The National Consumer Protection Technical Resource Center: The Center of Service & Information for SMPs

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Fraud and Abuse Facts


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.


Since 1997 almost 28 million people have been reached during community education events, approximately 5.3 million beneficiaries have been educated and served, and more than 35,000 volunteers have been active. Total savings to Medicare, Medicaid, beneficiaries, and other payers attributed to the SMP projects is $112 million. Total cost avoidance on behalf of the Medicare, Medicaid, beneficiaries, and others is $8.7 million.

In 2012, the 54 Senior Medicare Patrol Projects had 5,137 active volunteers. SMP staff and volunteers educated beneficiaries in 14,748 group education sessions, a 33-percent increase from the year before. The sessions were attended by 449,509 beneficiaries. SMPs held 113,457 one-on-one counseling sessions, a 71-percent increase.

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.

By the end of 2012, expected Medicare and Medicaid funds recovered that were attributable to the projects were $6 million. Savings to beneficiaries and others totaled $133,971, and cost avoidance on behalf of Medicare, Medicaid, beneficiaries, and others was $113,692. Finally, one project provided information to federal prosecutors for a case that eventually resulted in a $12.9 million settlement in 2012.

The OIG continues to emphasize that it is not always possible to track SMP referrals to Medicare contractors or law enforcement from beneficiaries who have learned to detect fraud, waste, and abuse from the projects. Therefore, SMPs may not be receiving full credit for savings attributable to their work. In addition, SMPs are unable to track the substantial savings derived from a sentinel effect whereby fraud and errors are reduced by Medicare beneficiaries’ scrutiny of their bills.

SOURCE: Office of the Inspector General July 2013 Performance Report, reporting on data for 2012

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