In fiscal year 2023, federal agencies reported approximately $236 billion in improper payments, contributing to a cumulative total of nearly $2.7 trillion since 2003. These figures encompass payments that should not have been made or were made in incorrect amounts. The Government Accountability Office (GAO) estimates that fraud-related losses range from $233 billion to $521 billion annually.
The Department of Health and Human Services’ Office of Inspector General (HHS OIG) anticipates recovering over $3.44 billion from investigations into fraud and misallocated funds within Medicare, Medicaid, and other government health programs for fiscal year 2023. This includes 707 criminal enforcement actions and 746 civil actions, such as false claims and civil monetary penalty settlements. Additionally, more than 2,000 individuals and entities have been excluded from participating in federal healthcare programs.
The Department of Justice (DOJ) reported nearly $2.7 billion in recoveries from False Claims Act settlements and judgments in 2023, marking the highest number of settlements and judgments in history, though the monetary value is less than in recent years. The DOJ has increased its commitment to initiating cases without qui tam relators, significantly boosting self-initiated cases to 500 from 305 in 2022.
The House Committee on Oversight and Accountability released a staff report detailing how states processed and administered pandemic unemployment insurance claims with minimal oversight, resulting in billions of taxpayer dollars lost to improper and fraudulent payments. The U.S. Government Accountability Office estimates that 11 to 15 percent of total benefits paid during the pandemic were fraudulent, totaling between $100 to $135 billion. The Department of Labor’s Office of Inspector General estimates that at least $191 billion in pandemic unemployment insurance payments could have been improperly paid, with a significant portion attributable to fraud. As of March 2023, states reported recoveries of improper payments amounting to only $6.8 billion.
The GAO identified six programs that generated $200 billion, or 85%, of the estimated $236 billion in improper payments for fiscal year 2023: Medicare, Medicaid, Unemployment Insurance, Paycheck Protection Program, Earned Income Tax Credit, and Supplemental Security Income. These programs have been previously identified as high-risk for fraud, waste, and abuse.
The Department of Government Efficiency (DOGE) Subcommittee, chaired by Rep. Marjorie Taylor Greene, aims to combat waste, fraud, and abuse in federal spending with real-time implementation of recommendations. The subcommittee’s first meeting on February 12, 2025, focused on addressing financial inefficiencies in federal programs like Medicare, Medicaid, and SNAP. Federal agencies reported $236 billion in improper payments in 2023, with cumulative losses reaching $2.7 trillion since 2003. Proposed reforms could lead to significant cost savings, including $120–$236 billion annually from asset testing for Supplemental Security Income applicants and $164 billion over ten years by repealing the Medicaid Streamlining Rule. Legislative efforts, such as the Protecting Medicaid Beneficiaries Act of 2023, aim to enhance oversight and reduce waste, with support from figures like Elon Musk for better fiscal management.
The federal government loses between $233 billion and $521 billion annually to fraud, according to GAO’s government-wide estimates based on data from fiscal years 2018 through 2022. Additionally, federal improper payment estimates have totaled about $2.8 trillion since fiscal year 2003. For instance, 16 agencies reported a total of about $162 billion in improper payments across 68 programs in fiscal year 2024. Most (75%) of these improper payments were concentrated in five areas.
Efforts to combat fraud were consolidated and strengthened under the Health Insurance Portability and Accountability Act of 1996 (HIPAA). The Act established a comprehensive program to combat fraud committed against all health plans, both public and private. The legislation required the establishment of a national Health Care Fraud and Abuse Control Program (HCFAC), under the joint direction of the Attorney General and the Secretary of the Department of Health and Human Services acting through the Department’s Inspector General. The HCFAC program is designed to coordinate federal, state, and local law enforcement activities with respect to health care fraud and abuse.
In fiscal year 2023, civil health care fraud settlements and judgments under the False Claims Act exceeded $1.8 billion, in addition to other health care administrative impositions won or negotiated by the federal government. Due to these efforts, as well as those of preceding years, more than $3.4 billion was returned to the federal government or paid to private persons in fiscal year 2023. Of this $3.4 billion, the Medicare Trust Funds received transfers of approximately $974 million during this period, in addition to $257.2 million in federal Medicaid money that was transferred separately to the Centers for Medicare & Medicaid Services.
The San Francisco Public Works corruption scandal is an ongoing investigation by federal, state, and local prosecutors and investigators into bribery and fraud involving employees and contractors working for San Francisco Public Works, and particularly, the Department of Building Inspection. The investigation was first brought to the public’s attention by the arrest in January 2020 of Mohammed Nuru, who was the Director of Public Works, by federal agents. The scandal involved multiple instances of corruption, including conflict of interest, bribery, and fraud within the Department of Building Inspection. Several former city officials and individuals in the construction industry were indicted and faced charges related to corrupt practices. The scandal was uncovered through audits, legal proceedings, and investigations by city authorities and federal prosecutors, ultimately leading to the exposure of widespread corruption within the department. As of December 2023, 23 employees, contractors, consultants, and permit expediters have been implicated in the investigation.
The federal government continues to address these issues through various initiatives and legislative efforts. The Department of Government Efficiency, under the leadership of Elon Musk, is implementing reforms aimed at reducing waste and improving fiscal management. These efforts include enhancing oversight mechanisms, streamlining administrative processes, and leveraging technology to detect and prevent fraudulent activities.
While these measures are expected to yield positive results over time, the complexity and scale of federal programs mean that challenges will persist. Ongoing vigilance, robust oversight, and adaptive strategies will be necessary to mitigate improper payments and fraud effectively. That’s just where we are now.
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Greg Sanders covers federal oversight, administrative restructuring, and the mechanics of government reform. He holds a degree in public policy from the University of Texas and began his career auditing municipal budgets before moving to federal-level investigative reporting. His work focuses on how agencies evolve, consolidate, and expand under the banner of efficiency.