Weak oversight of Obamacare’s state-based exchanges has led to millions of dollars in wasteful spending, according to a report released Tuesday by the House Energy & Commerce Committee.
“Neglecting to limit the dollars granted to [states] and inadequate oversight of documented wasteful spending has cost the American taxpayer millions of dollars,” the report said. “Six years into the implementation of [the Affordable Care Act], it is time that the administration strengthen its measures to account for the significant waste of taxpayer dollars.”
The report said the Obama administration handed out nearly $4.6 billion in grants for the 17 state-based Obamacare exchanges, which includes the one in the District of Columbia.
The committee said it estimates four of the exchanges lost $239 million in IT work. The reported added that acting CMS director Andy Slavitt told the committee in May that more than $200 million in unspent grants were to be returned, but cited CMS documents showing that only $21.5 million was recovered.
It highlighted that five of the 17 state-based exchanges have closed or are about to close, and that the federal government provided them with about $1 billion in grants. Exchanges in Hawaii, Nevada, New Mexico and Oregon have closed, and Kentucky’s will close next year.
It also noted that CMS has only recovered $1.6 million in misspent federal funds from three of the 17 exchanges in Arkansas, Oregon and Minnesota.
“Nearly $1 million was for impermissible construction costs that went undetected by CMS for over a year,” the report said.
The committee said one hurdle to getting a final estimate for money wasted is that one state exchange, Kentucky, complied with the federal government’s requirement to publish the costs associated with operating an exchange, which include money lost to waste and fraud.
“It does not appear that CMS has taken any action to enforce this statutory requirement that state exchanges publish the monies lost to waste, fraud and abuse,” the report said. “As a result, these [exchanges] have escaped public accountability.”
It also pointed to two state exchanges, Maryland and Nevada, that violated federal rules and used federal Medicaid dollars to pay for exchange expenses.
CMS did not immediately return a request for comment as of press time.
