CMS' Andy Slavitt defends oversight of state exchanges

The federal government is doing all it can to ensure that taxpayers' dollars are being properly spent on the Affordable Care Act's state-based exchanges, Centers for Medicare & Medicaid Services Acting Administrator Andy Slavitt told lawmakers Tuesday.

During a hearing held by the House Energy and Commerce Committee's Subcommittee on Oversight and Investigations, Slavitt (right) assured skeptical Congress members that not only have state-run health insurance exchanges made great strides, but also that CMS is striving to be a responsible steward of the grant money that those exchanges receive.

"We've seen significant successes as states have innovated to meet the needs of their populations," Slavitt said. "For all the challenges they've had, their ingenuity, their persistence and their commitment to state residents has paid off for millions of Americans."

With those successes, however, have come some difficulties, Slavitt acknowledged, including five states that experienced "significant IT challenges" with their exchanges. And some states' financial struggles with their exchanges forced them to move to Healthcare.gov instead--as was the case with Hawaii, whose transition will likely cost between $2 million and $2.5 million, FierceHealthPayer has reported.

Like Hawaii, Nevada also chose to transition to the federal platform after deciding that route would be more efficient, Slavitt said in response to a question from Rep. Bill Flores (R-Texas). But the way Flores sees it, "it would be more efficient because they're broke and they can't afford to sustain themselves."

Rep. Tim Murphy (R-Pa.) also questioned whether it was "appropriate" for states to be able to switch to Healthcare.gov after spending federal funds to set up their own exchanges. But Slavitt maintained that the states have the right to choose between setting up their own platform and using the federal one, including the ability to change their minds.

Lawmakers at the hearing also wanted to know what CMS is doing to recoup funds spent inappropriately by state exchanges--given that since as of 2015 federal grant money is only supposed to go toward the exchanges' development efforts, not their operational needs. Rep. Diana DeGette (D-Colo.) highlighted a report from the Government Accountability Office that said CMS had established a framework for oversight of the state exchanges but it was not always effectively executed.

To that end, Slavitt said CMS is focused primarily on preventing funds from being used inappropriately in the first place, and has developed a tool that monitors funding in order to "stop money going out the door that shouldn't." For example, 69 times this year the agency has denied state exchanges the use of federal funds for operational expenses, he noted.

But if it finds a case of misspent funds--such as $1 million identified recently in Arkansas--CMS also works to recoup that money, he said. In total, more than $200 million in funding from states' original grant awards have already been returned to the federal government, he said, adding that no new money to fix IT problems was given or will be given to any state that ran into difficulties. "We should not pay twice for the same result," Slavitt said.

Nevertheless, some Congress members were unimpressed with Slavitt's account of CMS' oversight efforts. "The committee's oversight has revealed that CMS took a hands-off approach to the state exchanges," Rep. Fred Upton (R-Mich.) said in a post-hearing statement, adding that the agency "issued permissive and vague guidance and welcomed failed state exchanges to the federal platform with no questions asked."

To learn more:
- here's a webcast of the hearing
- read the committee's statement

Related Articles:
State-based exchanges tough to pull off
Hawaii state insurance exchange to shut down
State exchanges may turn to feds, other states to run their marketplaces
Healthcare.gov better at retaining enrollees than state-run exchanges

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