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Watchdog: PPACA exchange payment system is a mess

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The Centers for Medicare & Medicaid Services (CMS) can’t really say whether the $2.8 billion in exchange plan subsidies it paid from Jan. 1, 2014, through April 30, 2014, went to the right places.

Officials at the U.S. Department of Health and Human Services Office of Inspector General (HHS OIG) have published that conclusion in a report blasting U.S. Department of Health and Human Services (HHS) efforts to make sure it was sending the right PPACA financial assistance payments to the right exchange plan issuers.

CMS, an arm of HHS, has been sending advance premium tax credit (APTC) money to help reduce the amounts low-income and moderate-income qualified health plan (QHP) enrollees pay for premiums out of their own pockets.

CMS has also sent cost-sharing reduction subsidy payments to QHPs to help reduce the amounts enrollees with incomes under 250 percent of the federal poverty level pay for deductibles, co-payments and coinsurance amounts.

HHS OIG investigators did not actually go into case files and see whether any premium tax credit or cost-sharing reduction subsidy payments were incorrect.

Instead, the investigators looked at a sample of $302 million in reimbursement transactions to see what kind of “internal controls” CMS was using to prevent and detect problems.

Because of the lack of proper controls, ”CMS cannot verify the accuracy of the nearly $2.8 billion it authorized for financial assistance payments during our audit period,” HHS OIG officials write in a summary of their investigators’ findings.

CMS used the QHP issuers’ own promises, not investigations of its own, to check whether unusually high cost-sharing reduction payment rate amounts were correct, HHS OIG officials say.

CMS also lacked systems states could use to submit enrollee eligibility data and did not have systems in place to ensure that premium subsidy payments were made on behalf of confirmed enrollees and in the right amounts, officials say.

See also: Watchdog warns states may be misusing PPACA funds

HHS OIG officials said investigators will also review CMS PPACA payments on an enrollee-by-enrollee basis.

CMS says it has added a better cost-sharing reduction payment calculation since April 2014, and that the change has eliminated some of the verification processes HHS OIG officials recommended.

HHS OIG officials acknowledge that CMS may have fixed some of the problems since April 2014, but they say they have not yet tested the new systems.

See also: 3 PPACA premium tax credit program weak points


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