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A long-awaited audit of Maryland's health insurance exchange has found that the state improperly billed the federal government $28.4 million as former Gov. Martin O'Malley's administration struggled to launch what would become one of the most troubled websites in the nation. Though the year-long probe by the Department of Health and Human Services inspector general found no fraud or criminal wrongdoing, auditors said the state lacked oversight and internal controls — and they recommended that Maryland refund what the federal government paid to subsidize the cost of signing people up for coverage. (Fritze and Cohn, 3/27)

Maryland officials misallocated $28.4 million of federal funds when they were building the state’s health insurance exchange and should pay the money back, a federal audit concluded. (Radnofsky, 3/26)

ConnectiCare Benefits Inc. was the most popular carrier among plans sold on the state’s health insurance exchange this year, capturing 42.3 percent of the 110,095 people who signed up for insurance through Access Health CT. Anthem Blue Cross and Blue Shield, the state’s largest insurer and last year’s exchange leader, received 39.8 percent of signups. HealthyCT raised its share from 3.2 percent last year to 15.6 percent this year, while UnitedHealthcare, in its first year of offering coverage through the exchange, captured 2 percent of customers. (Levin Becker, 3/26)

Three Democratic governors have become so exasperated by flaws in their health law insurance exchange websites that they took steps this month that could lead to the federal government assuming control over all or part of their operation. More states may follow. Oregon Gov. Kate Brown signed a bill on March 6 that have her state’s Cover Oregon exchange use the same computers that run the federal government’s healthcare.gov – after the state spent millions of dollars to fix the site and fired the contractor that built it. In a March 16 letter to lawmakers, Minnesota Gov. Mark Dayton wrote that he wants a task force to examine the long-term financial sustainability for the state’s MNsure exchange. (Evans, 3/26)

Gov. Bill Haslam said Thursday that he is willing to risk a second defeat of his Insure Tennessee proposal to highlight the need for improving health standards in the state. The Republican governor told reporters after a prayer breakfast at Lipscomb University that the more often lawmakers take up his plan, the more chances his administration has to quell concerns about the proposal to extend health coverage to 280,000 low-income Tennesseans by drawing down $2.8 billion in federal Medicaid funds. (Schelzig, 3/26)

An effort to stop signing people up for Arkansas' compromise Medicaid expansion has failed in the state Senate. The Senate voted 15-13 Thursday against the bill to require the state to seek approval from the federal government to freeze enrollment in the "private option," which uses federal funds to purchase private insurance for the poor. The program was crafted as an alternative to the Medicaid expansion envisioned under the federal health law. (3/26)