The Centers for Medicare & Medicaid Services (CMS) Medicare Parts C and D Oversight and Enforcement Group this week released a report on 2024 Part C and Part D program audits, offering a snapshot of the current audit landscape. Here’s what CMS found.
The report, which CMS said is not intended to reflect overall performance or pervasive issues throughout the industry, provides a summary of 2024 program audits. The audits covered 494 contracts, 87.6 percent of the total Medicare Part C population, and 68.8 percent of the total Medicare Parts C and D population.
CMS said it hopes that MA organizations will use the report to improve their internal auditing, monitoring, and compliance activities.
Audit breakdown
The agency conducted 39 total program audits of 36 parent organizations. Nineteen of the audits were routine or full-scope program audits, and 20 were focused audits, which only reviewed certain program areas.
The routine audits covered 181 Medicare Advantage Prescription Drug Plan (MAPD) contracts (103 of the contracts offered special needs plans), 10 prescription drug plan-only contracts, one 1876 cost plan, 12 Medicare Medicaid plan contracts, and 14.9 million Medicare beneficiaries.
Focused audits involved an additional 290 Medicare Advantage and MAPD contracts and 24.3 million Part C beneficiaries.
Audit insight
General noncompliance issues identified during 2024 program audits included, but were not limited to:
Compliance issues were not tracked, addressed, and corrected. Internal routine monitoring processes didn’t detect untimely notifications to enrollees when a delegated entity misinterpreted regulatory requirements.
Coverage requests were misclassified or inappropriately dismissed, resulting in enrollee delays in accessing medications. Specifically, electronic prior authorization configuration logic processed redetermination (appeal) requests as initial requests when cases were submitted with different National Provider Identifiers; internal processes for correctly classifying coverage requests were insufficient and/or not followed; and valid requests for coverage were dismissed due to a misinterpretation of CMS guidance.
Decision notifications were incorrect or incomplete, which prevented members and providers from appropriately advocating for services. Specifically, dismissal notification templates did not contain members’ right to request that the sponsor vacate its dismissal, and when cases were partially denied, notifications did not clearly specify what services, items, or drugs were approved/denied.
Requests for coverage were inappropriately delayed. Internal processes used to review coverage requests were insufficient to ensure members were notified of decisions in a timely manner. Reviewers overlooked pertinent clinical information when processing coverage requests that indicated services should be approved. Coverage denials were inadvertently issued due to a system logic error.
Lessons learned
Part D issues: CMS noted there were instances in which organizations failed to cover Part D drugs due to inaccurate eligibility files. Organizations must ensure accurate processing of Part D claims by maintaining correct beneficiary enrollment and eligibility information and overseeing the proper data transmission of those files to their Pharmacy Benefit Managers. The agency also reminds organizations to ensure timely updates of eligibility data. In some cases, CMS audits found that, while organizations corrected the eligibility data system issue, they failed to address the previously rejected claims. This left beneficiaries without access to necessary medications. Organizations must fix the system-level eligibility issues and remediate the impact on affected members.
Inappropriate cost sharing for Part C services: CMS found that a high number of organizations weren’t appropriately tracking maximum out-of-pocket (MOOP) limits, which caused members to pay more in cost sharing than allowed. The agency urged organizations to conduct oversight of this issue, specifically monitoring beneficiary out-of-pocket spending, ensuring correct MOOP limit programming, tracking concurrent claims processing for the same member and benefit, and verifying MOOP limits during manual claims processing. Furthermore, CMS has found organizations overcharging members due to incorrectly processing claims. Audits have revealed failure to update systems appropriately, resulting in incorrect provider payments and cost-sharing amounts. Organizations must address any system limitations that affect proper Part C claims processing to prevent beneficiary overcharges.
Beneficiary reimbursements: When organizations overcharge members for cost-sharing, they must refund the incorrectly collected amounts. CMS expects that when organizations reprocess claims, they will return entire amounts. CMS said that even if claims are reprocessed quickly, it may impose penalties if an audit reveals members have not received appropriate refunds. Organizations must verify the return of incorrectly collected amounts, and if they delegate refund responsibilities to providers, organizations must ensure providers follow proper refund procedures.