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Transcript for the audio podcast:
U.S. Department of Health and Human Services Met Many Requirements of the Improper Payments Information Act of 2002, but Was Not Fully Compliant

From the Office of Inspector General of Department of Health and Human Services

http://oig.hhs.gov

[Roberta Baskin] I'm Roberta Baskin, Director of Media Communications, speaking with Kay Daly, the Assistant Inspector General for Audit Services. Now the OIG recently issued a report about improper payment reporting, and Kay let's just start with what is an improper payment?

(Kay Daly) An improper payment is a payment that should not have been because it did not meet program rules, or was an incorrect amount. It includes both overpayments and underpayments.

[Roberta Baskin] How are improper payments tied to fraud within HHS programs?

(Kay Daly) Improper payments are NOT estimates of fraud. While all payments obtained by fraud are improper, NOT all improper payments are fraudulent. Tools that measure improper payments are not designed to detect or measure the amount of fraud in programs such as Medicare.

(Interviewer) What are Inspectors General supposed to do about reporting on improper payments?

(Kay Daly) In 2010, Congress passed legislation requiring Inspectors General to review and report on agencies' improper payment information every year. We make determinations on requirements in the law, for example: did the agency assess the program's risk level? Did it develop improper payment estimates and were the error rates below 10 percent? Did it establish and meet targets to reduce improper payments? Did the agency publish plans to correct the problems?

[Roberta Baskin] How big of a problem are improper payments at HHS?

(Kay Daly) In 2012, the Department reported almost $65 billion dollars in improper payments across eight high-risk programs. And this is over half of all improper payments reported across the Federal Government. HHS did not report an error rate for the ninth high-risk program, called Temporary Assistance for Needy Families, or TANF, because HHS does not have authority to REQUIRE states to provide the necessary data. So there is no estimate for that program.

[Roberta Baskin] Did all of these HHS programs have improper payment rates of less than 10 percent?

(Kay Daly) Well seven of the eight programs had rates below 10 percent. Medicare Advantage did not. Its improper payment rate was 11.4 percent which is over $13 billion dollars in estimated improper payments.

[Roberta Baskin] $13 billion is an enormous amount of improper payments. So how did the Department fare in meeting its reduction targets?

(Kay Daly) The Department reported that four programs, Medicaid, Medicare Prescription Drugs, Head Start, and the Child Care and Development Fund met their improper payment rate reduction targets. However, three programs, the Medicare Fee for Service, Medicare Advantage, and Foster Care programs had targets that they did not meet. So the two remaining programs, TANF and the Children's Health Insurance Program, or CHIP, did not have established targets.

[Roberta Baskin] Did HHS develop the required corrective action plans?

(Kay Daly) The Department did develop plans for 7 of the 9 programs. For TANF, this requirement did not apply because there was no estimate. HHS did not publish a corrective action plan for CHIP, but reported it was working with states to develop corrective action plans for that program.

[Roberta Baskin] Did OIG identify any other problems?

(Kay Daly) We also looked at the accuracy and completeness of the Department's reporting. The Child Care and Development Fund overstated the rate of improper payments and understated the total amount of improper payments. We also identified some relatively minor mathematical errors that effected two programs and a few other issues.

[Roberta Baskin] What does OIG recommend that the Department do?

(Kay Daly) The Department should continue reducing improper payments, and meet its target rates. It should also develop error rate reduction targets and corrective action plans for CHIP. Finally, we also recommended that the Department ensure that amounts used in the computations for reporting improper payments are accurate and complete.

[Roberta Baskin] Thank you, Kay Daly, for sharing this important work on improper payment reporting.

(Kay Daly) Thank you.

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