PaymentAccuracy.gov

Success Stories

The Administration recognizes that agencies need to do more with less, and Federal resources must be managed properly. One way to do this is to eliminate wasteful spending. The President has taken several important steps to reduce improper payments.

	The Administration has launched a tool to help guard against wasteful and improper payments that squander taxpayer dollars. The new Do Not Pay tool will help Federal agencies avoid the types of payment errors that have plagued government for too long—including pension payments to the deceased and payments to contractors who have attempted to defraud the government. This tool was created in response to a June 2010 Presidential memorandum directing Federal agencies to review current pre-payment and pre-award procedures and check the appropriate available databases before making payments, to ensure that the recipients of those payments are eligible to receive them.
	The Administration has announced that the government has exceeded the goal the President set in 2010 to recapture $2 billion in overpayments to contractors by the end of 2012. The government surpassed this goal nearly 6 months ahead of schedule, due in large part to hundreds of millions of dollars in recoveries from the Medicare Fee-for-Service Recovery Audit Contractor (RAC) program. To continue this momentum, we will keep on working closely with agencies to ensure that we continue to reduce error rates and recover overpayments in programs across the government.
	Last year, the President announced that by the end of fiscal year (FY) 2012, the Administration would avoid $50 billion in improper payments. The Administration is on track to meet or exceed this goal. The Federal government has avoided over $20 billion in improper payments in FYs 2010 and 2011 combined. The FY 2011 government-wide improper payment rate decreased to 4.7 percent, a sharp decrease from the FY 2010 error rate of 5.3 percent. By reducing the government-wide improper payment rate, federal agencies avoided a significant amount of errors from being made. If the error rate had not declined, the government would have made an additional $17.6 billion in improper payments in FY 2011. Combined with the $3.0 billion avoided in FY 2010, agencies have avoided making over $20 billion in improper payments, getting us that much closer to achieving the President’s $50 billion goal.
	Federal agencies recaptured $1.26 billion in overpayments to contractors in fiscal year (FY) 2011, an increase of over 80 percent compared to FY 2010. This amount includes approximately $460 million recaptured through agency payment recapture audits—a significant effort—and $800 million recovered through the Medicare Recovery Audit Contractor (RAC) program. In total, the Federal government has recaptured $1.95 billion in FYs 2010 and 2011 combined. Last year, the President announced that by the end of FY 2012, the government would recapture $2 billion in overpayments to contractors. This year’s results put us only $50 million away from meeting the President’s goal.
	On June 18, 2010, the President issued a memorandum directing that a “Do Not Pay List” be established as a single source through which federal agencies can check the status of a potential recipient before making a payment or award. In response to the President’s directive, we have created VerifyPayment.gov, which checks multiple databases through a single portal and helps federal agencies determine whether a payment should be made before it goes out. VerifyPayment.gov serves as the public online presence of the “Do Not Pay List,” but the database cross-checking tool is primarily geared towards federal personnel. Therefore the tool will be available in a secure, password-protected environment accessible only to government employees who need the information to perform their job. The Department of Veterans Affairs (VA) piloted this improper payments prevention tool and we anticipate expanding this tool to other federal agencies over the coming months as well.
	In response to the President’s directive to recapture more improper payments, federal agencies recovered a record amount of approximately $687 million in FY 2010. This total includes approximately $611 million recaptured through agency payment recapture audits—a significant increase from previous years, and the highest reported amount in the six previous years of agency reporting. The $687 million recaptured in FY 2010 puts us on track to achieve the Administration’s goal of recapturing at least $2 billion between 2010 and 2012. The Administration is very focused on reducing and recapturing improper payments, and will continue its efforts to improve the government’s financial performance.
	The Department of Housing and Urban Development (HUD) has achieved a 72 percent reduction in the level of improper payments since 2002—from $3.430 billion to $959 million. HUD’s improper payment rate for fiscal year 2011 was maintained at the historically-low rate of 2.9 percent. HUD achieved these results through the use of sophisticated data matching solutions that help confirm recipient eligibility.
	On June 24, 2011, the Social Security Administration (SSA) completed rolling out the Access to Financial Institutions (AFI) initiative to all States, the District of Columbia, and the Northern Marianna Islands. AFI is an electronic process that SSA, in partnership with financial institutions, uses to identify bank accounts that may affect entitlement for Supplemental Security Income benefits. Discovering and confirming these accounts is one of SSA’s key initiatives to curb improper payments. It will take time and resources to reach the full potential lifetime savings, but with sufficient resources, SSA expects $20 of lifetime program savings for each administrative dollar spent. SSA achieved this national rollout 3 months ahead of schedule.
	Veteran’s Affairs (VA) Financial Service Center Project Health Care Effectiveness through Resource Optimization Audit “Project HERO” is a pilot program to establish a contracted network of healthcare providers in four Veterans Integrated Service Networks (VISN) for veterans to receive authorized medical and dental care. The Project HERO audits have been performed for 8 months. They re-adjudicate 100 percent of the Project HERO claims against the negotiated provider fee schedules and provide the Veterans Health Administration’s (VHA) Central Business Office with reports of discrepancies. VHA uses these reports to correct provider billings and collect over-payments. The VA Financial Service Center identified approximately 13% ($11.6 million of potential erroneous payments) of the claims from the contracted networks that require review by the Central Business Office.
	The Department of Defense (DoD) has prevented approximately $2.3 billion in improper payments to vendors since August 2008 through the deployment of their Business Activity Monitoring (BAM) tool. BAM is an analytical tool that assists DoD in flagging potential improper payment transactions for closer review before they are completed and the money is spent.