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CMS Audit Season Is Upon Us

CMS Audit Season Is Upon Us

Now that the holidays are over and the calendar flipped to 2017, many health executives are waiting nervously to hear whether their plan will be among the “lucky few” to undergo a Medicare program audit by the Centers for Medicare and Medicaid Services (CMS) this year. With Civil Monetary Penalties (CMPs) and suspension of enrollment and marketing at record levels these past few years, the stakes for health plan revenue and survival has never been higher.

Ensuring a successful audit today means the right system and ongoing planning and auditing, we want to offer a few suggestions about how you approach an audit and the high-profile concerns CMS has. While ultimately audit conditions will be assessed where audit conditions exist, even some last-minute awareness and remedial action can help plans if the notice arrives over the next few weeks or months.

Approach

  • Perform a mock audit now to assess where you appear to be non-compliant.This could help plans make easy fixes before the audit notice arrives. This is important to ensure you populate universes correctly and avoid Invalid Data Submission findings.
  • Disclosure (prior to the audit) or self-identification (usually by the plan post audit notice or sometimes by CMS to the plan during usual monitoring prior to the audit) are key for avoiding assessment of conditions. It is important that all disclosed and self-identified issues are reported on the Pre-Audit Issue Summary template provided by CMS within five business days of the audit notice. If not, they will be treated as if they are conditions found during the audit. So catalogue throughout the year and make sure you spend time assessing what you know in terms of deficiencies and what was or should be reported to CMS. The template must also include the remediation status and include the beneficiary impact. Any disclosed conditions remediated prior to the audit notice will essentially be deemed corrected. Self-identified conditions remediated may be validated by the auditor and be defined as observations only.
  • Additional best practice recommendations around audit preparation and readiness can be found in our September 20, 2016 blog here.

Issues CMS Will Be Watching

Compliance Timeframes

CMS has been paying increasing attention to all aspects of compliance with case turnaround times. Plans can no longer look at this as simply a timely decision, but in most instances three (for denials) or four (for approvals) thresholds all must be met to consider cases in full compliance.

  • Case decision date and time
  • Member written communication date and time
  • Provider written communication date and time
  • Approval effectuation date and time

Plans need to pay attention to all of the above and ensure their systems accurately capture case type Service Level Agreements (SLAs), vigorously monitor workflow dashboards as well as fax, Interactive Voice Response (IVR), and letter fulfillment. Ensure you have a clearly documented Standard Operating Procedure (SOP) that demonstrates correct capture of actual fulfillment and effectuation dates and times. Since audit timeframes are roughly three months, plans can make an immediate impact on compliance issues in this area if they start now. In some cases, remediation of these type of issues may be easy. Plans should also ensure they take advantage of written communication extensions allowed in the Medicare manuals for certain cases where oral notification is made. And plans must have a mechanism to ensure manual fulfillment of cases that will expire before fulfillment houses are able to send letters, etc. This often happens with expedited cases, but even standard cases over weekends.

CMS has issued guidance that it will increase scrutiny of auto-forwards in the following areas: (1) lack of timely auto-forwards to the Independent Review Entity (IRE) and (2) inordinate auto-forwards. This could lead to investigation of plan practices outside of audits and intermediate sanctions.

Last, plans are failing to effectuate IRE overturns. Make certain you are effectuating IRE overturns timely.

Outreach Attempts

CMS has long been frustrated with the lack of sufficient outreach by plans to providers for required documentation before a case is denied for lack of medical necessity. In October 2016, CMS laid down the law by issuing a sweeping guidance memo on what is expected (immediately of plans) in the area of outreach. This new outreach guidance in effect introduces an additional SLA turnaround time for the initial outreach and requires a minimum of three outreach attempts that may include multiple modes of outreach to be deemed in compliance. It also requires medical director outreach before a denial for lack of medical necessity documentation is made. These requirements have generally been applied by CMS during audits over the past several years, but the guidance ensures the ante will be upped on audit and that conditions, Corrective Action Required (CARs), Immediate Corrective Action Required (ICARs) and Civil Monetary Penalties (CMPs) will almost certainly be issued in great measure in this area. See our November 8, 2016 blog to get all the details on what is required of plans in this area.

