Medicaid Audits Cost More Than Fraud They Reveal

As states and the federal government continue to fight Medicaid fraud, investigators recently revealed that a government program designed to fight such fraud ended up costing more than it saved. According to the Government Accountability Office the fraud prevention program cost the United States about $102 million in auditing fees since its inception in 2008. Since then it has only identified $20 million in Medicaid fraud.

The Justice Department estimates that Medicaid and Medicare cost at least $60 billion a year in fraud. In an effort to reduce the money wasted to fraudulent Medicaid payments, Congress passed a law in 2005 that created the Medicaid Integrity Group. This group then hired 10 different companies to conduct Medicaid audits. Five of these companies were designed to analyze state information and identify potential targets, while the five other companies were designed to investigate suspected fraudulent health providers.

Since 2008, these companies conducted at least 1,500 separate audits of various Medicaid health care providers. Since then, about two thirds of the audits revealed little or no information and were dubbed “unproductive” by the GAO, the non-partisan arm of Congress.

Of the more than 1,500 audits performed, 26 of them found evidence of Medicaid overpayments that amounted to about $8.1 million. Other audits that were performed in partnerships with various states found an additional $4.4 million in overpayments, while joint state and federal investigations revealed about $7 million more.