White House Seeking to Trim $2.1 Billion in Medicaid Waste
Vice President Joe Biden
Lintao Zhang/Getty Images
Vice President Joe Biden.
Vice President Joe Biden. Photographer: Lintao Zhang/Getty Images
The Obama administration is targeting waste in government programs and announced a move to squeeze $2.1 billion out of the Medicaid program over the next five years by tracking down improper payments and fraud.
“As long as there’s waste and fraud in government, serious waste and fraud, people lose confidence in the ability of their government to do their job for them,” Vice President Joe Biden said at the beginning of a Cabinet meeting today on the plan.
The effort to find savings in Medicaid, the federal-state health program for the poor, relies on contractors to find waste. That system recovered almost $670 million so far this year from the health insurance system for the elderly and disabled, according to an administration statement.
Biden announced the plan today at meeting with Jack Lew, White House budget director, Homeland Security Secretary Janet Napolitano, Labor Secretary Hilda Solis, and Health and Human Services Secretary Kathleen Sebelius.
Federal spending is under scrutiny in Congress and President Barack Obama has ordered his Cabinet officials to take steps to reduce some of the $110 billion in improper or erroneous payments made by the government last year.
Under Scrutiny
Lew said that because of the weak economy “every dollar we spend is going to have to be very carefully scrutinized.”
The U.S. Centers for Medicare and Medicaid Services accounted for the largest portion of improper payments in fiscal 2010, amounting to $70.4 billion last fiscal year, according to April testimony to a House panel by Kay Daly, the Government Accountability Office’s director of financial management and assurance.
Patrick Burns, a spokesman for Taxpayers Against Fraud, a Washington-based advocacy group that helps whistleblowers and their lawyers pursue fraud cases, said that the federal government should have clamped down on wasteful Medicare and Medicaid payments far sooner.
“HHS is now ripped and ready for 1980,” Burns said. “You have to wonder what the old management was doing under Reagan, Clinton and Bush.”
Contractors such as Las Vegas-based HealthDataInsights and Canada’s CGI Group Inc. pursue improperly disbursed Medicare payments and collect fees ranging from 9 percent to 12.5 percent of the money they recover.
Spreading Effort
Similar efforts are under way at the Labor Department to cut erroneous payments of jobless benefits and at Homeland Security to cut costs.
“There’s never been a worse time to try and steal from Medicare and Medicaid,” Sebelius said at the meeting. She said that investigators have new tools to find fraud and have built more effective models to track waste.
According to administration figures, the federal government has shrunk contract spending for the first time in 13 years, identified $3 billion in cost reductions in information technology projects across government, worked to help agencies avoid $4 billion in payment errors last year and tripled the amount of recoveries of improper payments to vendors.
Still, Biden said that states are “way behind the curve” when it comes to issuing unemployment insurance. He said that checks are still being sent to people in prison and people who have died.
“There’s a lot of people hurting, they’re hurting very, very badly,” he said, referring to people who have lost their jobs and need the assistance. “An awful of money is being wasted.”
To contact the reporters on this story: Kate Andersen Brower in Washington at kandersen7@bloomberg.net
To contact the editor responsible for this story: Mark Silva at msilva34@bloomberg.net
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