The Obama administration’s interest in creating a streamlined application process for Medicaid, CHIP, and subsidized health insurance via the state Obamacare exchanges has come at the expense of effective security and fraud prevention.
As of January 1, 2014, this easing of requirements now includes the mandate that states accept applications completed entirely via telephone. Rather than require such applications be later accompanied by the electronic or mailed transmission of a signed document, HHS instead requires states to accept a spoken assent on a telephone call as the equivalent of an actual signature.
Says J. Christian Adams, PJ Media legal editor and former DOJ attorney:
Perjury prosecutions are impaired by telephone signups. Signing on a dotted line has been the core means of assent for hundreds of years, and even computerized signatures have a means of verifying that the person signing is real.
This is the administration inviting fraud.
The Affordable Care Act, as passed, does not mandate the acceptance of “telephonic signature.” The relevant passage — Section 1413(b)(1)(a) — only requires that applications “may be filed online, in-person, by mail, or by telephone.” Relevant regulations issued by HHS did not initially mandate telephonic signature, either. See 42 CFR 435.907, which only required “a written application from the applicant, an authorized representative, or, if the applicant is incompetent or incapacitated, someone acting responsibly for the applicant.”
However, on March 23, 2012, Section 435.907 was revised. This revised section went into effect on January 1, 2014. It included the new part (f):
(f) The agency must require that all initial applications are signed under penalty of perjury. Electronic, including telephonically recorded, signatures and handwritten signatures transmitted via any other electronic transmission must be accepted.
The comment-and-response process which resulted in the new part (f) is available here. Note that the comments include scant discussion regarding any expressed need or desire for the mandated acceptance of telephonic signatures. Part (f) simply appears later in the document, and is now in effect.
On August 9, 2013, the Center for Medicaid and CHIP Services issued a document titled “Medicaid and CHIP FAQs: Telephonic Applications.” This document included the following passage:
2. Voice Signatures: All applications must be signed (under penalty of perjury) in order to complete an eligibility determination. In the case of telephonic applications, states must have a process in place to assist individuals in applying by phone and be able to accept telephonically recorded signatures at the time of application submission. If applicable, states can maintain their current practices of audio recording and accepting voice signatures as required for identity proofing.
With this document, CMS offered guidance to the states regarding enactment. But CMS left unaddressed both the motivations behind the issuance of this regulation, and how telephonic signature can provide any level of security or fraud prevention.
Why the interest in forcing states to mandate acceptance of telephonic signatures?
Perhaps the answer lies with Enroll America, the Obamacare enrollment organization that was exposed late last year by James O’Keefe for violations of its non-profit status.
Enroll America received its non-profit status as an organization existing to assist applicants for Obamacare plans, Medicaid, and CHIP, but the organization’s ties with the politically biased Organizing for Action and Battleground Texas have placed the group’s purpose in question.
In February 2013, Enroll America produced a document titled “Telephonic Signatures: An Essential Tool for Enrollment.” The document stresses that low-income applicants — those likely to qualify for Medicaid, and thus exceedingly likely to receive voter registration forms, as reported here at PJ Media — have expressed a preference for telephone applications:
A recent three-state study conducted by Lake Research Partners found that nearly as many low-income people want assistance by telephone as in person, and almost twice as many want help over the phone compared to those who want help online. This research suggests that phone applications will be especially important to supporting enrollment in health insurance that will be available to individuals and families in 2014 (Medicaid, the Children’s Health Insurance Program (CHIP), and coverage through a health insurance exchange).
Notably, the document does not make any mention of the obvious security and fraud prevention concerns inherent in such a system.
The document does mention past use of telephonic signature by the federal government, though; not surprisingly, telephonic signature was first implemented federally only within another public assistance program. This was the 2008 Farm Bill as it related to the SNAP program, formerly known as the food stamps program.
With this history, telephonic signature appears to be an attractive tool for those interested in increasing the disbursement of federal subsidies. (In researching this article, I have yet to come across much interest being expressed for the implementation of telephonic signature for, say, tax collection.) Further, telephonic signature appears to be an attractive tool for a federal subsidy enrollment organization with demonstrated ties to Democratic Party groups invested in voter registration.
The Enroll America document continues:
A telephonic signature is a type of electronic signature that uses an individual’s recorded verbal assent in place of an ink signature, and it is considered legally enforceable in both the private and public sectors under certain conditions. In addition to significant use of telephonic signatures in the private sector, the federal government has been testing various ways to implement telephonic signatures since the 2008 Farm Bill, which allowed state agencies to accept “spoken signatures” for the Supplemental Nutrition Assistance Program (SNAP, formerly the Food Stamp Program). The goal of this rule change was to develop a more efficient and cost-effective application process for individuals and government agencies by allowing SNAP applicants to avoid the lengthy and often unreliable mail exchange to submit ink signatures.
Despite mentioning the above “goal,” the document does not mention any specific or documented faults alluded to by the “lengthy and often unreliable” language, nor why a scanned and electronically transmitted signature would not solve such problems. The document also does not mention how a telephonic signature can be “efficient and cost-effective,” considering the substantial IT implementations needed and the obvious fraud concerns. The document does not mention how telephonic signature can provide any level of security, only that it has been considered “legally enforceable … in certain conditions.”
Today, those certain conditions now include any federally subsidized health insurance plan governed by Obamacare.
The following is an excerpt from a document titled “Road to the Sale,” produced by Humana and dated December 2, 2013. It appears to be a step-by-step manual for a customer service representative to use when handling an insurance application that will use telephonic signature. The relevant section:
Prepare the caller for the telephonic signature by reading the required scripting:
“You will now be signing your application telephonically, giving your verbal authorization to all terms and conditions included in the application. You will hear three short recordings, and at the end of each recording I will ask for your consent to the terms and conditions you just heard.”
Conference into the VoiceLog number listed in So-Easi
After the first beep, ask:
- “Mr./Mrs./Ms. (must use applicant’s full name) do you agree to these terms?”
- Press # to continue to the next recording
After the second beep, ask:
- “Mr./Mrs./Ms. (must use applicant’s full name) do you agree to an electronic verbal signature of your application?”
- Press # to continue to the next recording
After the third beep, ask:
- “Mr./Mrs./Ms. (must use applicant’s full name) do you agree to an electronic verbal signature of your payment authorization?”
- Press # to continue
Capture Voicelog ID# and enter it into VoiceLog ID box.