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Testy hearing reveals OIG plans for future exchange monitoring


By Darius Tahir
Posted: July 16, 2014 - 5:45 pm ET
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HHS' Office of the Inspector General will focus on four major areas in its future reporting on federal and state healthcare exchange activities: payments and their accuracy; eligibility; contracting; and information security.

Kay Daly, the assistant inspector general for OIG's Office of Audit Services, Wednesday outlined the office's oversight strategy during a testy hearing before the House Energy & Commerce Committee.

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The hearing focused on inadequacies of the systems used for checking applicant inconsistencies, which were brought to light in an OIG report released earlier this month.

The hearing was convened because of that report, which uncovered 2.9 million inconsistencies between consumers' insurance applications and their information in federal databases. For 90% of those inconsistencies, HHS had to resort to a manual resolution system, as opposed to the automatic, information technology-enabled system envisioned when the exchanges first started, the report noted.

Going forward, the OIG will analyze the eligibility functions of the state-based exchanges. It also is “looking at several aspects of the contracting involved in the development of HealthCare.gov,” Daly said.

The OIG should be prepared to report on its findings by the end of this year or the beginning of 2015, she said.

Republicans at the hearing focused on the financial pain potential of the inconsistencies. Might inconsistencies mean that many applicants had misstated their income and received improper subsidies? And how would those subsidies be recovered?

OIG witnesses replied that income misstatements and improper subsidies were possible, and those subsidies would be recovered through the Internal Revenue Service.

That reply occasioned worry from committee members. Rep. Leonard Lance, (R-N.J.), said that IRS review of incorrect subsidy levels might result in “many unhappy surprises in spring 2015” if consumers were to learn that they owed much more federal tax than expected because of the IRS' need to recover incorrectly applied subsidies.

Follow Darius Tahir on Twitter: @dariustahir


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