During the 2017 audit season, BluePeak observed increased CMS increased scrutiny on plans and their First Tier, Downstream and Related Entities (FDRs), as well as repeated Common Conditions. With limited changes from the 2017 to 2018 program audit protocols planned by CMS, BluePeak’s observations from the 2017 audits may serve as a roadmap of issues for plans to remediate before the 2018 audit cycle begins.

CMS’ “Laser” Focus on FDRs in CPE and ODAG Program Audit Areas

BluePeak provided CMS program audit support for 8 clients this year and observed the agency’s “laser” focus on plans’ First Tier, Downstream and Related Entities (FDRs) in both the Organization Determinations, Appeals and Grievances (ODAG) and Compliance Program Effectiveness (CPE) program audit areas.

CMS reviewed more FDR samples during the ODAG program audit area than in previous years. In at least one audit, a majority of the ODAG Clinical Decision-Making samples were FDR cases. During the 2016 CMS program audits, some plans received a condition for insufficient FDR oversight in the ODAG program audit area. Previously, insufficient FDR oversight had been a condition exclusive to the CPE audit area. CMS’ annual Program Audit Enforcement Report, likely to be released in late spring 2018, will reveal whether the number of plans with an insufficient FDR oversight condition in the ODAG program audit area has increased as a result of increased FDR sampling in the same program audit area.

CMS potentially increased the number of FDR tracers selected for review during the CPE audits, by clarifying that one-third (2 of the 6) CPE tracers would be chosen from the First Tier Entity Monitoring & Auditing (FTEAM) universe during the spring Medicare Advantage and Prescription Drug Plan Audit & Enforcement Conference.

CMS Continues to Find Common Conditions

Formulary Administration
Prior authorizations continued to be a heavy focus for CMS during the Formulary Administration (FA) audits. Inappropriate prior authorizations have been an FA Common Finding for the last 7 years and were identified in this year’s program audits. Improper prior authorizations were also identified as findings during the Transition Monitoring and Program Analysis (TMPA) audits.

CMS also identified instances where the prior authorization inappropriately restricted the beneficiary to a day supply, which was less than the plan benefit, resulting in a condition. Plans failing to properly administer their CMS-approved formulary by applying unapproved prior authorization edits has been an FA Common Finding in 4 of the last 7 years.

Coverage Determinations, Appeals and Grievances

For the Coverage Determinations, Appeals and Grievances (CDAG) program audit area, CMS honed in on two areas: 1) Classification of cases as standard or exception cases to ensure they are processed in the appropriate timeframes, and 2) Misclassification of coverage determination or redetermination requests as grievances and/or customer service inquiries. Misclassification of coverage determination or redetermination requests as grievances and/or customer service inquiries was a condition in the majority of CMS program audits that BluePeak supported and has been a Common Finding in 6 of the last 7 years.

Organization Determinations, Appeals and Grievances

CMS appeared to focus more on ODAG claims specific to emergency services and correct claim adjudication. Denial letters that did not include adequate rationales or were written in a manner not easily understandable to members continued to be an ongoing challenge for plans and has been a Common Condition for the past 6 years.

Plans’ Member Service areas are still driving initial and repeat conditions due to the inability to distinguish an inquiry versus grievance and/or organization determination or reconsideration. CMS also found incomplete documentation in plans’ Member Service’s call log notes. Where documentation is insufficient, the call itself is requested and listened to, which opens the plan up to more scrutiny.

Let BluePeak Help You Prepare for 2018 CMS Program Audits Now

2018 will mark the start of a new CMS program audit cycle, and ANY plans can be audited. Are you ready? Since 2013, BluePeak has conducted over 120 mock audit and audit support projects. BluePeak can assist you with preparation of universes, training of staff to present during the CMS audits and provide subject matter expertise in each of the CMS program audit areas. We employ seasoned plan, PBM and former CMS auditors and conduct our mock audit just as CMS will perform the audit. The mock audit report will contain information that will allow you to understand exactly where the issues lie and will give you actionable tasks that will allow you to remediate BEFORE CMS identifies the issues.