Would you ever send someone a blank check for services rendered without ever asking what you actually owed? Neither would I, but not our federal government.

In a stunning demonstration of a lack of stewardship over public resources, we’re learning that the Obama Administration has paid out $2.8 billion to healthcare insurers for those generous ObamaCare subsidies without a way to verify the amount the government actually owes for each enrollee.

Remember when healthcare.gov was initially launched in 2013? It was a disastrous rollout; for weeks the website was broken and rife with glitches and errors. That’s a memory President Obama would rather forget. Of the many back-end features that were not built out at the time was an income verification and payment system. And to-date, it still has not been completed.

As a result, the Centers for Medicare and Medicaid Services (CMS) have to rely on insurers to submit estimated claims. Customers apply for premium subsidies based upon the previous year’s income and the subsidies they qualify for don’t get checked until tax season when individual enrollees file their tax returns. As we reported, this tax season many ObamaCare enrollees had to pay back the government because their actual income was much higher than estimated when they applied for ObamaCare.

Thanks to a report from the inspector general which studied a sample of payments, we’re seeing just how wildly inaccurate these payments have been.

According to the watchdog report, CMS has been blowing our money using based on a pay-first-and-verify-later philosophy:

We determined that CMS’s internal controls (i.e., processes put in place to prevent or detect any possible substantial errors) for calculating and authorizing financial assistance payments were not effective. Specifically, we found that CMS:

o   relied on issuer attestations that did not ensure that advance CSR payment rates identified as outliers were appropriate,

o   did not have systems in place to ensure that financial assistance payments were made on behalf of confirmed enrollees and in the correct amounts,

o   did not have systems in place for State marketplaces to submit enrollee eligibility data for financial assistance payments, and

o   did not always follow its guidance for calculating advance CSR payments and does not plan to perform a timely reconciliation of these payments.

We note that CMS has the responsibility to verify that financial assistance payments made to QHP issuers are accurate. CMS also has the authority to (1) require QHP issuers to restate enrollment totals and payment amounts for prior months to reflect prior inaccurate payments and (2) recoup these payments by offsetting them against future payments or other means. Because CMS has not developed the systems to obtain enrollment and payment information on an enrollee-by-enrollee basis, CMS cannot verify the accuracy of the nearly $2.8 billion it authorized for financial assistance payments during our audit period. We plan to conduct an additional review that will address financial assistance payments on an enrollee-by-enrollee basis. The planned review will include the audit period covered by this review and collect information necessary to determine payment accuracy.

The report makes some common sense recommendations that should be no-brainers for the Administration including making haste in building computerized systems to confirm enrollee and payment information so they don’t have to rely on insurers’ estimates, building ways for applicants to submit eligibility information, and developing reconciliation procedures to address incorrect payments.

Does it really take a government watchdog report to apply pressure on the Administration to do what it needs to do? We’ll see how long it takes CMS to implement these systems. It’s been 20 months since healthcare.gov was launched and this missing functionality was exposed. That’s plenty of time to make this a priority which leads us to question just whether accuracy is really a focus of the Administration?

There’s a compelling reason to believe that it’s not: the Administration needs an impressive headcount to claim that ObamaCare is successful. It’s more expedient to recruit at the front end and weed them out afterward or make then pay back later. We can hope that is not the motive here, but there doesn’t seem to be any other plausible explanation for why the development to this functionality is so tardy.