Using fake information during an undercover “secret shopper” investigation, the GAO created 18 fictitious identities through the federal exchange by telephone, online, and in-person. In 17 of 18 attempts the GAO was able to obtain premium subsidies and health insurance with fake information through telephone and online applications. According to the report, 11 out of 12 fake applications for the federal exchanges were approved, with credits totaling $2500 per month ($30,000 per year).
During the investigation, fake shoppers provided fake documents, such as Social Security numbers and proof of income and citizenship. They found that “Federal contractors made no effort to authenticate documents applicants provided” and the fake ID and income information proved to be no impediment to enrollment. According to the report, the Center for Medicare and Medicaid Services (CMS) is not required to authenticate documentation. “The contractor told us it does not seek to detect fraud and accepts documents as authentic unless there are obvious alterations,” the GAO said.
As of July 2014 the fake enrollees continue to receive subsidized coverage for the 11 applications, including 3 applications where GAO did not provide any requested supporting documents.
When the GAO made attempts to sign up for federal subsidies in person, they were unable to obtain assistance in five of six attempts. “One navigator said assistance was not available because HealthCare.gov was down and another [declined] to provide assistance,” the preliminary report said, noting that navigaors have received tens of millions of dollars in federal grants to provide assistance to those in need of healthcare.
The report also pointed out that CMS officials still do not have the electronic capability to identify enrollees who have “put their policies in force” by paying their premiums. “As a result, CMS must rely on health insurance issuers to self-report enrollment data used to determine how much CMS owes the issuers for the income-based subsidies,” the GAO report said. “Work is underway to implement such a system, according to CMS, but the agency does not have a timeline for completing and deploying it.”
Ways and Means Chairman Dave Camp (R-MI) said, “We are seeing a trend with ObamaCare information systems: under every rock, there is incompetence, waste, and the potential for fraud.” Camp said, “Now, we learn that in many cases, the exchange is unable to screen out fake identities or documents.”
Senator Tom Coburn (R-OK) said, “Fictitious people have used fictitious documents to gain tens of thousands of dollars in real subsidies. Yet, before subsidies were paid in January, the former secretary ‘certified’ the proper controls were in place to prevent these kinds of improper payments.” Coburn added that such incompetence and gross mismanagement is unacceptable and deeply troubling. “At a time when we’re facing a $17 trillion debt, it is imperative that DHS take the necessary steps to address the problems identified in GAO’s report.”
According to GAO, over 2.6 million application inconsistencies have been found for people who have signed up for health plans in the exchange. The House Ways and Means Subcommittee on Oversight will hold a hearing on Wednesday morning with the GAO to discuss the findings of its report.