CMS Annual Report Shows Audit Scores and CMPs Decreased, Common Conditions Repeated in 2017

By June 7, 2018Audits, CMPs, CMS, CPE

From 2016-2017, audit scores were lower in all areas, except Compliance Program Effectiveness (CPE); Civil Money Penalties (CMPs) were significantly reduced; and most Common Conditions were repeated, according to the 2017 Part C and Part D Program Audit and Enforcement Report the Centers for Medicare and Medicaid Services (CMS) released May 8.

Audit Scores

Average overall audit scores decreased from 1.22 to 1.10, with Special Needs Plan-Model of Care (SNP-MOC) having the largest average audit area score improvement by more than 50 percent. CPE was the only audit area in which the average audit score increased, from .36 to .59, from 2016-2017. During the same period, the number of CPE audit elements decreased from 7 to 3. Because the audit score is calculated by dividing the number of conditions by the number of audit elements, the decrease in audit elements may have impacted the average CPE audit score.

The average number of conditions cited per audit has decreased by more than two-thirds over the course of almost two audit cycles. In 2012, the average number of conditions cited per audit was 38, compared to just over 12 in 2017.

2017 was the first year that CMS saw a direct trend in the relationship between audit scores and Star Ratings. Plans with the highest Star Ratings (i.e., greater than 4.5) performed better than those with average or low Star Ratings.

CMPs

Nearly half, 47 percent or 17, of the 36 Plans that were audited in 2017 had some type of enforcement activity. CMS issued $2.9 million in CMPs, with an average CMP of $120,899.  The largest CMP for 2017 directly related to a program audit was nearly $1.37 million, and the smallest was for $23,800.  These amounts are significantly reduced from 2016, due to a smaller number of violations per CMP and smaller enrollment size per sponsor. There were no sanctions issued in 2017 related to program audit findings.

The nature and scope of the violation(s) determined the total CMP a sponsor received.  A standard CMP amount applies for each deficiency cited in a CMP notice, based on either a per enrollee or a per-determination basis.  A sponsor’s CMP is increased if aggravating factors, such as the following, apply to certain deficiencies:

  • Drugs that are used to treat acute conditions that require immediate treatment
  • Expedited cases
  • Financial impact over $100
  • A prevalence of failed audit samples
  • A Top-5 Common Condition
  • A history of prior offense

Common Conditions

Unlike previous years’ Program Audit and Enforcement Reports, CMS did not include Citation Frequency in the 2017 report. BluePeak has included that information for Common Conditions that repeated in 2017, as well as new Common Conditions found from 2016 to 2017, in Tables 1-5. Four of the 5 Most Common Immediate Corrective Action Required (ICAR) Conditions remain the same from 2015-2017 (Table 6).

CPE Most Common Conditions:

Table 1

Condition Language Citation Frequency 2011-Present Percent of 2017 Audits Affected
Sponsor did not review Office of Inspector General (OIG) and General Services Administration (GSA) exclusion lists for any new employee, temporary employee, volunteer, consultant, or governing body member prior to hiring or contracting and monthly thereafter. 5 out of 7 31%
Sponsor did not establish, implement, and provide timely and effective compliance and fraud, waste and abuse (FWA) training and education for its employees, including the CEO, senior administrators and managers and for its governing body members involved in the administration or delivery of Parts C and D benefits. 4 out of 7 26%
Sponsor did not provide evidence that it audits the effectiveness of the compliance program at least annually and that the results are shared with the governing body. 5 out of 7 18%
Sponsor did not have an effective system to monitor first tier, downstream and related entities’ (FDRs’) compliance with Medicare program requirements. NEW 10%
Sponsor did not establish and implement a formal risk assessment and an effective system for routine monitoring and auditing of identified compliance risks. NEW 10%

FA Most Common Conditions:

Table 2

Condition Language Citation Frequency 2011-Present Percent of 2017 Audits Affected
Sponsor failed to properly administer its CMS-approved formulary by applying unapproved utilization management practices. 7 out of 8 67%
Sponsor improperly effectuated prior authorizations or exception requests. 8 out of 8 23%
Sponsor failed to properly administer the CMS transition policy. 8 out of 8 18%
Sponsor failed to properly administer its CMS-approved formulary by applying unapproved quantity limits. 8 out of 8 18%
Sponsor failed to properly post its CMS-approved formulary on its website. NEW 8%

