By NextBestFitFraud and improper payments
Fraud is estimated at 3–10% of spending. Medicare's fee-for-service improper payment rate was about 7.7% in FY2024, mostly documentation errors.
Evidence
- Fraud conservatively 3% of spending; up to 10% by some estimates.
- Medicare FFS improper payment rate about 7.7% (FY2024).Sources: CMS (2024)
Who's affected
- Taxpayers and public budgets: Fraud and improper payments consume public funds and premiums.
- People with employer coverage: Fraud and improper payments consume public funds and premiums.
- Fraudulent operators and cybercriminals: Fraudulent providers receive improper health payments.
Under your mix of paths
- Pay-first, check-later claims
- Fragmented data across payers
Related costs
Open questions
- How much should be spent on program integrity, and how much friction is acceptable for honest providers?
Caused or worsened by these paths
This problem only matters if one of these paths is chosen.
Expanded telehealth coverage carries a risk of fraud.
Universal ride coverage creates a risk of fraudulent claims for fake rides.
Broader access to buprenorphine and methadone raises concerns about medication diversion.
Solution paths (2)
Open a path for what it fixes, what it creates or worsens, who gains and who loses, precedents, and how it connects to other paths. See all paths as a decision tree.
Real-time fraud detection on all claims; more audits and prosecution.
- +Fraud and improper payments
- −Adds paperwork, coordination, or complexity
- −Requires difficult enforcement
Background checks, site visits, and moratoriums on new providers in high-fraud categories.
- +Fraud and improper payments
- −Adds paperwork, coordination, or complexity
- −Health professional shortage areas
Also addressed by paths for other problems
Moratoriums in high-fraud areas, audits of long hospice stays, and ownership disclosure target hospice fraud.
Dedicated funding for fraud detection, audits, and prosecutors supports deterrence and recovery of fraudulent payments.