Fraud Facts

Overall

Each year, billions of American taxpayers’ dollars are wasted on improper payments to individuals, organizations and contractors. These are payments made in the wrong amounts, to the wrong person, or for the wrong reason. In 2009, improper payments totaled $98 billion, with $54 billion stemming from Medicare and Medicaid.

SOURCE: The White House, Office of the Press Secretary, March 10, 2010

"The United States spends more than $2 trillion on health care every year. The National Health Care Anti-Fraud Association estimates conservatively that at least 3 percent -- or more than $60 billion each year -- is lost to fraud. Although it is not possible to measure precisely the extent of fraud in Medicare and Medicaid, everywhere it looks OIG continues to find fraud against these programs. ... OIG opened 1,750 new health care fraud investigations in FY 2008."

SOURCE: Testimony by Daniel R. Levinson, United States Inspector General, before the Senate Special Committee on Aging on fraud in the Medicare and Medicaid programs, May 6, 2009

"The units of measure for losses due to health care fraud and abuse in this country are hundreds of billions of dollars per year. We just don't know the first digit. It might be as low as one hundred billion. More likely two or three. Possibly four or five. But whatever that first digit is, it has eleven zeroes after it. These are staggering sums of money to waste, and the task of controlling and reducing these losses warrants a great deal of serious attention."

SOURCE: Testimony by Malcolm K. Sparrow, professor of the Practice of Public Management, John F. Kennedy School of Government, Harvard University, before the Senate Subcommittee on Criminal Prosecution as a Deterrent to Health Care Fraud, May 22, 2009. To review the report in its entirety, click here.

SMPs

Since the inception of the SMP program in 1997, actual Medicare funds recovered attributable to the projects are $4,521,399. Total savings to Medicaid, beneficiaries and other payers are approximately $101 million.

In 2008, the 54 projects had a total of 4,685 active volunteers. These volunteers educated beneficiaries in 6,869 group education sessions and held 24,505 one-on-one counseling sessions. In addition, the projects conducted 785,468 media outreach events1 and 5,742 community outreach education events. Medicare funds recovered attributable to the projects were $21,068 and actual savings to the beneficiaries attributable to the projects were $34,548. Total savings to Medicare, Medicaid, beneficiaries and others were $65,735. Additionally, cost avoidance on behalf of the Medicare program, the Medicaid program, beneficiaries and others totaled $73,006.

SOURCE: Office of the Inspector General SMP Performance Report of 2008 outcomes published in May 2009

Definition of Medicare Fraud

Medicare fraud is defined as knowingly and willfully executing, or attempting to execute, a scheme or ploy to defraud the Medicare program, or obtaining information by means of false pretenses, deception or misrepresentation in order to receive inappropriate payment from the Medicare program.  

The most frequent kind of fraud arises from a false statement or misrepresentation that is relevant to entitlement or payment under the Medicare program.