U.S. cuts $17.6 billion in improper payments including Medicare and Medicaid

The Office of Management and Budget (OMB) yesterday announced that the Obama administration cut improper payments by $17.6 billion dollars in 2011 as part of the administration’s Campaign to Cut Waste initiative, fueled by decreases in payment errors in Medicare, Medicaid, Pell grants and food stamps.

Specifically, the administration claimed to have cut the 2011 government-wide error rate to 4.7 percent from 2010’s error rate of 5.3 percent and 2009’s error rate of 5.42 percent. It recaptured more than $1.2 billion in overpayments from government contractors last year.

The administration said these results were achieved by increasing scrutiny of payments with more robust audits, leveraging new technologies and building partnerships with states focused on improved program integrity.

In related news, Health and Human Services Secretary Kathleen Sebelius announced that HHS will launch four additional pilots to reduce the error rate and cut Medicare and Medicaid waste and fraud including: letting private inspectors catch wasteful spending before it happens by expanding the use of Recovery Audit Contractors; testing changes to outdated hospital billing systems to help prevent over-billing; changing its process for approving payments for medical equipment with high error rates; and working with states to improve fraud detection.