Audit criticizes coverage eligibility controls in Kentucky exchange

Kentucky sometimes failed to ensure that all consumers who signed up for insurance on the state's health exchange were eligible for coverage, a federal audit found.

The audit, released Thursday by the Office of Inspector General (OIG) for the Department of Health and Human Services, found that some of the Kentucky exchange's controls for confirming consumers' eligibility were not effective.

The OIG report said the Kentucky Health Benefit Exchange's internal controls were generally effective in making sure that individuals were enrolled in qualified health plans according to federal requirements. However, in a review of 45 sample applicants in the 2014 enrollment period, the OIG found deficiencies in eight cases. However, as the report notes, a deficiency does not necessarily mean Kentucky improperly enrolled applicants.

The Kentucky audit was the latest in an ongoing review of insurance exchanges set up under the Affordable Care Act. Earlier audits also identified deficiencies in internal controls in as well as in the New York exchange. And an audit released this week by the Maryland Office of Legislative Audits found various security problems with the state's health insurance exchange, including inadequate data security control, as FierceHealthIT reported.

In Kentucky's case, the OIG has recommended the marketplace ensure that it maintain identity-proofing documentation for applicants and improve the design of its enrollment system so that if initial data verification fails, it could ensure that further validation occurs or an inconsistency would be identified and resolved using all available electronic date sources.

In other bad news for the state's exchange, Kentucky Health Cooperative, a state-based consumer operated and oriented health plan that was the largest private provider on the marketplace, just announced it will not offer plans in 2016, forced out of business because of financial difficulties.

To learn more:
- read the OIG audit report