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Feds may go after some 'special' PPACA exchange plan enrollees

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Officials at the Centers for Medicare & Medicaid Services (CMS) imply that they could prosecute some consumers for exchange plan application fraud in an answer to a question about special enrollment period (SEP) enforcement measures.

See also: Health market gets special

CMS officials announced Tuesday in a blog entry and a pair of informal guidance documents that they will try to do a better job of verifying whether consumers really qualify for special enrollment periods (SEPs) in the Patient Protection and Affordable Care Act (PPACA) open enrollment period system.

Officials will look especially hard to consumers who obtained SEPs based on assertions that they lost access to minimum essential coverage (MEC) or moved permanently to a new location, officials say in one batch of guidance.

CMS program integrity investigators will “sample consumer records nationally and may request additional information from consumers or take other actions to validate that they properly accessed coverage using those SEPs,” officials say.

Officials note that, “Responses to questions that trigger a special enrollment period are made subject to penalty of perjury.”

Officials go on to say they will try to improve and it’s call center scripts to ensure that consumers understand that they may be subject to penalties under federal law if they intentionally provide false or “untrue” information as part of the enrollment process. Officials appear to be leaving behind the possibility that they will bring criminal charges against some consumers who lied on SEP applications open to interpretations.

CMS also has eliminated some obsolete SEP types, such as SEP types related to the launch of PPACA-based programs.

PPACA now blocks insurers from using personal information other than location when they are deciding whether to issue coverage, and it prohibits use of information other than location, age, and — in some cases — tobacco use, when insurers are pricing individual coverage.

Regulators developed the open enrollment period system to give insurers some protection against moves by healthy consumers to wait until they get sick to pay for coverage. By letting consumers buy health coverage only a few months a year, the system exposes non-buyers to the threat that they might get sick, and run up huge bills, at a time when they cannot buy coverage.

Consumers who apply for individual health coverage outside the open enrollment period are supposed to show that they have a good excuse, such as the loss of employer-sponsored coverage, to qualify for a SEP.

Executives at UnitedHealth Group Inc. (NYSE:UNH) and the National Association of Health Underwriters (NAHU) have reported that some consumers seem to be evading even that modest defense against adverse selection, by lying about whether they qualify for SEPs.

CMS officials announced efforts to police the SEP system better around the same time they were training PPACA exchange plan issuers to feed plan data into a big new Quality Improvement Strategy (QIS) reporting program. 

Issuers are supposed to use the QIS program to tell CMS about the quality improvement goals they set for themselves and how well they did at meeting their quality improvement goals. 

See also:

PPACA: The Insurance Agent’s Guide to the Next 12 Months

10 things to know about state health insurance exchanges


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