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Patient Protection and Affordable Care Act: Status of CMS Efforts to Establish Federally Facilitated Health Care Exchanges and the Federal Data Services Hub

GAO-13-786T Published: Jul 17, 2013. Publicly Released: Jul 17, 2013.
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What GAO Found

In brief, GAO's work found that CMS will operate a health insurance exchange in the 34 states that will not operate a state-based exchange for 2014. While CMS will retain full authority over each of these 34 FFEs, it planned to allow 15 of these states to assist it in carrying out certain FFE functions. However, the activities that CMS plans to carry out in these 15 exchanges, as well as in the 17 state-based exchanges, have evolved and may continue to change. For example, CMS approved states' exchange arrangements on the condition that states ultimately complete activities necessary for exchange implementation. Agency officials indicated that they were working with each state to develop mitigation strategies to ensure that all applicable exchange functions are operating in each state on October 1, 2013. CMS indicated that it would carry out more exchange functions if any state did not adequately progress towards implementation of all required activities.

To support consumer-eligibility determinations, CMS is developing a data hub that will provide electronic, near real-time access to federal data, as well as provide access to state and third-party data sources needed to verify consumer-eligibility information. Effective use of the FFEs' eligibility and enrollment systems is dependent upon CMS's ability to provide the data needed to carry out eligibility determination and enrollment activities through the implementation of the data hub. CMS began conducting both internal and external testing for the data hub in October 2012, as planned.

Why GAO Did This Study

This testimony discusses the efforts of the Centers for Medicare & Medicaid Services (CMS) to establish federally facilitated exchanges (FFE) and the federal data services hub (data hub). The Patient Protection and Affordable Care Act (PPACA) required the establishment in all states of exchanges. All exchanges, whether state-based or FFE, will be required to perform certain activities, many of which fall into the core functions of eligibility and enrollment, which are marketplaces where eligible individuals can compare and select health insurance plans. CMS must oversee the establishment of exchanges, including approving states to operate a state-based exchange or establishing and operating one itself in states that will not do so, referred to as an FFE. In establishing the framework within which an FFE in a particular state will be established and operated, CMS has provided states with the option to assist with certain FFE functions. This statement today highlights key findings from our June 2013 report that describes the status of CMS efforts to establish FFEs and the data hub. In that report, we described (1) the federal government's role in establishing FFEs for operation in 2014 and state participation in that effort; (2) the status of federal and state actions taken and planned for FFEs and the data hub; and (3) CMS spending to support establishment of FFEs and the data hub.

For more information, contact John E. Dicken at (202) 512-7114 or

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