Department of Health and Human Services 
OFFICE OF 
 
INSPECTOR GENERAL 
 
 
 
 
 
 
 
 
 
D I U
ATA  NADEQUACIES  NDERMINE 
 
CMS O
  S  VERSIGHT OF THE 
 
I R P
NCONSISTENCY  ESOLUTION  ROCESS 
 
FOR THE FEDERAL MARKETPLACE
 
 
Suzanne Murrin 
Deputy Inspector General 
For Evaluation and Inspections 
 
 March 2017 
OEI-01-14-00620   
   
Report in Brief 
March 2017  
OEI-01-14-00620   
 
Why OIG Did This Review   Data Inadequacies Undermine CMSs Oversight of 
Ensuring that only eligible applicants  the Inconsistency Resolution 
can enroll in qualified health plans 
Process for the Federal  Key Takeaway 
(QHPs) and insurance affordability 
Marketplace   Our findings demonstrate that 
programs depends on the integrity of 
CMS cannot readily answer 
the enrollment process.  A key part of 
basic questions about 
What OIG Found 
that process involves resolving 
inconsistencies, particularly 
inconsistencies between self-attested  The Federal Marketplace is unable to  the number of individuals 
information submitted by applicants  calculate the total number of applicants with  with inconsistencies.  Data 
inconsistencies during the first open  limitations preclude CMS from 
and data received through Federal 
enrollment period because the data cannot  accurately counting and 
and other data sources.  In 
uniquely identify an individual seeking to  tracking inconsistencies by 
June 2014, the Centers for Medicare 
enroll in a QHP.  These shortcomings in the  applicant. 
& Medicaid Services (CMS) reported 
data also created additional work for CMS   
to the Office of Inspector General 
because it had to resolve the same inconsistencies more than 
(OIG) that the Federal Marketplace 
once and increased the burden to applicants with redundant 
was unable to resolve most 
requests for information.  
inconsistencies from the first open 
CMS experienced challenges using its inconsistency data and was 
enrollment period because the 
unable to extract accurate data on inconsistencies or fully explain 
eligibility system was not fully 
how it tracks inconsistencies in its data in a timely manner.       
operational.  This report follows up 
on our earlier work, focusing on  Our analysis of the portion of inconsistencies for applicants 
enrolled in QHPs shows that the Federal Marketplace appears to 
CMSs data management and 
have resolved or expired (i.e., terminated) 42 percent of 
resolution of prior inconsistencies.  
inconsistencies that we tracked for the first open enrollment 
 
period.  Inconsistencies do not necessarily indicate that an 
How OIG Did This Review 
applicant inappropriately enrolled in a QHP or incorrectly enrolled 
We requested updated data related 
in one or more insurance affordability programs.  However, the 
to inconsistencies that occurred in 
Federal Marketplace cannot ensure that the applicants meet the 
the first open enrollment season 
requirement unless it resolves their inconsistencies.   
from CMSs Multidimensional 
OIG Recommendation and Agency Response   
Insurance Data Analytics System.  We 
CMS should improve its management of the inconsistency resolution process 
also interviewed CMS staff and 
to ensure that it can readily identify all applicants with inconsistencies.  CMS 
contractors about the data 
should refine its data management system so that it can track individuals and 
management process for 
readily count the number of each type of inconsistency and whether those 
inconsistencies and the resolution 
inconsistencies are unresolved, resolved, or expired.  
process for inconsistencies and 
CMSs prior Acting Administrator provided comments on this report and 
conducted a site visit at an office of 
concurred with our recommendation.  For the full text of CMSs comments, 
the Federal Marketplace. 
see Appendix B. 
  The complete report can be found at http://oig.hhs.gov/oei/reports/oei-01-14-00620.asp 
 
       
   
TABLE OF CONTENTS 
 
Objective ......................................................................................................1 
Background ..................................................................................................1 
Methodology ................................................................................................6 
Findings........................................................................................................8 
The Federal Marketplace is unable to readily determine an accurate 
number of applicants with inconsistencies ......................................8 
CMS was unable to efficiently manage the inconsistency resolution 
process............................................................................................10 
The Federal Marketplace appears to have resolved or expired     
just 42 percent of inconsistencies from the first open enrollment 
period for applicants enrolled in QHPs .......................................... 11 
Conclusion and Recommendation .............................................................14 
Agency Comments and Office of Inspector General Response .................15 
Appendixes ................................................................................................16 
A:  Detailed Methodology .............................................................16 
B:  Agency Comments ...................................................................18 
Acknowledgments......................................................................................21
 
