The number seems to come from Medicare’s CERT program [0]. At a hurried glance they seem to have published data right up to present, but their most recent interpretive report I could find with error margins was from 2016. That one [1] put the CIs on those fraud rates in the +/-2% range per subtype and around +/-0.9% overall. Bearing out your point.
CERT’s annual assessments do seem to involve a large-scale, rigorous analysis of an independent sample of 50,000 cases, though. And those case audits seem, at least on paper and to a layperson, to apply rather more thorough scrutiny than Medicare’s day-to-day policies and procedures.
As @patio11 says, and to your point, “the optimal amount of fraud is non-zero”… [2]
That CERT doesn't seem to be looking for fraud, but more like errors in the bureaucracy. They request medical documents and assess them against the regular criteria, but no effort is made to find the sort of fraud criminals would engage in, like fraudulently produced documents for tests that never happened.
CERT’s annual assessments do seem to involve a large-scale, rigorous analysis of an independent sample of 50,000 cases, though. And those case audits seem, at least on paper and to a layperson, to apply rather more thorough scrutiny than Medicare’s day-to-day policies and procedures.
As @patio11 says, and to your point, “the optimal amount of fraud is non-zero”… [2]
[0] https://www.cms.gov/data-research/monitoring-programs/improp...
[1] https://www.cms.gov/research-statistics-data-and-systems/mon...
[2] https://www.bitsaboutmoney.com/archive/optimal-amount-of-fra...