In 2015 a Slap on the Wrist Can Be the Kiss of Death

It is truth that in the second term of Democratic administrations, scores get settled between Washington regulators and business partners of the Federal government.  2015 will be no different for our favorite agency, the Centers for Medicare & Medicaid Services (CMS).  It’s already on a pace for 2015 to be the toughest year ever in enforcement actions against Medicare Advantage plans.  And generally speaking, the regulatory bar is rising faster than anyone imagined.  Consider:

  • So far in 2015 CMS has issued significant new Medicare Advantage and Part D regulations, and this year’s Advance Notice for 2016 rates and rules for Medicare and Part D health plans is the most anticipated I can remember in more than 20 years.
  • 2015 is the toughest year in benchmark payment rates thanks to the approximately $200 billion in cuts from the Affordable Care Act.
  • 2015’s technical corrections for Star Ratings are almost bewildering in their complexity in raising the clinical bar. Indeed, in 2014, an election year, CMS famously told Medicare Advantage plans below 3 Stars for 3 consecutive years that a stay of execution was granted. In the fall, many of those low performers were quietly shown the door and were non-renewed. In 2015, however, the agency is handing out live ammunition to its firing squad.  Now an intermediate sanction freezing marketing and enrollment automatically knocks the plan down to 2.5 Stars, often meaning loss of millions in bonus payments and rebate dollars. In competitive markets now, the first plan sanctioned is the first hunk of roadkill.
  • The HHS Office of Inspector General, the guys with the badges and guns in Medicare, have made data validation audits for Medicare Advantage risk adjustment one of its top priorities in its 2015 workplan.   And the President’s budget includes over a half-billion dollars in recoveries from these RADV audits.
  • But nowhere is there better evidence that the paper tiger is growing its claws back than in CMS’ track record in enforcement actions against MA plans.  In January, the agency levied the highest monthly toll of civil monetary penalties ever — and if it keeps up the pace, 2015 will be nastiest enforcement environment in Medicare history.


*January 2015


Granted, CMPs don’t typically amount to much, usually no more than a couple hundred grand, rarely 7 figures plus.  But the damage is actually far greater, when considering damage in the local and national press; the chatter factor among beneficiaries; lost membership, and damage to the Star Rating and the relationship with CMS, which for many plans is or is becoming its biggest customer.  A slap on the wrist is now the kiss of death in this environment.

Last week my colleague  Betsy Seals, Senior Vice President of Compliance, conducted a webinar on the “Top 10 Things Killing Your MA Plan.” CMS’ top infractions, in order, are coverage determinations and grievances, and formulary administration, or performance of your pharmacy benefits management vendor.  Those findings are driven by these 10 root causes:


5.Member letter content
6.Clinical decision-making


Now is the time to ensure your compliance function and Medicare operations have the right tools, processes and people to be successful in the toughest environment we’ve ever seen in government health programs. In 2015, Gorman Health Group launched its latest product, CaseIQ™ , providing a new way to ensure your Appeals & Grievance cases come to a timely and compliant resolution. The tool not only captures all the data points needed to categorize, work and report coverage disputes and complaints; it also guides users through the appropriate processing of each case, minimizing the risk of non-compliance due to user error.  Built and governed by GHG Medicare compliance subject matter experts, CaseIQ™  aims to keep our clients out of CMS’ audit crosshairs. Learn more in our recent press release.

In addition, in the Common Conditions, Improvement Strategies, and Best Practices memo based on 2013 program audit results, CMS outlined areas where plans have been consistently non-compliant and described best practices to address failings. Ongoing monitoring is at the heart of non-compliance. Our solution, the Online Monitoring Tool(OMT™), is a highly flexible oversight tool and dash boarding software that brings together key metrics, documents, and tasks for ongoing monitoring and auditing, which results in the Organization being audit ready. This integrated solution also streamlines vital compliance activities, such as the implementation of new requirements and corrective actions. Read our recent White paper to learn more.


CaseIQ™, GHG’s latest solution, offers built-in reports that allow for tracking of past performance, current backlog as well as trends, and is designed to assist the caseworker to a complete and compliant resolution in Part C (MA) appeals, Part D appeals, and Part C and Part D grievances. Learn more >>

Registration for the Gorman Health Group 2015 Forum is now open! Attendees can expect timely, actionable advice on the trends shaping health care from notable speakers, including Barclay’s analyst, Joshua Raskin, and regulatory guidance directly from Jennifer Smith, a Director in the Medicare Parts C and D Enforcement Group at the Centers for Medicare & Medicaid Services (CMS). Register your team for The Gorman Health Group 2015 Forum today!




John Gorman
John Gorman

Under John's leadership, Gorman Health Group has become the leading professional services and solutions firm for government-sponsored health care, providing thought leadership and expert strategic, operational, and technology-based solutions. Read more

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