Watchdog waiting for IRS PPACA fraud systems

The investigators charged with keeping tabs on the Internal Revenue Service have no way to tell how well they can detect health insurance premium tax credit fraud.

J. Russell George, the Treasury inspector general for tax administration testified about the concern yesterday at a hearing on the 2015 U.S. Treasury Department budget request organized by a Senate Appropriations Committee subcommittee. 

The Patient Protection and Affordable Care Act created a “refundable tax credit” that moderate-income consumers can pay for “qualified health plan” coverage bought through the public exchanges.

Exchange system managers and IRS officials have argued the design of the program should limit tax fraud, because premium tax credit cash is supposed to go directly to carriers, not the consumers.

But George said the IRS is planning to use two systems to fight any PPACA tax credit fraud that occurs.