$55 Billion In "Improper" Spending

Sharyl Attkisson is an investigative correspondent for CBS News.
When you do as many stories on government waste and fraud as I do, you can almost start to believe that if the misspending could be wiped out, we'd have enough money to pay for all of our needs, help the guys next door, and still have money leftover to give some back to hard working taxpayers.

The scope of "improper payments," as the government calls them, is so huge, it's counted in terms of billions of dollars. It's so huge, you may even begin to think a billion dollars isn't that much. You forget that a billion is it's a thousand million. And that a million is a thousand thousand . And so on.

A new report from the GAO has some upsetting figures on this front. Congress now requires major executive branches to report how much in improper payments (of your tax dollars) they believe they make in a given year. For fiscal year 2007, the GAO reports the total is $55 billion dollars. That amounts to about "2% of the total federal executive branch agencies'" spending, which right about now totals almost $2.8 trillion. Now that's huge.

Most of the $55 billion in improper payments comes from eight programs and "other":

  • Medicaid: $12.9 billion
  • Earned Income Tax Credit: $11.4 billion
  • Medicare fee-for-service: $10.8 billion
  • "Other": $6.7 billion
  • Supplemental Security Income: $4.1 billion
  • Unemployment Insurance: $3.2 billion
  • Old Age Survivors' Insurance $2.5 billion
  • Food Stamps: $1.8 billion
  • National School Lunch Program: $1.4 billion
Tonight's Follow the Money story on the CBS Evening News looks at the huge amount of improper payments made by Medicare to hospitals who have billed the federal government improperly or fraudulently. The government started a pilot program in three states to try to recoup some of the losses and it is, financially, extremely successful. Private auditors, who get to keep a cut of the fraud or improper payments they unearth, headed to hospitals in three states (California, New York and Florida) and combed through a slice of audits.

What did they find? Hundreds of millions of dollars that should not have been billed to Medicare. Much of that money has been returned to the Medicare Trust Fund which, without a lot more help and a small miracle, will go belly up in a little more than a decade.

The auditing program is supposed to be expanded to 50 states in March but-- well, you can probably write this script-- the hospital lobby is trying to put a halt to all of that. They say they agree that Medicare should be properly billed, but claim the audits are unfair, the auditors are "bounty hunters," and the program is riddled with problems. On the other hand, the government says the hospital lobby is trying to exploit a few glitches in a highly successful program in order to put the brakes on the whole idea.

So where do things stand today? The hospital lobby, backed by some members of Congress, is pushing for a moratorium on the rollout of hospital Medicare audits to all 50 states. Consumer groups and the government Medicare folks say the rollout should march onward. Hopefully we'll end up with something that somehow will end up eliminating a good chunk of the waste, fraud or abuse. And maybe shrink those government "improper payment" numbers for next year.

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    Sharyl Attkisson is a CBS News investigative correspondent based in Washington.