Department of Health and Human Services 

 OFFICE OF 

INSPECTOR GENERAL 

MARKETPLACES FACED 

EARLY CHALLENGES 

RESOLVING 

INCONSISTENCIES WITH 

APPLICANT DATA 

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 marketplace’s 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 selfattested 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-ofpocket 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 applicant’s 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 applicant’s State of residence; by telephone; by 

mail; in person; or directly with a QHP issuer’s 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 selfattested information on family size.10 

Federal Data Hub. A marketplace verifies an applicant’s 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 applicant’s 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 applicant’s 

eligibility through the Data Hub or with other data sources, the applicant 

can select a QHP.14 The marketplace uses the applicant’s information and 

the tax filer’s 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 applicant’s 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 applicant’s 

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 Children’s 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 applicant’s 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 caseby-case basis, accept an applicant’s attestation along with an explanation 

of why the documentation is not available.26 The marketplace cannot 

accept an applicant’s 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 

Marketplace verifies 

information against Federal 

data sources though Data 

Hub or other data sources 

Applicant information 

matches data sources, no 

inconsistency is created, 

and application proceeds 

Applicant information 

does not match data 

sources and an 

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 

Outcome #1 

Marketplace 

determines that 

applicant is eligible 

using applicantsubmitted information 

Outcome #2 

Marketplace 

determines that 

applicant is eligible 

using data sources 

Outcome #4

 Marketplace 

determines applicant 

is eligible using selfattested information 

on a case-by-case 

basis (except for 

citizenship and 

immigration status) 

Marketplace receives additional 

information from applicant during 

the 90-day inconsistency period 

Marketplace does not receive 

acceptable additional information 

from applicant during the 90-day 

inconsistency period 

Outcome #3 

Marketplace 

determines applicant 

is not eligible 

because data 

sources indicate not 

eligible or data 

sources are 

unavailable 

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). 

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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 selfattested 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. 

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Table 1: Number and Percentage of Inconsistencies That the Federal Marketplace 

Was Unable and Able to Resolve as of February 23, 2014 

Type of inconsistency unable to be resolved Number of 

Inconsistencies* 

Percentage of 

Total 

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 

coverage 110,220 4% 

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 

applicant’s 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 marketplace’s 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 CMS’s 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). 

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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 

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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 applicant’s 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 applicant’s 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 CMS’s 

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 marketplace’s 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 CMS’s 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 

State Type of Marketplace 

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 

State Type of Marketplace 

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. 

73,267 Applicants 

with inconsistencies in 

insurance affordability 

program eligibility 

145,307 Applicants 

with inconsistencies 

in QHP enrollment 

eligibility 

Data reported for 10/1/13-12/31/13 as of 2/13/14 and 

does not account for terminations or re-enrollments. 

California reported that it resolved some inconsistencies, 

but lacked the resources to resolve all of them. 

CALIFORNIA 508,292 QHP Applicants 

Unique Inconsistencies 

Income 88,509 

Citizenship 42,228 

Social Security number 129 

Incarceration 230 

Residency 0 

7,157 Applicants 

with inconsistencies in 

insurance affordability 

program eligibility 

8,075 Applicants 

with inconsistencies 

in QHP enrollment 

eligibility 

Data reported for 10/1/13-12/31/13 and includes QHP 

applicants with or without insurance affordability 

program payments. Connecticut reported that it 

resolved inconsistencies without delay. 

*Self-attested applicant information accepted. 

CONNECTICUT 30,117 QHP Applicants 

Unique Inconsistencies 

Income 6,759 

Citizenship 1,742 

Social Security number 1,138 

Incarceration * 

Residency * 

3,496 Applicants 

with inconsistencies in 

insurance affordability 

program eligibility 

6,232 Applicants 

with inconsistencies 

in QHP enrollment 

eligibility 

Data reported for 10/1/13-12/31/13 and includes 

applicants that may ultimately receive Medicaid. DC 

reported that it resolved inconsistencies without delay. 

*Self-attested applicant information accepted. 

DC 12,618 QHP Applicants 

Unique Inconsistencies 

Income 2,384 

Citizenship 1,356 

Social Security number 1,963 

Incarceration * 

Residency 2,971 

1,053 Applicants 

with inconsistencies in 

insurance affordability 

program eligibility 

1,053 Applicants 

with inconsistencies 

in QHP enrollment 

eligibility 

Data reported for 10/1/13-12/31/13 and includes unique 

applicants with a minimum of one inconsistency for 

insurance affordability program eligibility. Hawaii 

reported that its State Medicaid office resolved 

inconsistencies. 

