Funding for these agencies to pursue fraud and  abuse in federal health care programs is available from the Health Care  Fraud and Abuse Control Program (HCFAC). The magnitude of improper  payments throughout Medicaid is unknown, although a few states have  attempted to determine the level by measuring the accuracy of their  program’s payments. As we recently reported, the Medicare  program devotes little more than one-fourth of 1 percent of its program  expenditures to safeguarding payments. States’ Postpayment Detection Activities and Capabilities Differ

Just as states are uneven in their efforts to prevent improper payments,  they also vary in their ability to detect improperly paid claims. Current Federal Role Focuses on Technical Assistance

HCFA and the OIG—the agencies that are responsible for the Medicaid  program at the federal level—are taking steps to promote effective  Medicaid program integrity by providing technical help to the states to  facilitate states’ efforts. The federal government  has provided technical assistance and a forum for information exchange  for the states, as well as some guidance. Scope and Methodology

As we developed our work on this report, we focused on the risk of  improper Medicaid fee-for-service payments, states’ efforts to address  improper payments—including efforts to investigate and prosecute fraud— and the  guidance and oversight the states are receiving from federal  oversight agencies.
What GAO Found

State Medicaid programs make a wide variety of payments to individuals, institutions, and managed health care plans for services provided to beneficiaries whose eligibility status may fluctuate because of changes in income. Because of the size and the nature of the program, Medicaid is potentially at risk for billions of dollars in improper payments. The exact amount is unknown because few states measure the overall accuracy of their payments. Some improper Medicaid payments by states are the result of fraud by billers or program participants, but such improper payments are hard to measure because of the covert nature of fraud. Efforts by state Medicaid programs to address improper payments are modestly and unevenly funded. Half of the states spend no more than 1/10th of one percent of program expenditures to safeguard program payments. States also differ in how they help prevent improper payments as well as the degree to which they coordinate their investigations and prosecutions of fraud. Federal guidance to the states relies largely on technical assistance. The Health Care Financing Administration has recently taken a more active role to facilitate states' efforts and provide a national forum to share information.