CMS Releases Long-Awaited Civil Money Penalty Calculation Methodology
On September 13, 2016, the Centers for Medicare & Medicaid Services (CMS) quietly released its long-awaited proposed methodology on the calculation of Civil Money Penalties (CMPs). The memo describes the calculation method of CMPs for Medicare Advantage Organizations (MAOs), Prescription Drug Plans (PDPs), Cost Plans, and Programs of All-Inclusive Care for the Elderly (PACE) plans in 2017. While CMS is not mandated to release this methodology, it did so in response to industry concern over transparency of CMP calculation and to provide more clarity to compliance operations. Comments on the proposed methodology are due to CMS by 5:00 p.m. ET on October 13, 2016.
Given that 60% of the referrals for potential enforcement actions stemmed from MA and Part D program audits, this memo focused on CMP calculations for deficiencies detected during such audits. For each deficiency identified, CMS determines whether the sponsor:
- Failed to substantially carry out the contract;
- Is carrying out the contract in a manner inconsistent with the efficient and effective administration of this part; or
- Is no longer substantially meeting the applicable conditions of 42 C.F.R Parts 422 or 423.
CMS then calculates CMPs on a per enrollee or per determination basis, as developed during its pilot, to standardize CMP calculations in 2014. The main difference CMS made between the pilot and its proposed calculation is the slight increase in penalty amounts over time to "encourage" compliance with CMS' rules. CMS also introduced an enrollment-based limit on the maximum CMP amount a sponsor can receive for each deficiency.
CMS calculates the standard penalty amount by taking the CMP amount and multiplying it by the number of enrollees or determinations. CMS then applies the aggravating and/or mitigating factors, multiplied by the number of enrollees, to the CMP which either increases or lowers the amount. Finally, CMS applies the enrollment-based or per determination limit, which caps the overall penalty CMS can issue.
The specific amounts CMS applies for the above can be found in the memo.
"In my daily conversations with Compliance professionals, the challenge to compile clean universes on the first pass is still that — a challenge — regardless of plan size," says Regan Pennypacker, Senior Vice President of Compliance Solutions. "This memo clarifies the agency will also consider Invalid Data Submission (IDS) as a condition that could result in beneficiary harm. This is cited when a Sponsor fails to produce an accurate universe within three attempts. CMS has noted this would be cited for each element which cannot be tested, and counts as one point in the scoring. CMS will calculate a CMP for this deficiency on a per determination basis."
This proposed methodology comes during the same time frame federal agencies are increasing CMP maximums across the board to comply with the Federal Civil Penalties Inflation Adjustment Act of 2015. The Department of Health and Human Services (HHS) released its interim final rule on September 6 across all its agencies. Some MA maximum penalties will see a maximum increase more than double its current amount. However, as the CMP methodology memo points out, CMS rarely utilizes the maximum amounts currently, instead using amounts that are likely to "better encourage the remaining non-compliant sponsors to improve performance." Currently these amounts are significantly lower than the maximum possible CMPs, however, this memo clearly puts plans on notice continued non-compliance will lead to increased penalty amounts that will cause a greater sting. Given this notice penalties among health plans for common infractions will increase, health plans should make sure to focus on highest risk areas like delegation oversight and appeals and grievances.
Now is the time to confirm those responsible for pulling and compiling CMS universes are equipped with the tools and skills to complete the task. Failure to produce accurate universes after a third attempt during an audit will significantly impact a CMP. Contact us for ways we can help.
Resources
The Centers for Medicare & Medicaid Services (CMS) audit practices have radically changed in recent years. Now with only days to prepare for CMS audits, organizations must become proactive in creating a culture of compliance. Visit our website to learn how we can help you >>
New Webinar! Each year, billions of dollars are set aside by investment banks and pension managers to invest in measurable social good. Gorman Health Group (GHG) is offering a new capability to connect health plans and providers with social impact investors to obtain capital for clinical innovations of which many plans have only dreamed. Join us on Tuesday, November 1, from 2:30 — 3:30 p.m. ET, to learn how social impact investing can be used to improve health outcomes and Star Ratings and how your organization can benefit. Register now >>
Stay connected to industry news and gain perspective on how to navigate the latest issues through GHG's weekly newsletter. Subscribe >>
Part D Benefit Administration Continues to be Important Monitoring for CMS
Your Pharmacy Benefit Manager (PBM) may have already provided to you their benefit testing pan for 2017. Based on many years of experience, that is not going to be enough. In the September 12, 2016, memo entitled "Contract Year 2016 Part D Formulary Administration Analysis (FAA)", the Centers for Medicare & Medicaid Services (CMS) reiterates their concern with the accuracy of formulary coding. In previous years' analysis, 9 out of 88 (10. %) Plan Sponsors were found to have failed FAA, meaning greater than 20% of the sampled rejects were determined to be inappropriate. The parameters for the 2016 FAA are:
- Sponsors are required to submit all point of sale (POS) rejected claims relating to the following four categories:
- Non-formulary status;
- Prior Authorization (PA);
- Step Therapy (ST); and
- Quantity Limits (QL).
