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Government programs inappropriately spent more than $236 billion in fiscal year 2023. Medicare and Medicaid made the largest share of improper payments, according to a new report by the Government Accountability Office.

The GAO tracked payments made by 14 federal agencies across 71 different government programs. In 2023, the sum of all wrongful Medicare spending (including Medicare fee-for-service, Medicare Advantage and prescription drug spending) was an estimated $51.1 billion. Medicaid was responsible for another $50.3 billion. Both programs combined accounted for roughly 43% of improper government spending.

It’s important to note that GAO did not track data from programs that are susceptible to “significant improper payments” such as Temporary Assistance for Needy Families. The full extent of improper spending was likely not captured in the report, GAO noted.

Across all agencies, overpayments accounted for the majority of wrongful government spending. Nearly three quarters of improper payments were considered overpayments by GAO, with the rest falling under unknown payments, underpayments or payments that failed due to technical issues.

Problematic Medicare spending

Medicare’s wrongful expenses were distributed among Medicare fee-for-service, MA and prescription drug spending. Medicare fee-for-service made up the largest share of the problematic Medicare spending segment, accounting for an estimated $31 billion in improper spending.

Medicare improperly spent another $17 billion on MA. In January, lawmakers called out the Centers for Medicare & Medicaid Services for making “gross overpayments” to MA plans as private insurers frequently receive higher levels of reimbursement while simultaneously paying out fewer claims than Traditional Medicare.

CMS itself in recent years has taken steps to reduce overpayments to MA plans. In 2023 it began clawing back MA overpayments and returning the money to the Medicare Trust Fund in an effort to ensure the program’s future stability.

In its report, GAO instructed agencies and inspectors general to produce corrective action plans and set goals to reduce improper payments. Its goal, GAO said, is to have a governmentwide improper payment rate of less than 10%.