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Obamacare Audit Finds Improper Payments

stethoscope resting on cash stock photo.
The Florida Channel
Leon County Judge John Cooper on June 30, 2022, in a screen grab from The Florida Channel.

The Obama administration improperly paid insurance companies and HMOs nearly $434 million in 2014 when Affordable Care Act policies first became available, according to a new federal inspector general’s report. 

In making the finding, auditors reviewed 140 sample policies from 2014 and found accurate payments were made for 109 policies.

However, auditors found that financial assistance payments for 26 policies were not accurately authorized.

The report by the inspector general’s office of the U.S. Department of Health and Human Services puts the amount of potentially improper overpayments at almost $504.9 million for 2014.

The national report does not contain a breakout of companies --- called qualified health plans --- that were overpaid or the amounts.

It notes, though, that some of the overpayments were made to companies that have gone out of business.

The inspector general’s office is recommending that the federal Centers for Medicare & Medicaid Services work with the Treasury Department and insurance companies to collect improper and potentially improper payments.

The Centers for Medicare & Medicaid Services told the inspector general it is conducting a risk-based audit process on the 2014 payments.

According to the report, “CMS stated that it is adjusting financial assistance payments to QHP issuers for any overpayments or underpayments found as part of these audits.”

The Centers for Medicare & Medicaid Services said it will also use the audit to address potential overpayments, but it said that "many of the QHP issuers associated with the financial assistance payments we identified as potentially improper were no longer in business or were experiencing financial distress or liquidation.”

A copy of the report is here.