As a Plan Sponsor, whether you delegate all or part of your Part D drug benefit set-up to your PBM, CMS expects Plan Sponsors to demonstrate effective management of the CMS-approved formulary to ensure timely beneficiary access to clinically appropriate medications.
CMS expects Plan Sponsors to understand regulatory requirements and to oversee their PBM to ensure the benefit administration by the PBM is compliant and accurate. Beneficiaries must be able to receive the Part D drugs to which they are entitled consistent with the plan's CMS-approved benefit from January 1 through December 31 of the plan year.
To accomplish this, it is essential to perform comprehensive benefit administration testing of formulary files and system edits prior to going "live" in the adjudication system. In addition, it is required to perform a regular review of rejected POS pharmacy claims as well as to perform regular oversight of other delegated PBM functions.
You can reduce your compliance risk of transition non-compliance by testing transition fill look-back logic, which must accurately identify transition eligible beneficiaries and drugs eligible for transition fills; maintaining formulary consistency for beneficiaries across years and during the year; ensuring formulary edits are effectively tested for accuracy prior to implementation; and by ensuring the PBM does not administer the Part D benefit based on either Medicaid or commercial program requirements.
In the likely event of a Compliance Program Audit, CMS seeks to determine how the Plan Sponsor properly administers the CMS transition policy and its approved formulary by avoiding unapproved utilization management (UM) practices, PAs, QLs, rejecting formulary medications as non-formulary, and maintaining beneficiary access to protected class drugs during transition and throughout the year. Failure to properly use approved formularies creates high audit risk, a possible civil monetary penalty (CMP), or even plan sanction.
Performing a comprehensive Benefit Administration Test review of the formulary and UM system edits prior to going "live" on January 1 of every new plan year requires a robust, systematic process for comparing the CMS-approved formulary benefit to a comprehensive claims universe in order to ensure all covered drugs, tiering, and UM edits are consistently and accurately adjudicated.
Our Pharmacy experts can create a plan and conduct in-depth benefit administration testing for your organization to validate everything is working precisely as it should before the new plan year begins. We can ensure your PBM is processing claims consistent with your CMS-approved prescription drug benefit.
Resources
New Webinar! Each year, billions of dollars are set aside by investment banks and pension managers to invest in measurable social good. Gorman Health Group (GHG) is offering a new capability to connect health plans and providers with social impact investors to obtain capital for clinical innovations of which many plans have only dreamed. Join us on Tuesday, November 1, from 2:30 — 3:30 p.m. ET, to learn how social impact investing can be used to improve health outcomes and Star Ratings and how your organization can benefit. Register now >>
We can help your MAPD or PDP develop and implement efficient and compliant internal operations and prepare effectively for CMS audits with professional services and unmatched compliance tools. Contact us today to get started >>
Stay connected to industry news and gain perspective on how to navigate the latest issues through GHG's weekly newsletter. Subscribe >>
Hot Takes on Medicare Advantage and Part D in 2017
The Centers for Medicare & Medicaid Services (CMS) released its annual Medicare Advantage (MA) and Part D "landscape files" with data on plans and bids for 2017. It's a picture of programs that are rock-solid and driving insurers' revenues and earnings, offering better supplemental benefits for no increase in price for two-thirds of beneficiaries. Interestingly, CMS appears to be sandbagging its enrollment projections and assumed no growth for MA in 2017. We think we're heading to 4.2-4.5% enrollment growth, continuing a steady, winning drumbeat for the industry.
By the numbers, the landscape files showed the following:
- While the number of contracts with CMS dropped by 8%, the number of Plan Benefit Packages (PBPs) is virtually the same.
