Aug 21, 2018

$434 Million in Financial Payments Improperly Issued by CMS to Insurers

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In a new report by The HHS Office of Inspector General, the Centers for Medicare & Medicaid Services (CMS) was found to have wrongly funded $434.4 million in financial assistance payments to qualified health plan (QHPs) issuers for 461,127 policies. The audit revealed that the improperly authorized funding occurred in 2014, the first year the ACA law’s health insurance marketplaces went online. According to the report, CMS relied on insurers to verify that their enrollees were confirmed and to attest that the financial assistance payment information they reported on their templates was accurate.  

Excerpt from the full report stated that to be eligible for financial assistance payments, individuals must enroll in a QHP through one of the marketplaces. In addition, the marketplace must allow an enrollee to pay directly to the QHP issuer any applicable premium owed. CMS is responsible for ensuring that financial assistance payments are made only for confirmed enrollees. As described earlier, confirmed enrollees are defined as those who have paid their first month’s premium to the QHP issuer and had their enrollment information approved by the issuer.

CMS was recommended to work with the Department of Treasury to collect the improper payments and send guidance to QHP issuers clarifying federal requirements for terminating coverage, but they maintained that they will not require ACA health insurers to return improper financial assistance payments for policies “on which issuers acted in good faith, nor will it resolve potentially improper financial assistance payments for issuers that are out of business,” the report said.  



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