Government Medicaid Audits Cost 5 Times What They Recover
In 2008, the federal government launched a Medicaid audit program designed to curtail the estimated
$60 billion a year that Medicaid loses to fraudulent claims and overpayments. Since its inception, the
program has performed about 1,550 audits, resulting in the identification of about $20 million worth
of Medicaid overpayments and fraud. However, the program also incurred about $102 million in audit
expenses, meaning it cost the government five dollars to discover every one dollar in Medicaid fraud.
According to a study recently released by the Government Accountability Office, about two thirds of
the audits performed were unproductive. The audit program, begun in 2008 by the Medicaid Integrity
Group, hired 10 different companies to perform the audits. Five of those companies were hired to
perform audits of state records while another five were hired to investigate individual healthcare
providers that were identified as potential sources of fraudulent payments.
The audit program ended in 2011, and resulted in about $19.9 million in identified overpayments or
Medicaid fraud. Currently, the Medicaid integrity group is also conducting “collaborative” audits with
state Medicaid officials. There are 137 of these audit programs in progress, targeting health care
providers or industries that state Medicaid officials believe federal auditors should investigate.
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