- The number of PBPs with $0 premium is virtually the same. Although the number of $0 premium Preferred Provider Organizations (PPOs) with prescription drugs has increased by 21 PBPs, the number of Health Maintenance Organizations (HMOs) with drugs has decreased.
- The number of PBPs with a $0 drug deductible has decreased 11% from last year.
- Approximately two-thirds of all beneficiaries on an enrollment-weighted basis will see no premium increase, and most will see additional supplemental benefits in 2017, such as vision, hearing, and dental care. The average enrollment-weighted premium is actually $1.19 less than 2016.
- Humana will offer the cheapest Prescription Drug Plan (PDP) in 22 of 34 regions. EnvisionRx, which was acquired by RiteAid last year, is the lowest bidder in 11 regions.
- WellCare and United showed improvement in Part D bidding and are now eligible for low-income auto-assigns in 8 and 27 regions, respectively.
- MA enrollment is up almost 60% since the passage of the Affordable Care Act (ACA) in 2010, smashing expectations of an exodus.
- Strangely, CMS implied in its announcement that MA growth would be flat in 2017. We're projecting year-over-year growth of 4.2-4.5% in 2017.
- Centene (which acquired Health Net), United, and Aetna expanded their service areas in several states.
By every measure, 2017 should be another good year for Medicare plans. Let's hope whoever wins this Presidential election doesn't screw it up.
Resources
New Webinar! Each year, billions of dollars are set aside by investment banks and pension managers to invest in measurable social good. Gorman Health Group (GHG) is offering a new capability to connect health plans and providers with social impact investors to obtain capital for clinical innovations of which many plans have only dreamed. Join us on Tuesday, November 1, from 2:30 — 3:30 p.m. ET, to learn how social impact investing can be used to improve health outcomes and Star Ratings and how your organization can benefit. Register now >>
The MA marketplace is evolving — are you prepared? Gorman Health Group's marketing experts have developed strategic plans for hundreds of Medicare Advantage Plans, Prescription Drug Plans, Special Needs Plans and Exchange participants. Visit our website to learn more about how we can help you >>
Stay connected to industry news and gain perspective on how to navigate the latest issues through GHG's weekly newsletter. Subscribe >>
An "October Surprise" in Medicare Advantage Star Ratings
Each year, one of the most anticipated announcements in the Medicare Advantage (MA) industry is the Star Ratings and program technical guidance for the coming year from the Centers for Medicare & Medicaid Services (CMS). This year's includes an "October Surprise:" a little-known methodological change that could force dozens of 4- to 5-Star-rated plans to lose their hard-fought bonuses and rebates.
Roughly 370 MA plans are currently scored under the Star Ratings system, which we all know by now is graded on a curve. Plans above 4 Stars get substantial bonus payments and bid rebates from CMS and above 5 Stars can market and sell their products year-round. In this sense, plans below 4 Stars are circling the toilet bowl as there is only so long they can compete against the better benefits of 4+ Star plans. The Star Ratings for 2017 will likely knock many 4+ Star plans off their pedestals. Here's why: for 2017, for the first time, 188 new plans could be scored under Star Ratings.
- 64 of the 188 are Medicare-Medicaid Plans (MMPs), which CMS announced in June will be moved into their own separate Star Ratings program this fall. This is a bit of bad news for most MA plans, since their inclusion in the MA Star Ratings program would likely have helped fill the lowest end of the curve.
- The 124 that are left still represent enough mathematical volume that their performance will shift the bell curve. Most will likely earn an overall rating of 3 or 3.5 stars, which will cause rating dilution for those at 4+ Stars. If those plans have the same level of performance as the previous year, they will likely dip below 4 Stars. This is a looming disaster for those companies because they've already booked the bonus money and predicated their benefit designs and 2017 campaigns on receiving the rebate.
- Regarding the 6 "dead men walking" plans below 3 Stars for 3+ years and slated for termination: a "hospital improvement" bill, which passed the House and is still in the Senate, includes a provision to delay CMS' authority to terminate MA contracts based on poor Star Ratings for 3 years. It's possible these 6 plans may continue to fill the very lowest end of the Star Ratings bell curve, thus helping other low-performing plans by padding the lowest end of the bell curve.
