On June 16, CMS hosted the “2015 Medicare Advantage and Prescription Drug Plan Audit and Enforcement Conference & Webcast.” The purpose was to provide MA and Part D sponsors with insight into how plans can best prepare for a program audit. Visante’s experts were in attendance and identified the following key takeaways for plans.

Revised audit protocols are coming. Universe preparation is a critical step in the audit process.  Plans must be able to produce complete and accurate universes or they risk facing the new “three strike rule” for universe submission. The 2015 audit protocols introduced new record layouts posing many challenges for plans in preparing universes.  Based on plan and industry feedback, by late June CMS will provide an updated protocol containing clarification to the descriptions and record layouts. It is likely plans will need to re-program their universe queries – again!

Compliance Program Effectiveness (CPE) tracers unveiled. Of the five tracer samples chosen for audit, CMS indicated two will come from the submitted FDR universes, one from the internal auditing and monitoring universe, another will be based on a compliance action, and the last will be from the “Common Conditions, Improvement Strategies & Best Practices” memo issued August 27, 2014. CMS also provided an example of the power point template required to be populated for each tracer sample selected.

New pilot protocols expand the scope of program audits. Two new pilots will be introduced in late summer/early fall. The Provider Network Adequacy (PNA) protocol will evaluate the Provider/Facility Networks and Provider Directory of MA organization, while the Medication Therapy Management (MTM) protocol will evaluate a sponsors performance related to MTM enrollment, Comprehensive Medication Reviews and Targeted Medication Reviews. Both programs will utilize the same scoring methodology as existing program areas, but the scores during the pilot year will not count toward the final audit score.

It’s time to take off the blinders. CMS states that many plans still seem “caught by surprise” concerning what’s expected in an audit and that many are “unaware of their level of compliance in key areas.” Plans should take full advantage of the information available to them, particularly the audit protocols and “Common Conditions & Best Practices” memos, which was mentioned repeatedly throughout the conference. Two plans shared some “lessons learned” from their audit experience in 2014. Both emphasized the importance of audit preparation and the value of an external mock audit, especially prior to a CMS performance or validation audit.

Audits are the primary driver of enforcement actions. Since 2014, 38 of 42 civil monetary penalties (CMPs) levied and 4 of the 6 sanctions imposed were due to violations found during program or validation audits. Organization Determinations, Coverage Determinations, Appeals, Grievances and Formulary Administration continue to be audit areas with the most violations. These and other violations contributed to more than $8 million in CMPs from 2014 to the present!

Independent auditors are required for validation audits. There is a CPE requirement to have an annual independent audit of the Compliance department. Starting in 2016, plans will also need to hire independent auditors to conduct validation audits. The independent auditor will develop an audit work plan, evaluate the sponsor’s performance, and provide a final written audit report outlining the findings to CMS.


Not sure where to begin?

An external mock audit is a great place to start as it provides an independent evaluation of a plan’s audit performance, critical feedback on universe preparation and sample reviews, and practical audit experience for staff. As we approach the second half of the 2015 audit season, there is no better time than the present to conduct an external mock audit to assess your plan’s compliance in key audit areas. If you are interested in learning more about these changes or would like to discuss setting up a mock audit or audit-readiness strategy, our team of experts is available to speak with you. Contact us at solutions@visanteinc.com to start that conversation.

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