GAO: Medicare Advantage and VA Community Care Had More Than $24 Billion in Improper Payments in FY2025

More than $24 billion in improper payments flowed through two major federal health programs in fiscal 2025, according to a new Government Accountability Office report that also found both programs lacked comprehensive fraud-risk assessments and that the government still has no detailed plan to clear an audit backlog used to recover Medicare Advantage overpayments.

The report, published Tuesday as GAO-26-107946, examined the Department of Veterans Affairs’ Community Care program and the Centers for Medicare and Medicaid Services’ Medicare Advantage program, both designated by the Office of Management and Budget as high-priority improper payment programs for fiscal 2025. Under the Payment Integrity Information Act, agencies must estimate and report improper payments. Those payments are not the same as fraud: They can include payments that should not have been made, were made in the wrong amount or lacked required documentation.

The largest problem by far was in Medicare Advantage, the private-plan alternative to traditional Medicare. GAO said CMS reported an improper payment estimate of $23.7 billion for fiscal 2025, equal to 6.1% of program outlays. CMS’s own Jan. 15, 2026, fact sheet similarly said, “The Medicare Part C estimated improper payment rate was 6.09%, or $23.67 billion…”

GAO said the Medicare Advantage improper payment rate “has not decreased but remained steady.” The program covered about 35 million people as of March 2025, underscoring the scale of the issue.

GAO found that CMS had processes to identify and assess the root causes of improper payments, but said its corrective action plans for Medicare Advantage were not sufficiently detailed and were not adequately monitored. The watchdog said Risk Adjustment Data Validation, or RADV, audits are CMS’s primary corrective action for identifying and recovering improper payments in Medicare Advantage.

Those audits matter because Medicare Advantage pays private insurers using risk-adjusted payments tied to diagnosis codes. RADV audits test whether those diagnoses are supported by medical records and can lead to recovery of overpayments.

But GAO said CMS has a backlog of RADV audits, causing significant delays in recovery efforts. Although CMS announced in May 2025 that it would expedite RADV audits for payment years 2018 through 2024, GAO said the agency had not provided a sufficiently detailed plan showing timeframes, costs and milestones.

GAO also found that CMS had not conducted a comprehensive fraud risk assessment for Medicare Advantage. It said the agency had taken some steps, but not enough to meet the key elements of GAO’s fraud risk framework.

At the VA, GAO said the Community Care program reported an improper payment estimate of $608 million for fiscal 2025, or 2.4% of outlays. In the report highlights, GAO said, “VA reported a Community Care improper payment estimate of $608 million for fiscal year 2025, or 2.4 percent of the program’s outlays. CMS reported a Medicare Advantage improper payment estimate of $23.7 billion for fiscal year 2025, or 6.1 percent of the program’s outlays.”

GAO’s findings on VA were narrower. The watchdog said VA had processes to identify and assess the root causes of improper payments and had developed, implemented and monitored corrective action plans that adequately addressed those causes. But it said VA had not conducted a comprehensive fraud risk assessment for Community Care that met the key elements of GAO’s framework.

GAO made three recommendations: that VA conduct a comprehensive fraud risk assessment for Community Care; that CMS establish and document a detailed plan to expedite RADV audits; and that CMS conduct a comprehensive fraud risk assessment for Medicare Advantage.

VA concurred with the recommendation directed at it. CMS neither agreed nor disagreed with GAO’s recommendations, the report said, and pointed to steps it had already taken, though GAO said additional action is still needed.

GAO said its analysis was based on work completed from November 2024 through June 2026, drawing on agency documents and interviews with officials and watchdog staff. Its findings point to a basic oversight problem: Without stronger fraud-risk reviews and a workable plan to complete Medicare Advantage audits, the government has less ability to recover overpayments and protect federal health spending.