An audit by the Department of Health and Human Services determined that in 1997 Medicare lost $20 billion (11 cents on the dollar) to waste, fraud, or error. That's down from 1996, when $23.2 billion (14 percent) was squandered. HHS is working to bring that figure down to 10 percent by 2002. Nearly 30 percent of improper payments went to doctors, another 30 percent went to hospitals, and 13 percent went to HMOs.

A General Accounting Office report also determined that the $29 billion Supplemental Security Income program, administered by the Social Security Administration, lost $1.6 billion in overpayments attributed to computer error, recipients' failure to disclose income that would disqualify them from the means-tested program, and SSI's subsequent failure to recover overpayments it detects. The GAO also determined that fraud cost the program about $4 billion annually. HHS is preparing a bill to counter many of the problems, including trafficking in false Social Security numbers within SSA, doctors who take kickbacks for facilitating disability scams, recipients who live overseas but claim U.S. residency, and recipients who are in jail. SSA Inspector General David C. Williams told a congressional panel that cracking down on jailed SSI recipients may save the program $3.46 billion over the next seven years.

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