The Centers for Medicare & Medicaid Services (CMS) recently released the 2014 Audit Process and Protocols.  This article will focus on the changes to the Coverage Determination and Appeals (CDA) portion of the CMS audit. 

The CDA portion of the audit consists of two parts: Effectuation Timeliness (ET) and Appropriateness of Clinical Decision Making (CDM).  While the changes may appear minor, the resultant effect of the changes can be quite significant.  Part D Sponsors and delegated PBMs (“plans”) need to be prepared for these changes and their potential impact on audit results.

The audit process can be broken down into four key components:

Universe Collection:  As in years past, CMS will request a universe template from the plan, one each for ET (Attachment II-A1) and CDM (Attachment II-A2).  At a minimum, the review period will be the three-month period preceding the audit. Plans will have 10 business days to provide the universes to CMS.  Most data elements remain the same from previous years, but both universes have additions:



2013 Data Elements

2014 Data Elements

Effectuation   Timeliness



Clinical   Decision Making




Timeliness Test:  This is one of the most significant changes for 2014.  After receipt of the universe and prior to the live audit review, CMS will conduct a “Timeliness Test” on the data received from the plan.  CMS will perform an analysis on the timeliness of the Decision, Notification, Effectuation (ET only), and IRE Autoforward (CDM only) timeframes of all cases within the universe.  Each metric is further subdivided based upon type (e.g. Coverage Determination) and status (e.g. Expedited).  The percentage of cases timely for each metric will be recorded and scored against thresholds set by CMS:

  • First Threshold Sponsors above this threshold will generally not be cited a condition
  • Second Threshold – Sponsors falling below this threshold will receive a “corrective action required” or CAR
  • Third Threshold Sponsors falling below this threshold will be cited an “immediate CAR” or ICAR .


Selection of Case Samples and Obtaining Evidence:  CMS will continue to select 30 samples for CDM, but only 10 samples for ET.  Expectations for providing evidence and documentation are similar to previous years. 

Applying Compliance Standards:  On both universes, CMS will apply the following test to all sample cases, “Are the dates observed during live audit consistent with the timeliness fields in the universe submission?”  A favorable response to this question is required to “pass” each sample case, otherwise the case fails and a condition (finding) is documented.  For the ET portion, this will be the only compliance standard applied, whereas the CDM portion will contain five additional compliance standards that require favorable responses in order to “pass.”  In addition, CMS notes “The integrity of the universe will be questioned if the timeliness metrics on six or more cases observed during the live audit do not match the metrics provided in the universe.  If this occurs, CMS will request a new universe to test timeliness.  Sponsors providing misleading information will be referred to the Division of Compliance and Enforcement for a civil monetary penalty.”

We, at Visante, perceive the following areas of risk for plan sponsors and their delegated entities:

1. Coordination of universe data from multiple systems for timely submission.    Compiling all data across multiple systems, unifying the format, and validating the content within 10 business days for plans can be extremely challenging.

2. Data integrity is now more essential than ever.  CMS will be validating the integrity of the universe data as part of the audit and civil monetary penalties are on the table.  This approach presumably allows CMS to significantly and confidently widen their scope, without incrementally increasing the demand on time and resources. 

3. Increased exposure for timeliness.  One of the largest concerns is the new timeliness test.  By applying the test to the entire universe, plans will have expanded exposure and increased risk of a CAR or ICAR.

4. CMS has not disclosed the set values of the thresholds.  At this time, it is unknown if each threshold will be based on a simple percentage, or alternatively, creation of a formula to incorporate differences in population size amongst plans.

With the stakes higher than ever and the audit season approaching quickly, it is imperative for plans to be prepared.  Enlisting an outside expert to support the creation of accurate universes and assess overall audit readiness is a good place to start.


Share this on Twitter: