Administration targets improper health care payments

WASHINGTON -- The Obama administration is targeting programs that help the poor and unemployed as it seeks to recover billions of dollars in improper payments.

The effort, part of a government-wide focus on wasteful spending led by Vice President Biden, will get a high-profile boost today when the entire Cabinet meets for the first time on that subject alone.

The latest target for government auditors is Medicaid, the federal-state health care program for the poor and people with disabilities. The Health and Human Services Department will announce an initiative today aimed at recovering $2.1 billion in improper payments over five years.

At the same time, the Labor Department will intensify its partnership with states to reduce improper payments of unemployment insurance. More than half the states have improper payment rates higher than 10%, led by Indiana and Louisiana at more than 40%, according to Labor Department data.

"If we're going to spur jobs and economic growth and restore long-term fiscal solvency, we need to make sure hard-earned tax dollars don't go to waste," Biden said in prepared remarks.

Medicare and Medicaid are considered high-risk programs by the Government Accountability Office because they are prone to high rates of fraud, waste, abuse and improper payments. The GAO estimates that $70 billion was lost through improper payments in 2010 — roughly 10% of their combined federal cost.

The Health and Human Services Department estimated that improper payments in Medicaid alone cost the government $22.5 billion last year.

Government recovery efforts have lagged far behind the problem. Inspector general reports show that $4 billion was recovered last year from improper payments in government health care programs, a figure which has risen steadily from $1 billion in 2007.

The effort to track improper government payments dates back to 2002 under the Bush administration and was later expanded to include Medicare and, most recently, Medicaid. Last year's health care overhaul called for about $6 billion in savings by cracking down on waste and fraud.

Past administrations have made similar efforts to reduce waste and audit programs for efficiency and effectiveness. Vice President Al Gore headed President Bill Clinton's "Reinventing Government" effort, while President George W. Bush created a new method of assessing and rating government programs.

In carrying on the tradition, President Obama brought it under the Biden's control and instructed all government agencies to look for wasteful spending, just as he has pushed them to eliminate unneeded regulations.

Outside experts say the effort is worthwhile — but they warn not to expect too much.

"It's nickels and dimes in terms of the whole thing, but no one can argue that you should just let it go," says Patrick Louis Knudsen, a budget expert at the conservative Heritage Foundation. "I don't think that you can correct the whole budget problem from that."

Veronique de Rugy, a senior research fellow at George Mason University's Mercatus Center, says past government efforts have proven largely ineffective.

"The federal government is so big at this point that you just can't do proper oversight, unless you're willing to hire an army and give them enforcement powers," she says. "They don't ever seem to get it under control."