Operations Mistakes Will Be Costly — Highlights of the 2017 Draft Call Letter

There was a time when operational areas were shooting for 98% accuracy as the “golden” number.  In today’s age of data and focused audits, even 99% may not be enough.  The Call Letter doesn’t have many surprising new risk areas for Operations.  No new crazy regulations to ponder how we can possibly implement them.  Instead, they have something worse: the addition of teeth to the new regulations.  Why is this worse?  Because the focus is on areas Operations and plans often struggle with and eventually accept status quo as good enough.  How many times have you heard or possibly said, “What are our peers doing?” and used them as the measuring stick.

Some of the key focuses to keep operational eyes on are:

  • One-Third Financial Audit Results — Don’t skip this section thinking this is Finance and doesn’t involve Operations. One-third financial audits are full of operational reviews with direct member impact. The Draft Call Letter is indicating, beginning with 2017, one-third financial audits for plan year 2015 will have potential enforcement action like civil money penalties (CMPs) assessed for findings with adverse beneficiary impact.  The Centers for Medicare & Medicaid Services (CMS) specifically calls out increased or incorrect cost-sharing or copayments as items of concern.  Reviewing your benefit setup and claims processing to ensure controls are in place for adequate application of copays is a fundamental process but one in which CMS is seeing discrepancies year after year.  Plans should review their controls or Medicare Secondary Payer (MSP) processes, their provider fee schedule process, and their benefit setup processes to ensure beneficiaries are protected and benefit designs are operationalized each year as filed with CMS.
  • Timely Processing of Coverage Determinations and Redeterminations — Your plan may delegate coverage determinations and possibly redeterminations, but whether delegated or processed in house, the plan is responsible.  CMS is seeing a continued high volume of auto-forwards of coverage determinations and redeterminations to the Independent Review Entity (IRE) when these functions are not processed within required time frames.  CMS is indicating they will be taking action against plans with high volumes—no waiting for an audit and a review of the results.  CMS has the data to know there is a problem.  Have you looked at your numbers?  Do you know your auto-forward volumes?  Better yet, do you know the root causes and mitigations to ensure there are no auto-forwards and no negative beneficiary impact?
  • Data Integrity — Once again a misleading title that has big operational impacts.  CMS is raising concerns CMS program audits are identifying issues that may impact Star Ratings data used for Star Ratings.  CMS is indicating they are looking at tying audit findings to data submitted for Part C and Part D reporting and Star Ratings where the audit may have raised concerns.  CMS is indicating finding issues within other reviews, such as program audits, may result in review of submitted data for Star Ratings.  They are right—it is a holistic approach health plans should be using to get ahead of this curve.  If during an internal audit at the health plan a finding occurred indicating grievances were under-reported, is there follow-through to reconcile that under-reporting and revise Part C and Part D grievance reports?  In our often-siloed departments and processes, that type of follow through doesn’t often occur.

We are all busy.  Few of us in Operations have the luxury of focusing on one product or function. We are all trying to keep multiple balls in the air.  But if we don’t take time to evaluate, stabilize, and set up good controls, we won’t survive unscathed.  The last thing any of us want is an enforcement action that will take time and energy to resolve and will ultimately impact our members, resulting in most or all of the balls crashing down.  Our multi-disciplinary team of consultants has been in your shoes—we have juggled the same balls and are ready to partner with you. Contact us to get started >>



For actionable advice and best practices, join us at our annual Gorman Health Group 2016 Forum, April 19-20, at the Worthington Renaissance Fort Worth Hotel in Fort Worth, Texas. During this year’s information-packed two days, our elite team of experts, operators, clients, and partners will help you figure out what matters and what doesn’t. We will share proven tactics to cut costs, increase member satisfaction, and manage and drive sustainable growth. Register now >>

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