United States Government Accountability Office

Highlights of GAO-24-107487, a testimony 

before the Subcommittee on Oversight and 

Investigations, Energy and Commerce

Committee, House of Representatives

April 16, 2024

MEDICARE AND MEDICAID

Additional Actions Needed to Enhance Program 

Integrity and Save Billions

What GAO Found

The Department of Health and Human Services (HHS) estimated a combined 

total of over $100 billion in improper payments in the Medicare and Medicaid 

programs in fiscal year 2023. This represents 43 percent of the government-wide 

total of estimated improper payments that agencies reported for that year.

Improper Payments Estimates for Fiscal Year 2023

Note: Estimates also include payments whose propriety cannot be determined due to lacking or 

insufficient documentation.

The Centers for Medicare & Medicaid Services (CMS), within HHS, has taken 

several steps in response to GAO recommendations to help reduce improper 

payments in Medicare and Medicaid. These actions have resulted in billions of 

dollars in federal savings. For example:

• Improved fraud prevention in Medicare. CMS implemented capabilities 

that automatically stopped payments of certain improper and non-payable 

claims. These improvements generated an estimated almost $2 billion in 

savings over a 5-year period. 

• Improved Medicaid managed care oversight. CMS worked with states and 

audit contractors to improve oversight. This included an exponential increase

in investigations of managed care providers, from 16 in 2016 through 2018 to 

893 in 2019 through 2021. Preliminary results indicate that the audits are 

identifying overpayments.

In the current fiscal environment, addressing improper payments and providing 

sufficient oversight of program spending, more generally, is particularly 

important. Federal spending for Medicare and Medicaid has grown by almost 80 

percent over the past decade and growth in these and other health programs is 

projected to continue. View GAO-GAO-24-107487. For more 

information, contact Jessica Farb at (202) 512-

7114 or farbj@gao.gov.

Why GAO Did This Study

In 2023, the Medicare program spent 

an estimated $1.0 trillion to provide 

health care services for approximately 

66 million elderly and disabled 

individuals. This involved processing 

over a billion transactions. Medicaid is 

a joint federal-state program that 

finances health care for low-income 

and medically needy individuals. It is 

the second largest health care program 

by expenditures, with an estimated 

$849 billion in federal and state

spending for services provided to 

about 90 million individuals in 2023. 

Medicare and Medicaid are complex 

and large programs. They represented

26 percent of federal program 

spending in fiscal year 2023. The 

programs are susceptible to improper 

payments, as well as potential 

mismanagement and fraud, waste, and 

abuse. As a result, GAO added 

Medicare to its High-Risk list in 1990 

and Medicaid in 2003.

This testimony focuses on examples of 

steps taken by CMS to reduce 

improper payments in Medicare and

Medicaid, as well as actions still 

needed by CMS and Congress. It

draws on GAO’s reports issued and 

recommendations made from 2008 

through 2024 on the Medicare and 

Medicaid programs and known steps 

CMS has taken to address these

recommendations as of March 2024. 

What GAO Recommends

CMS has implemented dozens of GAO 

recommendations to improve Medicare 

and Medicaid. As of March 2024, over 

100 recommendations to CMS remain 

unimplemented, including 15 related to 

improper payments.
Page ii Highlights

Health Care and Other Government Program Spending, Actual and Projected

CMS and congressional action on GAO recommendations related to Medicare 

and Medicaid has resulted in over $200 billion in financial benefits since 2006. 

Action on recommendations that remain unimplemented would further enhance 

program integrity and save billions of dollars in Medicare and Medicaid spending.

• Provider screening and enrollment. GAO recommended CMS expand its 

review of states’ implementation of provider screening and enrollment 

requirements in Medicaid, and monitor progress when states are not fully 

compliant. For Medicare, GAO recommended that CMS implement a riskbased plan for revalidating enrollment for Medicare providers after pauses 

during the COVID-19 pandemic. 

• Prepayment claim reviews in Medicare. GAO recommended that CMS 

seek legislative authority to allow Recovery Auditors to conduct prepayment 

claim reviews, which are generally more cost effective than postpayment 

reviews in preventing improper payments.

• Equalizing certain Medicare payments. GAO recommended that Congress 

take action to address that Medicare pays more for certain services based on 

where they are provided. Congress has taken some actions. For example, 

this committee proposed and the House passed legislation to equalize 

payments for certain drug administration services. Taking additional steps to 

equalize payments has been estimated to save Medicare $141 billion over 10 

years.

• Telehealth. In response to the COVID-19 pandemic, HHS temporarily 

waived certain Medicare restrictions on telehealth and use increased 

dramatically. We recommended CMS comprehensively assess the quality of 

telehealth services in Medicare, which is needed to ensure those services 

are medically necessary, among other things.

• Medicaid demonstrations. In response to GAO recommendations, CMS 

has made changes to its policies for ensuring that demonstrations do not 

increase federal spending, reducing federal liabilities by over $120 billion. 

Additional action by CMS and Congress could result in further savings.

• State auditors. State auditors play an important role in Medicaid oversight 

and have identified improper payments and other deficiencies through their 

reviews. GAO recommended that CMS use trends in state auditor findings to 

inform its Medicaid oversight and share information on the status of actions 

to address findings with state auditors.