Department of Health and Human Services 
OFFICE OF 
  
INSPECTOR GENERAL 
 
 
 
 
 
 
 
M F
ARKETPLACES  ACED 
 
 
E C
ARLY  HALLENGES 
 
  R
ESOLVING 
 
I W
NCONSISTENCIES  ITH 
A D  
PPLICANT  ATA 
 
Daniel R. Levinson   
Inspector General  
 
June 2014 
OEI-01-14-00180   
   
EXECUTIVE SUMMARY:  Marketplaces Faced Early Challenges Resolving 
Inconsistencies with Applicant Data 
OEI-01-14-00180 
 
WHY WE DID THIS STUDY 
This evaluation examines how the Federal and State health insurance marketplaces 
ensured the accuracy of information submitted by applicants for enrollment in qualified 
health plans and for advance payment of premium tax credits and cost sharing reductions.  
This evaluation complements a separate Office of Inspector General report                   
(A-09-14-01000) issued in response to the mandate in the Continuing Appropriations 
Act, 2014, by providing an analysis of how and the extent to which marketplaces 
resolved inconsistencies between applicants self-attested information and the data 
received through the Federal Data Hub or from other data sources. 
 
HOW WE DID THIS STUDY  
We requested data on inconsistencies for October through December 2013 from all 
marketplaces although four did not provide any.   We conducted interviews or site visits 
with the staffs at the Federal marketplace and all 15 State marketplaces between January 
and March 2014.  We reviewed each marketplaces policies and procedures for resolving 
inconsistencies.   
 
WHAT WE FOUND 
During the period of our review, marketplaces were unable to resolve most 
inconsistencies, which they reported most commonly as citizenship and income.  Each  
applicant can have multiple inconsistencies. Inconsistencies do not necessarily indicate 
that an applicant provided inaccurate information or is enrolled in a qualified health plan 
or is receiving financial assistance through insurance affordability programs  
inappropriately. Specifically, the Federal marketplace was unable to resolve 2.6 million 
of 2.9 million inconsistencies because the Centers for Medicare & Medicaid Services 
(CMS) eligibility system was not fully operational.  The abilities of State marketplaces to 
resolve inconsistencies varied.  Four State marketplaces reported that they were unable to 
resolve inconsistencies, seven reported that they resolved inconsistencies without delay, 
one reported that it resolved only some inconsistencies, and three reported that their State 
Medicaid offices resolved inconsistencies. We also found that data on inconsistencies are 
limited.  For example, the Federal marketplace could not determine the number of 
applicants who had at least one inconsistency.  Finally, marketplaces faced challenges 
resolving inconsistencies despite having policies and procedures in place.   
 
WHAT WE RECOMMEND   
CMS should develop and make public a plan on how and by what date the Federal 
marketplace will resolve inconsistencies.   CMS should conduct additional oversight of 
State marketplaces to ensure that they are resolving inconsistencies according to Federal 
requirements.  CMS concurred with both of our recommendations.  
   
   
 
TABLE OF CONTENTS 
 
Objective......................................................................................................1 

Background..................................................................................................1 

Methodology................................................................................................8 

Findings......................................................................................................10 

Marketplaces were unable resolve most inconsistencies, which 

they reported most commonly as citizenship and income  .............10 

Data on inconsistencies are limited ................................................13 

Marketplaces faced challenges resolving inconsistencies despite 

having policies and procedures in place ........................................14 

Conclusion and Recommendations ............................................................17 

Agency comments and Office of Inspector General response .............19 

 
Appendixes ................................................................................................20 

A: 	Type of Marketplace Established by Each State  

as of October 1, 2013.....................................................................20 

B: 	Inconsistency Data by Applicants Reported by  

      State Marketplaces .........................................................................22 

C: Agency Comments  .........................................................................25 

Acknowledgments......................................................................................28 

 
 
   
   
OBJECTIVE 
To determine how and to what extent the Federally facilitated marketplace 
and State-based marketplaces resolved inconsistencies between self-
attested applicant information and data received through the Federal Data 
Services Hub (Data Hub) or from other data sources for eligibility to 
enroll in a qualified health plan (QHP) and for advance payments of the  
premium tax credit and cost-sharing reductions.  
BACKGROUND 
Health Insurance Marketplaces  
The Patient Protection and Affordable Care Act (ACA) requires the 
establishment of a health insurance exchange (marketplace) in each  
State.1, 2   For States that elected not to establish their own marketplaces, 
the Federal Government was required to operate a marketplace on behalf  
of the State. A marketplace is designed to serve as a one-stop shop where 
individuals can obtain information about their health insurance options, 
determine eligibility for QHPs and insurance affordability programs, and 
select the QHP of their choice.  QHPs are private health insurance plans 
that each marketplace recognizes and certifies as meeting certain standards 
and covering a core set of benefits. 
As of October 1, 2013, the Centers for Medicare & Medicaid Services 
(CMS) operated the Federally facilitated marketplace (Federal 
marketplace) for 36 States, consisting of 29 States that use the Federal 
marketplace and 7 State-partnership marketplaces.  Fifteen States 
(including the District of Columbia) operated their own marketplaces 
(State marketplaces).  See Appendix A  for a complete list of all Federal, 
State, and State-partnership marketplaces.3   
Insurance Affordability Programs 
The ACA provides two types of insurance affordability programs to lower 
insurance premiums and out-of-pocket costs for those who enroll in a 
 
1 P.L. 111-148,  1311(b), 1321(c) (March 23, 2010), as amended  by the Health Care 
 
Reconciliation Act of 2010, P.L. 111-152 (March 30, 2010), collectively known as ACA. 
 
2 CMS, Creating  a New Competitive Health Insurance Marketplace.  Accessed at: 

www.cciio.cms.gov on  November 8,  2013.  The ACA uses the term exchanges to refer 

to competitive marketplaces for insurance.  However, CMS now uses the term  

marketplaces. 

3 A State may establish a State-partnership marketplace, in which the Department of 

Health and Human Services and the State share responsibilities for core functions. 

 
Marketplaces Faced Early Challenges Resolving Inconsistencies (OEI-01-14-00180)           1 
   
   
QHP: premium tax credits and cost-sharing reductions.  Applicants may 
be eligible for either or both types of insurance affordability programs.4,5  
Premium tax credits.  The premium tax credit reduces the cost of 
insurance premiums to the applicant.  In general, the premium tax credit is  
available on a sliding scale to individuals and families with incomes 
between 100 percent and 400 percent of the Federal Poverty Level.  
Premium tax credits can either be paid directly to the insurance plan (i.e., 
QHP issuers) in advance as a premium tax credit, or taken as a tax credit 
when an individual files a tax return. If the applicant chooses the advance 
premium tax credit, the Internal Revenue Service (IRS) will reconcile the 
actual credit amount made on behalf of the individual when an individual 
files a tax return at the close of the year. 
Cost-sharing reductions.  Whereas the premium tax credit reduces the cost 
of monthly insurance premiums, cost-sharing reduction lessens out-of-
pocket expenditures for such costs as co-payments, deductibles, and 
coinsurance. Cost-sharing reductions are available to individuals and 
families with incomes between 100 and 250 percent of the Federal Poverty 
Level. Cost-sharing reductions are available only for an eligible 
individual enrolled in a silver-level QHP or for an individual who is an 
Indian enrolled in a QHP.6    
 
