HHS' Office of the Inspector General found the Department of Vermont Health Access improperly allocated at least $10.5 million in funding for grant programs when it created its insurance marketplace.
OIG launched an investigation to determine whether Vermont complied with federal requirements for allocating costs to its grants for implementing a state-run health insurance marketplace. The report found Vermont incorrectly allocated funds because it used a methodology that assumed the entire state population would use the marketplace. This caused the state health department to improperly draw between $10.5 million and $13.9 million in federal funding for Medicaid and other programs.
OIG recommended Vermont refund a portion of the $13.9 million to CMS.
Health department officials said they intend to work with CMS to devise proper funding allocation policies moving forward. Vermont has returned funds to CMS as advised by OIG.