Feds make $125 billion in “improper payments” … whoa, Nellie.

In these days of Moneyball and Team Obama’s campaign technology apparatus that could pin down the ice cream flavor that somebody eats, this shouldn’t happen.

But, it does.

The GAO just issued a report saying that the Feds made an estimated $125 billion (that’s billion with a “b”) in so-called “improper payments” in 2014



 Here are some of the ugly details …


According to the GAO report

Government-wide, improper payment estimates totaled $124.7 billion in fiscal year 2014, a significant increase of approximately $19 billion from the prior year’s $105.8 billion.

The estimated improper payments for fiscal year 2014 were attributable to 124 programs spread among 22 agencies.

The reported government-wide error rate was 4.5 percent of program outlays in fiscal year 2014 compared to 4.0 percent reported in fiscal year 2013.

The increase in the 2014 estimate is attributed primarily to increased error rates in three major programs: the Department of Health and Human Services’ (HHS) Medicare Fee-for-Service and Medicaid programs, and the Department of the Treasury’s Earned Income Tax Credit program.

These three programs accounted for $80.9 billion in improper payment estimates, or approximately 65 percent of the government-wide total for fiscal year 2014.


Think about that for a moment …

4.5% of program outlays are “improper”.

The $125 billion is about what ObamaCare costs each year.

The number is going up!


Side Note: I had a guest speaker in one of my classes a year or so ago.

The guy was an experienced uber-techie with a big consulting outfit that was trying to implement predictive analytics to squash the fraud in the above programs.

Paraphrasing, he said “we’ve got the algorithms to stop the vast majority of the fraud, but the Administration won’t let them be implemented. Their view is that if the rules inadvertently stop payments to even one entitled person, that’s one too many.  They’d rather incur the fraud and be sure that nobody who is entitled is denied benefits.  We couldn’t give 100% certainty of that. Nobody can.”

The guys didn’t seem to have a political ax to grind … he was just making the observation.



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