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From Health Law Daily, October 23, 2015

Better eligibility verification procedures needed for exchanges and Medicaid

By Kathryn S. Beard, J.D.

Two Government Accountability Office (GAO) officers testified before the House Energy & Commerce Committee’s Health Subcommittee in an October 23, 2015, hearing on “Reviewing the Accuracy of Medicaid and Exchange Eligibility Determinations.” The hearing focused on CMS’ oversight of the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148), particularly with regard to the ACA’s health insurance exchanges and eligibility determinations made by the exchanges for individuals enrolling in Medicaid and in private health insurance. In his opening comments, Subcommittee Chairman Joe Pitts (R-Pa) said there are “systematic and ongoing vulnerabilities of eligibility verification systems in place governing the and state-operated health exchanges.”

Background. The hearing’s background memo referred to an August 2015 report from the HHS Office of Inspector General (OIG) and testimony from the GAO presented in July 2014 and July 2015, which “raised serious concerns” about exchange eligibility verification systems. Section 1413 of the ACA requires coordination between the exchanges and state programs including Medicaid and the Children’s Health Insurance Program (CHIP), with the intention of streamlining procedures. The Subcommittee is concerned that the exchanges’ problems with eligibility determinations for qualified health plans “may have been imported into Medicaid,” resulting in benefits being provided to ineligible individuals.

Testimony. The two witnesses from the GAO were Carolyn Yocom, Director, Health Care and Seto Bagdoyan, Director, Audit Services, Forensic and Investigative Service. Yocom said that the agency “found gaps” in CMS’ oversight of Medicaid enrollment resulting from expansion under the ACA, and that, although CMS implemented policies and procedures to minimize the potential for coverage gaps and duplicative coverage, “those plans do not sufficiently address the risks.” For example, Yocom said that the GAO found “individuals transitioning from Medicaid to exchange coverage” can experience coverage gaps and may decide to forego necessary care. Further, some individuals had impermissible duplicate coverage. She said that the GAO recommended that CMS:

  • routinely monitor the timeliness of account transfers from states;
  • establish a schedule for regular checks for duplicate coverage; and
  • develop a plan to monitor the effectiveness of the checks.

Bagdoyan spoke about undercover testing performed by the GAO using 18 fictitious identities in four states: New Jersey and North Dakota, which use the federal exchange, and California and Kentucky, which use state-based exchanges. He noted that although the undercover results are illustrative, they “cannot be generalized to the full population of enrollees.” The testing found that eligibility verification systems remain vulnerable to fraud, though the majority of its attempts at Medicaid enrollment were either denied or were asked for additional verification information. Only one fictitious applicant, in California, was approved for Medicaid eligibility without additional documentation; the agency discussed its findings with California Medicaid officials.

Minority opposition. Subcommittee Ranking Member Gene Green (D-Texas) expressed his disappointment with the preparation for the hearing, having not received the necessary documentation 48 hours in advance. He also shared concerns about the undercover testing, which he called “statistically insignificant” and explained that the GAO had experience with the exchanges’ shortcomings and knew exactly how to get around the systems.

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