New Ideas to Cut Improper Payments

For many years, the federal government has erroneously cut checks to the wrong person for the wrong amount and for the wrong reason – sometimes these misdirected payments even go to dead people or prisoners.  These mistakes, though often inadvertent, contributed to the $125 billion in improper payments made in 2010.  Cutting waste and combating these kinds of erroneous payments has been a priority [] for President Obama. Today, the Administration is taking another step to tackle these improper payments.

As part of the President’s committment to crack down on improper payments he created the Partnership Fund for Program Integrity Innovation, to help States and localities find ways to save taxpayer dollars and deliver benefits more efficiently and effectively.  The “Collaborative Forum,” a group of 200+ state and local administrators and other stakeholders involved in the benefit delivery process, has been working to generate ideas for innovative pilot projects to reduce errors, fraud, and waste.  As a result of their efforts, OMB is announcing four exciting new pilot projects focused on reducing improper payments.

These pilot investments could lead to at least $100 million in annual savings if the pilots are successfully scaled up and will provide hard data about how Federal agencies as well as States and localities can save money and significantly improve program integrity, service delivery and efficiency.

Here’s a summary of the four new pilots:

  1. Through the Centers for Medicare and Medicaid Services (CMS), States will test how sharing a Medicaid provider enrollment system among a group of states may help Federal and State governments strengthen their abilities to detect and prevent provider fraud, while increasing administrative efficiencies.
  2. The Department of Labor will lead a project to test new ways to reduce overpayments in the unemployment insurance program by helping States access new data sources to more quickly identify beneficiaries who are most likely to be newly employed.
  3. Through the Food and Nutrition Service at the Department of Agriculture, States will test sharing benefits information, which could reduce duplicate payments, make it easier and quicker for a participant to find out whether they are eligible, and allow people in need to continue to receive benefits in the event of a disaster.
  4. The Department of the Treasury will test how they can apply their existing debt collection systems to help States collect outstanding debt that includes Federal dollars.

These pilots will help lay the groundwork for government to achieve better results at lower cost and improve service delivery for people who receive government services, whether in Washington or in communities across the country. We are thankful to the participants in the Collaborative Forum, who have lent their collective experience and expertise to explore new opportunities to improve stewardship of taxpayer dollars.


These new pilots build on the three Presidential directives on preventing and recapturing improper payments over the last year and a half, our use of cutting edge forensic technology and tools, the new accountability measures implemented with, the Improper Payments Elimination and Recovery Act of 2010, and the Administration’s early progress avoiding nearly $4 billion in improper payments and tripling the amount of improper payments to contractors recaptured last year. The President’s 2012 Budget proposes even more aggressive tools that will help drive down this waste.  Specifically, the Budget includes a number of legislative and administrative reforms on improper payments and debt collection, which if enacted will result in over $160 billion in savingsto the Federal Government over ten years. 


As the President said in his last State of the Union address, “We shouldn’t just give our people a government that’s more affordable.  We should give them a government that’s more competent and more efficient.  We can’t win the future with a government of the past.” Over the last two years, we have streamlined operations to save taxpayer dollars, curbed the decade long rise in contracting costs, proposed an aggressive plan to get rid of excess federal property, and saved billions by leveraging technology to make government work smarter and more efficiently for the American people.  Cutting waste and changing the way Washington does business are critical priorities for the Obama Administration and we’ll continue to update you on our progress.


To learn more about the Collaborative Forum, visit You can also submit pilot ideas to the Partnership Fund online at




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