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Common Findings by Program Area

By March 7, 2021March 23rd, 2021Audits, Claims

Common Findings by Program Area

In addition to ensuring compliance with COVID-19-driven changes, it is equally important to keep in mind lessons learned from prior audits when preparing for the 2021 audit season.  Be sure to revisit some of the most common audit findings by program area and take action now to avoid these findings in your 2021 audit results.

Formulary Administration Common Findings

Common Finding: Sponsor failed to properly administer the CMS transition policy.

Avoiding the Finding:

  • Have the enrollment department identify members that would qualify as a new member at the start of the year.
  • Proactively identify continuing members with a history of a medication with a negative formulary change.
  • For both new and continuing members, pull a sample of claims that rejected for a formulary reason and that were within a one-month supply within the first week of the plan year.  Review each sample and validate if the denial of the medication was appropriate.

Common Finding: Sponsor improperly effectuated a prior authorization or exception request

Avoiding the Finding:

  • Identify claims that rejected for a formulary reason with an active prior authorization.
  • If the prior authorization should have overridden the denial reason, update and test the prior authorization and perform outreach to the pharmacy to dispense the medication.
  • Consider developing an action plan to mitigate the risk of the issue reoccurring in the future.

Common Finding: Sponsor failed to properly administer its CMS-approved formulary by applying unapproved utilization management practices.

Avoiding the Finding:

  • Monitor all claims that rejected for a protected class medication with a Prior Authorization or Step Therapy for new starts (Type 2) formulary restriction.
  • Validate the member doesn’t have a prior paid claim within the lookback policy.
  • If the member is new, validate the denial was at least 108 days after the member started with the sponsor.

Common Finding: Sponsor failed to properly administer its CMS-approved formulary by rejecting formulary medications as non- formulary

Avoiding the Finding:

  • With more sponsors customizing their formularies, sponsors need to enhance their annual testing and daily claim monitoring to validate claim denials are consistent with their custom formulary.
  • Sponsors should also proactively validate monthly formulary updates are captured within the claim adjudication system and validate the CMS formulary is consistent with the adjudication formulary.

Coverage Determination, Appeals and Grievances Common Findings

Common Finding:  Sponsor made inappropriate denials when processing coverage determinations.

Avoiding the Finding:

  • Ensure the coverage determination team is capturing provided information (diagnosis, lab values, trial/failure of previous therapies), reviewing claim history as well as information provided in previous coverage determination requests while completing their case review against compendia and approved clinical criteria.
  • Review IRE data to ensure that any overturned cases did not have enough clinical data at the coverage determination or redetermination level to approve the case.
  • Perform a weekly or monthly sample of denied cases to ensure all submitted clinical information was considered in the decision. Case review should target a variety of utilization management, safety related and exception cases.
  • Ensure that the Medical Director is reviewing all redetermination cases where the initial coverage determination was denied for lack of medical necessity.

Common Finding:  Sponsor improperly effectuated prior authorizations or exception requests.

Avoiding the Finding:

  • Ensure all staff are properly trained to enter the prior authorizations into the prior authorization system and/or the claims adjudication system.
  • Ensure the authorizations are entered at the proper drug level to allow multiple strengths to adjudicate when appropriate.
  • Monitor the effectuation through dates for exceptions to ensure they are entered through the end of the plan year.
  • Perform test claims when entering the authorization to ensure it is payable at the point-of-sale for the member.
  • Perform a weekly or monthly sample review of effectuated PAs looking for effectuation at the proper drug level and the proper effectuation length of time, targeting exceptions and drugs with limited duration criteria.

Common Finding:  Sponsor misclassified coverage determination or redetermination requests as grievances and/or customer service inquiries.

Avoiding the Finding:

  • Ensure that members are properly offered the option to initiate a coverage determination or redetermination when applicable, and the offer is documented in the case notes.
  • Ensure that all grievances, including single call resolution grievances, are properly documented and counted as grievances in all required reporting.
  • Call center management should periodically live monitor or retrospectively review a target sample of calls, looking for missed grievances based on key words in the notes or an overall total number of calls made by one member.
  • Perform daily, weekly and monthly oversight of your call center logs to ensure that all calls that qualify as grievances are identified.

Common Finding: Denial letters did not include adequate rationales, contained incorrect/incomplete information specific to denials, or were written in a manner not easily understandable to members.

Avoiding the Finding:

  • Ensure all associates are properly trained on how to populate the denial letters with the correct template or detailed denial information specific to the enrollees case.
  • Review denial letter templates on a regular basis to ensure they contain the minimum required information found on the CMS denial templates. This should include all language versions of the templates.
  • Review alternate non-English language letters to ensure the entire letter is translated into the applicable language, including the description of denial.
  • Perform daily, weekly or monthly oversight of the denial letter content to ensure all required information and criteria is included on the letters for the member to gain an approval.  Case review should target a variety of utilization management, safety related and exception cases.

Organization Determinations, Appeals and Grievances Common Findings

Common Finding: Sponsor did not include in its denial letters adequate rationales, correct complete information specific to denials, or language easily understandable to members.

Avoiding the Finding:

  • Ensure all associates are properly trained on how to populate the denial letters with the correct template or detailed denial information specific to the members case.
  • Review denial letter templates on a regular basis to ensure they contain the minimum required information found on the CMS denial templates. This should include all language versions of the templates.
  • Review alternate non-English language letters to ensure the entire letter is translated into the applicable language, including the description of denial.
  • Perform daily, weekly or monthly oversight of the denial letter content to ensure all required information and criteria is included on the letters for the member to gain an approval.  Case review should target a variety of utilization management, safety related and exception cases.