Many plans are going to get a nasty shock when they dig into CMS' latest news. It's another stark reminder Star Ratings management is a constant campaign, and plans cannot afford to get comfortable when it comes to their quality performance.
Resources
CMS recently notified plans of the first preview period for the 2017 initial Star Ratings data. It is critical for plans to begin the annual re-evaluation of Star Ratings performance now to pinpoint new problem areas, implement tactical actions, and identify improvement opportunities to raise ratings. Read full analysis >>
Stay connected to industry news and gain perspective on how to navigate the latest issues through GHG's weekly newsletter. Subscribe >>
Keep the End in Mind as 2017 Readiness Approaches
According to Author Stephen Covey, in his book The Seven Habits of Highly Effective People, you should "begin with the end in mind." This means to start with a clear understanding of your destination so you know where you're going and understanding where you are now so the steps you take are always in the right direction.
Many department leaders have said, "I wasn't trained to be a compliance manager. I was just a good individual contributor managing my practice area, and someone asked me to take on this role." A powerful first step in becoming successful in a new role is to understand your organization's "End in Mind," which is usually described in the mission statement.
As Medicare Part D plan sponsors approach the 2017 Readiness season, this advice would be well taken. The Centers for Medicare & Medicaid Services (CMS) has intensified its program audit schedule, making it much more likely for a plan to receive the dreaded audit notice from CMS in 2017. Working from the point of view your plan will be one of those receiving an audit notice next year, you should approach the 2017 Readiness process as compliance audit preparation. In other words, the end in mind requires a critical review of the processes downstream from the Readiness Attestation.
Are your policies current with the latest regulatory requirements and guidance? Do your procedures match the actual processes in place? Can you demonstrate you comply with your stated processes? This is the approach CMS will take in a Compliance Program Audit. By attesting to the end point in the Readiness Checklist, you are in effect stating the processes on which the end is predicated are also functional and compliant.
Since most plan sponsors rely on first-tier, downstream, and related entities (FDRs) to help meet the operational and compliance requirements, it is also time to evaluate their performance. An FDR audit for delegation oversight is a critical part of the compliance plan for all plan sponsors. Any delegated function performed by an FDR is ultimately the responsibility of the plan sponsor. In the event of an audit, one of the greatest risks to a plan sponsor is from its FDRs. Since the Pharmacy Benefit Manager (PBM) is usually the largest, most impactful FDR, close attention should be paid particularly to regulatory changes that have been made in 2016 and need to be implemented in 2017.
Strategies that will ultimately improve the Compliance Readiness for 2017:
- PBM delegation oversight audits
- Mock program compliance audits
- Targeted audits (coverage determinations, formulary administration)
- Operational gap assessments
- Benefit administration testing
These represent key methodologies that can be used to discover deficiencies in functionality which translate to audit deficiencies Gorman Health Group can assist plan sponsors with as we approach the 2017 plan year.
Resources
The Centers for Medicare & Medicaid Services (CMS) audit practices have radically changed in recent years. Now with only days to prepare for CMS audits, organizations must become proactive in creating a culture of compliance. From a gap analysis to a comprehensive, deep-diving Part C and D audit, our team can help you minimize your compliance risk and maximize your time and resources. Visit our website to learn more about our audit services >>
On Tuesday, September 13, 2016, from 1:00 — 2:00 pm ET, join colleagues Diane Hollie, Senior Director of Sales & Marketing Services, and Carrie Barker-Settles, Director of Sales & Marketing Services, as they outline the keys to building an integrated member experience program that will deliver a significant and positive impact on health plan enrollment, retention, and revenue generation. Register now >>
Stay connected to industry news and gain perspective on how to navigate the latest issues through GHG's weekly newsletter. Subscribe >>
Star Ratings: Medication Management Is Not Just for D Ratings Anymore!
As a pharmacist and Star Ratings Senior Consultant for Gorman Health Group, whenever I am asked to provide insight on how to achieve or maintain Star Ratings success, the conversation has been limited to the "D" part of the metrics, and the folks involved with Medicare Advantage (MA) and Healthcare Effectiveness Data and Information Set (HEDIS®) kind of glaze over and mumble something like, "That's for the Pharmacy folks to deal with." That attitude has always been somewhat befuddling to me considering the historical and ever-increasing impact of appropriate clinical management of medications on many HEDIS® measures and the quality conversation in general. Equally confusing to me has been the willingness of many pharmacists to relinquish the ownership of the medication-related HEDIS® measures to Quality, Case Management, or other teams.
