Agencies reduce some payment errors; but overall rate rises

The government’s error rate for program payments rose to 3.9 percent, or $72.1 billion, in fiscal 2008 from 2.8 percent, or $42.1 billion, the previous year, the Office of Management and Budget said. The error rate increased because agencies added 12 programs to those already being measured, OMB said in a recent report.

Agencies in 2008 also increased the amount of federal outlays being measured so that they now measure 97 percent of all program payments that are at risk of being inaccurate, OMB said. In 2007, agencies reported on 85 percent of those federal outlays, the report issued Jan. 9 said.

“Agencies are successfully working to eliminate improper payments on all programs with a risk of error,” said Clay Johnson, OMB deputy director for management, at a briefing about the report.

The 3 percent of unmeasured high-risk outlays are from the Medicare prescription drug benefit program and several smaller Homeland Security Department programs, and those will begin to be reported in 2010, he said.

In 2008, 12 programs accounted for about 90 percent of reported improper payments, the report said. Those programs included three from the Health and Human Services Department: Medicaid, Medicare Fee-for-Service and Medicare Advantage, according to the report.

Agencies continue to reduce the improper payments in the programs they started tracking in 2004, when OMB started tracking such payments. Then the error rate for those programs was 4.3 percent, or $45 billion in improper payments; in 2008, the rate declined to 3 percent, or $37.9 billion, OMB said.

“The past five reporting years have shown that once an agency measures and reports program errors, it is able to implement corrective actions to reduce errors in subsequent years,” the report said.

Improper payments include payments that are the wrong amount, go to the wrong person or for the wrong purpose, the report said.