Sen. Tom Carper on solving the issue of improper payments

The Obama administration is taking a look at improper payments in the hopes of saving millions of dollars.

The president will soon issue an executive order requiring department secretaries to name a Senate-confirmed official to monitor improper payments.

Additionally, this information will be moved to an online dashboard to help agencies fix their problems.

Sen. Tom Carper (D-Del.) said he is pleased that the administration is taking this step, but also noted that it's a complicated issue and the problem can't easily be solved.

Carper said there are a number of reasons why the number has gone up so much in one near -- and one of those has to do with the fact that more agencies are required to report improper payments. Thus, there was $72 billion reported for 2008 and $98 billion for 2009.

President Obama's Executive Order would require all agencies at the cabinet level to report and recently OMB's Peter Orzag said a Senate-confirmed official will be personally responsible for reducing the amount of improper payments.

Carper said, it's a start.

"I hope whoever's put in charge of going after the improper payments is somebody that has some clout -- not just within OMB, but throughout the administration. . . . The administration seems not only intent on making sure that agencies are reporting improper payments and trying to reduce improper payments, [but] they share my interest -- the interest of our subcommittee -- in going after . . . overpayments and recover those as we can. When you're running a budget deficit of over $1 trillion, we've got to do a whole lot of things."

He tells Federal News Radio, however, that he does think more can be done.

"I'm concerned, among other things, that the portion of the Defense family that actually does reporting on improper payments is largely [focused] on payroll and benefits of our folks in the Armed services. There probably aren't going to be a whole heck of a lot of mistakes there. The part that's not reporting under the law is the contractor payments. We've seen some horror stories, particularly in Iraq, but to some extent in Afghanistan, that there's real money that's being wasted there."

This is why the Senator plans to hold a hearing in 2010 about why the contracting portion of DoD doesn't currently have to report on improper payments under the law.

He has also introduced legislation -- the Improper Payments Elimination and Recovery Act -- which he said is on the same wavelength as the Executive Order.

"We can have laws. Agencies can say they comply with the laws enthusiastically, wholeheartedly or haphazardly or occasionally -- and folks that are running these agencies have a number of things to do, [so] what they need to hear from the Commander in Chief, the Secretaries of the departments and up and down the chain of command is that -- one, we want to identify improper payments; two, we want you to report properly the improper payments; three, we want you to reduce improper payments; and four, where monies have been misspent in overpayments or fraudulent payments, we want you to go out and get the money. . . .

"That message, to the extent that it becomes clearly sent from the administration and that OMB is making sure that it's going to be done [is] a huge help. We can pass a good piece of legislation. I think the initial law was good. We're going to make it better. One of the real keys is the determination of the administration to follow through. We're going to do our best to make sure they do. Our job in the legislative branch is to provide oversight."

Carper said he and many of his colleagues in the Senate realize that mistakes aren't always purposefully being made, but something needs to be done to reduce those errors and fight fraud.

"If you look at some of the post-audit cost recovery that's going on with respect to Medicare, it's actually encouraging. About three years ago, we started a demonstration project to go after fraudulent, misspent money in Medicare. During the first year, they recovered almost nothing. The second year they recovered something -- but last year they recovered about $700 million in just three states. We're intent, now, on extending that to the other 47 states."

Additionally, while the Medicare issue was being examined, Carper said Medicaid was also looked at during a hearing, and the subcommittee discovered something interesting.

"We had a witness from New York state who [was with] their Medicaid program, and he reported this year that the way that we have asked states to go after Medicaid fraud wasn't very smart. He said that the way the law works today is that all the states have 60 days to turn over half the money that we recover from fraud cases to the federal government. So, that means [states] have to make their cases, get a settlement, get an award and do it all in 60 days. That's not realistic, so, as a result, a lot of states look the other way on Medicaid fraud and don't do anything."

Carper said this problem is being handled in the Senate Finance Committee's healthcare reform bill, but it is indicative of the changes that need to be made to the overall system that examines improper payments.

To listen to the entire interview with Sen. Carper, click on the audio link at the top of the page.