Fraud and Abuse 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 1997 more than 25.3 million people have been reached during community education events, more than 4 million beneficiaries have been educated and more than 24,400 volunteers have been active. Total savings to Medicare, Medicaid, beneficiaries and other payers attributed to the SMP projects is $106 million.

In 2010, the 55 Senior Medicare Patrol Projects had 4,964 active volunteers, an almost 12-percent increase in the number of active volunteers since 2009. SMP staff and volunteers educated beneficiaries in 8,300 group education sessions and held 70,789 one-on-one counseling sessions.

The SMP program model is one of prevention. SMPs educated Medicare beneficiaries to scrutinize their medical statements and bill and subsequently reduce fraud and errors, though SMPs are unable to track substantial savings derived from this sentinel effect. Though beneficiaries have several avenues they can take to report fraud, such as the OIG hotline or 1-800-Medicare, some beneficiaries choose to report fraud to the SMP. In these cases, SMPs refer the complaint to the appropriate entity.

In a few of these cases, SMPs are able to obtain documentation proving their financial impact against fraud, which in 2010 resulted in $39,031 documented savings to Medicare, Medicaid, beneficiaries and other insurers. SMP intervention also resulted in a 2010 cost avoidance on behalf of the Medicare program, the Medicaid program, beneficiaries and others totaling $248,064.

The OIG continues to emphasize that the number of beneficiaries who have learned from the Senior Medicare Patrol Projects to detect fraud, waste and abuse and who subsequently call the OIG fraud hotline or other contacts cannot be tracked. Therefore, SMPs are not receiving full credit for all savings attributable to their work.

SOURCE: Office of the Inspector General SMP Performance Report of 2010, outcomes published in May 2011

For More Information

• Elder Financial Abuse Estimated at $2.9 Billion a Year
• Medicare Fraud Estimates: A Moving Target?