In case you missed it, here’s our overview and insights of the CMS 2017 Medicare Advantage Prescription Drug Plan and Audit Enforcement Spring Conference, presented on May 10-11.

Auto-Forwarding Coverage Determination Cases to the Independent Review Entity (IRE AF) – Policy, Monitoring and Compliance Panel

Part D coverage determination and appeals timeliness and auto-forwards were hot topics at this year’s conference.  Using data from the first quarter of 2017, CMS will begin issuing civil monetary penalties (CMPs) on a quarterly basis for plans with a rate of 15 or more auto-forwards per 10,000 beneficiaries. Plans with either an enrollment size of under 800, fewer than 10 IRE cases/appeals per quarter, or fewer than 10 auto-forward cases will be excluded from the analysis. CMPs will be levied on a per enrollee basis, up to $37,396 per enrollee adversely affected. A plan that meets the criteria and receives a CMP for the first time will have one consecutive quarter to improve performance before being considered for another CMP. After that subsequent quarter, if the plan meets the criteria again, they will be subject to receiving another CMP. Plans exceeding the threshold may also be subject to additional compliance actions by CMS.

2017 Audit Protocol Updates – Compliance Protocol Changes

There are significant changes in the Compliance Program Effectiveness (CPE) audit protocols for 2017. One of the changes discussed was the use of three audit elements (Prevention, Detection, and Correction) instead of the traditional seven elements. As the seven elements map directly to the three new audit elements, it is unknown as to whether there will be any impact or a name change only. It was asked during the conference, if this meant that Chapter 9/21 Compliance Program Guidelines would be updated to reflect the new three elements. While the new three elements are only to be used in the audits, CMS did indicate a new chapter is currently being worked on.

Another change to the 2017 CPE Audits is the addition of three questionnaires to complete (Compliance Officer, FDR Oversight and SIU/FWA), as well as one less universe for submission. There will no longer be a template for the Tracers, however, more time will be given for completion. The number of Tracers will remain at six, however, they will be distributed differently with two Tracers for the FWAM universe. Also, the employee file sample selection will increase from five individuals to twenty, including Board Members. The presentation materials provided included several pages of clarification to field definitions in the universes which will hopefully clear up many questions.

This year’s CPE audit will be much different than last year’s. Our recommendation is to review the 2017 Audit Protocols, the presentation from the CMS Spring Conference, and plan your strategy accordingly in case you are audited.

Medication Therapy Management (MTM) Panel / Sponsor Insight and Lessons Learned from an MTM Pilot Audit

The MTM session featured two speakers who shared their experiences from their respective plans having undergone a MTM audit.

Key takeaways with respect to audit preparedness and lessons learned include:

  • The critical importance of having the appropriate subject matter experts present during the audit, including interdepartmental plan and PBM/vendor representatives. Smooth navigation through the systems and screens is imperative.
  • Perform universe pulls on a regular basis – don’t wait for the audit notice.
  • Incorporate an adequate span of time for the claims look-back period to account for 90-days’ supply prescriptions in the drug history.
  • Identify members who did not qualify for the program and understand why or why not they may be at risk; ways to monitor more robustly and identify members at risk more comprehensively.
  • Evaluate data sources used for identifying chronic conditions; ensure eligible members are not being missed.
  • Plans utilizing the services of PBMs or other vendors for service delivery should evaluate and update processes to ensure any updated member contact information is transmitted to the vendor to help facilitate successful member outreach. Also, have a process in place to be notified for situations when the vendor is unable to reach the member so the plan can further follow-up and assist.

Civil Money Penalty (CMP) Methodology

The CMP methodology and calculations released by CMS late in 2016 are in effect for Plan Year 2017. The CMP amounts were adjusted for 2017 to account for inflation, and CMS expects to adjust these amounts annually. Published CMP amounts include up to $37,396 per determination, up to $37,396 per enrollee adversely affected (or likely to be adversely affected) and up to $14,959 for each week that a deficiency remains uncorrected.

In determining the amount of the penalty, CMS considers the nature of the conduct, the degree of culpability of the sponsoring organization, the harm which resulted (or could have resulted), the sponsoring organization’s financial condition, and the history of prior offenses. The CMP calculation includes Standard Penalty Amounts, Aggravating Factor Amounts, Per Enrollee or Per Determination Penalties, and Enrollment-Based Threshold/Maximum. Each of these includes multiple factors that contribute to the overall CMP amount.

CMS intends to continue to use this methodology into 2018. Any proposed changes will be posted for comment and resulting changes to the methodology or calculations would apply to CMPs in the following contract year.

If you would like help to assess the information provided by CMS as it relates to your business or help assessing your associated risk, please feel free to contact us at

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