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.


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