Lawmakers Concerned About Income Verification in Exchanges

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By James Swann

Dec. 17 — Senate Finance Committee leaders are concerned that a lack of applicant income verification within the ACA insurance exchanges may be leading to improper Medicaid and premium assistance payments.

Committee Chairman Orrin Hatch (R-Utah) and Sen. Johnny Isakson (R-Ga.) said in a Dec. 16 letter to the Centers for Medicare & Medicaid Services that there is no requirement for state-based insurance exchanges to use commercially verified consumer income information, and that the data aren't being used effectively within the federal health-care exchange. Medicaid enrollment and premium assistance eligibility are predicated on an applicant's income level, among other factors.

State-based exchanges use wage data and tax returns to assess eligibility, the letter said, though the data can often be several months old.

The letter asked the CMS to explain why it hasn't taken full advantage of income verification tools and what steps, if any, the agency is taking to utilize those tools to help curb improper payments.

Additionally, the letter asked the CMS if it agreed that eligibility decisions should be based on the most current data.

The lawmakers asked for a response by Jan. 22.

When asked by Bloomberg BNA to comment, a CMS spokesman said the agency would respond to the senators.

GAO Report

The letter said that while the CMS has contracts with third-party income verification services, they aren't being utilized to their full capacity.

“We believe there are opportunities within Medicaid and the broader FFM [federally facilitated marketplace] to reduce improper payments through the utilization of the most up-to-date and available employer-reported information at both the federal and state-levels,” the letter said.

Among state Medicaid programs, a lack of income information may be leading to improper payments. The letter referenced a May Government Accountability Office report that said better access to Medicare enrollment data would be helpful to Medicaid programs (104 HCDR, 6/1/15).

According to the report, state Medicaid programs haven't done enough to screen beneficiaries and providers for potentially fraudulent behavior, leading to millions of dollars in questionable payments.

The letter said the CMS estimated there were potentially $17.5 billion in Medicaid improper payments made in 2014.

To contact the reporter on this story: James Swann in Washington at

To contact the editor responsible for this story: Janey Cohen at

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