Kusserow on Compliance: CMS unable to ensure tax credits given only to enrollees who paid their premium

The HHS Office of Inspector General (OIG) reported that CMS could not ensure that advance premium tax credit (APTC) payments made to qualified health plan (QHP) issuers under the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148) were only paid to enrollees who had paid their premiums. The OIG found that CMS: (1) did not have a process in place to ensure that APTC payments were made only for enrollees who had paid their monthly premiums; instead, CMS relied on each QHP issuer to verify that enrollees paid their monthly premiums and to attest that APTC payment information that the issuer reported to CMS was accurate; and (2) had sole responsibility for ensuring that APTC payments were made only for enrollees who had paid their premiums and did not share this data for enrollees with the IRS when making payments. Without processes for ensuring that APTC payments are made on behalf of enrollees who had paid their premiums, federal funds may be at risk. Specifically, there is a risk that funds were authorized for payment to QHP issuers in the incorrect amounts.

OIG recommended that CMS: (1) establish policies and procedures to calculate APTC payments without relying solely on QHP issuers’ attestations, including QHP issuer assurances, that enrollees have paid their premiums; and (2) consult with the IRS to explore sharing APTC payment data when these payments are made throughout the year in order to allow the IRS to verify the data reported on each individual’s Form 1095-A at tax filing time. CMS concurred with the first recommendation and did not indicate concurrence or non-concurrence with the second recommendation.

Richard P. Kusserow served as DHHS Inspector General for 11 years. He currently is CEO of Strategic Management Services, LLC (SM), a firm that has assisted more than 3,000 organizations and entities with compliance related matters. The SM sister company, CRC, provides a wide range of compliance tools including sanction-screening.

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