 
       
   
OBJECTIVE 
To determine the extent to which the Federal Marketplace has resolved 
inconsistencies that occurred in the 201314 open enrollment period 
between self-attested information submitted by applicants and data 
received through Federal and other data sources.  
BACKGROUND  
Ensuring that only eligible applicants can enroll in qualified health plans 
(QHPs) and insurance affordability programs depends on the integrity of 
the enrollment process.  A key part of that process involves resolving 
inconsistencies between self-attested information submitted by applicants 
and data received through Federal and other data sources.  In June 2014, 
the Office of Inspector General (OIG) analyzed inconsistency data from 
the Centers for Medicare & Medicaid Services (CMS) and found that the 
Federal Marketplace was unable to resolve 2.6 of 2.9 million 
inconsistencies because the eligibility system was not fully operational as 
of February 2014.1  Since then, CMS has reported that it has improved in 
its ability to process inconsistencies.  This report follows up on our earlier 
work, focusing on CMSs data management and resolution of 
inconsistencies from the first open enrollment period. 
Health Insurance Marketplaces  
The Patient Protection and Affordable Care Act (ACA) requires the 
establishment of a health insurance exchange (marketplace) in each  
State.2  For States that elected not to establish their own marketplaces, the 
Federal Government is required to operate a marketplace (hereinafter, 
Federal Marketplace) on behalf of the State.3  A marketplace is designed to 
serve as a one-stop shop where individuals can obtain information about 
their health insurance options, determine their eligibility for QHPs and 
insurance affordability programs, and select the QHP of their choice.   
The ACA required the Secretary of Health and Human Services to specify 
an initial open enrollment period during which individuals could enroll in 
                        ____________________________________________________________ 
1 OIG, Marketplaces Faced Early Challenges Resolving Inconsistencies with Applicant 
Data.  OEI-01-14-00180, June 2014. 
2 P.L. No. 111-148,  1311(b), 1321(c) (March 23, 2010), as amended by the Health 
Care and Education Reconciliation Act of 2010; P.L. No. 111-152 (March 30, 2010), 
collectively known as the Affordable Care Act (ACA).  The ACA uses the term 
exchanges to refer to competitive marketplaces for insurance.  However, CMS now 
uses the term marketplaces. 
3 ACA,  1321(c).   
 
 
Data Inadequacies Undermine CMSs Oversight of the Inconsistency Resolution Process    (OEI-01-14-00620)  1 
     
   
a health plan, to be followed by annual open enrollment periods each 
subsequent year.4  The first open enrollment period was 6 months in 
duration, lasting from October 1, 2013, through March 31, 2014.5  During 
the first open enrollment period, CMS operated the Federal Marketplace 
for 36 States, consisting of 29 States that used the Federal Marketplace 
and 7 States that had marketplaces with the Federal Government.  
Insurance Affordability Programs 
The ACA provides two types of insurance affordability programs for those 
who enroll in QHPs:  premium tax credits and cost-sharing reductions.  
Applicants may be eligible for either or both types of insurance 
affordability programs.6, 7 
Premium tax credits.  These reduce the cost of insurance premiums to the 
applicant.  Premium tax credits can either be paid directly to the insurance 
plan (i.e., to the QHP issuer) monthly as an advance premium tax credit or 
taken as a tax credit when an individual files a tax return.  If an applicant 
chooses the advance premium tax credit, the Internal Revenue Service 
(IRS) will reconcile the payments made on behalf of the individual with 
the maximum allowable amount of the credit when the individual files a 
tax return. 
Cost-sharing reductions.  These reduce out-of-pocket expenditures for 
such costs as copayments, deductibles, and coinsurance.  Cost-sharing 
reductions are available only for eligible individuals enrolled in 
Silver-level QHPs or for eligible individuals who are Indians enrolled in 
QHPs.8   
                        ____________________________________________________________ 
4 ACA  1311(c)(6)(A) and (B).   
5 45 CFR  155.410.  The Federal Marketplace created a special enrollment period to 
allow applicants who started an application by March 31, 2014, to finish the application 
and enrollment process by April 15, 2014.  
6 For the purpose of this report, the term applicant refers to both the person who 
completes the application (i.e., the 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. 
7 ACA  1401 and 1402; 45 CFR  155.305(f) and (g).   
8 45 CFR  155.305(g) and 155.350(a).  Indian is defined as an individual who meets 
the definition in section 4(d) of the Indian Self-Determination and Education Assistance 
Act, P.L. No. 93-638.     
 
