $37 billion on improper payments last year.
"We are spending hundreds of billions of dollars, and we want this money spent well," he said. "When we have $37 billion in improper payments, it's something we need to provide oversight of."
The hearing followed on the heels of a new initiative announced Tuesday by the Centers for Medicare & Medicaid Services that intends to crack down on Medicaid, including conducting audits at the state level. Officials from neither CMS for the Department of Health and Human Services spoke at the hearing.
Sen. Claire McCaskill, D-Mo., agreed with Johnson that Medicaid needs to be more efficient and better handle its finances, but she also took a jab at pharmaceutical companies for increasing drug prices.
"It is ridiculous that we are handcuffing Americans with higher costs because we are protecting profits of the pharmaceutical industry," she said.
Eugene L. Dodaro, comptroller of the Government Accountable Office, told lawmakers improper Medicaid payments could be much higher than $37 billion because managed care spending is not properly evaluated for improper payments.
"There really isn't a full measure of the payment issues in the Medicaid program," he said.
Supplemental payments and demonstration programs might also not receive proper oversight, Dodaro said, adding that Congress could take action on tightening budget neutrality issues within demonstration programs.
"[CMS] has a policy that when they approve demonstrations it should be budget neutral, and we've repeatedly found that that's not the case ... and ends up costing the federal government more," he said.
The comptroller also said that the new CMS initiative doesn't fully address all of his concerns.
"Much more urgent and aggressive action is needed by CMS in these areas," as Medicaid spending continues to increase, and as a result, so will improper payments, Dodaro said.
Brian Ritchie, assistant inspector general for audit services at HHS Office of Inspector General reminded lawmakers that the CMS has not implemented various recommendations the OIG has made in recent years to curb fraud.
A previous recommendation included ensuring that national Medicaid data are complete, accurate and timely, which Ritchie said went unimplemented.