Health Reform WK-EDGE Colorado health insurance marketplace did not meet federal requirements
News
Wednesday, July 25, 2018

Colorado health insurance marketplace did not meet federal requirements

By Wendy Biddle, J.D.

The HHS Office of Inspector General recently reviewed the Colorado health insurance marketplace and found that the financial management of the marketplace did not always comply with federal requirements attached to the establishment grants, stated in a published report of its findings. The purpose of the review was to determine whether the Colorado marketplace financial management system for the administration of its establishment grant funds complied with federal requirements (OIG Report, No. A-07-17-02808, July 2018).

This review is part of a series of reviews that the OIG has been doing across state marketplaces to ensure that the marketplaces are complying with the requirements attached to receiving establishment grants from the federal government. The ACA established marketplaces to allow individuals and small businesses to shop for health insurance and provided grants to states for planning, establishing, and early operation of the marketplaces.

The OIG reviewed $183.7M that CMS awarded to the Colorado marketplace from fiscal year 2012 through the third quarter of fiscal year 2016. The primary focus of the review was cost transfers, payments made outside of the grant period and the marketplace’s financial management procedures and practices.

Federal compliance. In its review, the OIG found that Colorado did not always comply with the federal requirements for the establishment grant funds. The marketplace improperly transferred grants costs totally nearly $2M that were outside of the allowable time frame and they did not receive advance approval. The marketplace also transferred costs between grants totaling $3.2M that may not have been allowable due to lack of certifications that the new charges were correct. Also, the marketplace made 65 payments to vendors, contractors, and contract employees in excess of $500,000 that used grant funds for obligations not incurred during the grant period, which is not allowed. The review further found that the marketplace lacked financial management practices and procedures to provide for effective control over the accountability for establishment grant funds.

To remedy their findings, the OIG recommended Colorado refund the $2M in improperly transferred costs, as well as the $500,000 in payments related to obligations not incurred during the grant period. Additionally, the OIG recommended that the Colorado marketplace work with CMS to certify the $3.2M in expenditures to ensure that each was allowable, and if not, refund the any monies that was determined to be unallowable. Lastly, the OIG recommended that marketplace implement written policies for the administration of its financial management system.

Colorado responded that it has reviewed the information presented by the OIG and it did not agree that money should be refunded. The state did agree to work with CMS to get the $3.2M in expenditures certified and will provide evidence that they are allowable.

ReportsLetters: OIGReports NewsFeed AccessNews AgencyNews HealthInsuranceExchangeNews

Back to Top

Interested in submitting an article?

Submit your information to us today!

Learn More