The federal government paid Medicare Advantage plans $23.7 billion in improper payments during fiscal year 2025, and the agency that oversees those plans has never completed a comprehensive assessment of the fraud risks inside the program, according to a federal watchdog. The Government Accountability Office singled out Medicare Advantage alongside a much smaller Department of Veterans Affairs program in a report examining how well each agency identifies and controls the errors and fraud draining its budget. For the millions of older Americans who rely on a Medicare Advantage plan for their health coverage, the finding raises a basic question about how closely the government is watching the money moving through the program on their behalf.
A $23.7 Billion Improper-Payment Estimate for Fiscal Year 2025
Every year, the Office of Management and Budget designates certain federal programs as high priority for improper payments, and Medicare Advantage and the VA’s Community Care program both made the fiscal year 2025 list. The Government Accountability Office’s report on the two programs puts the numbers side by side: the Centers for Medicare & Medicaid Services reported a Medicare Advantage improper-payment estimate of $23.7 billion, or 6.1% of the program’s outlays, while the VA reported $608 million in Community Care improper payments, or 2.4% of that program’s outlays. Both figures are the government’s own self-reported estimates, meaning CMS and VA calculated and disclosed the numbers themselves before GAO reviewed how each agency arrived at them and what it has done since.
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Neither Program Has Completed a Fraud-Risk Assessment
GAO measured each program against three specific yardsticks: whether it identified the root causes of its improper payments, whether it built and monitored corrective action plans addressing those causes, and whether it conducted a comprehensive fraud-risk assessment. CMS met the first standard for Medicare Advantage and only partially met the second, but GAO marked the fraud-risk assessment as not met for both Medicare Advantage and VA Community Care alike. The report is explicit about what that gap means in practice: CMS “has not conducted a comprehensive fraud risk assessment for the program,” leaving Medicare Advantage, in GAO’s words, without a documented profile of its own inherent fraud risks, their likelihood, their potential impact or the controls meant to catch them.
A Backlog of Audits Meant to Claw Back Overpayments
CMS’s primary tool for identifying and recovering Medicare Advantage overpayments is a process called Risk Adjustment Data Validation, or RADV, and GAO found that tool struggling under its own backlog. The report states plainly that CMS “does not have a detailed plan for expediting” those audits, and that the resulting delays are contributing to slower recovery of money the program overpaid. GAO also found that Medicare Advantage’s improper-payment rate has not meaningfully declined over the years covered by its review, despite CMS having a process in place to identify why the errors happen in the first place; identifying a problem’s root cause, the report suggests, has not been enough on its own to fix it.
Why Lawmakers Asked GAO to Look in the First Place
GAO frames the review as a direct response to a request that it assess how well VA and CMS identify and address the root causes of their own improper payments, work GAO describes as critical to safeguarding federal funds and improving the government’s fiscal position. To answer that request, GAO examined internal documentation from both VA and CMS, reviewed data published on PaymentAccuracy.gov, read prior reports from each agency’s own Office of Inspector General, and interviewed agency officials, OIG staff and trade association representatives. That mix of internal records and outside interviews is what let GAO build the side-by-side scorecard comparing the two programs rather than relying solely on each agency’s self-reported improper-payment percentage.
What GAO Told CMS and the VA to Do Next
GAO issued three recommendations from the review, work it conducted from November 2024 through June 2026. It told the VA’s Under Secretary for Health to conduct a comprehensive fraud-risk assessment of the Community Care program, a recommendation the VA concurred with. It told CMS’s administrator to both document a detailed plan for expediting RADV audits, complete with cost estimates and completion dates, and to conduct its own comprehensive fraud-risk assessment of Medicare Advantage. CMS neither agreed nor disagreed with either recommendation, pointing instead to past actions it believes already address the concern; GAO’s report states plainly that it maintains new action is still warranted. As of the report’s publication, all three recommendations remain listed as open, with GAO waiting to confirm what steps, if any, the agencies take next.
The GAO’s overpayment number is about money moving through Medicare Advantage without enough oversight. On the opposite end of the same system, older households leave money on the table too — Medicare Savings Programs that cover Part B premiums, Extra Help for Part D drug costs, and state drug assistance programs all go unclaimed because enrollment isn’t automatic. The Benefits Checklist brings these programs together with 2026 income and asset limits and the state office that handles each one.
This article was produced with the assistance of AI and reviewed by The Financial Wire editorial team.
David M. Keller is a finance writer based in Columbus, Ohio, covering personal finance and consumer-focused economic topics. He earned his degree in journalism from Ohio University and began his career reporting on local business and economic trends for a regional media outlet. Since then, he has contributed to a variety of online publications, focusing on clear, practical coverage of topics such as cost of living, debt, and everyday financial decision-making.
