Health Reform WK-EDGE CMS needs to improve process resolving inconsistencies in QHP applications
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Monday, March 27, 2017

CMS needs to improve process resolving inconsistencies in QHP applications

CMS experienced challenges using its inconsistency data and was unable to extract accurate data on inconsistencies for applicants wishing to enroll in qualified health plans (QHPs) or fully explain how it tracks inconsistencies in its data in a timely manner, according to an Office of Inspector General (OIG) report. To ensure that it can identify inconsistencies in applications, the OIG recommended CMS improve its management of the inconsistency resolution process to track unique individuals and count the number of each type of inconsistency and determine whether those inconsistencies are resolved, unresolved, or expired. In this report, the OIG focuses on CMS’ data management and resolution of prior inconsistencies in the federal marketplace to determine the extent to which the federal marketplace resolved inconsistencies that occurred in the 2013-2014 open enrollment period (OIG Report, No. OEI-01-14-00620, March 17, 2017).

ACA provisions. Section 1311(b) of the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148) requires the establishment of a health insurance exchange in each state. Under sec. 1321(c), the federal government is required to operate a market place on behalf of states that elect not to establish their own marketplaces. The Secretary was required to specify an initial enrollment period followed by annual enrollment periods each subsequent year. Under the ACA, individuals that enroll in a QHP could enroll in one of two types of insurance affordability programs, premium tax credits and cost-sharing reductions (see ACA secs. 1401 and 1402).

Eligibility process. An applicant must meet certain eligibility requirements defined in sec. 1312(f) of the ACA to enroll in a QHP. When an applicant completes an application for insurance affordability programs, the applicant must submit certain information and must attest to the accuracy of the information. The federal marketplace verifies an applicant’s self-attested information to determine the eligibility of an applicant through electronic data sources, including the Federal Services Data Hub (Data Hub). The Data Hub includes HHS, the IRS, the Social Security Administration and the Department of Homeland Security.

The federal marketplace must identify and address any inconsistency. When the federal marketplace cannot verify the information the applicant submitted or the information is inconsistent with data source information, it must attempt to resolve the inconsistency by contacting the applicant to confirm the accuracy of the information on the application. The federal market place may give the applicant 90 days to present information to resolve the inconsistency and may extend the period if the applicant has shown a good faith attempt to obtain the required documentation. If the applicant fails to provide appropriate documentation to resolve the inconsistency, the federal marketplace expires (terminates) the inconsistency. Eligibility is then determined based on information from available data sources at the time of application and, in certain circumstances, the applicant’s attestation.

Prior OIG findings. In June of 2014, the OIG issued a report that found that the health insurance marketplace was unable to resolve 2.6 million of the 2.9 million inconsistencies between self-attested information submitted by applicants and the data received through federal and other data sources. Citizenship and income-related inconsistencies represented 77 percent of the 2.9 million inconsistencies. The OIG determined that the issue arose because of operational problems with CMS’s eligibility system. The report, which evaluated how both federal and state Marketplaces ensured the accuracy of applicant information for determining eligibility, was conducted based on data from October through December 2013, as well as on interviews and site visits between January and March 2014 report (see HealthCare.gov inconsistencies remain mostly unresolved, July 9, 2014).

In a 2015 report, the OIG reviewed the federal marketplace’s internal controls for determining eligibility and found deficiencies related to verifying eligibility and resolving inconsistencies in available information. The federal marketplace sometimes failed at properly determining eligibility for both QHPs and insurance affordability programs. Many of the failures surrounded verification of identity and annual household income (see HealthCare.gov due for maintenance: issues with eligibility determinations, data resolution, August 12, 2015).

2017 OIG findings. The OIG found that CMS cannot readily answer questions about inconsistencies because data limitations preclude CMS from accurately counting and tracking inconsistencies by applicant. Although the OIG concluded that the federal marketplace is unable to calculate the total number of applicants with inconsistencies during the first enrollment period because the data cannot uniquely identify an individual seeking to enroll in a QHP, it found that the federal marketplace appeared to have resolved or terminated 42 percent of inconsistencies that it had traced for the first enrollment period; however 58 percent were neither expired or resolved. Income and citizenship were the most commonly resolved inconsistencies representing 86 percent of all inconsistencies and 95 percent of resolved inconsistencies.

The OIG determined that certain data cannot be used to uniquely identify applicants, including: (1) Social Security numbers, because not all eligible individuals have a Social Security number or the number may be associated with multiple application identification numbers; (2) application identification numbers, because multiple application numbers may be associated with a single applicant due to HealthCare.gov malfunctions and applications online and in person or over the phone; and (3) member identification numbers, because one member identification number may be assigned to individuals with different Social Security numbers.

In addition, OIG noted that the inability to identify unique applicants or link duplicate inconsistencies created additional work for CMS because the same inconsistencies had to be resolved more than once. It also increased the burden on applicants having to respond to redundant requests for information. Furthermore, CMS remained unable to identify inconsistencies and applicants with inconsistencies even through the 2015 – 2016 open enrollment period.

Conclusion. Data limitations precluded OIG from accurately counting and tracking all inconsistencies through the resolution process. Although inconsistencies do not necessarily indicate that an applicant inappropriately enrolled in a QHP or incorrectly enrolled in one or more insurance affordability programs, the federal marketplace cannot ensure that the applicants meet the requirement unless inconsistencies are resolved. OIG was concerned that CMS’ inability to readily identify and resolve inconsistencies raises questions about the extent to which CMS can ensure the integrity of the enrollment process. CMS, however, reported that it improved the process for tracking and reporting on applicants and inconsistencies in subsequent years. It also noted it had reduced the number of duplicate inconsistencies and it now has the ability to track inconsistencies by type and individual consumer.

ReportsLetters: OIGReports CostSharingNews EnrollmentNews HealthInsuranceExchangeNews PremiumTaxNews TaxExemptionNews

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