skip to Main Content

Audit Scrutiny At All Time High for Medicare Plans

Audit Scrutiny At All Time High For Medicare Plans

2017 is off to a quick and challenging start when it comes to compliance in the Medicare Advantage (MA) world.

Timeliness Monitoring

This year has started off with a three-wave timeliness monitoring pilot for Coverage Determinations/Appeals/Grievances (CDAG) and Organization Determinations/Appeals/Grievances (ODAG). The Centers for Medicare and Medicaid Services (CMS) began the initiative to ensure it is able to gain greater insight into timeliness compliance beyond the number of program audits it does each year. CMS says the results of the timeliness monitoring process may be available as early as summer and it should give CMS a robust view of the status of the entire industry on one of the key focuses of program audits. It could also lead to additional program audits for problematic plans as well Civil Monetary Penalties (CMPs).

CMP Announcement and Spring Conference

In March, we found out that CMPs will be announced once per year and that 17 sponsors received penalties for 2016. The move to a once-per-year announcement gives CMS the ability to more closely assess plans and levy bigger penalties on the poorest performers. While audit scores are improving markedly, CMPs continue to remain high (with almost 50% of sponsors in 2016 receiving them). The long and short of it is that plans seem to be amassing better compliance records overall, but still struggle with key areas that are member facing. CMS focuses CMPs on areas that cause the greatest beneficiary harm. See our previous blog on the compliance areas that generated the actual CMPs.

To add to the record, the CMS 2017 Medicare Advantage & Prescription Drug Plan Spring Conference focused some time on the major conditions cited across the 2016 audits. Some of the cited conditions included:

  • Formulary Administration (FA)
    • Plans failed to administer transition properly.
    • Plans improperly effectuated pharmacy prior authorizations or exception requests.
    • Plans failed to properly administer its CMS-approved formulary by applying unapproved quantity limits.
  • Coverage Determinations/Appeals/Grievances (CDAG) and Organization Determinations/Appeals/Grievances (ODAG)
    • CDAG and ODAG: Denial letters did not include adequate rationales, contained incorrect/incomplete information specific to denials, or were written in a manner not easily understandable to enrollees.
    • CDAG and ODAG: Plans did not demonstrate sufficient outreach to prescribers or beneficiaries to obtain additional information necessary to make appropriate clinical decisions.
    • CDAG: Plans misclassified coverage determination or redetermination requests as grievances and/or customer service inquiries.
    • ODAG: Plans did not notify enrollees, and providers if the providers requested the services, of its decisions within 72 hours of receipt of expedited organization determination requests.
  • Special Needs Plans Model of Care (SNP MOC)
    • Plans did not administer comprehensive annual reassessments within 12 months of the last annual health risk assessment (HRA).
  • SNP MOC
    • Individualized care plans (ICPs) did not address issues identified in health risk assessments (HRA).

In terms of Immediate Corrective Actions Required (ICARs), ODAG had the highest average number of ICARs cited per audit in 2016, followed by CDAG and then closely by FA. In FA, the average number of ICARs stayed the same across both years, whereas in CDAG and ODAG there was a large decrease.

The most common ICARs in 2015 and 2016 were:

  • CDAG: Plans did not appropriately auto-forward coverage determinations and/or redeterminations (standard and/or expedited) to the Independent Review Entity (IRE) for review and disposition within the CMS required timeframe.
  • CDAG: Plans misclassified coverage determination or redetermination requests as grievances and/or customer service inquiries.
  • ODAG: Plans did not notify beneficiaries, and providers if the provider requested the services, of its decisions within 72 hours of receipt of expedited organization determination requests.
  • ODAG: Plans did not notify enrollees, and providers if the provider requested the service, of its decisions within 14 calendar days of receipt of standard organization determination requests.
  • FA: Plans failed to properly administer its CMS-approved formulary by applying unapproved prior authorization edits.
  • FA: Plans improperly effectuated prior authorizations or exception requests.