Also, plans should not be taking extensions on prior authorization or appeal requests for lack of documentation when a contracted provider is making the request. The assumption by CMS is if you contract with that provider, you should have a relationship with him or her and obtain the documentation needed.

Evidence-based criteria and appropriate clinical decision-maker

CMS’ goal is to see all authorizations and appeals decided via the consistent application of evidence-based criteria. It is incumbent on plans to ensure that valid criteria is used for each medical and pharmacy authorization and is consistently applied to avoid discrimination. Continuously refining strategies to ensure the criteria is consistently called up for diagnosis, procedure, place of service and service type in the medical world, as well as via National Drug Code (NDC) and Generic Product Identifier/Generic Code Number (GPI/GCN) in the pharmacy world is essential.

Plans also fail to ensure the appropriate clinical decision-maker makes case decisions. Three common failures are (1) plans do not require physicians to make denial decisions for certain cases, especially appeals; (2) ensure a different medical director from the one that decided an authorization makes the decision on an appeal; and (3) a physician with the requisite credentials and expertise are deciding certain cases.

We also know that Star now measures IRE overturns so using evidence-based criteria and consistently applying it now has quality and revenue implications as well.

The right letters – with clear and concise verbiage as well as appeal rights when necessary

Plans often fail to get it right on correspondence. CMS is looking for the right letter template to be used, the language is clear and concise so members clearly understand decisions, and the correct appeal rights are included in denials. Plans should always aim to reduce variability in letters by using pre-defined dropdowns in systems. Where verbiage needs to be included to explain specific individual circumstances, this text again should be clear and concise and geared toward individuals who may have cognitive impairments or health literacy barriers.

Misclassification or non-recognition of requests

Plans should train and retrain staff on the appropriate recognition and classification of cases. Some common problems:

  • Plan personnel are not recognizing certain calls from members as authorization requests or grievances.
  • Plans are processing requests as prior authorizations again when they should be appeals.
  • Plans are not processing certain requests as both a grievance and an authorization or appeal. Sometimes requests can constitute more than one category.
  • Reopens should only be used under the very narrow prescribed list of conditions in the Medicare manuals. Plans often use reopens as a convenient way to avoid opening up appeals post denial of an authorization.

CMS has issued helpful Job Aids for plan personnel in this area. See our blog from June 13, 2016 to gather more details.

Other pharmacy issues

Findings in the pharmacy area abound, especially in terms of formulary administration. Some common findings beyond those outlined already include:

  • Appropriate Part A vs. B vs. D authorization
  • Inappropriate PA, ST, QL and other UM edits
  • Failure to follow the transition supply requirements
  • Effectuation for the appropriate length of time did not occur

Grievance

In addition to issues noted above, plans need to closely look at the following as these have been consistent audit findings as well:

  • Plans do not adequately document grievances. Remember any expression of dissatisfaction or complaint is a grievance.
  • Establishing root causes for each and every grievance conducted is key.
  • Lack of notifying a member of their right to also go to the Medicare Quality Improvement Organization for quality of care grievances.
  • Plans fail to notify members of their right to undertake an expedited grievance as it relates to a plans denial to undertake an expedited authorization or appeal.

Special Needs Plans Model of Care

  • CMS is very frustrated plans do not timely undertake initial and annual Health Risk Assessments (HRA) on the population. Historically, completion rates have been very low. CMS expects every member can be reached in one way or another.
  • Each member also needs an Individualized Care Plan (ICP) and care team approach. CMS has found this lacking in many Special Needs Plans (SNPs).
  • CMS expects the member will be reassessed and the care plan updated when necessary as the members health changes. This is especially true during transitions of care but should also occur through risk stratification after an initial HRA and before or between annual reassessments.
  • If plans are unable to reach a member for an assessment, it still expects these members will be issued an ICP that seeks to meet their needs based on what is known about the member.
  • CMS wants plans to begin look at socio-economic and health literacy factors as well as other social determinants of health.

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.

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