4 For the purpose of this report, the term applicant refers to both the person  who 
completes the application (application  filer) and the person  who seeks coverage in a 
QHP.  The application filer may or may not be an applicant seeking coverage in a QHP 
(45 CFR  155.20).  For example, an application  filer may be a parent seeking coverage  
for a child, who is the applicant. 
5 ACA   1401  & 1402;  45 CFR   155.305(f). 
6 45 CFR  155.305(g).  Indians may receive cost-sharing reductions without selecting a 
silver-level plan if their income does not exceed 300 percent of the Federal poverty level 
(ACA   1402 and 2901 and  45 CFR   155.350).  Indian is defined as an individual  
who meets the definition in section 4(d) of the Indian Self-Determination and Education 
Assistance Act (ISDEAA), P.L. No. 93-638.  Under section 4(d), Indian is a person  
who is a member of an Indian tribe.  The  ISDEAA defines Indian tribes  as any Indian 
tribe, Band, nation,  or  other organized group or community, including any Alaska Native 
village or regional or village corporation as defined in or established  pursuant to the 
Alaska Native Claims Settlement Act, which is recognized  as eligible for the special 
programs and services provided  by the United States to Indians because of their status as 
Indians  (25 U.S.C.  450b(e)).  
A silver-level  QHP must provide benefits that are actuarially equivalent to  70 percent of  
the average share of covered benefits paid  by the plan.  ACA  1302(d)(1)(B) and 45  
CFR   156.140.   
 
Marketplaces Faced Early Challenges Resolving Inconsistencies (OEI-01-14-00180)           2 
   
   
Eligibility for QHPs and Insurance Affordability Programs 
Each marketplace determines an applicants eligibility to select a QHP and 
eligibility for insurance affordability programs.7    To determine eligibility,  
an applicant must complete an application through the marketplace Web 
site (online), which is either HealthCare.gov or the State marketplace Web 
site, depending on the applicants State of residence; by telephone; by 
mail; in person; or directly with a QHP  issuers agent.  The applicant must 
submit and attest to information such as Social Security number, income, 
citizenship status, and number of dependents.8     
An applicant must meet certain eligibility requirements defined by the 
ACA to select a QHP.  An applicant must 1) be a citizen of the United 
States, be a national of the United States, or be lawfully present in the 
United States; 2) not be incarcerated; and 3) meet applicable residency 
standards.9   To be eligible for an insurance affordability program, an 
applicant must meet additional requirements related to household income, 
not be eligible for other minimum essential coverage, and provide self-
attested information on family size.10    
Federal Data Hub. A marketplace verifies an applicants self-attested 
information through electronic data sources, including sources that are 
available through the Data Hub.11   The Data Hub is a single conduit for a 
marketplace to send and receive electronic data from multiple Federal 
agencies; it does not store data. Federal agencies connected to the Data 
Hub include the Department of Health and Human Services (HHS), 
Internal Revenue Services (IRS), Social Security  Administration (SSA), 
and Department of Homeland Security.  A marketplace uses the Data Hub 
to verify that the applicants information is consistent with Federal data 
sources, such as tax filings and Social Security data.12    
 
7 Marketplaces perform a number of other functions that include certifying available 
QHPs, operating Web sites to facilitate comparisons among QHPs, and operating toll-free 
hotlines for consumer support.   
8 When any verification relies on  the attestation of the applicant, this attestation can also  
be made by the application filer.  45 CFR   155.300(c).  The attestations  specified in  
 155.310(d)(2)(ii)  and  155.315(f)(4)(ii)  must be provided by  the tax filer [as defined 
by  155.300(a)]. 
9 ACA  1312;  45 CFR   155.305(a).   A person must not  be incarcerated other than  
incarceration pending the disposition of charges.  

10  45  CFR  155.305 & 155.320.  For purposes of determining eligibility for an 

insurance affordability program,  minimum essential coverage  does not include  being 
 
eligible for coverage on the individual market.  45 CFR  155.305(f)(1)(ii)(B).  

11 Some State marketplaces reported accessing State data, in addition to the  Data Hub, to 
 
verify applicant information.  These include,  for example, State Department of Correction 

data and State quarterly wage data. 
 
12 ACA  1411(c)(4). 
 
Marketplaces Faced Early Challenges Resolving Inconsistencies (OEI-01-14-00180)           3 
   
   
Generally, a marketplace is required to verify the following data to 
determine the eligibility of an applicant:  Social Security number, 
citizenship/national status/lawful presence, residency, income, family size, 
incarceration status, or status as an Indian, and for other minimum 
essential coverage.13  If the marketplace is able to verify the applicants 
eligibility through the Data Hub or with other data sources, the applicant 
can select a QHP.14  The marketplace uses the applicants information and 
the tax filers household income and family size data to determine whether 
the applicant qualifies for an insurance affordability program and, if so, 
the amount of such assistance. 15     
Inconsistencies between applicant information and Federal data sources 
or other data sources. In some circumstances, the marketplace cannot 
verify an applicants information through available data sources.  When 
this happens, it is referred to as an inconsistency.  This may arise when 
Federal data available through the Data Hub or data from other sources are 
unavailable or do not exist, or because the information on the application 
does not match the data received through the Data Hub or from other data 
sources. For these purposes, applicant information is considered to match 
data from other sources if it is reasonably compatible with the applicants 
attestation such that any difference does not affect the eligibility of the 
applicant. The marketplace must resolve any inconsistencies.16 See 
Chart 1 on page 7. 
The marketplace must first make a reasonable effort to identify and 
address the causes of the inconsistency by contacting the applicant to 
confirm the accuracy of the information on the application.  If the 
marketplace is unable to resolve the inconsistency through reasonable 
efforts, it must generally provide the applicant 90 days from the date the 
notice is sent to the applicant to present satisfactory documentation to 
resolve the inconsistency (referred to as the inconsistency period).17   
During the inconsistency period, the applicant may choose to enroll in a 
 
13 45 CFR   155.20 and  26  U.S.C.  5000A(f).  Minimum essential coverage includes 
employer-sponsored coverage and non-employer-sponsored coverage.  For the purpose of  
this report, non-employer-sponsored coverage includes government programs (e.g., 
Medicare and Medicaid), grandfathered plans, and other plans (e.g., State and Tribal).  
Special circumstances apply for individuals who are eligible for TRICARE and 
Department of Veterans Affairs benefits.  See 77 Fed. Reg.  30377,  30379 (May 23, 
2012).    
14 If eligible, applicants are referred to Medicaid or the Childrens Health Insurance 
Program (CHIP). 
 
15 Generally, a tax  filer is an individual (or married couple) who indicates that they are 

filing an income tax  return  for the benefit year.  45 CFR  155.300(a). 

16 45 CFR   155.300(d). 

