GAO: HealthCare.Gov Re-Enrolled 11 Fake Consumers in Health Plans

July 17, 2015 in News

The federal exchange automatically re-enrolled 11 fake U.S. residents in health plans for 2015, despite ongoing documentation issues with the staged individuals, according to a Government Accountability Office report released Thursday, the AP/San Diego Union-Tribune reports.

 

Background

 

The report is a follow-up investigation to an initial undercover federal query started last year (Alonso-Zaldivar, AP/San Diego Union-Tribune, 7/15). For the 2014 report, GAO investigators attempted to obtain subsidized coverage for fake applicants using incorrect citizenship or legal residence information or invalid Social Security numbers.

 

The investigators were able to obtain subsidized coverage for fake applicants in 11 out of 12 applications submitted through HealthCare.gov’s website or the telephone (GAO report, July 2015).

 

Follow-Up Findings

 

In its follow-up investigation, GAO found the 11 individuals automatically were re-enrolled in their plans for 2015.

 

According to the report, six of the fake individuals were flagged and received coverage termination notices following their re-enrollments, but GAO was able to have coverage reinstated for five of those individuals after calling the federal exchange’s customer service center (AP/San Diego Union-Tribune, 7/15). The sixth enrollee’s case remained under review as of April, when the investigation ended (Armour, Wall Street Journal, 7/15).

 

Further, GAO found the five enrollees who were re-enrolled in coverage also received subsidy increases for 2015.

Meanwhile, the report also noted the fake individuals received unclear and noncommittal communications about missing documentation from the exchange. When eight of the 11 individuals were asked to submit further documentation of their citizenship statuses or identities through HealthCare.gov, the exchange site listed acceptable documents that would have detailed individuals’ incomes instead of citizenships and identities.

 

According to the AP/Tribune, it is unclear whether coverage for the individuals would have eventually been terminated. For example, none of the individuals had filed tax returns, which the federal government uses to verify applicants’ subsidy amounts (AP/San Diego Union-Tribune, 7/15).

 

Senate Committee Hearing on GAO Report

 

On Thursday, the Senate Finance Committee held a hearing to discuss the latest GAO report findings.

 

Seto Bagdoyan, chief of GAO’s audits and investigations, in his testimony said that the federal exchange does not seem to be set up to detect fraud (AP/San Diego Union-Tribune, 7/15).

 

In addition, Bagdoyan said the investigation highlights genuine concerns with the exchange’s security. He said it was relatively simple for GAO to receive coverage for the fake individuals, adding that CMS seems to place more emphasis on getting people enrolled than on verifying enrollees actually qualify for exchange coverage (Alonso-Zaldivar, AP/Washington Times, 7/16).

 

Senate Finance Committee Chair Orrin Hatch (R-Utah) during the hearing said the report highlights the administration’s “negligence.” He also said the report “calls into question the legitimacy of the [Affordable Care Act's] enrollment numbers and challenges the integrity of the website’s security checks” (AP/San Diego Union-Tribune, 7/15).

Meanwhile, Democrats noted that the report did not show any actual evidence of fraud (Modern Healthcare, 7/16).

Sen. Ron Wyden (D-Ore.) in a statement said the cases were “fictitious” and the report did not show “any real-world fraud.” He said, “Not one” of the enrollees mentioned in the report “was a real person who filed taxes or got medical services. No fast-buck fraudster got a government check sent to their bank account” (AP/Washington Times, 7/16). Wyden added it would be much more difficult for a real person to fraudulently gain coverage through the exchange (Sullivan, The Hill, 7/16).

According to Modern Healthcare, a GAO official during an exchange with Wyden at the hearing said that the agency did not find any proof of an individual fraudulently enrolled in federal exchange coverage (Modern Healthcare, 7/16).

Despite disagreement over the report’s findings, leaders from both political parties called for action to address the potential security issues.

Wyden said he was “willing to look at all the ramifications of all the 11 [fake] applicants … in a bipartisan way” when the committee “actually [has] some recommendations.”

Hatch added, “Congress has an obligation to exercise rigorous oversight of the implementation of the [Affordable Care Act] and to work to protect both beneficiaries and taxpayers from its negative consequences” (The Hill, 7/16).

According to CQ News, Bagdoyen said GAO later this fall will release an additional report with recommendations on how to address the issue (Attias, CQ News, 7/16).

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