Whether the budget is in surplus or in deficit, we cannot tolerate the wasting of taxpayer dollars – and there are few more egregious examples of waste than improper payments. These are payments made by the government to the wrong person, at the wrong time, or in the wrong amount, and last year, they totaled approximately $110 billion.
This morning, Senator Tom Coburn released a report highlighting one aspect of improper payments: government benefits being sent to the deceased. Senator Coburn found that over the past decade, $1 billion has been sent improperly to individuals clearly ineligible for earthly benefits. While the vast bulk of these improper payments happened during the previous Administration, it’s critical that we move aggressively to curb them – and that’s what we have been doing since the early days of the Obama Administration. In fact, the President has set an aggressive goal: to eliminate $50 billion in improper payments between 2010 and the end of FY 2012.
How are we going to do that?
First, on November 19, 2009, the President issued an executive order laying out a strategy to reduce improper payments through boosting transparency, holding agencies accountable, and creating strong incentives for compliance. Specifically, the executive order required the identification of high-priority programs, the selection of accountable officials to coordinate agency program integrity efforts, the development of supplemental measures of payment error for high-priority programs, a public website to track progress in reducing improper payments (PaymentAccuracy.gov), and the pursuit of tough penalties on contractors for failing to timely disclose credible evidence of significant overpayments received on government contracts.
Second, on March 10, 2010, the President signed a presidential memorandum directing all Federal departments and agencies to expand and intensify their use of payment recapture audits. These are audits which offer specialized private auditors financial incentives to root out improper payments, and have been demonstrated through pilot programs to be highly effective.
Third, on June 8, the President announced that the Administration would cut the improper payment rate in the Medicare Fee for Service program in half by 2012. Doing so will eliminate more than $20 billion in payment errors by FY 2012.
Fourth, on June 18, the President issued a memorandum directing that a Do Not Pay List be established to provide a single source through which all agencies can check the status of a potential contractor or individual. Too often, an agency does not check all the different databases the government has or finds it unnecessarily difficult to do so. This denies agencies essential information they need to determine, for example, if an individual is alive or dead or if a contractor had been debarred. The Do Not Pay List will allow Federal agencies to access this information in a more timely and cost effective manner and will help reduce improper payments made by the Government and help save taxpayer dollars.
That same day, the Vice President announced the expansion of a cutting-edge fraud mapping tool that the Recovery Accountability Transparency Board has deployed that gathers enormous quantities of information in real time and then analyzes the data and helps connect the dots to identify indicators of possible fraud or error. The Administration is piloting it first at the Centers for Medicare & Medicaid Services before expanding the use of this type of tool across government.
Finally, in a ceremony in the State Dining Room on July 22, the President signed the bi-partisan Improper Payments Elimination and Recovery Act (IPERA) into law, which will strengthen and complement the efforts already undertaken to reduce improper payments.
There is still more work to be done as the team here works hard to implement these new strategies and the IPERA legislation. We welcome Senator Coburn’s highlighting of this important issue, and look forward to continue working with Congress to reduce improper payments, combat fraud, cut waste, and make government more effective and efficient.