Update: This story has been updated to include comment and explanation from the administration.
The House Energy and Commerce Committee Republicans can’t find most of the $200 million that the Obama administration claims it recouped from state-based health care exchanges as part of a federal grant program to help them set up shop, according to a new report obtained by Morning Consult.
The administration, however, claims the money has been in plain sight all along.
Centers for Medicare and Medicaid Services Acting Administrator Andy Slavitt told the committee in December that “over $200 million” had been returned to federal coffers from the state exchanges since the grant program went into effect.
According to the testimony, the money came from “unspent dollars to the Treasury, collecting grants, collecting improperly spent dollars, and preventing more from going out the door.”
The investigation by the Republican oversight and investigations panel of the committee found that CMS only recouped $21.5 million from the 16 states and the District of Columbia. Those are the states that opted to set up their own health care exchanges under Obamacare. The remaining states are using a federal marketplace for their residents to sign up for health care. As such, they aren’t entitled to federal grant money.
Still, when Obamacare was first coming online, all states were eligible for the grants. Once they declined to set up exchanges, the money was returned to the Treasury, which was included in Slavitt’s estimates, according to a CMS official.
Analyzing the data provided to them by CMS, Republican committee staffers concluded that some of the returned funds that Slavitt alluded to included money for states that declined to create their own exchanges, which was not what they thought he was saying.
The math doesn’t completely add up in that case either. According to the report, nearly $300 million was returned to CMS because states did not establish their own exchanges.
Either way, it appears to be a question of how to read Slavitt’s statement. From CMS’ perspective, he spoke clearly. From Republicans’ perspective, he misled them.
“The Acting Administrator stands by his testimony,” said CMS spokesman Aaron Albright. “Mr. Slavitt clearly stated in his testimony that the over $200 million returned was unspent dollars or improperly spent dollars from the grant program. CMS has always been clear with the committee, providing a detailed accounting of the grant funds on request, as well as multiple briefings and calls for the chairman and his staff.”
CMS has awarded about $4.5 billion to states (and one district) that have set up their own exchanges, according to the report. That money was largely spend on IT costs to set up websites and conduct outreach activities and in-person assistance. The exchanges were supposed to be operating on a self-sustaining basis by January of 2015, but many are still struggling. As such, CMS has allowed states to continue spending grant money they received before the cut-off.
In December, Slavitt testified that “over $200 million of the original grant awards have already been returned to the federal government,” which caused members to question where the money came from. The government is charged with obtaining refunds of grants from states if they find that the money was spent improperly.
After repeated requests, the report says, CMS provided members with a chart showing where it had recouped grant money, but the Republican staffers say the numbers did not add up to $200 million. The committee report said CMS was counting returned funds that came back because a grant agreement’s term had come to an end or the work was completed. At that point, CMS “de-obligated” the remaining funds.
Those de-obligated funds appear to amount to about $21.5 million, but that is different than what he implied in his testimony, Republicans argue.
“Because Mr. Slavitt made his remarks in the context of recouping misspent funds from the 17 [state-based exchanges], it was widely assumed — and reported in the media — that the $200 million figure represented funds recouped because CMS and [the exchanges] spent them improperly,” the report said.
The Republicans on the oversight panel concluded that Slavitt “misled Congress and the American people” in his statement.
Slavitt’s nomination to be the administrator of CMS is pending before the Senate.