Summary: 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.