The team approach, with the patient at the center of the team, is vital to delivering high-quality care. At many health plans, the Star Ratings teams historically have been "siloed" into medical Care/Case Management on one team and Pharmacy on the other. While we at the health plans were all focused on Star Ratings for the past several years, something happened outside of MA that will have a huge impact on the whole spectrum of healthcare. That event was MACRA — the Medicare Access and CHIP Reauthorization Act of 2015 — the latest and most sweeping healthcare reform law from Congress. MACRA will fundamentally change how healthcare providers are paid. Under value-based payment, the foundation of the reward system will be quality. Out of this change will come huge shifts in alignments and the creation of new partnerships requiring "outside-the-box" thinking. At the center of many of these new partnerships will be the critical role of the pharmacist and medication management.
Health plan Star Ratings teams would do well to pay attention to these profound trends outside of MA and understand the huge impact on how care will be delivered in order to respond to these changing incentives. Wasn't the Star Ratings system one of the early forms of value-based payment? Certainly if metric success is not achieved, there is a huge financial impact that will be incurred. A cornerstone of value-based payment is preventing hospital admissions impacted by many aspects of care but notably including a huge focus on medication reconciliation, medication management, and medication adherence. Sound familiar?
So how do we take these shifting sands and turn them into something tangible? The first step is collaboration. Star Ratings teams need to prepare themselves for a global value-based system by no longer segregating their teams into "C" and "D." And even if teams meet in an integrated way, the pharmacy members need to take the lead on metrics that extend beyond adherence and Medication Therapy Management (MTM) Comprehensive Medication Review (CMR) rates. Pharmacists should be taking the lead on new metric challenges like medication reconciliation even though they are a HEDIS® measure. A strong medication reconciliation program not only impacts the "checking of the box" that it was done but, if done right, has been shown to actually have an impact on reducing hospital readmissions (another Star Ratings measure). So this is good for Star Ratings, good for the plan, and, most importantly, good for the patient.
Resources
Every organization in the healthcare industry will be impacted by the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA). Gorman Health Group's Senior Vice President of Healthcare Analytics & Risk Adjustment Solutions, Dan Weinrieb, provided insight into the various options Providers will have if the legislation moves forward in a previous blog post on the subject >>
On Tuesday, September 13, 2016, from 1:00 — 2:00 pm ET, join colleagues Diane Hollie, Senior Director of Sales & Marketing Services, and Carrie Barker-Settles, Director of Sales & Marketing Services, as they outline the keys to building an integrated member experience program that will deliver a significant and positive impact on health plan enrollment, retention, and revenue generation. Register now >>
Stay connected to industry news and gain perspective on how to navigate the latest issues through GHG's weekly newsletter. Subscribe >>
How to Efficiently Conduct an Audit
Audits from regulatory bodies swarm around an organization like bees. And like a bee, upon first sight we do not think of the value they bring, but instead we first think of the sting that is to come.
A key aspect of an effective compliance program is to ensure there is an effective system for routine auditing and monitoring along with a system to identify compliance risks. You've established what you believe to be a solid audit plan for the year, but other things just seem to get in the way. First, you're tasked with researching the requirements for a new plan type. Then you have a fire to put out with a delegate. One of your staff gets a job offer she can't pass up, and before you know it, your audit schedule for the year is derailed. You'll get to them, right? Let's just hope you don't receive an audit letter in the meantime. With every passing Monday you hold your breath, all the while wondering how much time it will be before the inevitable occurs.
Sometimes an extra set of hands is all that's needed to get your audit activities back on track, but you do not have the budget for another full-time employee. Think of the following member-impactful audits that can be accomplished while you handle other responsibilities:
- Part C and Part D Grievances and Appeals
- Member Enrollment and Disenrollment
- Marketing
- Coordination of Benefits
All audit plans should include not only aspects included in CMS' protocol but also include audits of other self-identified areas of risk. Any operations that touch member service or payment might be considered higher risk on your assessment. Are they? And are you able to accomplish them all with the resources you have? Does your staff have the right skillset for the audits? From a CMS Q&A:
The safeguarding of beneficiary rights and protections is arguably the most important responsibility of a sponsor. Demonstrating you have the resources to detect, correct, and prevent occurrences of non-compliance is a struggle when a department lacks things like the time, resources, or skill to perform certain audits. Contact us for ideas on how we can partner with you to efficiently conduct some of your audits, providing you with some much needed assistance.
