Medicaid Fraud Accounts for Billions Lost Each Year
The costs associated with the growing number of Americans who have fallen into poverty and are
relying upon Medicaid for health care insurance are being complicated by the money lost to Medicaid
fraud each year. It's estimated that the federal government alone lost about $22 billion of Medicaid
funds last year to fraudulent claims. Because Medicaid is a joint federal and state program, states are
believed to have lost commensurate amounts during that same time period.
Though the recession officially ended a couple of years ago, state Medicaid budgets have continued to
swell, gobbling up a larger portion of state revenues each year. States currently spend a significant
amount of their income on Medicaid, with many paying more than one third of their total budgets on
Starting in 2014, millions more Americans will be eligible to enroll in Medicaid because of the
Affordable Care Act and its expansion of Medicaid coverage. This will put even more strain on states to
cut costs and prevent Medicaid fraud. States have already made some headway in this area. In 2008,
for example, it was estimated that about 11% of all Medicaid payments were lost or fraudulent claims.
That number decreased to about 8% in 2011.
Though everyone is aware of Medicaid fraud, the problem is often difficult to deal with at a system-
wide level because each state has its own Medicaid system. This makes it difficult to apply one fraud
prevention tactic or solution to all states.
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