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Watchdog: Vermont's PPACA exchange had big problems in 2014

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The public health insurance exchange in Vermont had trouble with many types of applicant eligibility verification steps in 2014, and it had no regular system for telling applicants about the application problems it did find, a federal watchdog agency says.

Officials at the U.S. Department of Health and Human Services Office of Inspector General (HHS OIG) talk about the Vermont Health Connect eligibility verification process in a new report.

See also: Vermont CO-OP still in limbo

Vermont used cash from the U.S. Department of Health and Human Services (HHS) to start Vermont Health Connect, a Patient Protection and Affordable Care Act (PPACA) exchange. HHS OIG, an agency that keeps tabs on HHS, has been auditing eligibility controls at all of the PPACA exchanges.

To get PPACA premium tax credit subsidies for PPACA exchange qualified health plan (QHP) coverage, consumers must show that they are in the country legally and are out of incarceration. They also need to show that they meet income eligibility requirements, and that they lack access to some other type of public or private major medical coverage.

HHS OIG auditors have been looking at random samples of applicant files at each exchange to see whether an exchange generally used outside information to verify what the applicants said; whether the exchange was consistent about seeking the outside information; and how the exchange handled apparent inconsistencies between what an applicant said and information from outside sources.

See also: Agency finds holes in an exchange program’s eligibility screening

For Vermont Health Connect, HHS OIG auditors looked at a random sample of 45 application files from a pool of 24,865 individual coverage application files opened from Oct. 1, 2013 through March 31, 2014.

The auditors found a failure to:

  • Document identity proofing for eight of the 45 applicants from the random sample.

  • Validate the Social Security number provided with the Social Security Administration (SSA) for two of the 45 applicants.

  • Validate citizenship status with SSA for two of the 45 applicants.

  • Verify incarceration status for two of the 45 applicants because of the failure to verify their Social Security number.

  • Seek income verification from the Internal Revenue Service (IRS) for two of the 30 applicants who appeared to qualify for premium tax credits.

  • Check whether any of the 30 applicants who appeared to be eligible for premium tax credits had access to other major medical coverage.

The auditors also found that at least 21 of the sample applicants had inconsistencies in their eligibility data. The Vermont exchange “did not notify the applicants of the inconsistencies or always resolve the inconsistencies,” HHS OIG officials say.

The exchange had not resolved any of the inconsistencies as of Dec. 4, 2014, and exchange managers said that, as of Feb. 23, 2015, the exchange had not developed the systems needed to send out inconsistency notices automatically, HHS OIG officials say.

“Although the marketplace developed a manual resolution process, the full process has not been implemented because of lack of resources,” HHS OIG officials say.

Officials at the Vermont Department of Health Access told HHS OIG that they agree with the auditors’ findings, have fixed some of the problems, and are working to fix the other problems.

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