The Department of Health and Human Services has to fill some gaps in improper payment reduction and reporting compliance, according to the agency's Office of the Inspector General (OIG).
While HHS has met most of the Improper Payment Information Act's requirements in its 2012 annual financial report, a recent OIG audit found several areas that need improvement, such as data accuracy in calculating mispayment recapture plans.
In fiscal year 2012, HHS made an estimated $64.8 billion in improper payments -- both overpayments and underpayments -- and in its annual financial report noted improper payments for nine programs deemed high financial risk by the Office of Budget and Management: Medicare fee-for-service, Medicare Advantage, Medicare prescription drugs, Medicaid, CHIP, TANF, Foster Care, Head Start and the Child Care Development Fund.
HHS failed to report improper payment estimates or create a subsequent action plan for TANF, though, and also still has to publish a corrective action plan for CHIP, the OIG found.
In fiscal year 2012, HHS did meet improper payment reduction targets for the Child Care Development Fund, Head Start, Medicaid and Medicare Part D -- with error rates of 9.4 percent, 0.6 percent, 7.1 percent and 3.1 percent, respectively.
But HHS did not meet goals for reducing erroneous payments in traditional Medicare, Medicare Advantage or Foster Care, the OIG found, with improper payment rates of 8.5 percent for Medicare fee-for-service, 11.4 percent for Medicare Advantage and 6.2 percent for Foster Care.
Neither HHS' annual report nor the OIG audit noted whether the programs were ultimately overfunded or underfunded, although the Government Accountability Office recently estimated that Medicare Advantage was overpaid by at least $3.2 billion between 2010 and 2012.
The OIG also found financial inaccuracies in HHS' accounting for four programs -- the Child Care Development Fund, Medicare fee-for-service, Medicare Advantage and Medicare Prescription Drugs -- and incomplete data for TANF and CHIP.
The OIG is recommending that HHS consider additional strategies for meeting error reduction targets and ensuring data accuracy and comprehensiveness; the government watchdog is also suggesting that HHS ensure financial data is being retained as specified by program requirements and that the agency develop rate reduction targets and corrective action plans for CHIP.
On the issue of data accuracy, HHS officials told the OIG they are refining internal procedures for controlling mathematical errors and data retention, and that they will address the other areas of concern.
As for TANF's missing error rates, in HHS' FY 2012 annual report agency managers noted that a continuing challenge in estimating improper payments in the TANF program was in part a factor of "statutory limitations." HHS can not compel states -- with whom the program is administered -- to collect and turn over information regarding overpayment, and so the agency does not have an estimate of the program's error rate.