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CMS Expands Penalties in 2017: One-Third Financial Audit Findings Will Cost You More This Year

By September 15, 2017February 18th, 2018CMPs, CMS, Medicare, News, Uncategorized

The Centers for Medicare & Medicaid Services (CMS) is now considering deficiencies found from one-third financial audits for potential enforcement actions, including Civil Money Penalties (CMPs), according to a memo published in late June and the 2017 Call Letter.

CMS is required to audit the financial records of at least one-third of Medicare Advantage (MA) and Prescription Drug Plans (PDPs) each year. Financial records, internal controls over payment disbursements, Medicare utilization and costs, and the computation of Parts C and D bids are within the scope of the one-third financial audit.

Applying their CMP methodology, CMS will take enforcement actions on deficiencies found in one-third financial audits that adversely or have the substantial likelihood of adversely affecting enrollees, such as those that impact enrollees’ out-of-pocket cost (OOPC) and cost sharing:

  • Failure to transfer total OOPC balances to the new plan of record (Part D true out of pocket [TrOOP]);
  • Incorrectly calculated enrollee cost sharing for claims in accordance with the plan benefit design or not processing them appropriately according to the enrollee’s position in the benefit;
  • Overstated prescription drug costs due to inappropriately charging sales tax;
  • Incorrectly calculated and overbilled Part D Late Enrollment Penalties (LEP);
  • Incorrectly tracked enrollee Part D Low-Income Cost-Sharing Subsidy (LICS) levels; and
  • Charged Part C copayments in excess of the Plan’s summary of benefits.

CMS will impose CMPs for one-third financial audit deficiencies on a per enrollee basis. If CMS does not have enrollee-specific data, then they will calculate the CMP for the deficiency on a per determination basis.

BluePeak’s veteran consultants can conduct a mock one-third financial audit to prepare your team and/or provide support during the actual audit.

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