OIG Report: Covered Calif. Failed To Properly Verify Eligibility

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During the first three months of open enrollment, California's health insurance exchange failed to adequately verify applicants' citizenship, maintain data on enrollees and fix data inconsistencies related to eligibility, according to a recent report by HHS' Office of Inspector General, the Los Angeles Times reports (Terhune, Los Angeles Times, 7/1). 

Details of Report

Last year, Republican lawmakers requested a review of the insurance exchanges as part of a federal budget deal (Lin, AP/U-T San Diego, 7/1).

For the section of the report pertaining to California, OIG examined a sample of 45 Covered California applicants who enrolled between October 2013 and December 2013 (Los Angeles Times, 7/1). OIG also conducted interviews with exchange officials and reviews of relevant documentation for its analysis (OIG report, 6/30).

California Findings

The report found that Covered California during the beginning of open enrollment did not:

  • Adequately verify the citizenship of enrollees;
  • Fix inconsistencies related to eligibility;
  • Submit paper applications accurately; and
  • Maintain data on enrollees.

The report specifically criticized the exchange for failing to verify the citizenship of seven enrollees after their Social Security information indicated issues with eligibility or available provided data.  

Further, the report found that for 19 of the 25 applications with data inconsistencies, Covered California did not resolve discrepancies that required further documentation (Los Angeles Times, 7/1).

A companion OIG report stated there were inconsistencies in the eligibility of 145,307 applicants out of Covered California's more than 500,000 enrollees during the first open enrollment period. The report noted that most of such inconsistencies were related to income and citizenship (AP/U-T San Diego, 7/1).

Covered California's Response

In response to the report, Covered California Executive Director Peter Lee said the exchange took issue with some of the report's findings.

Lee noted that the audit was based on a very small sample and only included the first three months of the open enrollment period. Since then, he said that "improvements have been ongoing to ensure program integrity" and "[s]ystems and processes have been and continue to be refined and improved."

In addition, Covered California disagreed with the report's claim that the exchange failed to adequately verify citizenship, arguing that:

  • Federal regulators approved the state's process for verification; and
  • Its efforts were stalled by the federal database often being unavailable during the fall (Los Angeles Times, 7/1).

However, Covered California did acknowledge that:

  • Data on eligibility often were not correctly maintained;
  • Inconsistent information was often left unverified; and
  • Paper applications were not always accurately processed.

In a statement, Lee said Covered California is using the findings to contribute to the exchange's "continuous improvement and refinement of [its] processes and systems" (AP/U-T San Diego, 7/1).

Exchange Refuses Request for Board Members' Emails

In related news, Consumer Watchdog officials last month requested a long list of public records -- including relevant communications -- from Covered California, but the exchange refused to disclose communications sent from board members' private email addresses, the Sacramento Bee reports. Covered California board members participate voluntarily and have other jobs, so email addresses are not issued to them, according to the exchange.

On Tuesday, exchange officials said that board members would be asked to search their private email accounts and voluntarily provide any pertinent emails (Cadelago, Sacramento Bee, 7/2).

Frank Apgar
Mr. Lee. In your response you noted that you are using the findings to further improve the exchange processes. I assume that this means that the enhanced processes are going to be used to reconfirm the eligibility of those enrolled during the first 3 months and anyone where there might be questions following this initial period. It is critical that the integrity of the enrollment processes must not be questioned. I would hope that you will respond to my posting and if not, I call on the Board to follow through with what I outlined as needing to be done. Dr. Apgar

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