17 ACA 1411(e)(3) & (4).; 45  CFR 155.315(f). 

 
Marketplaces Faced Early Challenges Resolving Inconsistencies (OEI-01-14-00180)           4 
   
   
QHP and may be eligible for insurance affordability programs, if 
applicable.18  During the inconsistency period, an applicant is eligible to 
enroll in a QHP to the extent that the applicant is otherwise qualified and 
may receive advance premium tax credit and cost-sharing reductions if the 
tax filer attests that the advance premium tax credit is subject to 
reconciliation. 19  
A marketplace may extend the 90-day inconsistency period if an applicant 
demonstrates that a good-faith effort has been made to submit required 
documentation.20  Additionally, for enrollments in 2014, the Secretary of 
HHS has the authority to extend the 90-day inconsistency period for all 
marketplaces.  However, this extension does not apply to inconsistencies 
pertaining to citizenship and immigration status.21    
One of four outcomes can result when a marketplace attempts to resolve 
an inconsistency: 22  
Outcome 1:   Marketplace determines that applicant is eligible for a 
QHP and an insurance affordability program, if applicable, using 
applicant-supplied information.  The marketplace is able to resolve the 
inconsistency when it receives and verifies applicant-submitted 
information pertaining to that inconsistency.  For example, the applicant 
provides a Certificate of Naturalization to resolve an inconsistency with 
citizenship.   
Outcome 2:   Marketplace determines that applicant is eligible for a 
QHP or an insurance affordability  program using data from the Data 
Hub or other data sources.  If the marketplace is unable to resolve 
inconsistencies at the end of the 90-day period using applicant-supplied 
information, then the marketplace must determine the applicant's 
eligibility using the information available from the Data Hub or other data 
sources. In this outcome, the applicant is determined eligible for a QHP 
and insurance affordability programs if the data sources show that he or 
she meets the criteria, even if those data sources are still inconsistent with 
applicant-submitted information.23   
 
18 45 CFR   155.315(f)(4). 

19 Ibid. 

20 45 CFR   155.315(f)(3). 

21 ACA  1411(e)(4). 

22 For 2014  only, an additional outcome exists for a specific subset of inconsistencies 

with  income.  See 78 Fed. Reg. 42160, 42254 (July 15, 2013);  CMS, Frequently Asked 

Questions on  Health Insurance Marketplaces and Income Verification (Aug. 5, 2013). 

23  45  CFR  155.315(f)(5).  

 
Marketplaces Faced Early Challenges Resolving Inconsistencies (OEI-01-14-00180)           5 
   
   
Outcome 3:  Marketplace determines that applicant is not eligible for 
a QHP or insurance affordability program because data sources 
indicate the applicant is not eligible or data from data sources are not 
available. Like Outcome 2, the marketplace must determine the 
applicant's eligibility based on the information available from the Data 
Hub or other data sources.24  In this outcome, the data sources indicate that 
the applicant is ineligible.  Therefore, the marketplace could terminate 
QHP coverage and/or terminate insurance affordability programs or adjust 
them accordingly after the inconsistency period.25      
Outcome 4:  Marketplace determines that applicant is eligible based 
on applicants attestation (except for citizenship and immigration 
status).   Finally, the marketplace may make an exception for special 
circumstances if inconsistencies remain unresolved.  If an applicant is 
unable to resolve an inconsistency because the documentation does not 
exist or is not reasonably available, then the marketplace may, on a case-
by-case basis, accept an applicants attestation along with an explanation 
of why the documentation is not available.26  The marketplace cannot 
accept an applicants attestation for citizenship or immigration status if it 
is unable to resolve this inconsistency.27    
 
 
   
 
24 CMS has stated that if any of  the data  sources in   155.315  are unavailable, the 
Exchange must notify the applicant that the  marketplace finds the applicant ineligible  
(77 Fed. Reg. 18310, 18359). 
25 45 CFR   155.315(f)(5). 

26 45 CFR   155.315(g). 

27 ACA  1411(e)(3) & 45 CFR   155.315(g). 

 
Marketplaces Faced Early Challenges Resolving Inconsistencies (OEI-01-14-00180)           6 
   
   
Chart 1: Steps and Outcomes for Resolving Inconsistencies  
 
Applicant submits information 
 
 
Applicant information  Marketplace verifies  Applicant information 
 
matches data sources, no  information against Federal  does not match data 
inconsistency is created,  data sources though Data  sources and an  
 
and application  proceeds   Hub or other data sources  inconsistency is created 
 
  After the marketplace makes a reasonable effort to address the causes of 
the inconsistency, it requests additional information from applicant.  
  Applicant is enrolled in QHP and insurance affordability  programs, if 
applicable, for a 90-day inconsistency period  
 
 
Marketplace receives additional  Marketplace does not receive  
information fr om applicant during  acceptable additional information 
the 90-day inconsistency period   from applicant during the 90-day  
  inconsistency period  
 
 
 
Outcome #1   Outcome #2   Outcome #3  Outcome #4
Marketpl ace  Marketplace  Marketplace   Marketplace 
determines that    determines that   determines applicant  determines applicant 
  applicant is eligible   ap plicant is eligible    is not eligible  is eligible using self-
using applicant- using data sources   because data   attested information 
submitted information   sources indicate not  on a case-by-case 
eligible or data  basis (except for 
sources are  citizenship and  
unavailable   immigration status)  
 
Marketplaces Faced Early Challenges Resolving Inconsistencies (OEI-01-14-00180)           7 
   
   
Related Office of Inspector General Work 
This evaluation complements a separate Office of Inspector General (OIG) 
report issued in response to the mandate in the Continuing Appropriations 
Act, 2014.28  The companion audit report is entitled, Not All Internal 
Controls Implemented by the Federal, California, and Connecticut  
Marketplaces Were Effective in Ensuring That Individuals Were Enrolled 
in Qualified Health Plans According to Federal Requirements, (A-09-14-
01000). 
METHODOLOGY 
SCOPE 
This study covers the early implementation of the Federal and State 
marketplaces efforts to resolve inconsistencies between self-attested 
applicant information and data received through the Data Hub or other 
data sources for QHPs and insurance affordability programs for the period  
October 2013 through December 2013.   We did not review inconsistency 
data for Medicaid or CHIP for this study.  
Data Sources    
Document review of marketplace policies and procedures.  We requested 
policies, procedures, and training materials for resolving inconsistencies 
from the Federal marketplace and each State marketplace.  We received 
these documents from the Federal marketplace and 14 of the 15 State 
marketplaces.  Marketplaces provided documents that were current at the 
time of our request in February 2014.  The Nevada marketplace did not 
provide policies or procedures for resolving inconsistencies.   
Marketplace data on resolving inconsistencies.   We requested data on 
inconsistencies for October through December 2013 from the Federal 
marketplace and each State marketplace.  We asked for the number of 
applicants with inconsistencies for QHP eligibility and insurance 
affordability programs and counts for each type of inconsistency occurring 
(e.g., income, citizenship, Social Security number).   
We received data from the Federal marketplace and 11 of the 15 State 
marketplaces.  Some marketplaces provided inconsistency data for periods 
other than October through December 2013.  The Federal marketplace 
provided data from October 1, 2013, through February 23, 2014.  The 
Washington State marketplace provided data for October 1, 2013, through  
 
28 P.L. No. 113-46  1001(c) (Oct. 17, 2013). 
 
Marketplaces Faced Early Challenges Resolving Inconsistencies (OEI-01-14-00180)           8 
   