CDAG Most Common Conditions:

Table 3

Condition Language Citation Frequency 2011-Present Percent of 2017 Audits Affected
Sponsor misclassified coverage determination or redetermination requests as grievances and/or customer service inquiries. 7 out of 8 64%
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. 8 out of 8 23%
Sponsor 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. 6 out of 8 18%
Sponsor failed to identify and process enrollee complaints and disputes as grievances (This condition has not appeared previously in a Common Conditions list). NEW 28%
Sponsor did not take appropriate actions, including full investigations, and/or appropriately addressing all issues raised by grievance. NEW 21%

ODAG Most Common Conditions: 

Table 4

Condition Language Citation Frequency 2011-Present Percent of 2017 Audits Affected
Sponsor did not take appropriate actions, including full investigations, and/or appropriately addressing all issues raised in grievances. 4 out of 7 48%
Sponsor 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. 6 out of 7 45%
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. 7 out of 7 42%
Sponsor failed to correctly determine whether the issues in enrollees’ complaints met the definition of inquiries, grievances, organization determinations, appeals, or a combination of the preceding and, therefore did not resolve the complaints or disputes through the appropriate procedures. NEW  36%
Sponsor failed to reimburse enrollees within 60 days of making favorable reimbursement reconsiderations (This condition has not appeared previously in a Common Conditions list). NEW 30%

SNP-MOC Most Common Conditions:

Table 5

Condition Language Citation Frequency
2011-Present
Percent of 2017 Audits Affected
Sponsor did not show documentation of interdisciplinary care team (ICT) coordination of member care. 2 out of 5 36%
Sponsor did not administer comprehensive annual reassessments within 12 months of the last annual health risk assessments (HRAs). 4 out of 5 36%
Sponsor did not review and/or revise individualized care plans (ICPs) consistent with its model of care (MOC) or as warranted by changes in the health status or care transitions of beneficiaries. 3 out of 5 29%
Sponsor did not develop Individualized Care Plans (ICP) for enrollees. NEW 36%
Sponsor did not provide evidence that it conducted initial Health Risk Assessments (HRAs) of enrollees. NEW 14%

Most Common CDAG and ODAG ICAR Conditions from 2017 Audits

4 out of 5 are Same as from 2015 and 2016 Audits

Table 7

Number of ICAR Citations Condition Language  Program Area
22 Sponsor misclassified coverage determination or redetermination requests as grievances and/or customer service inquiries. CDAG
5 Sponsor 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
4 Sponsor 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
4 Sponsor did not demonstrate sufficient outreach to providers or to enrollees to obtain additional information necessary to make appropriate clinical decisions. ODAG
12 NEW: Sponsor failed to properly administer its CMS-approved formulary by applying unapproved utilization management practices. FA

2018 CMS Program Audit Revisions

CMS streamlined the audit process in 2017 and kept the following revisions for 2018:

  • An audit checklist helps plans to account for all audit deliverables.
  • All data is now uploaded into Health Plan Management System (HPMS); CMS no longer using Secure File Transfer Protocols (SFTPs).
  • CDAG and ODAG universe periods have been scaled based on the size of the plan.
  • CPE protocol changes include elimination of employee interviews, review by CMS of all tracers onsite, and an additional third week for Medicare-Medicaid Plans (MMPs) and to give plans more time to develop CPE tracer documentation.
  • CMS added more time for plans to submit audit documentation, root cause and impact analysis.

The 2018 CMS program audit season started in late March. CMS will be rolling out new protocols and the start of their third audit cycle in 2019, so any plans that have not yet been audited during this second audit cycle (2015-2018) are at an increased risk to receive an audit notice in 2018.

BluePeak Can Help

CMS encourages plans to perform mock audits, including generating universes from data from internal operations and delegated entities. Mock audits not only help plans prepare for an actual CMS audit, but also helps operations by identifying areas that are problematic or otherwise non-compliant with CMS regulations. Since 2013, BluePeak has conducted over 150 mock audits and CMS audit support projects for more than 120 plans. Contact us today at (469) 319-1228 or info@bluepeak.com for a free consultation.