According to the Office of Managment and Budget, in FY 2009 improper payments rose to $98 billion from $72 billion in FY 2008. Of this $98 billion, $54.2 billion was in improper Medicare and Medicaid Spending (improper payments include fraud and payments that aren’t fully accounted for).

Over at the NPR blog, Julie Rovner writes:

The Medicare Advantage error rate also jumped — without any change in measurement methodology — from 10.6 percent to 15.4 percent.
Said Orszag, without a hint of irony, given the pitched battles in Congress over Democrats’ efforts to cut tens of billions of dollars from the Medicare Advantage program, “this is one of the reasons why, as part of health reform, we believe that there are crucial changes necessary to the Medicare Advantage program.

Here is a chart of improper payments.