A review of $2.8 billion in subsidies paid to health insurers on behalf of Obamacare enrollees during the early days of the program could not verify the accuracy of those payments. The Office of the Inspector General found that during January through April 2014, the Centers for Medicare and Medicaid Services (CMS), the agency that operates the federal marketplace, did not have effective internal controls in place to “for calculating and authorizing financial assistance payments.” The inspector general listed four areas where problems existed:
- Relied on information from issuers, even when the amounts were potential “outliers”.
- Could not verify that “financial assistance payments were made on behalf of confirmed enrollees and in the correct amounts”.
- There was no system for state-run insurance marketplaces “to submit enrollee eligibility data for financial assistance payments”.
- CMS “did not always follow its guidance” in calculating subsidies, and still has no plan for a “timely reconciliation” of the figures.
The inspector general concluded that, as a result, a “significant amount (approximately $2.8 billion) of Federal funds are at risk.”
CMS generally agreed with the recommendations in the report, but noted that it has made some changes since the time period covered by the report. CMS also suggested its own internal review did not find problems, and neither did an independent audit by an accounting firm. The inspector general on the contrary asserted that the “accounting firm reported findings related to advance CSR payments similar to those in this report.”
