Transparency and Accountability of Failed Exchanges Act

To amend title I of the Patient Protection and Affordable Care Act to require that a State awarded a Federal grant to establish an Exchange and that terminates the State operation of such an Exchange provide for an audit of the use of grant funds and return funds to the Federal Government, and for other purposes. 1. Short title This Act may be cited as the Transparency and Accountability of Failed Exchanges Act 2. States awarded Exchange establishment grants that terminate State operation of such an Exchange are required to provide audits of the use of grant funds and return funds to the Federal Government (a) In general Section 1311(a) of the Patient Protection and Affordable Care Act ( 42 U.S.C. 18031(a) (6) Treatment in case of Exchange termination (A) In general In the case of a State that is awarded a grant under this section to establish an Exchange and that terminates the operation of such Exchange or otherwise transfers the operation of such Exchange to an entity other than such State— (i) not later than 30 days after the date of such termination or transfer (or, in the case of such a termination or transfer that occurred before the date of the enactment of this paragraph, not later than 30 days after such date of enactment), the State shall submit to Congress and the Secretary a report containing the results of an audit of how amounts awarded to such State pursuant to such grant were used; and (ii) not later than 30 days after the date of such termination or transfer (or, in the case of such a termination or transfer that occurred before the date of the enactment of this paragraph, not later than 30 days after such date of enactment)— (I) in accordance with subparagraph (B), there are rescinded any unobligated amounts awarded to such State pursuant to such grant; and (II) in accordance with subparagraph (C), the State shall provide to the Administrator of General Services any property acquired by such State with amounts awarded to such State pursuant to such grant and shall submit to Congress and the Secretary a record of the provision of such property to the Administrator. (B) Retention of funds for deficit reduction Funds rescinded under subparagraph (A)(ii)(I) shall be retained in the general fund of the Treasury for Federal budget deficit reduction. (C) Treatment of property The Administrator of General Services may— (i) dispose of any property obtained pursuant to subparagraph (A)(ii)(II) through a public auction for cash and for not less than the fair market value of the property, as determined by the Administrator; (ii) provide to any Federal agency such property for official use by such agency; or (iii) lease or hire such property, and may insure such property. (D) Exemption from certain property disposal requirements Any disposal of property conducted under subparagraph (C)(i) shall not be subject to— (i) subchapter IV of chapter 5 of subtitle I of title 40, United States Code; (ii) sections 550 and 553 of title 40, United States Code; (iii) section 501 of the McKinney-Vento Homeless Assistance Act ( 42 U.S.C. 11411 (iv) any other provision of law authorizing the no-cost conveyance of property owned by the Federal Government; or (v) any congressional notification requirement other than that in section 545 of title 40, United States Code. (E) Income from property The Administrator shall deposit any income from the disposition, lease, or hire of the property obtained pursuant to subparagraph (A)(ii)(II) in the general fund of the Treasury for Federal budget deficit reduction. . (b) Application of the False Claims Act Section 1313(a)(6)(A) of the Patient Protection and Affordable Care Act ( 42 U.S.C. 18033(a)(6)(A) Further, except as otherwise provided for expressly under this Act, the False Claims Act preempts any State enforcement action of alleged fraud, waste, and abuse of funds issued pursuant to this Act. States that terminate or transfer their exchange will refer all current and future matters involving fraud, waste, and abuse of funds issued pursuant to this Act to the United States Department of Justice. Any current or future enforcement action shall be removed to or brought in Federal court. All fines, penalties, damages, or awards, monetary or otherwise, arising out of any current or future enforcement action, represent Federal funds that shall be returned to the United States. (c) Enforcement action The Attorney General may bring an action before the appropriate district court of the United States to enforce section 1311(a)(6) of the Patient Protection and Affordable Care Act ( 42 U.S.C. 18031(a)(6) (d) Effective date The provisions of this section, including the amendment made by subsection (a), shall apply with respect to grants made before, on, or after the date of the enactment of this Act and to terminations and transfers of Exchanges occurring before, on, or after such date.

Summary: Transparency and Accountability of Failed Exchanges Act This bill establishes specific audit requirements, and rescinds funds, for certain states that are awarded grants to establish health insurance exchanges under the Patient Protection and Affordable Care Act (PPACA). Specifically, states that are awarded grants to establish an exchange, but that subsequently terminate the exchange or transfer operations to another entity, must conduct an audit of how grant funds were used and return any acquired property and unobligated funds to the federal government, in accordance with specified requirements. Such states must also refer matters involving fraud, waste, and abuse of PPACA funds to the Department of Justice.