 
Data Inadequacies Undermine CMSs Oversight of the Inconsistency Resolution Process    (OEI-01-14-00620)  2 
     
   
Eligibility for QHPs and Insurance Affordability Programs 
The Federal Marketplace determines an applicants eligibility to select 
a QHP and eligibility for insurance affordability programs.9  When an 
applicant completes an application for insurance, the applicant must 
submit informationsuch as Social Security number, income, citizenship 
status, and number of dependentsand attest to the accuracy of this 
information.10    
An applicant must meet certain eligibility requirements defined by the 
ACA to enroll in a QHP.  The 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.11  To be eligible for an insurance affordability program, an 
applicant must meet additional requirements related to household income 
and family size and must not be eligible for other minimum essential 
coverage.12   
Federal Data Hub.  The Federal Marketplace verifies an applicants 
self-attested information through electronic data sources, including those 
available through the Federal Services Data Hub (Data Hub).  The Data 
Hub is a single conduit through which a marketplace sends and receives 
electronic data from multiple Federal agencies; it does not store data.  
Federal agencies connected to the Data Hub include HHS, the IRS, the 
Social Security Administration (SSA), and the Department of Homeland 
Security.13   
The Federal Marketplace is generally required to verify the following data 
to determine the eligibility of an applicant:  Social Security number; 
citizenship/nationality/lawful-presence status; residency; income; family 
size; incarceration status; whether an individual is an Indian; and whether 
                        ____________________________________________________________ 
9 Marketplaces perform a number of other functions that include certifying available 
QHPs, operating websites to facilitate comparisons among QHPs, and operating toll-free 
hotlines for consumer support.   
10 An 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)). 
11 ACA  1312(f); 45 CFR  155.305(a).  A person must not be incarcerated other than 
incarceration pending the disposition of charges. 
12 45 CFR  155.305(f) and (g).  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). 
13 ACA  1411(c)(4). 
 
 
Data Inadequacies Undermine CMSs Oversight of the Inconsistency Resolution Process    (OEI-01-14-00620)  3 
     
   
an individual is eligible for other minimum essential coverage.14  If the 
Federal Marketplace is able to verify the applicants eligibility through the 
Data Hub or with other data sources, the applicant can select a QHP.15  
The Federal 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.16   
Inconsistencies between applicant-submitted information and information 
from Federal or other data sources.  When the Federal Marketplace 
cannot verify information that the applicant submitted or when the 
information is inconsistent with information available through the Data 
Hub or other sources, the marketplace must attempt to resolve the 
inconsistency.  For these purposes, applicant-submitted information is 
considered to be consistent with other sources if it is reasonably 
compatible.17  Information is considered reasonably compatible if any 
difference between the applicant-submitted information and other sources 
does not affect the eligibility of the applicant.18  Inconsistencies may occur 
with either the person who files the application (known as the applicant 
filer) or the other individuals listed on the application who are seeking 
insurance.  
Resolving inconsistencies.  The Federal Marketplace must make 
a reasonable effort to identify and address the causes of an inconsistency 
by contacting the applicant to confirm the accuracy of the information on 
the application.  If the Federal Marketplace is unable to resolve the 
inconsistency through reasonable efforts, it must generally give the 
applicant 90 days to present satisfactory documentation to resolve the 
inconsistency.19  This 90-day period is referred to as the inconsistency 
                        ____________________________________________________________ 
14 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).    
15 If eligible, applicants are referred to Medicaid or the Childrens Health Insurance 
Program (CHIP). 
16 Generally, a tax filer is an individual (or married couple) who indicates that he or she 
is filing an income tax return for the benefit year.  45 CFR  155.300(a). 
17 45 CFR  155.300(d).  For purposes of determining reasonable compatibility, other 
sources include information obtained through electronic data sources, other information 
provided by the applicant, or other information in the records of the marketplace. 
18 45 CFR  155.300(d). 
19 ACA  1411(e)(3) and (4); 45 CFR 155.315(f). 
 