Because of the growth in the SNP MOC area, CMS is beginning to focus much more on the plans that have special needs offerings. Major SNP MOC conditions cited were:

  • Plans did not show documentation of interdisciplinary care team (ICT) coordination of member care.
    • 67% of sponsors affected in 2016
  • Plans did not administer comprehensive annual reassessments within 12 months of the last annual health risk assessment (HRA).
    • 56% of sponsors affected in 2016
  • Plans did not review and /or revise individualized care plan (ICPs) consistent with its model of care or as warranted by changes in health status or care transitions of beneficiaries.
    • 50% of sponsors affected in 2016
  • Individualized care plans (ICPs) did not address issues identified in health risk assessments (HRA).
    • 44% of sponsors affected in 2016
  • Individualized care plans (ICPs) did not include measurable outcomes.
    • 39% of sponsors affected in 2016

And the first year of the Medication Therapy Management Program (MTM) pilot audit clearly challenged plans and underscored CMS’ concern with the overall status of MTM. Some notable observations by plans include:

  • The audit is very data intensive and needs support from throughout the plan, including enrollment.
  • Have the ability to fully demonstrate your processes and systems.
  • The claims lookback period used by plans may not identify and include members who probably should qualify for MTM. Plans may need to increase their lookback periods to account for this in the future. Please also note that allow for sufficent claims completion on the medical side when building stratification algorithms. At MedHOK, we actually use as long as a one-year lookback for plans that would like to maximize program participation.
  • Auditors requested recorded phone calls, returned mail scans, and additional retrievable data. Remember that in MTM, plans must account for return mail, cancel out CMR Offer dates if mail is returned, and seek to make a valid offer within the requisite timeframe (60 days for new members and within 365 days of the last offer for returning members).
  • Comprehensive Medication Review (CMR) rates are low and challenging. Plans need to look to in-source at least certain MTM CMRs as well as look to perform CMRs in Skilled Nursing Facilities (SNFs) and in-clinic where approved. Plans can include medical, quality and case management in the MTM processes.
  • Few referrals were made to the plan for clinical follow-up.
  • There was inadequate communication between delegated Pharmacy Benefit Managers (PBMs) in cases where the PBM could not reach members who qualified. A biweekly report should be sought from the PBM for member phone numbers that need remediation.
  • There is minimal oversight by the plan as to the delegation of MTM. Oversight of PBMs needs to be increased.

Additional Audits

Given investments in additional resources the number of audits performed over the past years and moving forward should be much greater. CMS is currently in cycle 2 (which began in 2015) of its audits and by the end of 2017 almost half of all plans will have been audited. Almost 80 percent of enrollees were in contracts audited in 2015 and 2016. MedHOK has already worked with our plan clients on numerous audits this year. While many focus areas are similar to previous years, there are some new emerging trends as well. Highlights of 2017 audits so far include: include:

