GAO: Public exchanges remain vulnerable to enrollment fraud

Document titled "Patient Protection and Affordable Care Act"

Another federal audit revealed Affordable Care Act marketplaces are vulnerable to fraud, reiterating previous recommendations for improved enrollment verification and oversight.

In an undercover enrollment test conducted by the Government Accountability Office (GAO) during the 2016 open enrollment period, 15 fictitious applicants created by the watchdog agency were approved for subsidized coverage in Virginia, West Virginia and California despite a lack of supporting documentation. Specifically, the GAO reviewed whether previously approved applicants filed a tax federal tax return, a new requirement under the ACA in 2016.

Although three of the fictitious applicants were not able to activate their policies because of payment processing issues, four of the remaining 12 applicants that obtained coverage in 2014 were approved for 2016 subsidies even though they didn’t file a tax return. The other eight applicants received coverage despite issues surrounding citizenship, immigration status or identity verification.

The vast majority of fictitious applicants were approved even after subsequent document requests were ignored or met with incomplete information.  

In a response, the Department of Health and Human Services said that because of filing extensions and a lag time in receiving updated IRS data, HHS accepted "tax filers' attestations to having filed a tax return" during the 2016 open enrollment period, but noted that the agency is double checking applications against IRS data and would remove any ineligible applicants for the remainder of the year. 

Monday’s report is the third to test the enrollment protections of marketplace plans. During the 2014 enrollment period the GAO successfully enrolled 11 applicants using inaccurate Social Security numbers, which the agency managed to reenroll the following year. Earlier this year the GAO expounded on those concerns, indicating that the Centers for Medicare & Medicaid Services demonstrated a “passive approach to fraud," and outlining eight recommendations for the agency to improve enrollment oversight.