 
Data Inadequacies Undermine CMSs Oversight of the Inconsistency Resolution Process    (OEI-01-14-00620)  4 
     
   
period.  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.20   
The Federal Marketplace may extend the 90-day inconsistency period if an 
applicant demonstrates that he or she has made a good-faith effort to 
obtain required documentation.21  However, this extension does not apply 
to inconsistencies pertaining to citizenship and immigration status.22  
Applicants receive written notices in the mail or updates online letting 
them know when their inconsistencies are resolved. 
Expiring Inconsistencies.  If the applicant fails to provide appropriate 
documentation to resolve the inconsistency, the Federal Marketplace 
expiresi.e., terminatesthe inconsistency.  At that point, the Federal 
Marketplace determines the applicants eligibility on the basis of 
information from available data sources at the time of application 
submission and, in certain circumstances, on the basis of information from 
the applicants attestation.23  On the basis of those data sources, the 
Federal Marketplace determines whether the applicant is eligible or 
ineligible for a QHP and, when applicable, for insurance affordability 
programs.  If the marketplace determines that the applicant is ineligible to 
remain in a QHP, the health insurance coverage will end.  In addition, the 
Federal Marketplace will determine the applicants eligibility for 
insurance affordability programs on the basis of data available from the 
IRS and SSA and adjust the amounts of the advance premium tax credit 
and cost-sharing reductions. 
Related Work 
In June 2014, an OIG evaluation found that as of February 2014, the 
Federal and State marketplaces were unable to resolve most 
inconsistencies.  The Federal Marketplace was unable to resolve 2.6 out of 
2.9 million inconsistencies.  Citizenship- and income-related 
inconsistencies represented 77 percent of the 2.9 million inconsistencies.24  
In its response to our recommendation that CMS develop and make public 
a plan on how and by what date the Federal Marketplace will resolve 
                        ____________________________________________________________ 
20 45 CFR  155.315(f)(4). 
21 45 CFR  155.315(f)(3). 
22 ACA  1411(e)(4). 
23 45 CFR  155.315(f)(5), (f)(6), and (g). 
24 OIG, Marketplaces Faced Early Challenges Resolving Inconsistencies with Applicant 
Data.  OEI-01-14-00180, June 2014. 
 
 
Data Inadequacies Undermine CMSs Oversight of the Inconsistency Resolution Process    (OEI-01-14-00620)  5 
     
   
inconsistencies, CMS stated that the Federal Marketplace had in place an 
interim manual process to resolve inconsistencies until it established an 
automated system.  Since then, CMS has stated that it resolves and expires 
all inconsistencies through the Federal Marketplace, which could result in 
terminating enrollment and adjusting advanced premium tax credits and 
cost sharing reductions.  
In August 2015, an OIG audit found that not all of the Federal 
Marketplaces internal controls were effective in ensuring that individuals 
were determined eligible for enrollment in QHPs and eligible for 
insurance affordability programs according to Federal requirements.25  
Although the audit found that certain controls were effective, it identified 
deficiencies related to verifying applicants eligibility and resolving and 
expiring inconsistencies.  Specifically, inconsistencies related to certain 
eligibility requirements were not always resolved or expired properly, and 
applicant data and documentation related to resolving inconsistencies were 
not always managed properly. 
METHODOLOGY 
This study is based on our analysis of inconsistency data from the Federal 
Marketplace for inconsistencies occurring during the first open enrollment 
season of the Federal Marketplace.  We also interviewed CMS staff and 
contractors and conducted a site visit to the Federal Marketplace.  See 
Appendix A for a full discussion of our methodology. 
Analysis of Inconsistency Data 
We requested from CMS all Federal Marketplace data for inconsistencies 
that occurred in the first open enrollment season for applicants for health 
and dental insurance who had inconsistencies during coverage year 2014.  
We excluded inconsistencies related to Medicaid and CHIP because 
Statesnot the Federal Marketplaceaddress these types of 
inconsistencies. 
To determine the extent to which the Federal Marketplace resolves and 
expires inconsistencies, we analyzed inconsistency data only for 
applications that resulted in the creation of a health or dental insurance 
policy.  We originally intended to analyze all inconsistencies regardless of 
whether the application resulted in health care coverage.  Instead, because 
of limitations with the inconsistency data (discussed below), we analyzed 
                        ____________________________________________________________ 
25 OIG, Not All of the Federally Facilitated Marketplaces Internal Controls Were 
Effective in Ensuring That Individuals Were Properly Determined Eligible for Qualified 
Health Plans and Insurance Affordability Programs.  A-09-14-01011, August 2015. 
 
