According to a GAO report from March 2020, of the federal government agencies that reported improper payments to the GAO, those improper payment estimates for fiscal year 2019 totaled about $175 billion, an increase from the fiscal year 2018 total of $151 billion. Of the $175 billion, about $121 billion (approximately 69 percent) was concentrated in three program areas, Medicaid, Medicare, and the Earned Income Tax Credit (EITC). Substantial improper payments are also for food benefits provided by Food and Nutrition Services, like SNAP and WIC; and with the Children’s Health Insurance Program (CHIP).
Why are improper payments so high? The GAO says that in part its because of an inability to “verify the accuracy of a payment identified [including information to] support a beneficiary’s eligibility for a benefit…”
To make matters worse, the GAO cannot fully assess the correct amount of improper payments because “the federal government’s ability to understand the full scope of its improper payments is hindered by incomplete, unreliable, or understated agency estimates; risk assessments that may not accurately assess the risk of improper payment; and agencies not complying with reporting and other requirements in [the federal law that requires agency reporting].”
This March 2020 GAO report reinforces what we already know, to help prevent fraud, waste, and abuse by government agencies, and to direct the money owed to those in need, data matching and data analytics must be central to the government’s work, much like it is in the private sector. Laws or rules that throttle data sharing or the use of analytics hurts those that pay taxes and hurt those in need.
U.S. Gov’t Accountability Off., GAO-20-336, Payment Integrity: Federal Agencies’ Estimates of FY 2019 Improper Payments (March 2020).
Eric J. Ellman is Senior Vice President for Public Policy and Legal Affairs at the Consumer Data Industry Association (CDIA) in Washington, DC. He also served for eight months as Interim President and CEO of the Association. More