Resources
The Centers for Medicare & Medicaid Services (CMS) audit practices have undergone a few changes in recent years, but the core focus remains the same: beneficiary protections. From a gap analysis to a comprehensive, deep-diving Part C and D audit, our team can help you minimize your compliance risk and maximize your time and resources. Visit our website to learn more about our audit services >>
On Tuesday, September 13, 2016, from 1:00 — 2:00 pm ET, join colleagues Diane Hollie, Senior Director of Sales & Marketing Services, and Carrie Barker-Settles, Director of Sales & Marketing Services, as they outline the keys to building an integrated member experience program that will deliver a significant and positive impact on health plan enrollment, retention, and revenue generation. Register now >>
Stay connected to industry news and gain perspective on how to navigate the latest issues through GHG's weekly newsletter. Subscribe >>
CMS Announces Expansion of the Medicare Advantage Value-Based Insurance Design Model
The Centers for Medicare & Medicaid Services (CMS) announced plans to expand the Medicare Advantage (MA) Value-Based Insurance Design (VBID) model to more states and more conditions in 2018 without the experience of the first year's launch, which begins in January 2017. The schedule underlines the Administration's goal of rapidly expanding the use of innovative payment and delivery models that emphasize quality and good outcomes rather than volume of services. VBID models have been used in the private sector to better manage the costs and care of persons with high healthcare needs and the Medicare population, which has the largest number of persons with chronic care conditions, and offers the potential to see even better results for more people.
Under the demonstration, the requirement that the MA benefit package be uniform for all enrollees will be waived. The uniformity provision was adopted many years ago to ensure health plans did not use benefit design to exclude persons with conditions and disabilities requiring the use of many services and prescription drugs. Fortunately, over time, policymakers and plans have seen the value of programs that better manage the conditions of persons with chronic conditions, such as disease management programs, although participation has been lower than expected. The VBID model will allow MA plans to lower cost sharing, add services, and target providers considered "high value" for the selected chronic condition. MA and Part D plans will still be required to offer uniform benefits under the new model for all plan members with the target condition. As a beneficiary protection, participants in the VBID program can never pay more than other MA enrollees for their services or receive fewer benefits.
For 2018, the new states eligible to participate will include Texas, Michigan, and Alabama. Seven states and seven chronic conditions were selected for the first year of the demonstration. Participating plans will be announced in September 2016. The additional chronic conditions that will be available for VBID participants include rheumatoid arthritis and dementia. The second year model test program will allow MA organizations with at least one plan or a parent organization with one plan with 2,000 or more enrollees to offer VBID enrollment to other Plan Benefit Packages (PBPs) with at least 500 enrollees, thus expanding the number of participating plans and VBID participants.
CMS will conduct a webinar of the second year changes on August 24, 2016, at 2:00 pm EST. Participants may register at https://innovation.cms.gov/resources/vbid-2018changes.html.
CMS plans to issue a Request for Applications for the second year VBID model test program in the fall of 2016. Information on how to apply can be found at http://innovation.cms.gov/initiatives/VBID.
Resources
From ACO-type incentives to bundled payments and contract capitation, to full professional and global capitation — where the potential is promising, we can help design and implement these arrangements. Contact us today to get started >>
Stay connected to industry news and gain perspective on how to navigate the latest issues through GHG's weekly newsletter. Subscribe >>
Lessons on the Audit Front
The regulatory scrutiny continues. The Centers for Medicare & Medicaid Services (CMS) 2016 Compliance and Program Audits are in full swing, and it is readily apparent plan sponsors must be "audit ready." CMS' intent to hold plan sponsors accountable to comply with Medicare standards and ensuring beneficiary protection is evident. Plan sponsors must be ready to take the test.
It all starts with the data…make sure you get it right! The invalid data submission (IDS) was a condition added to the 2016 scoring methodology. CMS has emphasized the need for plan sponsors to validate all data submission before they are uploaded. The "Three Strike Rule" applies. If the sponsor fails to provide "accurate and timely" universe submissions twice, it will be cited as an observation in the audit report. After the third failed attempt, or if an accurate universe cannot be produced in fewer than three attempts due to missing or unavailable data, an IDS may be cited.
