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MedHOK Compliance Insights – July 2015 – Important Reminders and Information

Compliance Insights

Important Reminders

  • Mid July, 2015 – Release of CY 2016 Update in advance of the Limited Formulary Update Window (All Plans)
  • Mid-Late July, 2015 – CY 2016 Limited Formulary Update Window (All Plans)
  • Late July/Early August, 2015 – CMS releases the 2016 Part D national average monthly bid amount, the Medicare Part D base beneficiary premium, the Part D regional low-income premium subsidy amounts, the Medicare Advantage regional PPO benchmarks, and the de minimis amount (All Plans)
  • Late July/Early August, 2015 – Rebate reallocation period begins after release of the above bid amounts (All Plans except MMP)
  • No Later Than July 31, 2015 – CMS informs currently contracted organizations of its decision to not renew a contract for 2016 (All Plans except MMP)
  • August 20-24, 2015 – CY 2016 preview of the 2016 Medicare & You plan data in HPMS prior to printing of the CMS publication (not applicable to EGWPs) (All Plans except Cost)
  • End of August/Early September 2015 – Plan preview periods of Star Ratings in HPMS (All Plans except MMP)


CMS Audit Season In Full Swing

The Centers for Medicare and Medicaid Services (CMS) audit season is in full swing
with numerous Medicare Advantage and standalone Part D plans receiving audit notices
early in the season. As a best practice, plans should be running universes often
throughout the year to ensure strong knowledge of the requirements when audit notices
arrive. That was relatively impossible this season, though, as CMS changed the
universe reporting and expanded the number of universe submissions dramatically.
The chief aim was for CMS to better ascertain compliance with regulations.

In this Newsletter, we are focusing on what audit trends MedHOK has seen this year
with Coverage Determinations, Appeals and Grievances (CDAG). We plan on covering
other audit universes in the near future.

While many findings echo what we already know from the myriad of best practice memos,
annual audit briefings, and what is published in various civil monetary penalty
letters publically, we do note that CMS is more closely scrutinizing a number of
areas in 2015. It all points to an increasingly rigorous audit regime moving forward.

  • In 2015, CDAG has 15 audit universe reports. While CMS published these reports
    a few weeks before audit season began, plans had yet to acclimate themselves fully
    to these new universes. More important, definitions were not always altogether
    clear, necessitating CMS to clarify its intent in areas and re-running of universes
    based on more specific CMS guidance. Thus far, CMS has not counted reruns related
    to clarification of the new universes as one of three attempts to avoid an Immediate
    Corrective Action Required (ICAR).
  • CMS is spending a great deal of time upfront to validate the universe. This is
    clearly a new trend and focus of CMS this year. This means plans will need to have
    a clear focus on validating their universes in the future.
  • Special attention on timeliness seems to be focused on two areas, although all
    continue to remain extremely important:

    • Effectuation date and time
    • Effectuation date and time
  • A repeat audit finding is the misclassification of a case. Oftentimes redeterminations are inappropriately classified as coverage determinations. For 2015, CMS appears to be zeroing in on duplicate cases and the creation of redeterminations. While the former has clear beneficiary impact, CMS is arguing duplicate case creation also harms beneficiaries by creating beneficiary confusion.
  • CMS continues to closely scrutinize plans regarding outreach for required medical
    documentation. In the perfect world, CMS does not want to see denials for lack
    of adequate medical documentation. As such, there is now an expectation on the
    part of CMS that plans have their Medical Director reach out to providers (for MA-PD
    members) that are not providing the information they need before denying for lack
    of clinical information. Further, it is raising the bar on requirements for adequate
    outreach before denial. Three clear attempts – at different points in time within
    the life cycle of the case – seems to be the evolving standard.
  • CMS’ focus has been on ensuring that all letters to members, especially denials,
    have clear and concise language regarding the reason for the denial and the next
    steps a member can take in the appeals process. This continues to be a major focus
    in 2015 as well.
  • Further, CMS is requiring that approval letters have clear language regarding
    any quantity limits on an approved medication.
  • Formulary administration remains a major concern for CMS and continues to constitute
    a large share of overall audit findings and civil monetary penalties. Following
    transition policy guidelines to the letter is a paramount concern for CMS as well.
  • Last, CMS is very frustrated with plans that do not adequately document cases
    during audits. Auditors want to see all case information clearly documented in
    one system of record.


