Investigators say a public health insurance exchange should make sure the mix of federal funding it’s using reflects the actual enrollment mix, even if that means updating how it allocates costs in the middle of the year.
Officials at the U.S. Department of Health and Human Services Office of Inspector (HHS OIG) have delivered that message in a report on an audit of the Maryland Health Benefit Exchange, which runs the state-based Maryland Health Connection exchange.
The auditors say the Maryland exchange misallocated $28.4 million of $132 million in Patient Protection and Affordable Care Act (PPACA) exchange construction grants it received because of a failure to shift to using actual enrollment mix figures, rather than outdated, inaccurate enrollment mix projections.
Maryland exchange managers used their exchange to enroll consumers in both Medicaid and private qualified health plans (QHPs). Managers originally predicted enrollment would justify allocating 42 percent of the costs to Medicaid and 58 percent to PPACA QHP program funding.
In reality, HHS OIG officials say, updated March 2014 enrollment numbers show that the exchange should have allocated 63 percent of the costs to Medicaid and only 34 percent of the costs to PPACA QHP funding.
Maryland exchange managers misallocated $42.9 million in QHP funding because they failed to update their enrollment fix figures promptly, and they misallocated the other $89 million by failing to speak up when they learned of a major error in the data they had used to come up with their enrollment mix projections, HHS OIG officials say.
The exchange should pay $28.4 million in PPACA exchange grant money back to the Centers for Medicare & Medicaid Services (CMS), the arm of the U.S. Department of Health and Human Services (HHS) that provided the money, HHS OIG officials say.