   
March 3, 2014. The Colorado, Minnesota, Oregon, and Nevada 
marketplaces did not provide data on inconsistencies.    
To determine the most common inconsistencies for each marketplace, we  
calculated the total number of inconsistencies and the percentage of the 
total for each type of inconsistency.   We determined the most common 
inconsistencies for the Federal marketplace and for each of the State 
marketplaces.  We did not sum all State marketplace data together because 
the different time periods and methods each marketplace used did not 
allow for a comparison across State marketplaces.   
Interviews and site visits with State marketplaces.   We conducted site 
visits at the State marketplaces in California, Connecticut, Massachusetts, 
New York, Oregon, and Washington State.  We conducted telephone 
interviews with the remaining nine State marketplaces.  We selected the 
State marketplaces for site visits on the basis of geographic diversity.  We  
conducted structured interviews with marketplace staff members and 
reviewed policies and procedures for resolving inconsistencies.  We asked 
State marketplace staff about their policies, practices, and training for 
resolving inconsistencies. We conducted the site visits and telephone calls 
between January and March 2014. We analyzed the responses from the 
interviews for common themes. 
Site visit with the Federal marketplace.   We conducted a site visit at the 
Federal marketplace in February 2014.  We conducted structured 
interviews with Federal marketplace  staff members and reviewed policies 
and procedures for resolving inconsistencies.  We asked the Federal 
marketplace staff about their policies, practices, and training for resolving 
inconsistencies.   
Limitations 
All data in our analysis are self-reported from the Federal marketplace and 
State marketplaces.  We did not independently verify the data that the 
Federal marketplace and State marketplaces provided or the information 
reported in interviews and site visits. 
In some cases, marketplaces provided data on enrollment and  
inconsistencies that were based on definitions and time periods other than 
those we requested.  Thus, these data are not comparable across 
marketplaces.   
Standards 
This study was conducted in accordance with the Quality Standards for 
Inspection and Evaluation issued by the Council of the Inspectors General 
on Integrity and Efficiency. 
 
Marketplaces Faced Early Challenges Resolving Inconsistencies (OEI-01-14-00180)           9 
   
   
FINDINGS 
Marketplaces were unable to resolve most 
inconsistencies, which they reported most commonly 
as citizenship and income  
An inconsistency occurs when a marketplace is unable to verify self-
attested applicant information with the data received through the Data Hub 
or from other data sources or when data sources are unavailable during an 
outage. Each applicant can have multiple inconsistencies; however,  
inconsistencies do not necessarily indicate that an applicant provided 
inaccurate information or is enrolled in a QHP or is receiving financial 
assistance through insurance affordability programs inappropriately.  At 
the time of our evaluation, the Federal marketplace was unable to 
determine the individual number of applicants with inconsistencies;  
therefore, we cannot determine the percentage of all applicants that had at 
least one inconsistency.  In addition, data on inconsistencies may have 
been overstated because some applicants submitted multiple applications,  
for reasons described below. 
The Federal marketplace was unable to resolve 89 percent of 
inconsistencies 
As of the first quarter of 2014, the Federal marketplace was unable to 
resolve about 2.6 million of 2.9 million inconsistencies because the CMS 
eligibility system was not fully operational.  It was unable to resolve 
inconsistencies even if applicants submitted appropriate documentation.  
These inconsistencies pertained to citizenship, national status, and lawful 
presence; income; and employer-sponsored minimum essential coverage.29   
On the other hand, the Federal marketplace was capable of resolving more 
than 330,000 inconsistencies with Social Security number, non-employer 
minimum essential coverage, incarceration status, and whether the 
applicant is an Indian. However, during the same reporting period, the 
Federal marketplace reported that it had actually resolved only about 
10,000 such inconsistencies, or less than 1 percent of the total.  See Table 
1 for Federal marketplace inconsistency data.  CMS said that it was 
working toward being able to process all inconsistencies.  
 
 
 
29 Because of the lack of data sources for verifying both residency and family size, 
marketplaces generally may accept attestation without further verification as the basis for 
eligibility.  45  CFR   155.315(d) and  .320(c)(3)(i)(A).  Thus, for these two eligibility 
requirements, there may have been few, if any, inconsistencies to resolve. 
 
Marketplaces Faced Early Challenges Resolving Inconsistencies (OEI-01-14-00180)           10 
   
   
Table 1: Number and Percentage of Inconsistencies That the Federal Marketplace 
Was Unable and Able to Resolve as of February 23, 2014  
  Percentage of  
Type of inconsistency unable to  be resolved   Number of   Total  
Inconsistencies*  
Inconsistencies  
Citizenship/national status/lawful presence  1,295,571   44%  
Income  960,492   33%  
Employer-sponsored minimum essential coverage  355,717   12%  
Subtotal  2,611,780   89%  
 
Type of inconsistency able to be  resolved    
Social Security number   132,278   5%  
Non-employer-sponsored minimum essential 
110,220  4%  
coverage 
Incarceration status  75,013   3%  
Indian status  20,320   1%  
Subtotal  337,831   11%  
Total Inconsistencies   2,949,611   
              Source: CMS data, February 24, 2014.  
* Each applicant can have multiple inconsistencies.  Inconsistencies do not necessarily indicate that an applicant provided 
inaccurate information or is enrolled in a QHP or receiving insurance affordability benefits inappropriately.   
Totals do not sum due to rounding.  
 
The Federal marketplace was generally incapable of resolving most 
inconsistencies. Without the ability to resolve inconsistencies in an 
applicants eligibility data, the marketplace cannot ensure that an applicant 
meets each of the eligibility requirements for enrollment in a QHP and 
when applicable, eligibility for insurance affordability programs.  
Additionally, because of the Federal marketplaces inability to resolve 
most inconsistencies, we were unable to determine the number of 
applicants who may have exceeded the 90-day inconsistency period or for 
whom the inconsistency period was extended by the Federal marketplace 
because the applicant demonstrated a good-faith effort in obtaining 
satisfactory documentation.30   The Federal marketplace reported that it will 
verify those applicants with inconsistencies when CMSs eligibility system  
is operational.  
Seventy-seven percent of all inconsistencies were related to 
citizenship/lawful presence (44 percent) and income (33 percent).  
Incarceration status and whether the applicant is an Indian generated the 
fewest inconsistencies.  
 
30 The marketplace may extend the 90-day period when an applicant demonstrates a good 
faith effort to  obtain sufficient documentation to resolve the inconsistency. 45 CFR 
 155.315(f)(3).  
 
