This week Musk has latched onto the first two. On February 5, he wrote that Medicare “is where the big money fraud is happening,” and the next day, when an X user quoted the GAO’s numbers for improper payments in Medicare and Medicaid, Musk replied, “at least.” The GAO does not suggest that actual values are higher or lower than its estimates. DOGE aides were soon confirmed to be working at Health and Human Services.
“Health-care fraud is committed by companies, or by doctors,” says Leder-Luis, who has researched federal fraud in health care for years. “It’s not something generally that the patients are choosing.” Some of it is “upcoding,” where a provider sends a bill for a more expensive service than was given, or substandard care, where companies take money for care but don’t provide adequate services. This happens in some nursing homes. However most of it, Leder-Luis says, is medical necessity fraud, where a patient receives a service that they’re not qualified for or didn’t need.
In the GAO’s reports, Medicare says most of its improper payments are due to insufficient documentation. For example, if a health-care facility is missing certain certification requirements, payments to it are considered improper. Other agencies also cite issues in getting the right data and documentation before making payments.
The documents being shared online may explain some of Musk’s early moves via DOGE. The group is now leading the United States Digital Service, which builds technological tools for the government, and is reportedly building a new chatbot for the US General Services Administration as part of a larger effort by DOGE to bring more AI into the government. AI in government isn’t new—GAO reports show that Medicare and Medicaid use “predictive algorithms and other models” to detect fraud already, but such techniques are underutilized, Leder-Luis says. It’s unclear whether DOGE staffers have probed those existing systems.
Improper payments are something that can and should cause alarm for anyone in or out of government. Ending them would either open up funds to be spent elsewhere or allow budgets to be cut, and that becomes a political question, Leder-Luis says. But will eliminating them accomplish Musk’s aims? Those aims are broad: Musk has spoken confidently about DOGE’s ability to trim trillions from the budget, end inflation, drive out “woke” spending, and cure America’s debt crisis.
“Improper payments are 14% of the federal deficit,” Leder-Luis says, “and therefore cutting it actually does make a meaningful dent in the overspending problem.”
For their part, Padilla and Baghdoyan at the GAO say they have not been approached by Musk or DOGE to learn what they’ve found to be best practices for reducing improper payments.
UPDATE: This story was updated to add additional comments and context from Jetson Leder-Luis and information on medical necessity fraud.
