OMB Releases Annual Data Showing Lowest Government-wide Improper Payment Rate Since 2014
Today, the Office of Management and Budget (OMB) is releasing its annual data on improper payments, which shows an improper payment rate of 3.97%, the lowest government-wide rate in more than a decade and the second lowest rate since 2009. This significant progress in lowering improper payments demonstrates the Biden-Harris Administration’s unwavering commitment to improving the integrity of Government programs while ensuring that every program delivers results for the American people.
The improper payment rate has declined by nearly 50 percent since Fiscal Year 2021, when President Biden took office mid-year amidst a once-in-a-lifetime pandemic. This substantial improvement is driven by a government-wide approach focused on improving up-front controls, prioritizing fraud prevention, and driving increased collaboration between agencies and their inspectors general.
Improper payments include overpayments, underpayments, and even payments made to the right recipient in the right amount but not in strict adherence to agency policies and procedures are all improper payments. Furthermore, if an agency has insufficient documentation when performing its improper payment review to determine whether a particular payment was made properly, the entire payment is counted toward the improper payment rate despite there being no evidence to support the payment was made improperly. Even in cases where improper payments are subsequently recovered, they are still counted as improper.
The Centers for Medicare & Medicaid Services (CMS), in particular, made significant progress in minimizing improper payments, with Medicaid continuing to report significant reductions in its improper payment rate. In FY 2024, Medicaid saw a reduction of their improper payments by more than $19 billion, bringing their improper rate to just 5.1% — a decrease of more than 75% from the 21.7% rate reported in FY 2021. This builds on top of the pronounced reduction already seen in FY 2022 and FY 2023, with the continued decrease in improper payments resulting from CMS’ ongoing work with states to improve states’ compliance, processes, and systems.
With today’s release, OMB continues to make major strides in addressing improper payments, especially for ongoing and recurring programs. The end result of OMB’s concerted efforts is increased integrity in Government programs and an increase in taxpayer funds delivering results. While OMB’s government-wide approach is paying dividends, more work remains to continue protecting taxpayer dollars and ensuring that the Government works better for the American people.