Marketplaces Faced Early Challenges Resolving Inconsistencies (OEI-01-14-00180)           11 
   
   
The abilities of the State marketplaces to resolve 
inconsistencies varied 
During our review, 4 of the 15 State  marketplaces reported that they were  
unable to resolve inconsistencies (Massachusetts, Nevada, Oregon, and 
Vermont).  They attributed this inability to failures in their information 
technology systems.  These failures hampered the initial enrollment process, 
so the marketplaces had to enter information manually, leading to 
substantial backlogs.  To address these backlogs, these marketplaces shifted 
their resources to processing eligibility applications rather than attempting 
to resolve inconsistencies. 
The California marketplace reported that it had resolved some  
inconsistencies, but that it lacked the  resources to resolve all of them.  It 
was unable to resolve inconsistencies until December 2013 because 
applicants were unable to upload documents electronically until then.  In  
addition, it had to shift resources to manually process a backlog of paper 
applications for enrollment. 
Three State marketplaces reported that inconsistencies with applicant 
information were being resolved by their State Medicaid offices.  Hawaii 
and Minnesota reported that all applicants apply for Medicaid before 
applying for a QHP.  Colorado reported that it relied on the Medicaid 
office to verify all applicant information through the first calendar quarter 
of 2014. As of March, the Colorado marketplace reported that it had 
assumed responsibility for resolving the inconsistencies.   
The remaining seven State marketplaces (Connecticut, the District of 
Columbia, Kentucky, Maryland, New York, Rhode Island, and Washington 
State) reported that they resolved inconsistencies without delay.  Staff 
from these marketplaces reported that the process ran smoothly with 
minimal problems.  However, one marketplace official noted that 
verifying lawful presence can be difficult because applicants can supply a 
wide variety of documents to resolve that inconsistency.   That official 
reported that this did not prevent the marketplace from resolving the 
inconsistency.  See Appendix B for inconsistency data reported by State 
marketplaces. 
Like the Federal marketplace, State marketplaces reported that the most 
common inconsistencies occurred with income and citizenship.  With the 
exception of the District of Columbia, all State marketplaces relied on 
 
Marketplaces Faced Early Challenges Resolving Inconsistencies (OEI-01-14-00180)           12 
   
   
self-attested information for residency as allowed by Federal 
requirements, so inconsistencies rarely occurred.31   
The ACA generally requires a marketplace to allow the applicant 90 days 
to provide satisfactory documentation to resolve an inconsistency.32, 33     
Marketplaces reported flexibility in granting extensions to applicants 
beyond the initial 90-day period. A marketplace may extend the 90-day 
period if an applicant demonstrates that a good-faith effort has been made 
to obtain required documentation.34   Additionally, marketplaces reported 
having flexibility as to when the 90-day period started.35  Some State 
marketplaces reported starting the 90-day period from the applicants first 
day of QHP coverage, whereas others reported starting from the date the 
marketplace sent the applicant a notice about the inconsistencies.  Federal 
regulations stipulate that a marketplace generally use the date the notice is 
sent to the applicant as the start date of the inconsistency period.36  
Data on inconsistencies are limited 
Although 11 State marketplaces and the Federal marketplace provided 
data on inconsistencies, those data are limited.  For example, the Federal 
marketplace could not determine the number of applicants who had at 
least one inconsistency.  Rather, the Federal marketplace reported unique 
inconsistencies, and it could not determine the corresponding number of 
applicants because one applicant could have more than one inconsistency.   
As a result, it was not possible at the time of our evaluation to determine 
the extent to which inconsistencies are distributed across applicants in the  
Federal marketplace.   
Marketplaces also reported that data on inconsistencies may be overstated.  
Some marketplaces reported that failures with eligibility systems allowed 
applicants to submit multiple applications.  In these instances, each 
application could be processed and cause the same inconsistencies to 
occur and be counted. Other marketplaces reported that when the Data 
Hub was experiencing an outage, additional inconsistencies may have 
 
31 45 CFR   155.315(d). 

32 ACA   1411(e)(3), (e)(4). 
 
33 For 2014  only, the ACA allows leeway for the Secretary to  extend the 90-day 

inconsistency  period (except  for citizenship  and immigration status).   ACA 

 1411(e)(4)(A).  This  leeway is different from  the other exceptions that a  marketplace 

may use to extend the 90-day inconsistency period, i.e. extensions  due to the applicant 

demonstrating  good-faith effort to obtain required documentation.  

34 45 CFR   155.315(f)(3). 
35 Some State marketplaces reported that CMS provided verbal instructions that allowed 

the marketplaces to start the 90-day inconsistency period on January 1, 2014. 

36  45  CFR  155.315(c)(3), (f).  

 
Marketplaces Faced Early Challenges Resolving Inconsistencies (OEI-01-14-00180)           13 
   
   
occurred because the Data Hub could not be accessed to verify applicant 
information.37   Another State marketplace, the District of Columbia, could 
not separate Medicaid applicants from QHP applicants for data reporting 
purposes, and, therefore could not provide data on inconsistencies specific 
to QHP applicants.  These data limitations contribute to the difficulty in 
determining the volume of inconsistencies across marketplaces. 
In addition, few State marketplaces provided data regarding resolved 
inconsistencies. For example, one State marketplace, Maryland, reported 
that it had resolved inconsistencies, but it was unable to provide the 
number of inconsistencies resolved or the final action on eligibility for 
enrollment and insurance affordability programs.  At the time of our data 
collection, some  marketplaces reported that applicants had not reached the 
end of the 90-day period to provide supporting documentation.    
Four State marketplaces could not provide data on inconsistencies 
(Colorado, Minnesota, Nevada, and Oregon).  Nevada and Oregon 
reported that their information technology systems were not built with the 
capacity to provide that data (neither State was resolving inconsistencies at  
the time of our review).  Colorado and Minnesota reported that they rely 
on their State Medicaid offices to resolve inconsistencies and that they had 
limited access to State Medicaid data.  
Marketplaces faced challenges resolving
inconsistencies despite having policies and 
procedures in place 
Marketplaces faced Web site, information system, and Data Hub 
challenges that delayed implementation of policies and procedures for 
resolving inconsistencies.  Web site challenges reduced the anticipated 
efficiencies from applicants entering their own information online and 
forced marketplaces to reallocate their limited resources to focus on 
enrollment, thereby making other functions, such as resolving 
inconsistencies, lower priorities.    
 
 
 
37 Federal regulations require that marketplaces do not place applicants in an  
inconsistency period if the marketplace expects data from  the Data Hub to be available 
within 1 day. 45 CFR  155.315(f).  One marketplace reported that when  the Data Hub is 
inoperable, its system attempts to access the  Data Hub several times before considering 
the applicants information inconsistent with Federal Data sources.  However, not all 
marketplaces described their specific procedures when  data from the Data Hub were 
unavailable.  
 
