10 CMS Program Audit Risks

Program audits and oversight activities must be designed with many factors to balance: accuracy, consistency, efficiency, and in an effort to be least disruptive to a plan sponsor. Correspondingly, a plan should be tailoring its response to these audits with those same factors in mind. My colleague Deb Devereaux and I outline ten common risk areas we observe in plans large and small.

  1. Comprehensive Part D Benefit Administration Testing: Plans accept the standard Pharmacy Benefit Manager (PBM) testing scenarios and do not endeavor to do full benefit testing on the Part D formulary prior to the beginning of the plan year. This puts the plan at risk for transition issues and inappropriate rejected claims during the critical data universe window the Centers for Medicare & Medicaid Services (CMS) uses.
  2. Coverage Determinations and Redeterminations: Plans continue to experience issues with decision and notification timeliness as well as notice content that is unclear to the member and provider.
  3. Organization Determinations: Plans fail to do appropriate provider outreach and experience decision and notification timeliness issues.
  4. Claims Determinations: Claims are not fully developed, out-of-area emergency and plan-directed care denials continue to appear in universes, and appeals language is missing from notices.
  5. Delegated Function Audits: Plans do not complete annual delegation oversight audits (a CMS recommendation) for both the PBM and Part C delegates.
  6. Misclassification of Grievances/Appeals/Inquiries: Plans continue to struggle with multiple entry points of information into the plan, which increases the risk for misclassification and thus timeliness of outreach and decision notification.
  7. Special Needs Plan Model of Care (MOC): Oftentimes, it is found plans have misinterpreted the MOC requirements, leading to the realization a MOC was incorrectly written, regardless of high scoring from the National Committee for Quality Assurance.
  8. Failure to Connect the Compliance Dots: Plan staff struggle to articulate their roles and responsibilities when it comes to program oversight, whether it pertains to internal or delegated operations. With only six tracer samples to evaluate, each sample matters a great deal in the evaluation of the three Compliance Program audit areas.
  9. Data Integrity in Universe Preparation: Incomplete or inaccurate universes continue to plague Operations and Compliance teams, an indication of readiness and a possible indicator on the state of delegation oversight.
  10. Commitment: Plans operate in full-on reactive mode, which may be palpable to CMS. They agency has noted in the past they can tell within five minutes whether or not a plan has a culture of compliance. Demonstrated organizational commitment changes the “have to do it” mindset to a “we are glad to do it” attitude.

If any of the 10 items listed resonate with you, contact us. Do you already have a dedicated audit team, comprised of the specialists in your plan, who can speak to your operations and samples? Practice with and exposure to the CMS program audit process gives you and your colleagues a leg up on expectations. Secondly, are the program audit areas on your auditing and monitoring plan for this year? These are areas of particular concern for Medicare Parts C and D. We are more than halfway through 2017 – are you on track to meet your audit plan goals? Contact us for information on how Gorman Health Group can help with your 2017 internal audit activities and your CMS audit preparedness.



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Regan Pennypacker
Regan Pennypacker

Regan is Senior Vice President of Compliance Solutions at Gorman Health Group (GHG). She leads the Compliance Solutions practice, responsible for multidisciplinary projects such as Part C and Part D audits, new applications, marketing material reviews, risk assessments, and training engagements. As a member of this team, she has provided compliance direction and insight on industry best practices to many GHG clients. Regan brings GHG clients 19 years of experience in the healthcare industry. Read more

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