Perfect Storm

By November 3, 2020CMS

The last quarter of 2020 will likely be the most significant and the most challenging testing season plans have experienced.  Unfortunately, there may be a perfect storm brewing that is causing a lot of concern within the Part D industry.  There are two big components that may lead to increased CMS compliance action for next year.

Increased CMS Activity

In CMS’ last audit cycle, they conducted an average of 34 program audits each year.  For the first two years of this four-year audit cycle, CMS has conducted less than 10 program audits each year.  If CMS plans to administer the same volume of program audits in this audit cycle, they would need to administer 60 audits in the next two years.  Although it’s unlikely they’ll hit this number, many experts agree it’s a real possibility that CMS will significantly increase the volume of program audits starting next year.  As a result, plans who were not audited in the last two years, have a greater chance of being selected for a program audit next year or 2021.

Lack of Resources

Many plans and PBMs are still working remotely due to COVID-19 restrictions.  Traditionally, plans and PBMs closely collaborate in-person on testing strategy and results which will now need to happen via webinar or phone.  Although most plans will still conduct some form of year-end testing, it’s likely to be even more challenging than in prior plan years.  As a result, there is a higher likelihood of issues occurring in 2021 regarding benefit administration, formulary administration, and transition of care.

Each year, plans must balance year-end testing while continuing to perform claims monitoring and oversight.  Plans often have challenges determining the best approach and the dedicated resources to effectively manage both areas.  However, a failure to effectively manage both of these areas will increase compliance risks and the potential to negatively impact beneficiaries.  If audited, any issues identified may result in further CMS corrective action including a Civil Monetary Penalty, suspension in marketing, or termination of contract.  BluePeak Advisors strongly recommends for plans to dedicate resources to validate the accuracy of their formularies, benefits, and transition of care logic.  Additionally, plans should also dedicate resources to performing a daily claim monitoring and oversight process to identify any setup errors.

To assist plans during this time, BluePeak Advisors has a trained staff of seasoned Medicare analysts to perform year-end testing and to offer continued monitoring and oversight.  We collaborate with our internal auditors on CMS audit trends and ensure our testing and monitoring approach captures any high-risk areas t reduce compliance risk during a CMS program audit.  Allow BluePeak Advisors to be your calm within this storm and don’t hesitate to contact us with any questions.