Federal audit finds Maryland misallocated $28.4 million for flawed health care exchange

A federal audit says Maryland misallocated $28.4 million in federal money for its flawed health care exchange and is recommending the state pay the money back.

The inspector general of the Department of Health and Human Services is releasing the audit Friday.

It says Maryland misallocated costs to federal grants instead of the Medicaid program in 2013 and 2014. The audit says Maryland did not use updated estimated enrollment data when it became available.

In a response included in the audit, the state says it complied with federal guidance on the frequency of cost allocation updates. But auditors concluded their findings and recommendations are valid.

Maryland's health exchange website crashed soon after it opened in October 2013. The state revamped the website with new technology for the second enrollment period.