CMS Not Seeing Improvement in Plans' Audit Performance, Despite Memorandums

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By Mindy Yochelson  

June 24 — Despite several Centers for Medicare & Medicaid Services memorandums describing best practices and other agency offerings aimed at improving the audit performance of Medicare Advantage and Part D prescription drug plans, the agency is “not seeing the fruit of that labor,” an official said June 24.

Jerry Mulcahy, director of the CMS's Medicare Parts C & D Oversight and Enforcement Group (MOEG), told an agency conference that plans are still “inappropriately denying” enrollees access to drugs and services.

“We're not seeing the results we had hoped,” Mulcahy told attendees at the Medicare Advantage & Prescription Drug Oversight & Enforcement conference and webcast. The conference was intended to provide insight into preparing for a CMS performance audit, best practices of high performing organizations and common audit findings.

Problems Continue

Mulcahy said that although the CMS has improved its process of informing plans about what they are doing wrong and showing them methods to achieve high performance, there are still problems and some sponsors have had to be terminated.

Overall, PDPs received better average audit scores than MA plans, Kathleen Flannery, deputy director of MOEG's Division of Analysis, Policy, and Strategy, said. Nonprofit groups had better scores on average than for-profits, she said

The CMS's audit policy has evolved from one that scored plans based on a pass/fail numeric threshold to one that considers not just the number of violations examined during an audit but their severity, she said.

Results of the 2013 audits will be posted on CMS's website this summer.

Results of 2013 Audits

Lorelei Piantedosi of CMS's Division of Analysis, Policy, and Strategy offered details on sponsors audited during 2013:

  •  89 percent issued denial letters to beneficiaries that either failed to include an adequate rationale or contained incorrect information;
  •  78 percent didn't demonstrate sufficient outreach to the prescriber or beneficiary to obtain additional information necessary to make an appropriate clinical decision;
  •  43 percent failed to properly administer the CMS transition policy for nonformulary medications; and
  •  39 percent failed to properly administer CMS-approved formularies by applying unapproved utilization management practices.
  • Unfortunately, she said, many of the issues in the findings had been included in the past three best practice/common findings memos.

    Best Practices

    In the meantime, best practices found during 2013 audits included:

  •  placing contact information for the fraud, waste and abuse hotline on the back of employee access badges;
  •  requiring customer service representatives to correctly and completely go through the call script before the user screen can advance to the next page;
  •  using drug utilization review alerts for pharmacists when a beneficiary has claims for four or more prescribers or four or more drugs from the same therapeutic class;
  •  supplying a health-care manager for some beneficiaries to assist with clarifying treatments or processes;
  •  recording all customer service representatives' calls to allow for comprehensive review; and
  •  automatically expediting reconsideration requests for skilled nursing facility admissions.
  • Piantedosi said that the fourth CMS memo on best practices will be out shortly.

    To contact the reporter on this story: Mindy Yochelson in Washington at

    To contact the editor responsible for this story: Ward Pimley at

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