The issue of fraud is still alive and well with respect to the health care exchanges established by the Affordable Care Act (ACA). The Government Accountability Office (GAO) recently issued a new update with respect to fraud in the federal exchanges. In that report, the GAO recommended that the Center for Medicaid and Medicare Services (CMS) strengthen enrollment controls and manage Fraud Risk. The report notes that implementation of the new eligibility and enrollment provisions for the first year was “a broad, complex, and costly undertaking.” The review demonstrated again that the enrollment process is vulnerable to fraud and there are a number of areas where CMS should act to “enhance program integrity and management and better assess potential fraud risk.”
The GAO highlighted several specific areas of concern including CMS’s failure to resolve inconsistencies with Social Security numbers or incarceration status associated with applicants. This undermined the IRS’s tax compliance efforts—a key control for ensuring that federal subsidies, a significant cost under the program, are properly received. Second, the inability of Marketplace call center representatives to have current information on the status of applicant document submissions can also lead to consumer frustration and hinder the timely and accurate filing of eligibility information.
The report states that “CMS has assumed a passive approach to identifying and preventing Fraud” and “relies on a contractor charged with document processing to report possible instances of fraud, even though CMS does not require the contractor to have fraud detection capabilities.”
The report makes recommendations that the Department of HHS has concurred with, encouraging CMS to take the following actions among others:
- Conduct a comprehensive feasibility study on actions that CMS can take to monitor and analyze, both quantitatively and qualitatively, the extent to which data hub queries provide requested or relevant applicant verification information.
- Track the value of subsidies that are terminated or adjusted for failure to resolve application inconsistencies.
- Identify and implement procedures to resolve Social Security number inconsistencies where the Marketplace is unable to verify Social Security numbers or applicants do not provide them.
- Reevaluate CMS’s use of PUPS incarceration data to resolve inconsistencies.
- Create a written plan and schedule for providing Marketplace call center representatives with access to information on the current status of eligibility documents submitted to CMS’s documents processing contractor.
- Conduct a fraud risk assessment of the potential for fraud in the process of applying for qualified health plans through the federal Marketplace.