Marketplaces Faced Early Challenges Resolving Inconsistencies (OEI-01-14-00180)           14 
   
   
Most marketplaces provided policies and procedures for resolving 
inconsistencies, although they varied   
The Federal marketplace and all State marketplaces, except Nevada, 
provided policies and procedures for resolving inconsistencies. These 
policies and procedures varied in terms of specificity and the number of 
documents involved.  For example, several marketplaces provided detailed 
flow charts describing each step in resolving inconsistencies.  At the other 
end of the spectrum, some marketplaces merely described the Federal 
requirements to resolve inconsistencies.  One marketplace had just started 
planning its policies and procedures to resolve inconsistencies at the time 
of our data collection and provided an implementation plan in addition to a 
list of documents that the marketplace would accept from applicants to 
resolve inconsistencies.    
These marketplaces also provided OIG with lists of documents they 
accepted from applicants to verify self-attested information that resolves 
inconsistencies.  Some marketplaces accepted more documents than 
others. For example, although all accepted pay stubs to verify income, 
some accepted copies of bank statements with direct deposits of 
employment income or job award letters to verify income for the previous 
year. 
Although Federal requirements do not specify a timeline for marketplaces 
to process inconsistencies, nine marketplaces included timelines in their 
policies and procedures. These marketplaces defined that timeline 
differently, ranging from very specific (5 days) to less specific (in a timely 
manner).  Seven marketplaces provided no timeline for reviewing and 
processing inconsistencies. 
Marketplaces faced challenges with  their Web sites, their information 
systems, and the Data Hub that hindered their ability to resolve 
inconsistencies  
Marketplaces that did not resolve inconsistencies during the time of our 
review had challenges related to their Web sites.  For example, several 
marketplaces reported Web site operational problems, which affected 
applicants ability to apply online.  In these instances, marketplaces 
reported shifting resources to allow applicants to apply over the telephone, 
in person, or with paper applications.  Several marketplaces reported 
having a backlog of paper applications. 
Other information system issues created additional challenges for 
resolving inconsistencies. Federal regulations provide that the date on 
which a marketplace sends that notice is the start of the 90-day 
inconsistency period. Three marketplaces reported that their systems did 
 
Marketplaces Faced Early Challenges Resolving Inconsistencies (OEI-01-14-00180)           15 
   
   
not consistently send required notices to applicants requesting additional 
documents.  In these instances, applicants never sent additional documents 
to resolve the inconsistency because they were unaware that those 
inconsistencies existed.  The Federal marketplace sent notices to 
applicants requesting additional documents to resolve inconsistencies, but 
reported that it lacked the system capability to process these documents 
and resolve inconsistencies. Federal marketplace staff stated that the 
Federal marketplace will retain any submitted documents until CMSs 
eligibility system has that capability.  
Lastly, marketplaces reported challenges associated with the Data Hub.  
Several marketplaces reported that Data Hub outages caused problems in 
processing applications. When the Data Hub was inoperable, 
inconsistencies may have occurred because no electronic data sources 
were available to verify applicant-submitted data.38  For example, one 
marketplace reported that it had about 15,000 applications that it could not 
verify, because of Data Hub outages.  Marketplaces on the West Coast 
reported this as a particular challenge because of time zone differences.  
Furthermore, several marketplaces reported that Federal data sources 
accessed through the Data Hub, such as the IRS and SSA Federal prison 
data, appeared sometimes not current or accurate, therefore creating more 
inconsistencies.  For example, one marketplace cited situations in which 
infants and young children included on applications were erroneously 
identified as incarcerated, according to Federal data.       
 
   
 
38 Inconsistencies may also have occurred because State marketplaces may have placed 
applicants in an inconsistency period when  data from the Data Hub  were not available 
within 1 day. Federal regulations  require that marketplaces do not place applicants in an  
inconsistency period if the marketplace expects the data from the Data Hub to be 
available within 1 day.  45  CFR  155.315(f).   
 
Marketplaces Faced Early Challenges Resolving Inconsistencies (OEI-01-14-00180)           16 
   
   
CONCLUSION AND RECOMMENDATIONS 
Enrolling applicants in QHPs and determining eligibility for insurance 
affordability programs have been complex tasks, as has ensuring that  
eligibility decisions are made on the basis of accurate information.  
Federal and State marketplaces faced  a variety of challenges during the 
early phases of determining applicants eligibility to select a QHP and 
their eligibility for insurance affordability programs.   These challenges led 
many marketplaces to reallocate resources to enter applications manually.  
As a result, many marketplaces moved other responsibilities, such as 
resolving inconsistencies, to a lower priority.  
An inconsistency does not necessarily indicate that an applicant provided 
inaccurate information or is enrolled in a QHP or receiving financial 
assistance through insurance affordability programs inappropriately.   
However, marketplaces must resolve inconsistencies to ensure that 
eligibility determinations for enrollment in QHPs and for insurance 
affordability programs are accurate.  This will help ensure that only 
eligible applicants are enrolling in QHPs.  Moreover, because applicants 
eligibility for insurance affordability programs is based primarily on 
income, inconsistencies with income must be resolved to protect taxpayer 
funds. 
We found that marketplaces did not resolve most inconsistencies between 
self-attested applicant data and Federal data sources.  In addition, 
marketplaces could produce only limited data about inconsistencies.  Also,  
because marketplaces varied in how they collect and report data, a 
nationwide understanding of the extent and nature of inconsistencies, 
including how many applicants are affected, cannot be determined.   
We recommend that: 
CMS develop and make public a plan on how and by what date the 
Federal marketplace will resolve inconsistencies. That plan should 
specify, at a minimum:   
   the steps that CMS and the Federal marketplace will take to clear 
the current backlog of inconsistencies and to ensure the CMS  
eligibility system can resolve inconsistencies, and  
   the methods that CMS will use to monitor, track, and measure the 
Federal marketplaces progress in resolving inconsistencies.  
CMS conduct additional oversight of State marketplaces to ensure 
that they are resolving inconsistencies according to Federal 
requirements.  That oversight should include, at a minimum:  
 
Marketplaces Faced Early Challenges Resolving Inconsistencies (OEI-01-14-00180)           17 
   
   
 	  developing and making public a plan for ensuring that State 
marketplaces will resolve inconsistencies according to Federal 
requirements, clearing the current backlog of inconsistencies, and 
preventing a recurrence of any backlog in resolving 
inconsistencies; and 
 	  collecting information from the States that will enable CMS to 
monitor, track, and measure the State marketplaces progress in 
resolving inconsistencies. 
   
 
Marketplaces Faced Early Challenges Resolving Inconsistencies (OEI-01-14-00180)           18 
   
   
AGENCY COMMENTS AND OFFICE OF INSPECTOR GENERAL  
RESPONSE 
CMS concurred with both of our recommendations.  
    To address our first recommendation, CMS stated that it is working 
expeditiously to resolve inconsistencies.  CMS reported that since our 
draft report, the Federal marketplace has in place an interim manual 
process to resolve inconsistencies pertaining to citizenship and  
immigration status, income, and employer-sponsored minimum essential 
coverage. Later this summer, CMS plans to replace that manual process 
with an automated system.   
  In response to our second recommendation, CMS stated that it will 
continue to monitor State marketplaces through technical assistance and 
financial assessment. 
For a full text of CMSs comments, see Appendix C. 
 
Marketplaces Faced Early Challenges Resolving Inconsistencies (OEI-01-14-00180)           19 
   
   
APPENDIX A 
Type of Marketplace Established by Each State as of 
October 1, 2013 
 
Type of Marketplace  
State 
as of October 1, 2013  
Alabama  Federal  
Alaska  Federal  
Arizona  Federal 
Arkansas  State-partnership  
California  State 
Colorado  State 
Connecticut  State  
Delaware  State-partnership  
District of Columbia   State 
Florida  Federal  
Georgia  Federal  
Hawaii  State 
Idaho*  Federal  
Illinois  State-partnership  
Indiana  Federal  
Iowa  State-partnership  
Kansas  Federal  
Kentucky  State 
Louisiana  Federal  
Maine  Federal  
Maryland  State 
Massachusetts  State 
Michigan  State-partnership  
Minnesota  State 
Mississippi  Federal  
Missouri  Federal  
Montana  Federal  
Nebraska  Federal 
Nevada  State 
New Hampshire   State-partnership  
New Jersey  Federal  
 
* Idaho and New Mexico began to establish State marketplaces; however, they used the Federal 
marketplace as of October 1, 2013. 
 
 
Marketplaces Faced Early Challenges Resolving Inconsistencies (OEI-01-14-00180)           20 
   
   
(cont.):  Type of Marketplace Established by Each State as of 
October 1, 2013 
 
 
Type of Marketplace  
State 
as of October 1, 2013  
New Mexico*   Federal  
New York   State 
North Carolina  Federal  
North Dakota   Federal  
Ohio  Federal  
Oklahoma   Federal  
Oregon   State  
Pennsylvania  Federal  
Rhode Island   State 
South Carolina  Federal  
South Dakota   Federal  
Tennessee  Federal  
Texas  Federal 
Utah  Federal  
Vermont  State 
Virginia  Federal  
Washington  State 
West Virginia   State-partnership  
Wisconsin  Federal 
Wyoming  Federal  
 
* Idaho and New Mexico began to establish State marketplaces; however, they used the Federal 
marketplace as of October 1, 2013. 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Marketplaces Faced Early Challenges Resolving Inconsistencies (OEI-01-14-00180)           21 
   
   
APPENDIX B 
Inconsistency Data by Applicants Reported by State 
Marketplaces 
 
We did not independently verify State reported data, and States may have 
reported inconsistency data based on different definitions.  The number of 
applicants with inconsistencies in QHP enrollment may overlap with the 
number of inconsistencies in insurance affordability program eligibility.  
CALIFORNIA  508,292 QHP  Applicants   CONNECTICUT  30,117 QHP Applicants  
145,307 Applicants   73,267 Applicants   8,075 Applicants   7,157 Applicants  
with inconsistencies   with inconsistencies  in  with inconsistencies   with inconsistencies  in 
in QHP enrollment   insurance affordability   in QHP enrollment  insurance affordability  
eligibility   program eligibility   eligibility   program eligibility  
Unique Inconsistencies  Unique Inconsistencies 
Income  88,509  Income  6,759 
Citizenship  42,228  Citizenship  1,742 
Social Security number  129  Social Security number  1,138 
Incarceration  230  Incarceration  * 
Residency  0  Residency  * 
Data reported for 10/1/13-12/31/13 as of 2/13/14 and   Data reported  for 10/1/13-12/31/13 and includes QHP 
does  not account for  terminations  or  re-enrollments.    applicants with or  without  insurance affordability  
California reported  that  it  resolved  some  inconsistencies,   program payments.  Connecticut  reported that  it  
but lacked the resources  to resolve all of them.  resolved inconsistencies  without delay.   
*Self-attested applicant information accepted. 
DC                  12,618 QHP Applicants   HAWAII  12,731 QHP  Applicants  
6,232 Applicants   3,496 Applicants   1,053 Applicants   1,053 Applicants  
with inconsistencies   with inconsistencies  in  with inconsistencies   with inconsistencies  in 
in QHP enrollment  insurance affordability   in QHP  enrollment  insurance affordability  
eligibility   program eligibility   eligibility   program eligibility  
Unique Inconsistencies  Unique Inconsistencies 
Income  2,384  Income  498 
Citizenship  1,356  Citizenship  212 
Social Security number  1,963  Social Security number  183 
Incarceration  *  Incarceration  317 
Residency  2,971  Residency  42 
Data reported  for 10/1/13-12/31/13 and  includes   Data reported for 10/1/13-12/31/13 and includes unique 
applicants that may  ultimately  receive Medicaid.   DC  applicants with a  minimum  of  one inconsistency  for  
reported  that  it  resolved inconsistencies  without delay.   insurance affordability program eligibility.  Hawaii 
*Self-attested applicant  information  accepted.  reported that  its  State  Medicaid office  resolved 
inconsistencies.   
 
   
 
Marketplaces Faced Early Challenges Resolving Inconsistencies (OEI-01-14-00180)           22 
   
   
 
 
(cont.):  Inconsistency Data by Applicants Reported by State 
Marketplaces 
KENTUCKY  27,647 QHP Applicants  MASSACHUSETTS  6,923 QHP Applicants 
11,334 Applicants     4,648 Applicants       6,789 Applicants  10 Applicants  
with inconsistencies   with inconsistencies  in  with inconsistencies   with inconsistencies in 
in QHP enrollment  insurance affordability   in QHP enrollment  insurance affordability  
eligibility   program eligibility   eligibility   program eligibility  
Unique Inconsistencies  Unique Inconsistencies 
Income  7,945  Income  0 
Citizenship  2,444  Citizenship  3,096 
Social Security number  914  Social Security number  1,755 
Incarceration  110  Incarceration  0 
Residency  1  Residency  3,310 
Data  reported  for 10/1/13-12/31/13.  Kentucky  reported  Data  reported  for 10/1/13-12/31/13.  Massachusetts  
that  it  resolved inconsistencies  without delay.   reported that it  was  unable to resolve inconsistencies. 
MARYLAND  18,272 QHP  Applicants   NEW YORK  388,390 QHP  Applicants 
525 Applicants  992 Applicants   38,936 Applicants     24,322 Applicants       
with inconsistencies   with inconsistencies  in  with inconsistencies   with inconsistencies in 
in QHP enrollment  insurance affordability   in QHP enrollment  insurance affordability  
eligibility   program eligibility   eligibility   program eligibility  
Unique Inconsistencies  Unique Inconsistencies 
Income  992  Income  23,843 
Citizenship  445  Citizenship  28,984 
Social Security number  438  Social Security number  299 
Incarceration  6  Incarceration  493 
Residency  *  Residency  * 
Data  for 10/1/13-12/28/13.  Maryland  reported that  it   Data for  10/1/13-12/31/13.  New  York  reported that  it  
resolved inconsistencies  without delay.     resolved inconsistencies  without delay. 
*Self-attested applicant information accepted.  *Self-attested applicant information accepted. 
 
 
 
 
 
 
 
Marketplaces Faced Early Challenges Resolving Inconsistencies (OEI-01-14-00180)           23 
   
   
 
(cont.): Inconsistency Data by  Applicants Reported by State 
Marketplaces 
 
 
RHODE  ISLAND  20,465 QHP Applicants  VERMONT  31,114 QHP Applicants  
 
1,217 Applicants   244 Applicants   2,200 Applicants   8,661 Applicants 
with inco nsistencies  with inconsistencies  in   with inconsistencies  with inconsistencies  in  
in QHP  enrollment  insurance affordability   in QHP enrollment  insurance affordability  
eligibility   program eligibility   eligibility   program eligibility  
 
Unique Inconsistencies  Unique Inconsistencies 
   
Income  562  Income  15,339 
Citizenship  693  Citizenship  2,251 
Social Security number  133  Social Security number  1,168 
Incarceration  56  Incarceration  1 
Residency  *  Residency  * 
Data reported for 10/1/13-12/31/13.  Rhode Island   Data reported for 10/1/13-12/31/13 and includes only  
reported that  it  resolved inconsistencies  without delay.  active applicants.  Vermont  reported that it  was  unable 
*Self-attested applicant  information accepted.  to resolve inconsistencies. 
*Self-attested applicant information accepted.  
WASHINGTON  184,322 QHP  Applicants 
32,305 Applicants  25,771 Applicants  
with inconsistencies  with inconsistencies  in  
in QHP enrollment  insurance affordability  
eligibility   program eligibility  
Unique Inconsistencies 
Income  23,802 
Citizenship  20,005 
Social Security number  8,951 
Incarceration  9,148 
Residency  * 
Data reported for 10/1/13-3/5/14  and  includes applicants  
who have not  yet selected a QHP.  Washington  reported  
that it resolved inconsistencies without delay.   
*Self-attested applicant information accepted. 
 
