Improper payments by the U.S. government to people, firms and contractors rose sharply to $98 billion in 2009

“Over half the mistakes were made in the Medicare and Medicaid programs, and although some of the deterioration reflected stricter measurement, it also showed the need for healthcare reform, Office of Management and Budget Director Peter Orszag told reporters.”

Improper payments in the Medicare and Medicaid programs totaled $55 billion in fiscal 2009, according to documents provided by OMB.

Orszag said the error rate for payments under Medicare Advantage, where private insurers offer coverage to Medicare beneficiaries, jumped to 15 percent, or to $12 billion, in fiscal 2009. The error rate was 10 percent in fiscal 2008.

Obama has made overhaul of the $2.5 trillion U.S. healthcare industry his top domestic policy goal, pledging to expand medical coverage to millions of the uninsured and make healthcare more affordable.

Orszag stressed that tougher measurement, as well as higher government spending due to the recession, explained a big part of the jump in government waste.

The government made improper payments of $72 billion in the 2008 financial year. Fraud may also be partly to blame.

“It goes without saying that these results would be completely unacceptable in the private sector, as they should be in government, especially at a time of record deficits,” said Democratic Senator Tom Carper, chairman of the Senate subcommittee on federal financial management.

“Unfortunately, these numbers may still be just the tip of the iceberg since they don’t even include estimates for several major programs, including the Medicare prescription drug plan,” Carper said in a statement.

Read More: CNBC

This administration thinks that they can completely takeover the health sector to reduce waste and bring down cost, when they cannot even manage the Medicare program properly.