Coverage Determinations, Appeals, and Grievances (CDAG) remain a compliance Achilles heel for many Part D sponsors. The Centers for Medicare & Medicaid Services (CMS) has noticed! Challenges with interpreting CMS regulations and guidance and operational restrictions have the potential to create a very costly gap. CMS is increasing scrutiny of this area in 2017.
CMS identified this weak spot and has provided additional communications via the Common Conditions, Improvement Strategies, and Best Practice memos, Job Aids, and proposed clarifications in the 2018 Draft Call Letter. The 2017 Draft Audit Protocol proposes expanded case selection in the Clinical Decision-Making (CDM) 2017 Program Audits and increasing enforcement actions related to Part D Auto-Forwards.
GHG’s experience in assisting plans with Part D operational assessments and participation in CMS Program Audits has identified the following areas for greatest risk of non-compliance:
Timeliness – Despite overall improvements in recognizing the importance of adhering to the processing and notification regulatory time frames, many plans still struggle. On December 16, 2016, CMS released a memo describing their intent to increase the compliance to enforcement escalation process and intent to issue Civil Monetary Penalties (CMP) on a quarterly basis to sponsors that fail to meet an established threshold. The expected CMP outlier threshold is 15 or more auto-forwards per 10,000 beneficiaries per quarter. For smaller plans whose enrollment is less than 800, fewer than 10 IRE cases/appeals per quarter, and fewer than 10 auto-forward cases per quarter will be excluded from the analysis.
Classification and Processing of Re-Openings – GHG has observed sponsors that liberally utilize the reopening of coverage determinations and decisions. Sponsors may reopen a case, as a remedial action, under certain conditions; however, CMS expects plan sponsors to limit their use of the reopening procedure, so don’t get carried away! The reopening procedure must be used to process clerical errors but not the failure to execute the determination process itself to ensure enrollees have been afforded appropriate appeal rights. This scenario is on CMS’ radar for the 2017 Program Audits. Based on the draft protocol, an additional five cases may be selected for review to assess appropriate classification and processing of dismissals, withdrawals, and/or reopenings.
Tiering Exceptions – If your benefit is set up with a mix of brand and generic drugs on a formulary tier, you may need to loosen the purse strings. If a formulary tier contains both brand and generic drugs as determined by New Drug Application (NDA) and Abbreviated New Drug Application (ANDA) status, some sponsors have been incorrectly denying tiering exception requests. Many Immediate Corrective Actions Required (ICARs) were issued for this reason during the 2016 Program Audits. In the 2018 Advance Notice and Draft Call Letter, CMS provides clarification about their expectations for tiering exceptions. If a plan sponsor has a mixed tier, the lowest tier would be the tier containing alternatives to the requested drug. Make sure to review your formulary and understand the CMS definitions of “brand” and “generic” to appropriately assess your tiering exceptions procedures!
For a hands-on workshop on CDAG, plan to attend the GHG Forum April 26-27, 2017, in New Orleans. Our Conference Brochure and Preliminary Agenda Is Now Available! Download it to see the additional topics we have in store for you at this year’s event.
Register now for the Gorman Health Group 2017 Forum, April 26-27, 2017, at the JW Marriott New Orleans.
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