 
Data Inadequacies Undermine CMSs Oversight of the Inconsistency Resolution Process    (OEI-01-14-00620)  6 
     
   
only inconsistencies where the policy status was effectuated (resulted in 
coverage) or canceled (an insurance policy was created but was 
subsequently canceled).  This decision regarding the scope of our 
evaluation allowed us to operate within the data available from CMS.  
Because CMSs available data could not reliably be used to determine the 
universe of inconsistencies, we cannot establish what proportion of the 
universe of inconsistencies we excluded from our analysis.   
Interviews with CMS Staff and Contractors  
We interviewed CMS staff and contractors from September 2014 through 
December 2016 to learn about the data-management process for 
inconsistencies and the resolution process for inconsistencies. 
Site Visit at the Federal Marketplace  
We conducted a site visit to an office of the Federal Marketplace in 
December 2014. We conducted structured interviews with Federal 
Marketplace staff members to learn about the inconsistency resolution 
process and how the Federal Marketplace expires inconsistencies. 
Limitations   
Although we could not independently verify the accuracy and 
completeness of the Federal Marketplace data we received from CMS, we 
did take other quality control steps. These steps include testing for 
duplicates and other data integrity issues.  Although we tested for missing 
data within a record (or inconsistency), we were unable to determine 
whether entire records were missing.  Although these steps allowed us to 
identify and subsequently resolve some data issues, we cannot confirm 
that the data are free of all types of errors. 
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. 
   
 
 
Data Inadequacies Undermine CMSs Oversight of the Inconsistency Resolution Process    (OEI-01-14-00620)  7 
     
   
FINDINGS 
Our findings demonstrate that CMS cannot readily answer questions about 
inconsistencies, which are differences between self-attested information 
submitted by applicants and data received through Federal and other data 
sources.   Data limitations preclude CMS from accurately counting and 
tracking inconsistencies by applicant.  These limitations raise questions 
about the extent to which CMS can ensure the integrity of the enrollment 
process.  Because of these shortcomings in the data, we limited our data 
analysis to those applicants enrolled in QHPs at any point during the first 
enrollment period.  That analysis shows that the Federal Marketplace 
appears to have resolved or expired just under half of these inconsistencies 
from the first open enrollment period (October 1, 2013, through March 31, 
2014).26  
The Federal Marketplace is unable to readily determine 
an accurate number of applicants with inconsistencies   
The Federal Marketplace must track and count inconsistencies to manage 
the enrollment process with confidence that eligible applicants can enroll 
in QHPs and insurance affordability programs.  However, it is unable to 
calculate the total number of applicants with inconsistencies because its 
data cannot uniquely identify an individual seeking to enroll in a QHP.   
Even through the 201516 open enrollment period, CMS remained unable 
to identify unique inconsistencies and unique applicants with 
inconsistencies.   
Although the Federal Marketplace has the potential through many data 
fields to uniquely identify inconsistencies and applicants with 
inconsistencies, the data entered are not unique in some cases or in other 
cases are missing.  Thus, using Social Security number, application 
identification number, and/or member identification number would result 
in either overcounting or undercounting inconsistencies. 
Social Security Numbers.  Social Security numbers cannot be used to 
uniquely identify individuals because not all eligible individuals have 
a Social Security number and the Federal Marketplace does not require 
their entry on the application.  Moreover, we found many instances where 
individual Social Security numbers were associated with multiple 
application identification numbers.   
                        ____________________________________________________________ 
26 The Federal Marketplace created a special enrollment period to allow applicants who 
started an application by March 31, 2014, to finish the application and enrollment process 
by April 15, 2014.  Our review also included this special enrollment period. 
 
 
Data Inadequacies Undermine CMSs Oversight of the Inconsistency Resolution Process    (OEI-01-14-00620)  8 
     
   
Application Identification Numbers.  The application identification 
number also has limitations for counting inconsistencies.  Multiple 
application identification numbers may be associated with a single 
applicant (see Exhibit 1).  HealthCare.gov assigns an application 
identification number when an applicant submits an application for 
coverage.  During the first open enrollment period, many applicants 
completed multiple applications because HealthCare.gov experienced 
outages and malfunctions.  Some applicants submitted multiple 
applications online.  Other applicants submitted applications online as well 
as in another format, such as by phone or in person.  Unless these 
applications are manually linked within the system, their inconsistencies 
remain discretein other words, each inconsistency will be counted as if 
it were a unique inconsistency, leading to overcounting.  The application 
identification number is also associated with all applicants listed on an 
application; for example, all members of one family listed on an 
application for coverage would have the same application identification 
number.  The use of the same application number to cover multiple 
applicants further complicates an accurate count of individuals with 
inconsistencies.   
    Exhibit 1: Example of Overcounting When Using Application  
                                 Identification Number 
 
  Application   
  Identification   
Name  Number  Inconsistency 
Jane Doe  12345678  Income 
Jane Doe  98765432  Income 
Jane Doe  56789102  Income 
 
 
 
Overcounted by two inconsistencies:  In this example, 
 
Jane Doe applied for coverage twice by phone and once 
 
online.  Each application had a unique identification 
 
number, but the applications were otherwise identical.  This 
 
resulted in multiple application numbers associated with the 
 
same person, Jane Doe.  
 
