In Senate testimony, GAO warns of Affordable Care Act fraud risks

A top watchdog official told the Senate Finance Committee that the federal government needs to do more to strengthen Affordable Care Act enrollment controls and prevent fraud involving ACA subsidies, reinforcing key points of a report released last month.   

In Thursday's hearing that reviewed operation and enrollment for, Seto J. Bagdoyan, director of audits, forensic audits and investigative service at the Government Accountability Office (GAO) reviewed key findings in the report that highlighted the Centers for Medicare & Medicaid Services' (CMS) "passive approach" to enrollment fraud. The report found that although CMS relies on a "data services hub" to verify enrollee information--such as Social Security numbers, citizenship, family size and income--from other government organizations, the agency does not track or aggregate data hub outcomes.

In his testimony, Bagdoyan pointed out that by forgoing this type of analysis, CMS misses key information that could highlight program issues or potential enrollment fraud. For example, the GAO found that 431,000 applicants still had unresolved verification issues after the 2014 enrollment period closed, including 35,000 Social Security number inconsistencies.

"We continue to underscore that CMS needs to make ACA program integrity a priority and implement effective controls to help reduce improper payments and fraud risks, and preclude them from being embedded early in the program's life cycle," Bagdoyan said during the hearing.

Last week, the House Ways and Means Committee approved a new bill that would force enrollees to return subsidies they were ineligible for, according to Bloomberg BNA. Although Democrats overwhelmingly opposed the bill, pointing to the fact that ACA subsidies are paid to insurance companies, not to enrollees, House Republicans said people receiving tax credits should be held responsible for reporting potential changes to their income that would impact their health subsidies.

Flawed enrollment controls were highlighted in last year's Office of Inspector General report, which found certain tools used to verify an applicant's Social Security number and household income were ineffective. The GAO also successfully enrolled 11 fake applicants in 2015, five of which had coverage renewed and even saw a boost in ACA subsidies.

 To learn more:
- here's the Senate Finance Committee hearing
- read Seto J. Bagdoyan's testimony
- here's the Bloomberg BNA article

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