42 U.S.C. § 18033: Financial integrity

Summary

Exchanges must keep clear records of what they do, the money they get, and what they spend. They must send a report about those records to the Secretary of Health and Human Services every year. The Secretary and the HHS Inspector General can investigate an Exchange, look at its books and property, ask for regular reports, and the Exchange must cooperate. Exchanges also face annual audits. If the Secretary finds serious misconduct by an Exchange or a State, the Secretary can withhold up to 1 percent of federal payments each year until the problems are fixed. The Secretary must also put in place ways to reduce fraud and abuse. Any payments that include federal money and go through an Exchange are covered by the False Claims Act, and insurers must follow Exchange rules to get federal payments like premium tax credits and cost-sharing help. Penalties for fraud can be increased to 3 to 6 times the government’s losses. Within 5 years after Exchanges start operating, the Comptroller General must begin a continuing study of how Exchanges work and who enrolls. The study must look at operations, costs, claims and complaints, use of Exchanges, ideas for improvement, the cost for small businesses, and whether doctors and provider networks are taking new federal program patients.

Title 42, §18033

The Public Health and Welfare, Source: USLM XML via OLRC

(a)Accounting for expenditures

(1)In general

An Exchange shall keep an accurate accounting of all activities, receipts, and expenditures and shall annually submit to the Secretary a report concerning such accountings.

(2)Investigations

The Secretary, in coordination with the Inspector General of the Department of Health and Human Services, may investigate the affairs of an Exchange, may examine the properties and records of an Exchange, and may require periodic reports in relation to activities undertaken by an Exchange. An Exchange shall fully cooperate in any investigation conducted under this paragraph.

(3)Audits

An Exchange shall be subject to annual audits by the Secretary.

(4)Pattern of abuse

If the Secretary determines that an Exchange or a State has engaged in serious misconduct with respect to compliance with the requirements of, or carrying out of activities required under, this title, the Secretary may rescind from payments otherwise due to such State involved under this or any other Act administered by the Secretary an amount not to exceed 1 percent of such payments per year until corrective actions are taken by the State that are determined to be adequate by the Secretary.

(5)Protections against fraud and abuse

With respect to activities carried out under this title,1 the Secretary shall provide for the efficient and non-discriminatory administration of Exchange activities and implement any measure or procedure that—

(A)the Secretary determines is appropriate to reduce fraud and abuse in the administration of this title; 1 and

(B)the Secretary has authority to implement under this title 1 or any other Act.

(6)Application of the False Claims Act

(A)In general

Payments made by, through, or in connection with an Exchange are subject to the False Claims Act (31 U.S.C. 3729 et seq.) if those payments include any Federal funds. Compliance with the requirements of this Act concerning eligibility for a health insurance issuer to participate in the Exchange shall be a material condition of an issuer’s entitlement to receive payments, including payments of premium tax credits and cost-sharing reductions, through the Exchange.

(B)Damages

Notwithstanding paragraph (1) of section 3729(a) of title 31, and subject to paragraph (2) of such section, the civil penalty assessed under the False Claims Act on any person found liable under such Act as described in subparagraph (A) shall be increased by not less than 3 times and not more than 6 times the amount of damages which the Government sustains because of the act of that person.

(b)GAO oversight

Not later than 5 years after the first date on which Exchanges are required to be operational under this title,1 the Comptroller General shall conduct an ongoing study of Exchange activities and the enrollees in qualified health plans offered through Exchanges. Such study shall review—

(1)the operations and administration of Exchanges, including surveys and reports of qualified health plans offered through Exchanges and on the experience of such plans (including data on enrollees in Exchanges and individuals purchasing health insurance coverage outside of Exchanges), the expenses of Exchanges, claims statistics relating to qualified health plans, complaints data relating to such plans, and the manner in which Exchanges meet their goals;

(2)any significant observations regarding the utilization and adoption of Exchanges;

(3)where appropriate, recommendations for improvements in the operations or policies of Exchanges;

(4)a survey of the cost and affordability of health care insurance provided under the Exchanges for owners and employees of small business concerns (as defined under section 632 of title 15), including data on enrollees in Exchanges and individuals purchasing health insurance coverage outside of Exchanges; and

(5)how many physicians, by area and specialty, are not taking or accepting new patients enrolled in Federal Government health care programs, and the adequacy of provider networks of Federal Government health care programs.

Notes & Related Subsidiaries

Editorial Notes

References in Text

This title, referred to in subsecs. (a)(4), (5) and (b), is title I of Pub. L. 111–148, Mar. 23, 2010, 124 Stat. 130, which enacted this chapter and enacted, amended, and transferred numerous other sections and notes in the Code. For complete classification of title I to the Code, see Tables. This Act, referred to in subsec. (a)(4), (6)(A), is Pub. L. 111–148, Mar. 23, 2010, 124 Stat. 119, known as the Patient Protection and Affordable Care Act. For complete classification of this Act to the Code, see

Short Title

note set out under section 18001 of this title and Tables. The False Claims Act, referred to in subsec. (a)(6), was the popular name for section 231, 232, 233, and 235 of former Title 31, Money and Finance. section 231, 232, 233, and 235 were repealed by Pub. L. 97–258, § 5(b), Sept. 13, 1982, 96 Stat. 1084, and reenacted by the first section thereof as sections 3729 to 3731 of Title 31, Money and Finance.

Amendments

2010—Subsec. (b)(4), (5). Pub. L. 111–148, § 10104(k), added par. (4) and redesignated former par. (4) as (5).

Statutory Notes and Related Subsidiaries

Termination of Provision Pub. L. 111–148, title X, § 10104(j)(1), Mar. 23, 2010, 124 Stat. 901, provided that: “Subparagraph (B) of section 1313(a)(6) of this Act [42 U.S.C. 18033(a)(6)(B)] is hereby deemed null, void, and of no effect.”

§18033 Financial Integrity