OIG: Flawed Healthcare.gov controls unable to verify individuals' eligibility

The federal online health insurance marketplace's internal controls were not entirely effective in ensuring that individuals were determined eligible for enrollment in qualified health plans, according to a report from the Office of Inspector General (OIG).

The OIG reviewed 45 sample applicants and 45 prior applicants from Jan. 1, 2014 through March 31, 2014, and found that certain controls--such as the tools used to verify an applicant's incarceration status--were effective, but found deficiencies in controls used to validate an applicant's Social Security number and annual household income.

The report points out that the errors related to verifying an applicant's eligibility most likely occurred because the federal exchange's contractor did not resolve all inconsistencies as pointed out by the Centers for Medicare & Medicaid Services (CMS). Additionally, the exchange's enrollment and eligibility system was not designed to resolve inconsistencies related to eligibility requirements.

Multiple safeguards were used to verify eligibility, which resulted in the termination of coverage for nearly 226,000 individuals as of the end of March 2015 who weren't able to verify their citizenship, CMS spokesperson Meaghan Smith told the Wall Street Journal. Smith also points out that the government had to adjust the tax credits of hundreds of thousands of individuals. 

The OIG recommends that CMS take action to improve the federal exchange's internal controls related to verifying eligibility and resolving inconsistencies; redetermine the eligibility of the sample applicants; and improve procedures related to resolving inconsistencies.

In response, CMS agreed with the three aforementioned recommendations and said it plans to address the issues.

The recent findings come amid a Government Accountability Office report that found that 11 fake applications created by the GAO last year were automatically re-enrolled by Healthcare.gov for 2015, representing a weak oversight by the federal exchange, FierceHealthPayer reported last month.

For more:
- here's the OIG report (.pdf)
- read the WSJ article