When media organizations noticed a 606-page final rule on health insurance exchanges released the day after the July 4 holiday, a section that appears to allow exchanges to use income "self-attestation" jumped out.
"Health insurance marketplaces will not be required to verify consumer claims," headlined theWashington Post piece first reporting on the rules.
"U.S. relaxes health law income, insurance status rule for exchanges," Reuters' article was titled.
Then, with Affordable Care Act critics riding a wave of agitation following news of the employer mandate delay, came the conservative media.
"White House to Use 'Honor System' to Hand Out Obamacare's Subsidies," Manhattan Institute healthcare analyst Avik Roy titled his piece in the National Review and Forbes.
And a Wall Street Journal editorial: "ObamaCare's 'Liar' Subsidies: The White House says you can sign up 'without further verification.'"
In the rules, formally published in the Federal Register July 16, Centers for Medicare & Medicaid regulators said that a statistically significant sample of applicants for health insurance premium tax credits would have their income verified, rather than every single one, at least in the first year of operations.
"For income verification, for the first year of operations, we are providing exchanges with temporarily expanded discretion to accept an attestation of projected annual household income without further verification," CMS wrote.
"To provide relief to state-based exchanges that were planning to rely on this service" -- the federal government's verification of income -- "we note that we are also delaying the date by which an Exchange must implement the sample-based review."
And for employer-sponsored insurance availability and affordability, if exchanges don't have information on an applicant's employer-based offerings (which is hard to know without mandated employer reporting), they "may accept the applicant's attestation regarding enrollment in an eligible employer-sponsored plan and eligibility for qualifying coverage in an eligible employer-sponsored plan for the benefit year for which coverage is requested without further verification," CMS officials wrote.
Of course, a flurry of criticism came, and CMS Administrator Mary Tavenner, among other federal officials, were grilled by lawmakers at congressional hearings.
But now, CMS is going on the offensive, trying to explain that income self-attestation will only be allowed in a limited number of cases -- and that starting in 2015, the previous years' subsidies will be checked against current tax records.
"For 2014 only," CMS wrote in an FAQ published Aug. 5, "we recently indicated that HHS will exercise enforcement discretion such that a marketplace may choose to request additional documentation from a statistically-significant sample of the group of individuals in only one specific situation: when the marketplace has IRS data, the application filer inputs projected annual household income that is more than 10 percent below IRS and SSA data, Equifax data is unavailable, and the individual does not provide a reasonable explanation for the inconsistency between the attestation and IRS and SSA data."
The exchanges will request additional documentation in all other cases where an applicant's information can't be verified by the IRS, the Social Security Administration or Equifax, the eligibility contractor hired by CMS, or where "the individual does not provide a reasonable explanation for any discrepancy," the FAQ said.
"We are clarifying that, for the federally-facilitated marketplace, CMS intends to set the initial size of the sample at 100 percent, such that everyone who is in the circumstance described above in which sampling may be used is asked to submit satisfactory documentation."
Since the final rule was published, "we have ascertained that there are sufficient resources to ask every individual in this circumstance for such documentation with no exceptions," CMS wrote. State exchanges, though, can still choose whether or not to audit all or just a sample of applicants' income, "provided that they are statistically significant for 2014," CMS wrote.