Marketplaces Faced Early Challenges Resolving Inconsistencies (OEI-01-14-00180)           24 
  APPENDIXC 
Agency Comments 
~tJ*SIC,fs ' 
/ 
{ .4  ...  
DEPARTMENT OF HEALTH & HUMAN SERVICES  Genlers lor M1ldicare & Mediellld Services 
...... 
4*"4\01  A.dministrator 
Weshlnglorl. OC 20201 
Date: 	 May 27,2014 
To: 	 Brian P. Ritchie 
Acting Deputy Inspector General for Evaluation and Inspec tions 
From: 	 Marilyn Tavennet:. 
Administrator 
Cente rs for Medicare & Medicaid Services 
Subjed:  OIG Draft Report: Marketplaces Faced Early Challenges Resolving 
Inconsistencies with Applicant Dar a, OEI-0 t-I4...()0 180 
The Centers for Medicare & Medicaid Services (CMS) appreciates the opportunity to review and 
comment on the Office of the Inspector General's (OIG) draft report . CMS .is committed to 
verifying the eligibility of consumers who apply for enrollment in qualified health plans (QHPs) 
through the Marketplace or for insurance atfordability programs.  As part of that effort, the 
federally-facilitated Marketplace (FFM) follows the process required under the Affordable Care 
Act for reso lving inconsistencies bet.w.:en eligibility infonnation provided by applicatio n filers 
and the data obtained through electronic data sources to ensure that applicants receive the proper 
eligibility determinations for enrollment in a QHP through the Marketplace or for insurance 
aflordability programs. As the OJG droft report noted, an inconsistency between the eligibility 
information provided by an application filer and the electronic data sources does not mean that 
the information provided by the application filer is incorrect or that the applicant is ineligible. To 
date. there has been no evidence of an applicant defrauding the FFM or a state-based 
Marketplace (SBM) in order to unlawfully enroll in a QHP through the Murketpla.ce or take 
advantage of an insurance affordability program for which the applicant is not eligible. 
It is not surprising that there are inconsistencies between some information provided by 
application tilers and the electronic data sources, and, .in fact, this issue is addressed in the 
Affordable Care Act. This is the first year that consumers have applied for coverage through the 
Marketplaces . Therefore, consumers are inexperienced with the eligibility process, which could 
lend to application mistakes. Additionally , application filers generally have access to more up-to
date information about applicants (typically the application filer him-or hersel f, or the 
application filer's family members ) than the electronic data sources used to verify eligibility 
information. For example, the Internal Revenue Service's (IRS) tax data is generally two years 
old (i.e., tax return infom1ation for 2012 is used to verify income attestations for co erage for 
2014} There are several opportunities for data incon istencics to occur during the application 
process - a typical family of lour that applies for financial assistance generates 21 separate 
entries, any one of which could result in an inconsistency.  While the FFM was able to 
successfully match tens of millions of pk"(;cS of data with the electronic data sources during the 
1 
Marketplaces Faced Early Challenges Reso lving Inconsistencies (OEI-0 1-14-00180)  25   
   
   
 
Marketplaces Faced Early Challenges Resolving Inconsistencies (OEI-01-14-00180)          26 
   
   
   
 
Marketplaces Faced Early Challenges Resolving Inconsistencies (OEI-01-14-00180)          27 
   
   
ACKNOWLEDGMENTS 
This report was prepared under the direction of Joyce Greenleaf, Regional 
Inspector General for Evaluation and Inspections in the Boston regional 
office, and Russell Hereford, Deputy Regional Inspector General, and 
Kenneth Price, Deputy Regional Inspector General.  
Danielle Fletcher served as team leader for this study.  Other Office of 
Evaluation and Inspections staff from the Boston regional office who 
conducted the study include Christopher Galvin, Melissa Hafner, and 
Kimberly Ruppert.  Central office staff who provided support include 
Heather Barton. 
 
Marketplaces Faced Early Challenges Resolving Inconsistencies (OEI-01-14-00180)           28 
   
Office of Inspector General
http://oig.hhs.gov  
 
The mission of the Office of Inspector General (OIG), as mandated by Public Law 95-452, as  
amended, is  to protect the integrity of the Department of  Health and Human Services  
(HHS)  programs, as well as the health and welfare of beneficiaries  served by those 
programs.  This statutory mission  is  carried  out through  a nationwide network  of  audits, 
investigations, and inspections conducted by the  following operating components: 
Office of Audit Services 
The Office  of  Audit Services  (OAS) provides auditing services  for HHS, either by  conducting  
audits  with its own audit resources or by  overseeing  audit work done by others.  Audits  
examine the performance of HHS programs and/or its grantees and contractors in carrying  
out their respective responsibilities and are intended  to provide independent assessments of 
HHS programs and operations.  These assessments help reduce waste, abuse, and  
mismanagement and promote economy and efficiency  throughout  HHS. 
Office of Evaluation and Inspections 
The Office  of  Evaluation and Inspections (OEI)  conducts national evaluations to  provide 
HHS, Congress, and the public with timely, useful, and reliable information on significant 
issues.  These evaluations focus on preventing fraud,  waste, or abuse  and promoting  
economy, efficiency, and effectiveness of departmental programs.  To promote impact, OEI 
reports also present practical recommendations for improving program operations.  
Office of Investigations 
The Office of Investigations (OI) conducts criminal, civil, and administrative investigations  
of  fraud and misconduct  related to HHS programs, operations, and beneficiaries.  With 
investigators working in all 50 States and the District of Columbia, OI  utilizes its resources 
by actively  coordinating with the Department  of Justice  and other Federal, State, and local 
law enforcement authorities.  The investigative efforts of OI often lead to  criminal 
convictions, administrative sanctions,  and/or  civil monetary  penalties.  
Office of Counsel to the Inspector General 
The Office of Counsel to the  Inspector  General (OCIG) provides general legal services to 
OIG, rendering  advice and opinions on HHS programs and operations and  providing all  
legal support for OIGs  internal operations.  OCIG represents  OIG in all civil and 
administrative fraud and abuse cases involving HHS programs,  including False Claims Act, 
program exclusion, and civil monetary penalty cases.  In  connection with these cases, OCIG 
also negotiates and monitors corporate integrity agreements.  OCIG renders advisory 
opinions, issues compliance program  guidance, publishes fraud alerts, and provides other  
guidance  to  the health care industry concerning the anti-kickback statute and other  OIG  
enforcement authorities.