Source:  OIG analysis of inconsistency data from MIDAS (the Multidimensional Insurance Data 
Analytics System) for the first open enrollment period. 
 
CMS officials stated that because of improvements to HealthCare.gov, 
they expect that applicants will no longer submit multiple applications.  
 
 
Data Inadequacies Undermine CMSs Oversight of the Inconsistency Resolution Process    (OEI-01-14-00620)  9 
     
   
CMS stated that it performs a data manipulation process to eliminate 
duplicate inconsistencies.  If an applicant submits multiple versions of an 
application, CMS would count only one inconsistency for that applicant.  
However, CMS officials also stated that HealthCare.gov now prevents an 
individual from having more than one application ID for a given coverage 
year associated with his or her Federal Marketplace account. 
Member Identification Numbers.  Member identification numbers cannot 
be used to uniquely count applicants.  We found thousands of instances in 
which one member identification number was assigned to individuals with 
different Social Security numbers.  Consequently, using the member 
identification number would inaccurately count applicants.   
CMS experienced challenges in using its inconsistency data.  CMS was 
not able to extract accurate data on inconsistencies or to fully explain how 
it tracks inconsistencies in its data in a timely manner.  OIG detected 
anomalies in the first three extracts of inconsistency data that CMS 
provided to OIG, leading CMS to acknowledge problems with those data 
extracts.  OIG met with both technical experts and program officials from 
September 2014 through February 2016 to discuss our concerns with the 
accuracy of the data extracts.  CMS provided us with useable data in its 
fourth extract in February 2016. 
CMS was unable to efficiently manage the 
inconsistency resolution process   
The inability to identify unique applicants or link duplicate inconsistencies 
created additional work for CMS in resolving inconsistencies, and it 
increased the burden on applicants because duplicate inconsistencies 
resulted in duplicate requests for information.  For example, CMS would 
have attempted to reconcile each of Jane Does three inconsistencies (see 
Exhibit 1 on page 9) independently, thereby tripling the work needed to 
resolve one inconsistency.  For each inconsistency, CMS would have sent 
a separate letter to the applicant, requesting the information necessary 
to resolve the inconsistency.  If the applicant sent the information to 
resolve the inconsistency corresponding to one of the individual requests, 
the other two inconsistencies would have remained, and the applicant 
likely would have received additional requests for each of them.  CMS 
officials stated that its process for eliminating duplicate inconsistencies 
now allows it to send one request-for-information letter per application, 
and this single letter covers all household members and inconsistencies on 
the application. 
 
 
Data Inadequacies Undermine CMSs Oversight of the Inconsistency Resolution Process    (OEI-01-14-00620)  10 
     
   
The Federal Marketplace appears to have resolved or 
expired just 42 percent of inconsistencies from the 
first open enrollment period for applicants enrolled in 
QHPs 
Our analysis represents our best estimates of the outcomes of a limited 
portion of inconsistencies that occurred during the first open enrollment 
periodi.e., inconsistencies associated with those applicants that enrolled 
in QHPs at any time during the first open enrollment period.27  Of this 
limited portion of inconsistencies, the Federal Marketplace resolved 
40 percent and expired 2 percent.  Moreover, 58 percent of these 
inconsistencies were neither expired nor resolved.  Inconsistencies do not 
necessarily indicate that an applicant inappropriately enrolled in a QHP or 
insurance affordability program(s).  However, the Federal Marketplace 
cannot ensure that the applicants meet the requirements unless it resolves 
their inconsistencies.  
As Exhibit 2 shows, two types of inconsistenciesincome and 
citizenship/nationality/lawful-presence statuswere the most commonly 
resolved inconsistencies.  These two types collectively represented 
86 percent of all inconsistencies as well as 95 percent of the resolved 
inconsistencies.   
Furthermore, one applicant can have multiple inconsistencies.  The 
average number of inconsistencies for applicants with coverage 
effectuated during the first open enrollment period was 1.5; two-thirds of 
applicants had a single inconsistency each.  Applicants can resolve 
inconsistencies by submitting information that matches the information in 
trusted data sources or that confirms the information that the applicant 
included in the original application for coverage. 
   
