The Obama administration cannot account for nearly $3 billion in subsidies paid to insurance companies in 2014, according to a government watchdog.
Those dollars are untraceable because the Department of Health and Human Services (HHS) did not have “effective” methods to do so, according to a report from the department’s inspector general.
That lack of internal control means "a significant amount of federal funds are at risk," the report, released Tuesday, warns, though government health officials said they have resolved, or are working to resolve, most of the issues.
For four months in ObamaCare’s first year of offering insurance subsidies, HHS officials could not confirm that payments were made “to confirmed enrollees and in the correct amounts,” according to the report. State-run marketplaces also had no way of submitting enrollee eligibility data.
Part of the problem is that the department relies too heavily on insurance companies to say which customers have paid their premiums and therefore who should receive subsidies, the report states.
The payments occurred during the rollout of ObamaCare’s insurance exchanges, a tumultuous period for the administration.
Officials from HHS dismissed the findings but acknowledged they have “not established a computerized payment system.”
The department is still piloting a program with insurance companies that lets the government automatically obtain enrollment data from HealthCare.gov rather than from the companies.
Officials also told the inspector general that an outside auditor had recently reviewed its payment process and “reported no significant issues.”
The inspector general is planning a more far-reaching review that would dive into the eligibility of each enrollee and how much each person claimed for reimbursement. This report had been limited to payments sent directly to insurers.
A pair of GOP Senate chairmen sent a letter to HHS on Wednesday demanding answers about the payment problems.
Senate Finance Committee Chairman Orrin HatchOrrin Grant HatchLobbying world Congress, stop holding 'Dreamers' hostage Drug prices are declining amid inflation fears MORE (Utah) and Judiciary Committee Chairman Chuck GrassleyChuck GrassleyGrassley announces reelection bid The Hill's Morning Report - Presented by Alibaba - Democrats argue price before policy amid scramble Congress facing shutdown, debt crisis with no plan B MORE (Iowa) said they were "deeply troubled" by the report.
"This is an unacceptable programmatic issue that if left unaddressed could potentially could cause tens of billions of dollars in waste, fraud and abuse," they wrote in a letter provided first to The Hill.
Andy Slavitt, acting administrator at the Centers for Medicare and Medicaid Services, has until June 30 to respond to questions about how the department has fixed the issues.
Meaghan Smith, a spokeswoman for HHS, stressed that the payments are protected by "a number of well-tested controls" to ensure accuracy, as well as the end-of-the-year reconciliation process.
"We are committed to continuing to improve our processes and will work with the Inspector General to implement their recommendations," she wrote in a statement.
White House spokesman Josh Earnest declined to comment on the report Tuesday, referring reporters to HHS.
“The administration takes very seriously the mandate that we have to both be good stewards of taxpayer dollars but also make sure that those citizens across the country who qualify for subsidies that make their healthcare more affordable, that they get that tax credit,” he added.
— This report was updated at 1:43 p.m.