Dive Brief:
- CMS couldn’t ensure all advance premium tax credit (APTC) payments to health insurers in 2014 were for enrollees who had paid their premiums, a report by HHS’ Office of Inspector General concludes.
- The ACA authorized the payment of APTCs to qualified health plans (QHP) participating in the federal and state marketplaces. However, CMS has no process for verifying payments are on behalf of enrollees who paid their monthly premiums, the report says.
- In response to the OIG’s concerns, CMS is pilot testing an automated payment system that will input each enrollee’s APTC payment data when insurers file for reimbursement.
Dive Insight:
The OIG met with three QHP issuers to better understand how they went about requesting APTC payments and what steps they took terminate enrollees who didn’t pay their share of the premiums. The federal oversight agency also queried CMS about its processes for obtaining APTC payment data from insurers and providing that data to the IRS.
What the OIG found was CMS lacked formal processes for obtaining APTC data, relying instead on QHPs’ declarations that enrollees paid their premiums — and resulting in possible overpayments to insurers, according to the report.
“Without effective processes for ensuring that APTC payments are made on behalf of confirmed enrollees, Federal funds may be at risk (e.g., there is a risk that funds were authorized for payment to QHP issuers in the incorrect amounts),” the report says.
Once the automated process is in place, allowing CMS to maintain individual enrollee data, the agency should explore sharing APTC payment data with the IRS for purposes of verifying data reported in tax filings, the report recommends.
In comments to the OIG, CMS neither agreed nor disagreed with this recommendation, saying the agency “conducts its verification of APTC payments in accordance with” a memorandum of understanding with the IRS. CMS is responsible for ensuring payments are for confirmed enrollees, while the IRS reconciles those payments with enrollees’ tax returns.