HAWAII 12,731 QHP Applicants 

Unique Inconsistencies 

Income 498 

Citizenship 212 

Social Security number 183 

Incarceration 317 

Residency 42 

Marketplaces Faced Early Challenges Resolving Inconsistencies (OEI-01-14-00180) 22 
 

 

 

 

 

 

 

 

 

 

 

(cont.): Inconsistency Data by Applicants Reported by State 

Marketplaces 

4,648 Applicants 

with inconsistencies in 

insurance affordability 

program eligibility 

11,334 Applicants 

with inconsistencies 

in QHP enrollment 

eligibility 

Data reported for 10/1/13-12/31/13. Kentucky reported 

that it resolved inconsistencies without delay. 

KENTUCKY 27,647 QHP Applicants 

Unique Inconsistencies 

Income 7,945 

Citizenship 2,444 

Social Security number 914 

Incarceration 110 

Residency 1 

10 Applicants 

with inconsistencies in 

insurance affordability 

program eligibility 

6,789 Applicants 

with inconsistencies 

in QHP enrollment 

eligibility 

Data reported for 10/1/13-12/31/13. Massachusetts 

reported that it was unable to resolve inconsistencies. 

MASSACHUSETTS 6,923 QHP Applicants 

Unique Inconsistencies 

Income 0 

Citizenship 3,096 

Social Security number 1,755 

Incarceration 0 

Residency 3,310 

992 Applicants 

with inconsistencies in 

insurance affordability 

program eligibility 

525 Applicants 

with inconsistencies 

in QHP enrollment 

eligibility 

Data for 10/1/13-12/28/13. Maryland reported that it 

resolved inconsistencies without delay. 

*Self-attested applicant information accepted. 

MARYLAND 18,272 QHP Applicants 

Unique Inconsistencies 

Income 992 

Citizenship 445 

Social Security number 438 

Incarceration 6 

Residency * 

24,322 Applicants 

with inconsistencies in 

insurance affordability 

program eligibility 

38,936 Applicants 

with inconsistencies 

in QHP enrollment 

eligibility 

Data for 10/1/13-12/31/13. New York reported that it 

resolved inconsistencies without delay. 

*Self-attested applicant information accepted. 

NEW YORK 388,390 QHP Applicants 

Unique Inconsistencies 

Income 23,843 

Citizenship 28,984 

Social Security number 299 

Incarceration 493 

Residency * 

Marketplaces Faced Early Challenges Resolving Inconsistencies (OEI-01-14-00180) 23 
 

 

 

 

 

 

 

 

 

 

(cont.): Inconsistency Data by Applicants Reported by State 

Marketplaces 

8,661 Applicants 

with inconsistencies in 

insurance affordability 

program eligibility 

2,200 Applicants 

with inconsistencies 

in QHP enrollment 

eligibility 

Data reported for 10/1/13-12/31/13 and includes only 

active applicants. Vermont reported that it was unable 

to resolve inconsistencies. 

*Self-attested applicant information accepted. 

VERMONT 31,114 QHP Applicants 

Unique Inconsistencies 

Income 15,339 

Citizenship 2,251 

Social Security number 1,168 

Incarceration 1 

Residency * 

25,771 Applicants 

with inconsistencies in 

insurance affordability 

program eligibility 

32,305 Applicants 

with inconsistencies 

in QHP enrollment 

eligibility 

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. 

WASHINGTON 184,322 QHP Applicants 

Unique Inconsistencies 

Income 23,802 

Citizenship 20,005 

Social Security number 8,951 

Incarceration 9,148 

Residency * 

244 Applicants 

with inconsistencies in 

insurance affordability 

program eligibility 

1,217 Applicants 

with inconsistencies 

in QHP enrollment 

eligibility 

Data reported for 10/1/13-12/31/13. Rhode Island 

reported that it resolved inconsistencies without delay. 

*Self-attested applicant information accepted. 

RHODE ISLAND 20,465 QHP Applicants 

Unique Inconsistencies 

Income 562 

Citizenship 693 

Social Security number 133 

Incarceration 56 

Residency * 

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-todate 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 OIG’s 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.