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Some exchange rejecters have kept the money

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Some states that have rejected participation in the Patient Protection and Affordable Care Act (PPACA) health insurance exchange program have been quicker to return PPACA exchange development grant money than others.

Officials at the U.S. Government Accountability Office (GAO) has included a state-by-state PPACA exchange grant status table in a report on U.S. Department of Health and Human Services (HHS) administration of PPACA exchange and premium rate review grant money.

GAO officials prepared the report for Republicans on the Senate Health, Education, Labor and Pensions Committee.

HHS offered every state a $1 million exchange planning grant. States could use the money to decide whether to set up an exchange.

States that expressed an interest in setting up exchanges could qualify for early innovator grants and two levels of establishment grants.

GAO officials found, for example, that only three of the 18 jurisdictions that are developing their own state-based exchanges have returned any grant money to HHS.

The 17 exchange-building states and the District of Columbia have received a total of $3.1 billion in exchange grants.

The states that have returned unused grant money — California, Kentucky and Connecticut — have sent $2.2 million back to HHS.

The seven states that are working with HHS to develop “partnership” exchanges have received a total of $176 million in exchange funding. Two of the states, Illinois and Arkansas, have sent about $116,000 in unused grant money back to HHS.

The 25 “federally facilitated exchange” (FFEE) states have received a total of $3.7 billion in exchange grant money and returned about $97 million.

Thirteen states — North Carolina, Wisconsin, Pennsylvania, Arizona, Missouri, Mississippi, Alabama, Tennessee, New Jersey, South Dakota, Nebraska, Virginia and North Dakota — had large amounts of unused PPACA exchange grant money and, when the GAO compiled its table, had not returned much, if any, of the money to HHS.

Seven other FFE states — Oklahoma, Kansas, Maine, Texas, Florida, South Carolina and Louisiana — sent most of the exchange grant money they received back to HHS. Kansas, Maine and Oklahoma accounted for about $92 million in grant re-payments.

Five other FFE states — Indiana, Georgia, Montana, Ohio and Wyoming — reported that they had spent most or all of their exchange grant money on abortive efforts to set up exchanges.

One state — Alaska — never accepted any PPACA exchange grant money.

John Dicken, a GAO director, wrote in a letter summarizing investigators’ findings that HHHS has several mechanisms for reviewing use of PPACA grant funds. 

“The agency regularly monitors states’ grant activities though its review of program and financial information reported by states, as well as ongoing communication with grantees,” Dicken said. “HHS’s process also includes mechanisms to periodically verify state-reported information, including its analysis of states’ withdrawal of grant funds and site visits. To date, however, use of site visits has been limited. HHS has a number of mechanisms it can utilize, such as restricting a grantee’s access to funds, if its monitoring identifies concerns or compliance issues, but agency officials indicated they have not identified any misuse of grant funds or compliance issues to date.”

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