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OIG: Gov't paid insurers $2.8B in unverified subsidies

CMS has authority to recoup over-payments from qualified health plan issuers

The Obama administration has paid insurers almost $2.8 billion in federal subsidies for consumers' premiums and deductibles over the last two years--without verifying how much it actually owes each insurer, according to a new report from the U.S. Department of Health and Human Services (HHS) Office of Inspector General (OIG).

The problem is that the back-end system of Healthcare.gov, the federal health insurance exchange, still isn't properly wired to insurers, and subsidy payments aren't automatedFierceHealthPayer previously reported. 

In the meantime, insurers estimate subsidy amounts and submit them to the Centers for Medicare & Medicaid Services (CMS). Though it pays those claims, HHS doesn't know whether those amounts are accurate or if enrollees are up-to-date on their premium share, the report states.

The OIG considers this situation risky. "Because CMS has not developed the systems to obtain enrollment and payment information on an enrollee-by-enrollee basis, CMS cannot verify the accuracy of the nearly $2.8 billion it authorized for financial assistance payments during our audit period," the report found.

And the problem is going to continue, as HHS officials don't expect the back-end systems to be complete until the end of the year. But they said they will review deductible-subsidy payments with insurers next year and will work out any issues of either overpayment or underpayment.

The OIG report says CMS has the authority to require qualified health plan issuers to restate enrollment totals and payment amounts and recoup inaccurate payments by offsetting them against future payments or through other means.

"CMS takes seriously our responsibility to make sure this financial assistance is paid accurately and that taxpayer dollars are protected," Meaghan Smith, an Obama administration spokeswoman, told the Wall Street Journal. "We are committed to continuing to improve our processes."

To learn more:
- here's the OIG report
- read the Wall Street Journal article

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Back-end HealthCare.gov issues could make insurers go broke
Despite hitting goal, Healthcare.gov continues to sing the blues
Former HHS Secretary calls for simple workaround to exchange problems