Final Demonstration Year 1 California-Specific Quality Withhold Technical Notes

(HPMS Memo Date July 8, 2015)

The purpose of this memorandum is to announce the release of the final state-specific
quality withhold technical notes for Cal MediConnect, the California capitated model
demonstration under the Financial Alignment Initiative. The document provides additional
requirements associated with the state-specific quality withhold measures that California
Medicare-Medicaid Plans (MMPs) will be required to meet under the demonstration.
These state-specific measures directly supplement the Medicare-Medicaid Capitated
Financial Alignment Model Core Quality Withhold Technical Notes for DY 1.

Demonstration Year 1 and Application of the Withholds in CY 14 and 15
Demonstration Year 1 in the California Cal MediConnect initiative is defined as
April 1, 2014 through December 31, 2015 for MMPs in the following counties: Los
Angeles, San Bernardino, San Diego, San Mateo and Riverside. It is defined as January
1, 2015 through December 31, 2015 for Santa Clara County. Demonstration Year 1 is
July1, 2015 through December 31, 2015 for Orange County. As outlined in the three-way
contract, because Demonstration Year 1 may cross calendar and contract years, an
MMP will be evaluated to determine whether it has met required quality withhold
requirements at the end of both CY 2014 and CY 2015 and the withheld amounts will
be repaid separately for each calendar year. However, the determination in CY 2014
will be based solely on those measures that can appropriately be calculated based
on the actual enrollment volume during CY 2014. Because of the six month continuous
enrollment requirement and sampling time frame associated with CAHPS, MMPs in the
Cal MediConnect initiative will not be able to report CAHPS until CY 2015. In addition,
as noted in the Medicare-Medicaid Capitated Financial Alignment CMS Core Quality
Withhold Measure Technical Notes for DY 1, MMPs must begin submission of encounters
within four months from first enrollment effective date or from the earliest date
the MMP could submit, whichever is later, as part of the CMS core withhold measure
CW4. As outlined further in this document, CMS anticipates MMPs in California will
begin formal submission of encounters in 2015. As a result, CMS core withhold measures
CW3, CW4, and CW5 will not be included as part of the withhold calculation at the
end of CY 2014. MMPs in California will be evaluated on the full set of CMS core
and California-specific withhold measures at the end of CY 2015.

Quality Withhold Requirements in Future Years

CMS and the state shall provide subsequent guidance and technical notes for withhold
measures required for DY 2 and 3.

These state-specific measures directly supplement the Medicare-Medicaid Capitated
Financial Alignment Model Core Quality Withhold Technical Notes for DY 1, which
can be found at the following link.


Contract Year 2016 Medicare Marketing Guidelines Updated

An updated version of the contract year (CY) 2016 Medicare Marketing Guidelines
(MMG) has been posted to the website. To view the CY 2016 Medicare Marketing
Guidelines, click here.

CMS made the following updates

  • Added the text for section 120.4.3 – Compensation Recovery Requirements (Charge-backs),
    which was inadvertently left out of the previous version.
  • Added sections 90.5 – Time Frames for Marketing Review and 160.1 – When Prior
    Authorization from the Beneficiary Is Not Required to the Table of Contents.


90% of Healthcare Firms Hit by Cyber Attack

According to the Insurance Journal, in the past 5 years, criminal attacks against
healthcare providers have more than doubled, with the average breach costing a hospital
$2.1 million. A recent study found that in the past 2 years, nearly 90% of healthcare
providers were hit by breaches.

“The healthcare industry is being hunted and hacked by the elite financial criminal
syndicates that had been targeting large financial institutions until they realized
health-care databases are more valuable.” Medical records, which often include
protected health information, sell for as much as 20 times the price of a stolen
credit card number. A survey performed by Ponemon found that a large number of
healthcare organizations don’t have sufficient technology to prevent or quickly
detect a breach.

The Department of Health and Human Services requires that when a breach involves
more than 500 patients, it must be reported. In 2014, health records on 88.4 million
people were breached due to theft or hacking. This year, large companies have already
fallen victim to hackers. Almost 80 million records were accessed.

Many of the risks raised above are reviewed as part of a Service Organization Control 2 (SOC 2) Examination. MedHOK has successfully completed the (SOC 2) Examination.

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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