The OIG report stressed, however, that applications flagged for discrepancies don't necessarily mean that the associated individuals are receiving benefits that they aren't entitled to.
That didn't stop Republicans from pouncing on the report as the latest evidence that the Patient Protection and Affordable Care Act is failing to meet expectations. "Vital portions of the exchanges still sit incomplete, generating serious questions about the system's ability to process inconsistencies or handle next year's open enrollment period," said Rep. Fred Upton (R-Mich.), chair of the House Energy and Commerce Committee, in a statement. "The reports underscore the perils of the administration's incompetence, the reckless rollout and the systemic disregard for taxpayer dollars."
Applications are typically flagged when the information provided by an applicant doesn't match what's contained in the federal data hub, which includes records from the Internal Revenue Service, the Social Security Administration and the Department of Homeland Security, among other agencies.
It's uncertain how many federal exchange applications contained multiple errors and therefore how many of the more than 5.4 million enrollments in private health plans through HealthCare.gov are affected. The state-run exchanges enrolled an additional 2.6 million individuals in private coverage during the open enrollment period that closed at the end of March.
The OIG analysis only covered enrollments during the first three months of exchange operations, a time when the federal marketplace and many of its state counterparts were beset by technological problems.
In a statement responding to the report, HHS stressed that vast progress has been made in resolving those issues and that individuals with imperfect applications have been contacted multiple times to resolve the issues.
"CMS is working expeditiously to resolve inconsistencies to make sure individuals and families get the tax credits and coverage they deserve and that no one receives a benefit they shouldn't," the statement said. "We are actively reaching out to consumers to provide additional information that supports their application for coverage and verifying their information every day."
The discrepancies for income and immigration status are potentially troubling because they are crucial in determining eligibility for plans offered through the exchanges. Federal subsidies are determined by income, with individuals making up to 400% of the federal poverty threshold eligible for assistance. Immigrants who lack proper immigration documents are not eligible to obtain any coverage through the state and federal marketplaces.
"To date there has been no evidence of an applicant defrauding the (federal marketplace) or a state-based marketplace in order to unlawfully enroll in a (health plan) through the marketplace or take advantage of an insurance affordability program for which the applicant is not eligible," the report noted.
The four states that were unable to resolve inconsistencies—Massachusetts, Nevada, Oregon, and Vermont—blamed their problems on failures in their information technology systems that led to manual data entry. Among the states that reported specific data on discrepancies, there were vast differences in the percentage of flagged applications. In Massachusetts, 98% of the state's roughly 7,000 applications were found to have problems, according to the OIG report. By contrast, just 6% of Maryland's roughly 18,000 applications were deemed problematic.
The OIG report recommended that HHS come up with a detailed plan for reconciling discrepancies found in applications submitted through the federal exchange and a means for tracking its progress. In addition, it recommended that the federal agency heighten its scrutiny of state-run exchanges to make sure they are dealing with problematic applications in a timely manner. HHS indicated in its response to the report that it would follow through on both recommendations.
Follow Paul Demko on Twitter: @MHpdemko
