Latest Audit Enforcement Actions Issued by CMS

Like clockwork, the Centers for Medicare & Medicaid Services published the enforcement action notices issued to sponsors related to 2017 program audits. Additional detail regarding conditions, audit scores, and enforcement is expected to be included in the 2017 Program Audit Enforcement Report, which the agency hopes to release before their conferences taking place May 9-10. In the meantime, we break down the published data, which includes not only program audit actions but others as well:

  • Eighteen sponsors were issued almost $2.6 million in Civil Money Penalties (CMP) between September 2017 and February 2018 based on their 2017 program audit findings.
    • 72% of sponsors cited for Coverage Determinations, Appeals, and Grievances violations
    • 61% of sponsors cited for Formulary and Benefit Administration violations
    • 39% of sponsors cited for Organization Determinations, Appeals, and Grievances violations
    • 22% of sponsors cited for Part C Beneficiary Protections/cost sharing violations
  • A Program of All-inclusive Care for the Elderly (PACE) sponsor was issued a CMP in November of 2017, and two PACE sponsors had enrollment suspended in the fourth quarter of 2017.
    • PACE plans: You are small but have a mighty sense of responsibility. If you have not done so already, review the posted enforcement notices, distribute within your organization, and create an action plan if you identify any similar findings.
  • One Prescription Drug Plan sponsor had enrollment suspended due to medical loss ratio.
  • Two sponsors were issued CMPs in 2017 based on outlier status of auto-forwards to the Independent Review Entity.

CMS noted in their draft call letter the agency is considering adding a CMP icon in Medicare Plan Finder (MPF) starting in 2019. If the agency proceeds that way, sponsors undergoing audits this year and incurring CMPs will be impacted by this new indicator. We support efforts such as this which promote beneficiary transparency. As I outlined in our analysis, sponsors should take note. Low Performing Icon information has not been limited to the MPF. Marketing organizations and other industry publications have taken that information and run with it, which may give an advantage to competitors of affected plans. In a recent Bloomberg Law article, I further discuss enforcement actions and the implications of this Low Performing Icon.

Remember that enforcement actions can be levied not just for program audit performance but also for a host of other violations. While I have provided some recent statistics, an analysis of actions taken year over year show patterns in some regards, and no rhyme or reason in other regards. Don’t spend too much time slicing and dicing these figures for your management; let us do that here in these articles. Focus on plan performance and continuous improvement. The goal should be to ensure your organization does not end up with enforcement actions in the first place.




Gorman Health Group’s summary and analysis of the 2019 Advance Notice and Draft Call Letter for Medicare Advantage and Part D is now available. Download now

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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

  1. Well done Regan. Thank you for summarizing the major opportunities across the industry. Distressing that 76% of sponsors cited for CDAG issues. What is Gorman’s take on root cause? Where is the disconnect between Chapter 18 and real-world application? 61% cited for FA violations. It would be interesting to know the number of conditions vs. the number of samples that failed. Has CMS determined what baseline is based on data collected from 2015- present?

  2. Michelle, great question, and we hear you about the disconnect. While no baseline has been communicated, a couple main causes of CDAG findings we have seen include denial letters not being tailored to the member, including the clinical specifics of the case, and too much reliance on decision trees, where certain cases may require more clinical input. FA continues to include findings across the board but more and more we are seeing QL-related errors and transition logic or enrollment related issues impacting transition. Misclassification issues are on the rise since CMS added call logs to the protocol, and we find oversight is almost always a factor in all program audit areas.
    I believe the targeting of samples will continue to contribute to these high rates of Part D conditions, but if sponsors and PBMs are finding these things on their own, doing their own sampling and evaluation, the hope is that these noncompliance rates will be minimized. However, the rates will only go down if the true root cause of the matter is identified and corrected. Is it only coding? Are staff rushing to meet quotas? Root cause is a whole other kettle of fish. I could go on but I’ll save it for another post.

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