GAO’s Latest Findings on Improper Payments
The Government Accountability Office (GAO) released report GAO-25-108067 in August 2025, identifying 32 open priority recommendations for the Department of the Treasury. At the forefront of these recommendations is the reduction of fraud and improper payments, an issue that continues to plague federal programs, especially Medicaid.
GAO estimates that the federal government loses $233 to $521 billion annually to fraud. Since 2003, nearly $2.8 trillion in improper payments have been reported, with Medicaid consistently among the top contributors. For the past seven years, government-wide improper payments have exceeded $150 billion annually.
Recommendations from GAO
To address these challenges, GAO urged Treasury and OMB to:
- Expand fraud estimation capabilities for high-risk programs like Medicaid, supported by advanced data analytics.
- Conduct post-payment reviews and recovery audits to better identify and recover improper disbursements.
- Prioritize oversight in programs with the highest risk of fraud and waste.
GAO also cautioned that delays in implementing stronger controls reduce the likelihood of recovering overpayments.
Medicaid’s Billion Dollar Problem
The GAO’s recommendations reinforce findings highlighted in Syrtis Solutions’ white paper, Improper Payments: Medicaid’s Billion Dollar Problem. Medicaid improper payments often arise from:
- Eligibility and enrollment errors
- Incomplete verification processes
- Gaps in the coordination of benefits (COB)
While GAO stresses the importance of post-payment recovery, Syrtis Solutions emphasizes the need for front-end cost avoidance. Through its ProTPL solution, Syrtis delivers verified other health insurance (OHI) and third-party liability (TPL) data in real time. This approach enables MCOs to avoid paying claims that are the responsibility of other third parties, thereby significantly reducing the likelihood of improper payments.
Moving Toward Solutions
Improper payments remain one of Medicaid’s most persistent challenges. GAO’s report underscores the urgency of improved oversight, but states and managed care organizations (MCOs) can act today by adopting proactive tools that align with these recommendations.
Case studies show that effective TPL detection improves COB and can deliver ROI ratios greater than 15:1, producing tens of millions in annual savings while strengthening Medicaid program integrity.
The GAO’s latest report confirms what healthcare stakeholders already know—improper payments represent a systemic, billion-dollar issue. For Medicaid, pairing federal oversight with proactive cost-avoidance solutions is the most effective path forward. Syrtis Solutions continues to support states and MCOs with proven tools that reduce improper payments, improve accuracy, and safeguard limited program funds.