                        ____________________________________________________________ 
27 Because of shortcomings with the inconsistency data from the first open enrollment 
period, we could not analyze all inconsistencies from that time period. We limited our 
analysis of the inconsistency data to those applicants enrolled in QHPs.  We determined 
that about 1.4 million of the applications that resulted in effectuated coverage had about 
2.2 million inconsistencies. 
 
 
Data Inadequacies Undermine CMSs Oversight of the Inconsistency Resolution Process    (OEI-01-14-00620)  11 
     
   
The Federal Marketplace could not resolve inconsistencies with 
citizenship/nationality/lawful-presence status, income, or 
employer-sponsored coverage/minimal essential coverage for the majority 
of the first open enrollment period. 28  CMS stated that since that time it 
has developed procedures to resolve all types of inconsistencies.  
However, OIG has not independently tested CMSs ability to resolve these 
types of inconsistencies. 
The Federal Marketplace  also expired 2 percent  (50,782) of  all 
inconsistencies (see Exhibit 2). The Federal Marketplace expires 
inconsistencies when the applicant has not provided documentation to 
support information attested to on the application.  Expired inconsistencies 
can result in either terminated coverage or reduced or discontinued 
____________________________________________________________ 
28 The only data source available to the Federal Marketplace to  resolve inconsistencies 
regarding employer-sponsored coverage/minimum essential coverage is the Office of  
Personnel Management, which covers only Federal employees. 
 
 
Data Inadequacies Undermine CMSs Oversight of the Inconsistency  Resolution Process    (OEI-01-14-00620)   12 
     
   
financial assistance through insurance affordability programs.  The 
number of expired inconsistencies also represents just 4 percent of the 
1.3 million inconsistencies that the Federal Marketplace did not resolve.29    
According to CMS officials, the Federal Marketplace granted 
a good-faith effort extension to the inconsistency period for all 
applicants who submitted any documentation to resolve the inconsistency 
in the first enrollment period.  A 2015 OIG audit found that the Federal 
Marketplace extended these inconsistency periods indefinitely on the basis 
of applicants good-faith efforts and accepted documentation that was not 
relevant to the specific inconsistencies that were unresolved.30   Although 
the Federal Marketplace may extend the inconsistency period on 
a case-by-case basis, we are unable to determine the extent to which 
applicants with unresolved inconsistencies received extensions.   
 
   
____________________________________________________________ 
29 The figure of 4 percent is  based on the number of expired inconsistencies  (50,782)  
divided by  the number of  inconsistencies that were not resolved (1,302,648).  
30 OIG,  Not All of the Federally Facilitated Marketplaces Internal Controls Were 
Effective in Ensuring  That  Individuals Were Properly Determined Eligible for Qualified  
Health Plans and Insurance Affordability Programs.  A-09-14-01011, August 2015. 
 
 
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CONCLUSION AND RECOMMENDATION 
In this study, data limitations precluded us from accurately counting and 
tracking all inconsistencies through the resolution process.  Furthermore, 
our analysis shows that for those applicants with coverage at any point 
during coverage year 2014, the Federal Marketplace appears to have 
resolved or expired 42 percent of inconsistencies from the first open 
enrollment period.  Even through the third open enrollment period, CMS 
was still unable to identify unique inconsistencies and applicants with 
inconsistencies.   
Inconsistencies do not necessarily indicate that an applicant 
inappropriately enrolled in a QHP or insurance affordability program(s).  
However, CMSs inability to readily identify and resolve these 
inconsistencies raises questions about the extent to which CMS can ensure 
the integrity of the enrollment process.  
CMSs inability to extract accurate data in a timely manner calls into 
question whether it is able to answer basic questions about inconsistencies, 
particularly the number of individuals who have inconsistencies.  
Furthermore, the findings demonstrated CMSs inability to efficiently 
manage the inconsistency resolution process and limit the burden it placed 
on applicants with redundant requests for documentation.  CMS should be 
able to use inconsistency data to fulfill its responsibility to ensure that 
eligibility determinations are correct for applicants. 
Therefore, we recommend that CMS: 
Improve its management of the inconsistency resolution process to 
ensure that it can readily identify all applicants with inconsistencies.  
CMS should refine its data management system so that it can track unique 
individuals and readily count the number of each type of inconsistency 
and determine whether those inconsistencies are unresolved, resolved, or 
expired. 
   
