29 Aug GAO’S 2025 REPORT HIGHLIGHTS MEDICAID IMPROPER PAYMENTS
Improper Payments Remain a Systemic Issue
In its August 2025 publication, GAO-25-108067, the Government Accountability Office (GAO) identified 32 unresolved priority recommendations for the Department of the Treasury. A key focus of the report is the ongoing challenge of fraud and improper payments that weaken federal programs, with Medicaid consistently among the most impacted.
The GAO estimates that fraud costs the federal government between $233 billion and $521 billion annually. Since 2003, improper payments have reached almost $2.8 trillion, and Medicaid remains one of the largest contributors. For seven consecutive years, improper payments across all programs have exceeded $150 billion per year.
Recommendations from GAO
To address these vulnerabilities, the GAO urged the Treasury and the OMB to:
- Expand fraud estimation methods in high-risk programs, such as Medicaid, by using advanced analytics.
- Adopt post-payment reviews and recovery audits to strengthen detection and recovery of improper disbursements.
- Direct oversight resources to the areas of highest exposure, including Medicaid.
The report also warned that as more time passes, recovering overpayments becomes increasingly difficult.
Medicaid’s Billion Dollar Problem
Syrtis Solutions’ white paper, Improper Payments: Medicaid’s Billion Dollar Problem, points to several recurring causes of Medicaid’s high error rate:
- Eligibility and enrollment errors
- Incomplete verification processes
- Coordination of benefits (COB) gaps
While the GAO report emphasizes retrospective auditing, Syrtis Solutions stresses the importance of front-end prevention. The company’s ProTPL solution provides real-time access to verified other health insurance (OHI) and third-party liability (TPL) data. This enables managed care organizations (MCOs) to avoid paying claims that should be covered by other third parties, substantially lowering the risk of improper payments.
Moving Forward
Medicaid’s improper payment problem represents both a financial and operational challenge for federal and state governments. GAO’s recommendations underscore the importance of strengthening oversight, while states and MCOs can take immediate steps by adopting proven, proactive solutions.
Case results demonstrate that advanced COB and TPL detection can deliver return on investment ratios exceeding 15:1, resulting in tens of millions of dollars in annual savings and enhanced program integrity.
The GAO’s 2025 report confirms that improper payments continue to be one of the federal government’s most pressing challenges. Medicaid is at the center of this issue, requiring both federal oversight and proactive action at the plan level. Syrtis Solutions’ tools enable states and MCOs to reduce improper payments, safeguard taxpayer dollars, and enhance the long-term sustainability of Medicaid.