Audit: Maryland Misallocated $28.4M for Health Exchange

Maryland misallocated $28.4 million in federal money for its flawed health care exchange and should pay the money back, according to a federal audit set to be released Friday.

The audit by the inspector general of the Department of Health and Human Services found that Maryland misallocated costs to federal grants instead of the Medicaid program in 2013 and 2014, failing to use updated estimated enrollment data when it became available.

“The state agency misallocated these costs because it did not have adequate internal controls to ensure the proper allocation costs,” the audit said.

In a response included in the audit, the state said it believes it complied with guidance from the federal Centers for Medicare and Medicaid Services.

“The state agency said it complied with CMS guidance on the frequency of cost allocation updates and that our assumption that the Maryland marketplace ‘should have updated its cost allocation immediately after the first enrollment’ is not consistent with the most recent CMS guidance,” according to the audit.