  • The focus on case timeliness continues.
    • As you know, cases are timely as long as all of the following are within the regulatory timeframe:
      • case decisioning
      • issuance of member communication
      • issuance of provider communication
      • effectuation (for approvals.)
  • Outreach for needed medical documentation is a keen focus as well.
    • Plans continue to have inadequate numbers and times of outreach generally, including lack of medical director participation.
    • In October, CMS also announced that plans now must meet three additional timeliness tests or outreach conditions (these will be looked at in concert with timeliness requirements in the first bullet above):
      • (1) initial outreach for needed medical documentation within a prescribed timeframe;
      • (2) ensure at least three outreach attempts (which must be multi-modal in some cases); and
      • (3) a final documented verbal attempt by a medical director.
      • CMS does not appear to be hyper-focused on number 1 yet, but is clearly diving deep on two and three in 2017. But for sure all of them will see the greatest of scrutiny in 2018.
  • Continued concern about clear and concise verbiage is apparent.
    • In 2017, CMS now seems to indicate that denials for lack of documentation must also include language about the plan’s attempts to obtain the information as a guide to the member and provider in the future.
  • Plans are being told that extensions for ODAG requests should not be taken for contracted providers, unless there are truly extenuating circumstances.
    • The rationale is that the provider is your partner; he or she should be available anytime you call.
  • As noted above, CMS is turning major attention to the SNP MOC area. While it has yet to issue CMPs in this program area, the increased focus and findings lead us to believe that CMPs could be on the horizon in the near future.
    • Auditors are deep diving into HRAs, ICPs and ICT coordination.
    • Goals and interventions are needed for every problem identified in the HRA.
    • Some auditors seem positively impressed with documentation of interventions made on SNP members from other departments. Plans should use efforts to bring these interventions, from Star activities and external physician assessments as examples, to the overall SNP process. Sending assessments to members should also be pursued if members cannot be reached by the plan.
  • Formulary administration by PBM remains a major problem for plans, including PA edits and length of effectuation period.
  • Auditors want to see correct use of criteria in decisioning in both ODAG and CDAG.
    • In the case of CDAG, plans need to do a better job of ensuring that all aspects of a pharmacy request for a given drug (e.g., combinations of prior authorization, step therapy, quantity limits, exceptions, and tiering exceptions) are all addressed.
    • Compliance here can be driven by several mock adjudication processes with your PBM.
  • In the case of the pilot MTM audit, CMS is very focused on ensuring that all eligible participants are indeed given an opportunity to participate in MTM.
    • CMS is using submitted Prescription Drug Events (PDEs) to compare to plan stratification to determine if members are missing.
    • Plans must do a better job of ensuring that stratification algorithms are scrubbed and pull all eligible members against the program filing.
    • Pay attention to the lookback period as well to maximize (but perhaps not overly so) qualification.
    • CMS wants plans to increase demonstrably CMR and Targeted Medication Reconciliations (TMRs) rates.
    • Plans need to remember that methodological analysis of data and auto-generated clinical interventions (e.g., adherence letters for specific measures analyzed) meet the criteria for a quarterly intervention.
  • We also note the new non-discrimination notification mandate, Section 1557 of the Patient Protection and Affordable Care Act, went into effect late last year.
    • CMS has yet to focus here on audits but plans need to ensure they are compliant.
      • There is some confusion around scope and parameters. We believe all authorization, appeal and grievance letters must have the non-discrimination language in them. The DOJ guidance appears broader than CMS’ and CMS may clarify this in the future. As a best practice, include the required disclosures in your prior authorization letters as well.
      • In addition, plans must include all languages listed for their state and not just the so-called 5 percent threshold languages in a given market. If the 5 percent threshold languages are not on the state list, the additional languages must be added to the notice.

Marc Ryan

Marc S. Ryan serves as MedHOK’s Chief Strategy and Compliance Officer. During his career, Marc has served a number of health plans in executive-level regulatory, compliance, business development, and operations roles. He has launched and operated plans with Medicare, Medicaid, Commercial and Exchange lines of business. Marc was the Secretary of Policy and Management and State Budget Director of Connecticut, where he oversaw all aspects of state budgeting and management. In this role, Marc created the state’s Medicaid and SCHIP managed care programs and oversaw its state employee and retiree health plans. He also created the state’s long-term care continuum program. Marc was nominated by then HHS Secretary Tommy Thompson to serve on a panel of state program experts to advise CMS on aspects of Medicare Part D implementation. He also was nominated by Florida’s Medicaid Secretary to serve on the state’s Medicaid Reform advisory panel.

Marc graduated cum laude from the Edmund A. Walsh School of Foreign Service at Georgetown University with a Bachelor of Science in Foreign Service. He received a Master of Public Administration, specializing in local government management and managed healthcare, from the University of New Haven. He was inducted into Sigma Beta Delta, a national honor society for business, management, and administration.

Back To Top