Annual Testing More Important than Ever

By September 30, 2020CMS, FA

The most effective way for any Plan to mitigate any compliance risks for the new plan year is to strategize a process to validate the accuracy of the formulary and benefit areas prior to the start of the new plan year.  CMS continues to emphasize to Plans the importance of developing and maintaining a comprehensive testing plan to proactively validate the accuracy of the formulary and benefits prior to the start of the new plan year.  With each year, the testing strategy needs to be thoroughly reviewed and updated based on newly released guidance and also ensuring there are no reoccurrences of any previously identified issues.  With most of the world working remotely these days, Plans have struggled collaborating with all business units to develop an effective annual testing strategy.

The areas with the most importance typically include the formulary administration and benefit administration areas, as CMS will actively target both areas as part of a Program Audit and/or a Financial audit.

Benefit Administration

  • Within the benefit administration area, claims should be tested to ensure the Plan’s cost sharing structure is consistent with the CMS approved bid. For any tiered benefits, Plans should validate each benefit stage, each day supply level, and each pharmacy type.  Plans should validate all administrative edits, like refill-too-soon and day supply restrictions, are working as expected.  Lastly, Plans should ensure Part D payment rules, like straddle claims and daily cost sharing, are being applied based on CMS rules and regulations.
  • For Part C, test plans should be developed and executed to ensure that any new benefit packages and modifications to existing benefit packages have been properly configured. End-to-end claim review of specific benefit scenarios should be completed to assess accurate application of cost share, appropriate authorization rules and denial scenarios.
  • Testing scenarios should include a full processing cycle review, from front end input to outbound notification. It is important for Plans to conduct regression testing to ensure that configuration changes have not negatively impacted existing processes.  Plans should fully evaluate the outcomes of processing by reviewing notifications like denial notices, remittances and explanation of benefits for accuracy.
  • Lastly, new benefit package additions, product lines, configuration changes and corresponding updates may impact reporting that is vitally important to the Plan in monitoring inventories and timeliness. These reports, including audit universe procedures and any potentially impacted external reports, should be closely reviewed to ensure all expected data is included and is accurate.

After go-live, Plans must actively monitor both rejected and paid claims to ensure claims are adjudicating appropriately.  With all the challenges a new year brings, Plans often find it difficult to identify individuals with the bandwidth and/or knowledge to address all the complex layers of monitoring and validation necessary to ensure claims are processing appropriately.  BluePeak has collaborated with several Plans and PBMs to strategize and implement a successful blueprint to ensure formulary and benefits are thoroughly tested.  Additionally, BluePeak can support daily monitoring and oversight of claim processing to ensure the Plan’s existing resources have the bandwidth to address other challenges that may arise after the start of a new plan year.

Formulary Administration

  • Within the formulary area, Plans should validate paid claims are processing at the appropriate formulary tier and any products with a formulary restriction are adhering to all formulary and/or adjudication rules. Plans should test a wide variety of formulary products to increase the credibility of the testing.  Plans should also ensure new and continuing member transition logic is thoroughly tested to ensure claims are processing according to the Plan’s transition policy and beneficiaries will not be negatively impacted at the start of the new plan year.