The Trump administration has released new estimates on improper payments in key government insurance programs.
The Centers for Medicare & Medicaid Services (CMS) said late Thursday that the estimated improper payment rate in traditional Medicare was 6.55%, or $28.83 billion, in 2025. That’s down from $31.7 billion, or a 7.66% rate, the year prior.
The CMS said in a fact sheet that this marks the ninth year in a row in which this figure has been below the 10% threshold required by statute.
The agency noted that improper payments do not necessarily constitute fraud, but can include situations where data were missing to determine whether a payment was appropriate, or a situation where administrative errors impact a payment that would otherwise have been considered proper.
Improper payments can include both overpayments and underpayments, the CMS said.
By comparison, the improper payment rate in Medicare Advantage (MA) was 6.09%, or $23.67 billion, last year. That figure increased from the $19.07 billion in improper payments, or a 5.61% rate, that was reported for 2024.
The CMS said that, in MA, most improper payments are attributable to situations where the insurer’s documentation did not support the diagnosis data submitted for a payout.
The estimated payment rate for Part D also increased, according to the report. The CMS projects that 4%, or about $4.23 billion, of Part D payments were improper in 2025, increasing from 3.75%, or $3.58 billion, in 2024.
In addition, estimated improper payment rates increased in both Medicaid and the Children’s Health Insurance Program (CHIP), which was impacted by the post-COVID unwinding process, the CMS said.
“The increase in the national Medicaid and CHIP improper payment estimates reflects the effects of unwinding the flexibilities given to states during the COVID-19 public health emergency, such as conducting eligibility redeterminations and provider revalidation requirements, which resumed in April 2023,” the agency said in the announcement.
Estimates for Medicaid and CHIP are also both based on three cycles worth of data, meaning 2023, 2024 and 2025 for the latest projections. The agency’s estimate for fiscal 2025 in Medicaid was 6.12%, or $37.39 billion. This rose from fiscal 2024’s estimated 5.09% rate, equating to about $31.1 billion.
In CHIP, the CMS projects an improper payment rate of 7.05% in fiscal 2025, or $1.37 billion. The agency’s estimate for fiscal 2024 was $1.07 billion in improper payments, or a 6.11% rate.