The New York State Health Department “mis-allocated” nearly $150 million in federal funds to setup and operate its Obamacare exchange, according to an audit released Tuesday.
The audit by the inspector general from the federal Health & Human Services agency said New York's funding requests included a “material defect” that overestimated the populace permitted to apply on the state's health exchange for medical coverage.
“The state agency used a population-based methodology that assumed the entire population of New York would make use of the marketplace to enrolled in any adverse health insurance plan,” the audit said.
The methodology incorrectly included 14 million New Yorkers who already received medical coverage through Medicare or through their jobs or other means, the report said.
“Other individuals, for example those people who are incarcerated, wouldn't be permitted to sign up for a QHP (qualified health plan) with the marketplace,” the audit pointed out.
About 2.8 million people received coverage through the New York exchange.
The vast majority — 2.5 million — signed up for Medicaid and other publicly subsidized medical health insurance programs for the needy.
The audit said Ny allocated $93.4 million according to population over estimates and the other $55.3 million in grants and enrollment assistance costs that should happen to be invested in the Medicaid program, not the state's healthcare exchange.
New York was allocated $571 million in Affordable Care act grants from 2010 through 2021.
The audit reviewed $221 million of the spending.
“The state agency mis-allocated these costs since it was without adequate internal controls,” the audit said.
The IG recommended that the state return the $150 million.
But Ny officials disputed the findings, insisting they followed all procedures.
“New York has followed … federal rules and applied cost allocation techniques that were approved by CMS in apportioning costs to the various programs administered through the marketplace,” state Health Department Executive Deputy Commissioner Sally Dreslin said inside a four-page response to the audit.
“In no case did the audit discover that NY used federal grant funds for costs that aren't related or essential to the introduction of the marketplace.”