Common Finding: Sponsor failed to correctly determine whether the issues in members’ complaints met the definition of inquiries, grievances, organization determinations, appeals, or a combination of the preceding and, therefore did not resolve the complaints or disputes through the appropriate procedures. Particularly when multiple issues are presented by the member.

Avoiding the Finding:

  • Ensure that members are properly offered the option to initiate an organization determination or redetermination when applicable, and the offer is documented in the case notes.
  • Ensure that all grievances, including single call resolution grievances, are properly documented and counted as grievances in all required reporting.
  • Call center management should periodically live monitor or retrospectively review a targeted sample of calls, looking for missed grievances based on key words in the notes or an overall total number of calls made by one member.
  • Perform daily, weekly and monthly oversight of your call center logs to ensure that all calls that qualify as grievances are identified.

Common Finding:

Sponsor failed to hold members harmless for items or services provided by contract providers or providers referred by contract providers. (Inappropriate denial of claims from plan directed care)

Avoiding the Finding:

  • Review non-contracted provider claims for an otherwise Plan covered service to determine if a referring provider is present. If yes, validate plan participation status. If the referring provider is contracted with the Plan, process and pay the claim in accordance with the in-network benefit.

Common Finding: Sponsor did not demonstrate sufficient outreach to providers or to members to obtain additional information necessary to make appropriate clinical decisions.

Avoiding the Finding:

  • Ensure all employees are trained that when a claim is received and additional information is needed to process the claim, at least one outreach attempt is made.

Common Finding:  Sponsor did not render appropriate denials of pre-service organization determinations.

Denials that result from application of the wrong criteria Denials that result from misapplication of the right criteria

Out-of-network request is denied with rationale that there is in-network availability

Avoiding the Finding:

  • When an NCD and/or LCD exists, ensure the right criteria is used for the review. Ensure criteria is interpreted and applied correctly.
  • When denying an out-of-network request based upon the rationale that there is in-network availability, ensure the in-network provider can service the member as expeditiously as the member’s unique health needs require.

Special Needs Plans Common Findings

Common Finding: Sponsor did not complete individualized care plans (ICPs) according to its model of care (MOC).

Avoiding the finding:

  • Ensure ALL Members have an individualized care plan (ICP), including members the Plan is unable to reach and members who refuse to complete the HRA.

Common Finding: Individualized care plans (ICPs) do not address issues identified in health risk assessments (HRAs)

Avoiding the Finding:

  • Review care plans to ensure they addresses all issues identified in the HRA and goals are specific to the member, in the SMART format and measurable

Common Finding: Sponsor did not review and/or revise individualized care plans (ICPs) consistent with its model of care (MOC) or as warranted by changes in the health status or care transitions of beneficiaries

Avoiding the Finding:

  • Ensure the ICP is reviewed and updated with each transition of care

Common Finding: Sponsor did not coordinate communications among plan personnel, providers, and beneficiaries

Avoiding the Finding:

  • Ensure there is documentation to show that an interdisciplinary team is involved in member’s care plan development and updates.
  • Ensure coordination of that care is evidenced in the case notes

Common Finding: Sponsor did not use professional, knowledgeable and credentialed personnel as defined in the model of care (MOC) to review individualized care plans (ICPs).

Avoiding the Finding:

  • Ensure professional clinical staff (RN, NP, SW) are developing the ICP in accordance with Scope of Practice and Model of Care.

Compliance Program Effectiveness Common Findings

Common Finding: Sponsor failed to perform appropriate oversight of first-tier entities

Avoiding the Finding: Ensure the Plan rates the risk of each first-tier entity as part of its annual Risk Assessment.  Monitor key metrics of each first-tier entity and minimally audit the highest risk first-tier entities.

Common Finding: Sponsors failed to perform an annual review of the effectiveness of its compliance program and/or failed to share the results with the governing body

Avoiding the Finding:

  • Every year, include in the annual Audit and Monitoring Workplan a compliance program effectiveness audit. This audit must be performed by an independent entity, either by a team outside of Compliance or by an external entity. These audit results must be shared with your Compliance Committee and Governing Body, to ensure they understand the risks in the compliance program as they exercise oversight.

Common Finding: Sponsors failed to develop and undertake timely corrective actions to address issues of non-compliance

Avoiding the Finding:

  • When monitoring results detect non-compliance, take timely action to correct the issue and prevent it from reoccurring. While CMS does not define “timely action”, it is a best practice to implement corrective actions within 90 days, where possible. Request formal Corrective Action Plans (CAP) in accordance with your CAP policy.

Common Finding: Sponsors failed to distribute the Code of Conduct and compliance policies to employees and first-tier entities within 90 days of hire or contracting.

Avoiding the Finding:

  • Compliance may need to coordinate with Human Resources and/or Legal so it is timely aware when new employees and first-tier entities are being hired or contracted. Document the process used to distribute the Code of Conduct and compliance policies (e.g., via email, posting on an Intranet site (for employees) or portal (for first-tier entities), etc.).

Common Finding: Sponsors failed to ensure employees (including temporary employees and volunteers) and Board members complete Compliance and FWA training within 90 days of hire or appointment and/or failed to maintain records of timely training completion

Avoiding the Finding:

  • As noted above, coordination may be needed with Human Resources and/or Legal to ensure timely awareness of new employees and Board members. Dedicate a Compliance team member to be responsible for tracking that training is timely deployed, sending reminders and escalating to appropriate management as needed as the completion due date approaches, and tracking documentation of training completion.