CMS marketplace fraud sweep puts eligibility checks back on the front desk

The federal government has pulled marketplace coverage from more than 760,000 people in a fraud crackdown, and for many of them the first sign of trouble could come at your check-in window.

CMS said Sept. 22 that it canceled about 315,000 enrollments covering those people after the agency and insurers confirmed the enrollments were unauthorized, according to the agency's announcement. The cancellations took effect Aug. 31, a companion CMS fact sheet shows, and CMS expects them to return about $2.2 billion in advance premium tax credits.

More may be coming. Administration officials told The Wall Street Journal that CMS plans to check the immigration status and income eligibility of about 415,000 more current enrollees, according to ACA Signups' summary of the Journal's reporting.

The administration has also been open about how it finds suspect cases. At a Sept. 22 news conference, Vice President JD Vance said the White House fraud task force relies on AI and machine learning to recognize patterns likely to be fraud, and that eligibility decisions tied to fraud are "not the same standard of proof as" a criminal conviction. People cut off in error can appeal, Vance said, but he added that when the government does large cutoffs, "almost no one comes," a point he credited to CMS Administrator Mehmet Oz, MD.

The crackdown also targets the agents and brokers behind many of these enrollments. CMS has sent termination notices to more than 200 noncompliant agents and brokers since January and issued 569 notices of intent to terminate this summer to those who submitted 2026 applications without identifying information such as Social Security numbers. A new interim final rule imposes a temporary moratorium on 2027 registration for agents and brokers without an active 2026 Exchange Agreement. CMS said enrollments tied to brokers who first registered for 2026 were 2.7 times more likely to be missing Social Security numbers and 2.8 times more likely to have unresolved income verification issues than those tied to brokers who registered earlier.

Why it shows up at check-in

Officials told the Journal that the canceled enrollments include people who did not know they were enrolled, people who also had employer coverage and people who earn too much to qualify for subsidies. That mix means some patients will hand over a card for a plan that no longer exists, some won't recognize the plan on file and some will keep coverage but lose the subsidy that made it affordable.

That last group creates a slower-moving problem. Marketplace enrollees who receive advance premium tax credits and stop paying premiums get a three-month grace period. Insurers must pay claims for services in the first month but may pend claims from the second and third months, then deny them as expenses incurred after coverage terminated if the premium never arrives, as the Minnesota Department of Health's grace period best practice under 45 CFR 156.270 lays out. A claim that goes through cleanly on submission can still come back as a denial or a recoupment months later.

Where the tools already help

Most practices already have the plumbing. In 2023, 96 percent of medical eligibility verifications were fully electronic, driven by the HIPAA-mandated X12 270 and 271 transactions, according to CAQH CORE's summary of the 2024 CAQH Index. The same Index still estimates $12.3 billion in potential annual savings for the medical and dental industries from moving the remaining transactions to fully electronic, which points to gaps in how offices actually run those checks.

The fix is less about buying new software than about running the checks you already have at the right moments. For patients with marketplace plans, that means a batch eligibility check a few days before the visit and a real-time check at arrival, rather than trusting a card scanned at the last appointment. Flagging marketplace plans in the practice management system tells staff which patients need the second look.

On the back end, billing teams can build work queues around the remittance remark codes insurers use to signal the grace period: N616 for the first month and N617 for the second and third months. Catching those early gives staff time to reach the patient before a pended claim turns into a denial.

When a check comes back inactive, send the patient to a financial counselor instead of settling it at the counter. Someone enrolled without their knowledge may need help finding legitimate coverage when 2027 open enrollment opens, and a practice that walks them through the options is more likely to keep them. Anders Gilberg, senior vice president of government affairs at MGMA, made the case for tighter eligibility checks after the One Big Beautiful Bill Act in an interview with Physicians Practice, and similar pressure will hit Medicaid patients as work requirements reach the front desk Jan. 1.

CMS says it will require electronic consumer authorization before an agent or broker can act on an application ahead of open enrollment, and that consumers will get tips on protecting themselves from fraud. Expect some of those questions to land at your front desk, too.