 
 
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AGENCY COMMENTS AND OFFICE OF INSPECTOR GENERAL 
RESPONSE 
On January 9, 2017, CMSs Acting Administrator at that time, Andrew 
Slavitt, provided CMS comments on OIGs draft report.  CMS concurred 
with our recommendation to improve its management of the inconsistency 
resolution process to ensure that it can readily identify all applicants with 
inconsistencies. 
CMS acknowledged problems with the 2014 data and told us that it 
improved the process for tracking and reporting on applicants and 
inconsistencies in the subsequent years.  CMS further noted that it had 
reduced the number of duplicate inconsistencies.  Finally, CMS stated that 
it currently has the ability to track inconsistencies by type and individual 
consumer. 
For the full text of CMSs comments, see Appendix B. 
   
 
 
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APPENDIX A:  DETAILED METHODOLOGY 
This study is based on our analysis of Federal Marketplace data for 
inconsistencies occurring during the first open enrollment season of the 
Federal Marketplace, as well as interviews with CMS staff and contractors 
and a site visit to the Federal Marketplace.     
Analysis of Federal Marketplace Data 
We requested all Federal Marketplace data for inconsistencies that 
occurred during the first open enrollment season from October 1, 2013, 
through March 31, 2014.31  We excluded inconsistencies related to 
Medicaid and CHIP because Statesnot the Federal Marketplace
address these types of inconsistencies. 
To determine the extent to which the Federal Marketplace resolves and 
expires inconsistencies, we analyzed inconsistency data only for 
applications that resulted in the creation of a health or dental insurance 
policy.  For this analysis, we selected inconsistencies where the policy 
status was effectuated (resulted in coverage) or canceled (an insurance 
policy was created but was subsequently canceled).   
Counting inconsistencies  We calculated the total numbers of income 
inconsistencies and other inconsistencies differently.   
  Income inconsistencies  We calculated the number of income 
inconsistencies based on the unique number of application 
identification numbers that had an income inconsistency associated 
with them.  We were able to use the application identification number 
because only the head of household or tax filer would have an income 
inconsistency, even if there were multiple applicants on the 
application. 
  Other inconsistencies  Because the data lacked a unique identifying 
number, we created a proxy variable by combining personal tracking 
number and the member identification number.  We then used this 
variable to calculate the number of the inconsistencies by applicant 
for citizenship/nationality/lawful-presence status, incarceration status, 
Indian status, Social Security number, employer-sponsored 
coverage/minimum essential coverage, and public 
non-employer-sponsored coverage/minimum essential coverage. 
                        ____________________________________________________________ 
31 45 CFR  155.410.  The Federal Marketplace created a special enrollment period to 
allow applicants who started an application by March 31, 2014, to finish the application 
and enrollment process by April 15, 2014.  
 
 
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  Counting resolved and expired inconsistencies  We determined the 
number of inconsistencies that were resolved and expired based on 
CMSs definitions that indicated the status of the inconsistency.  For 
income inconsistencies, we used unique application numbers to 
calculate the numbers of resolved and expired inconsistencies.  For 
other types of inconsistencies, we used the unique combination of the 
personal tracking number and member identification number to 
calculate the numbers of resolved and expired inconsistencies.  
Interviews with CMS Staff and Contractors  
We interviewed CMS staff and contractors from September 2014 through 
December 2016 to learn about the data management for inconsistencies 
and the resolution process for inconsistencies.  We also met with CMS to 
discuss the Federal Marketplace data and the limitations associated with 
using these data. 
Site Visit at the Federal Marketplace  
We conducted a site visit at an office of the Federal Marketplace in 
December 2014. We conducted structured interviews with Federal 
Marketplace staff members to learn about the inconsistency resolution 
process and how the Federal Marketplace expires inconsistencies. 
 
 
 
 
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APPENDIX B:  AGENCY COMMENTS   
   
 
 
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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 and Kenneth Price, Deputy Regional 
Inspectors General. 
Danielle Fletcher served as the team leader for this study, and  
Maria Maddaloni served as the lead analyst.  Central office staff who 
provided support include Eddie Baker, Jr., Evan Godfrey, and 
Christine Moritz.  
 
 
 
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Office of Inspector General
http://oig.hhs.gov  
 
The mission of the Office of Inspector General (OIG), as mandated by Public Law 95452, 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 individuals 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 individuals.  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.