Feds move to prevent fraud, privacy violations on health exchanges

At the White House on Wednesday, HHS Secretary Kathleen Sebelius, Attorney General Eric Holder and Federal Trade Commission Chairwoman Edith Ramirez launched an interagency effort to prevent and detect consumer fraud and privacy violations on the health insurance exchanges that are scheduled to open for business Oct. 1.

Although the initiative was described as a planned part of the rollout rather than a response to political opponents, the administration will have to counter a perception fanned by Republicans that consumers will be putting their health and financial information at risk when they engage with the insurance marketplaces and the federally funded “navigators” that help them enroll in coverage beginning Oct. 1.

The White House's new initiative builds on a series of actions that the government already employs to protect and—where appropriate—prosecute acts of fraud, according to a senior administration official.

New measures for the exchanges include a feature on the Marketplace Call Center that allows individuals to report fraud by calling a toll-free number, as well as a section on HealthCare.gov that offers consumers access to the Federal Trade Commission's “Complaint Assistant.” Meanwhile, the three agencies have established a routing system for complaints through a centralized database through the FTC's Consumer Sentinel Network and set up “rapid response” mechanism that will be employed in case of a security data breach. Consumers will also have access to series of online tip sheets, including one especially for assisters who are meant to help consumers navigate the exchanges.

“Today, we are sending a clear message that we will not tolerate anyone seeking to defraud consumers in the Health Insurance Marketplace,” Sebelius said in a statement. “We have strong security safeguards in the marketplace to protect people's personal information against fraud and we will work with our partners to aggressively prosecute bad actors, just as we have been doing in Medicare, Medicaid and the Children's Health Insurance Program.”

The announcement from the three federal departments comes days after Republican Florida Gov. Rick Scott sent a letter to congressional leaders calling for more attention to the security of the information consumers provide “as the push for navigators to sign up Floridians on the federal health insurance exchange becomes more frenzied.”

And on Wednesday, House Democrats and House Republicans released separate and conflicting reports on the law's navigators, the organizations that will help consumers learn about the law and enroll in coverage.

In late August, House Republicans on the Energy and Commerce Committee requested information from more than 50 groups that received grants as navigators, and the following day, Rep. Henry Waxman (D-Calif.), ranking member on that panel, shot back that there is no evidence of any “malfeasance” from those organizations.

A report from the committee's Democratic staff (PDF) on Wednesday found that navigators have privacy protections in place and already have extensive experience in helping people enroll in federal and state benefit programs.

Meanwhile, separate findings from Rep. Darrell Issa (R-Calif.), chairman of the House Committee on Oversight and Reform, criticized the Obama administration for failing to conduct any analysis about whether navigators and other people and organizations helping consumers with enrollment should pass background checks.

The report concluded that Americans should approach the information provided by navigators or assisters “with caution” until the administration can address some of the issues included in the report.

Follow Jessica Zigmond on Twitter: @MHjzigmond