approves 11 of 12 fake applications, improvement still needed

The Senate Finance Committee held a hearing on March 17, 2016, to discuss findings of watchdog groups detailing issues with the website. Both the HHS Office of Inspector General (OIG) and Government Accountability Office (GAO) testified before the Finance Committee and detailed study findings related to

Last month, the OIG issued a report on CMS’ rollout of noting that both HHS and CMS made multiple missteps throughout the development and implementation of the website. According to the case study of the agencies’ management of and the federal marketplace, the poor website launch and implementation resulted from multiple factors, including the absence of leadership, the failure to identify the magnitude of the problem, and poor time allocation between development and implementation.

The Republican-led Finance Committee said that the OIG report confirmed what the party has long said: the Obama Administration’s insistence on launching was allowed to take priority over known problems with its security, integrity and workability.

The Finance Committee found fault with the following aspects of the launch:

  • In 2014, the GAO began an investigation into the enrollment controls of and found CMS approved 11 out of 12 fake applications that used fabricated documentation. Tax credits awarded for these fake applicants totaled $30,000 per year.
  • In July 2015, the Finance Committee held a hearing examining updated findings from the investigation. The GAO outlined how huge gaps in program integrity for the federal exchange continued to persist at CMS, despite the agency knowing of the GAO’s findings the year before.
  • In February 2016, the GAO confirmed these problems have still yet to be fixed, saying the administration “has not performed a comprehensive fraud risk assessment—a recommended best practice—of the [ACA] enrollment and eligibility process.”

OIG recommends information technology. In testimony before the Finance Committee, Erin Bliss, Assistant Inspector General at the HHS Office of Inspector General (OIG), noted three takeaways from the development and implementation of during the timeframe between enactment of the Patient Protection and Affordable Care Act (ACA) and the second enrollment period. First, the poor launch of the website was caused by many avoidable organizational missteps, in addition to problems with website technology. Second, despite the breakdown, CMS improved processes and worked with contractors and others to fix the website, and this approach led to broader organizational changes focused on leadership, decision making, and communication. Third, challenges remain in managing the marketplace and improving operations and services provided by, including issues identified in related OIG reports.

According to the OIG, CMS must continue applying lessons learned from to complete this work and address new challenges as they arise. Most of the changes will depend on the successful implementation of information technology, but success will require more than just ensuring that the right code is written or that the right technology is purchased.

GAO finds inconsistencies. Seto J. Bagdoyan, Director of Audits, Forensic Audits and Investigative Service, GAO, testified that while the federal agencies could successfully provide applicant verification information in a large percentage of cases, they did not have data in their records to verify information for millions of data hub inquiries over the course of ACA’s first two enrollment cycles for 2014 and 2015 coverage. For applicants who obtained subsidies, the GAO identified about 1.1 million applications with 2 million inconsistences, including Social Security numbers and incarceration issues. As a result, CMS missed information that could provide clues to address potential program issues or vulnerabilities to fraud.

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