New Documents Indicate Obamacare Applications Have At Least 4 Million Errors As Backend Systems Remain Incomplete

June 4, 2014

CMS Warned Days Before Disastrous HealthCare.gov Launch That No System Was In Place to Process Inconsistencies in Applications; Committee Learns First Round of 500,000 Notices Will Be Sent to Consumers Soon

WASHINGTON, DC – The House Energy and Commerce Committee today released new documents that indicate, as of May 27, there are at least 4 million recorded inconsistencies in health care applications in the Federally Facilitated Marketplace. The documents also indicate that the health care exchanges launched without a system to process these inconsistencies. Committee staff has learned that applications were approved without resolving these inconsistencies, which are now being addressed retroactively and manually as the backend of the exchanges has still yet to be built.

Committee leaders in May sent letters to the Department of Health and Human Services, Accenture Federal Services, CGI Federal, and Serco regarding reports that inaccurate health care subsidies have been provided to more than one million Americans through the health care law. Documents obtained by the committee indicate the problem may be much larger.

“Administration officials allowed applications to be processed before the information provided was fully vetted and verified. What’s worse is the system to process these discrepancies is still incomplete, leaving an antiquated mail and phone system to address the millions of questions in applications,” commented full committee Chairman Fred Upton (R-MI). “More than eight months after the start of open enrollment, the exchanges are still not built and accurate information remains hard to come by.”

“If struggling through HealthCare.gov the first time was not painful enough, millions are now being told they may have to go back to the website and address errors in their application. The president’s health care law was so flawed that workers are left with mail and phone calls to address questions in applications. We learned through our investigation that the backend of this system was never built and we continue to feel the negative effects of that failure,” said Oversight and Investigations Subcommittee Chairman Tim Murphy (R-PA). “Taxpayers could now be on the hook for paying subsidies for applications that were approved before being verified. Obamacare’s lack of transparency and accountability continues to cost the American people.”  

A chart (page 1) compiled by Serco for the administration shows that more than 4 million inconsistencies existed as of May 27, 2014, the vast majority of which are inconsistencies with annual income. The committee notes that these inconsistencies do not necessarily represent the number of impacted individuals, rather the total number of inconstancies across applications in the FFM.

Sylvia Burwell, nominee for Health and Human Services Secretary, indicated on May 21, 2014, that 5.45 million individuals had selected a plan at that time, and 5.18 million of those applied for financial assistance. A March 27, 2014, email (page 16) from Serco to CMS says, “For the Inconsistency processing, we have assumed that 3 million unduplicated inconsistencies across 3 million individuals will exist.”

Further, emails (page 18) from Serco to CMS on March 27, 2014, outline a call plan for addressing these millions of inconsistencies. An attachment (pages 19-20) reads, “We are proposing to call consumers that have not uploaded the acceptable document(s) required to overcome their inconsistencies.” This includes “… [Eligibility Support Workers] who call the consumers to inform and guide them to the HealthCare.Gov portion of the website that lists the acceptable documents to clear their inconsistencies. …”

A September 26, 2013, PowerPoint (pages 3-15) presentation for CMS confirms that the exchanges launched without the “Inconsistency Resolution” functionality. “Paper Support Documents cannot be uploaded into ESD,” leading to “Inconsistency Resolutions delayed and eligibility decisions also delayed,” and there were “No tools for resolving Complex Issues,” meaning “Eligibility decisions delayed or not made.” Yet committee staff has learned, that rather than resolving these issues first, applications were accepted, subsidy payments were approved, and now inconsistencies are being addressed retroactively.

Serco presented to CMS on slide 8, “If backlogs and delays with the paper processing, don’t throw us ‘under the bus.’ The root cause of these challenges is the failure of the ESD system, not Serco.” 

 

Read the complete documents online here.

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