GAO faults 'passive' strategy on fraud

The health care law offers subsidized private insurance to people who don't have access to job-based coverage. A new report questions the government's system for verifying eligibility for those benefits.

WASHINGTON (AP) — With billions in taxpayer dollars at stake, the Obama administration has taken a "passive" approach to identifying potential fraud involving the president's health care law, nonpartisan congressional investigators said in a report released Wednesday.

While the Government Accountability Office stopped short of alleging widespread cheating in President Barack Obama's signature program, investigators found that the administration has struggled to resolve eligibility questions affecting millions of initial applications and hundreds of thousands of consumers who were actually approved for benefits.

The agency administering the health law — the Centers for Medicaid and Medicare Services — "has assumed a passive approach to identifying and preventing fraud," the GAO report said.

In a formal written response, the administration agreed with eight GAO recommendations while maintaining that it applies "best practices" to fraud control.

Release of the report came as the House Energy and Commerce Committee held a hearing on the Department of Health and Human Services budget.

GAO "raises many red flags," committee Chairman Rep. Fred Upton, R-Mich., said in a joint statement with other Republicans. "Perhaps the most unsettling is that while HHS agrees there are many vulnerabilities, the agency has no urgency or plan to fix these critical errors."

Asked about the report at the hearing, HHS Secretary Sylvia Burwell defended her department.

The health care law offers subsidized private insurance to people who don't have access to job-based coverage, provided that they are citizens or legal immigrants, and fall within a certain income range.

The GAO report raised numerous questions about the government's system for verifying eligibility for those benefits.

Advocates for low-income people say the problem isn't fraud but a convoluted documentation system that leaves out hundreds of thousands of consumers legally entitled to benefits because their personal information may not exactly match what's in government files.

When people apply for coverage through and state insurance exchanges, a behind-the-scenes electronic system called the "data services hub" pings federal agencies such as Social Security to verify their personal details.

The GAO said that the administration does not aggregate, track and analyze the results of data hub inquiries — instead just using the responses to process individual applications.

By not tracking, the administration "foregos information that could suggest potential program issues or potential vulnerabilities to fraud," GAO said.

Its investigators approached the individual agencies assigned to verify personal information and found large numbers of inquiries in which the data hub could not confirm details.

For example, for the 2014 coverage year, Social Security could not verify citizenship for about 8.2 million inquiries in which the applicants claimed they were citizens, the report said. is legally permitted to approve applications with unresolved documentation problems. Consumers then get about three months to straighten out paperwork problems.

The investigators' analysis determined that 431,000 applications from 2014 still had unresolved paperwork problems in April 2015.

Nebraska among states to sue over health care fee

Six states filed a lawsuit Wednesday against the Obama administration over the Affordable Care Act.

The complaint that Texas, Wisconsin, Kansas, Louisiana, Indiana and Nebraska filed in Texas takes issue with a fee assessed to health insurers to cover federal subsidies and seeks an injunction against a rule that says states are responsible for the fee.— AP

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