High-Error Programs (designated by OMB)

The Office of Management and Budget (OMB) periodically evaluates federal programs for their susceptibility to risk. This evaluation results in OMB designating certain programs as "high error." OMB designates a program as high-error based on improper payment information in agencies’ annual performance and financial reports.

The criteria for determining when a program is high-error are found in OMB Circular A-123, Appendix C, Part III.

High-error programs—such as Medicare, Medicaid, the Children’s Health Insurance Program, and the Earned Income Tax Credit—account for billions of dollars of expenditures each year. They also typically account for the vast majority of all reported improper payments each year.

The reasons for the high error rates experienced by these programs are many and include documentation errors, administrative errors and verification errors. Since many of these programs involve health care, some of the errors are related to medical necessity and appropriate treatment. Though costly mistakes, these errors are not fraud. However, all high-error programs are subject any number of fraud that cost taxpayers millions and millions of dollars each year. Government can address this fraud with a combination of people, knowledge, effort and tools.

Office of Management and Budget (OMB)'s Listing of High-Error Programs