Speaking of audit scoring methodology, confusion appears to remain regarding the audit scoring method. Samples are no longer given a pass/fail score with a specified passing score of 95%. Issues are now identified as conditions. One condition may apply to multiple samples. CMS will evaluate the condition by the potential impact on the beneficiary as either an observation, Corrective Action Required (CAR), or Immediate Corrective Action Required (ICAR). The audit score is generated based on the number of non-compliant conditions discovered; the maximum audit score is unlimited.
Thus far in 2016, the most common conditions cited by CMS are ones we have seen before. Plan sponsors' failure to properly administer its CMS-approved formulary, usually due to a coding error by the Pharmacy Benefit Manager (PBM), remains a risk area. It is critical for plan sponsors to have an adequate oversight monitoring program to identify and remediate issues expeditiously.
Coverage Determinations, Appeals, and Grievances (CDAG) continue to be a low performer in 2016 CMS Program Audits. It is important for plan sponsors to connect the dots with end-to-end case preparation, and remember — nothing is off-limits. CMS can open any can of worms that is identified as a risk. Coverage determination notification letters remain a targeted area. Plan sponsors must have the necessary quality checks and/or oversight to ensure notification letters are specific to the enrollee's case, accurate, and provide the information needed to approve coverage in the case of a denial. This is a recurrent finding from prior years which CMS has cited in Best Practice Memos, so there is a low tolerance for inadequate denial letters.
New to the 2016 audit cycle is the Medication Therapy Management (MTM) Program Pilot Audit, which is conducted virtually in the second week. Despite the fact results of this pilot are not included in the plan sponsor's final report, CMS is not taking this audit casually. "The goal of this audit is to evaluate the implementation of the plan sponsor's adherence to its CMS-approved MTM Program," said a subject matter expert on our Pharmacy Solutions team. Be sure you are ready to tell the case story. "CMS has been particularly interested in looking at the continuity of care across plan years for members who received a Comprehensive Medication Review (CMR) in the previous year. This is one area which appears to be especially disconnected if plans may have had multiple MTM vendors or changed PBMs," continued Miller. "Coordination of information flow, especially for enrollee's year-over-year tracking, is essential." Plan sponsors that incorporate strategies for a ready state for CMS audit will be more successful. The conduction of an MTM Program mock audit is an effective way to identify shortfalls and issues in your data collection, accuracy, and overall readiness — before you are presented with a CMS audit engagement letter.
Another challenge noted in the 2016 audit front is, despite CMS process enhancements, auditor inconsistency. This presents a challenge in what a plan sponsor can expect. In order to be prepared for a program audit, plan sponsors should prepare by exceeding CMS' expectations, not just meeting them.
Resources
Our highly structured mock CMS audit services are designed to replicate the latest CMS audit processes. Our team of industry veterans is ready to help your organization practice and learn the new CMS audit protocols; new universes and many more data fields, interviews via a webinar, and of course the CMS protocol documents. Visit our website to learn more about our CMS Mock Audit services >>
Stay connected to industry news and gain perspective on how to navigate the latest issues through GHG's weekly newsletter. Subscribe >>
Meeting CMS Halfway: The 2016 Audit and Enforcement Conference
On June 16, the Centers for Medicare & Medicaid Services (CMS) held their third annual Medicare Advantage & Prescription Drug Audit and Enforcement Conference and Webcast. At the heart of this conference is the CMS Program Audit. Agency experts as well as Sponsor participants presented to an in-person and webcast audience on expectations, process enhancements, upcoming developments, and more.
While the agency has not given everyone the keys to the kingdom, the transparency of process improvements and changes can be likened to someone meeting you halfway. If you expect CMS to meet you where you are, you'll be waiting a long time. Sponsors need to do the rest: digest the free information provided, distribute to all affected parties, and implement. Practice until each step of an audit runs like a well-oiled machine. Sound cliché? It should. The core focus of this audit model has not changed in years. You may argue that you've had staff turnover or have switched delegates for a certain function. None of it matters. The requirements are still the same, and they are in line with many items your organization attested to upon application.
My summary and analysis of the conference can be downloaded here, however, it is no replacement for watching the webcast recordings on your own and making necessary changes to your program.
Resources
Stay connected to industry news and gain perspective on how to navigate the latest issues through GHG's weekly newsletter. Subscribe >>