Search

Leveraging Medicare audits to improve processes and the bottom line

by Yvonne Tso, Pharm D., MBA



The Centers for Medicare & Medicaid Services (CMS) announced that engagement letters for routine audits would be mailed between March 2021 and July 2021. Since the beginning of 2021, however, CMS has been conducting desktop audits of the various services provided by Medicare Advantage and Prescription Drug Plans (MAPD) to their enrollees. A few of them are described below.

  • On January 15, 2021, some Part D plans were notified of having their Prescription Drug Event (PDE) records selected for Improper Payment Measure (IPM) or “Part D IPM 19”. Results of this review will be used to calculate a program wide improper payment measure for Medicare Part D. Plans have to submit supporting documentation for the selected PDE samples.


  • On April 1, 2021, CMS announced the results in HPMS of their monitoring audit of the timeliness of Part C and Part D current enrollee beneficiary customer service call centers’ response performance (i.e., Monday through Friday, 8 a.m. to 8 p.m. in the service area for the plans from October 26-November 20, 2020), and the timeliness of pharmacy technical help desk call centers’ response performance (i.e., Monday through Friday, 24 hours a day, from October 26-November 20, 2020). Some plans have already been notified of the monitoring results.


  • On April 21, 2021, CMS announced that in collaboration with the Plan Program Integrity Medicare Drug Integrity Contractor (PPI MEDIC), they are conducting a review of nebulizer drugs used with an item of DME (durable medical equipment). Medicare Part B covers DME supply drugs that are administered through the use of DME (e.g., a nebulizer, external or implantable pump). Therefore, drugs administered through a covered nebulizer would be inappropriate for payment under the Medicare Part D drug benefit if they qualify for payment under the Medicare Part A or Medicare Part B programs. Upon completion of the review, CMS and the PPI MEDIC will be conducting a national audit of selected MA-PDs and stand-alone PDPs.


  • On May 19, 2021, CMS notified plans selected for the National End-Stage Renal Disease (ESRD) audit that in collaboration with the PPI MEDIC, they have conducted a review of the Medicare Part D payments for drugs included as part of the Prospective Payment System (PPS). Plans selected for the audit appear to have submitted potentially duplicate payments for PDE records for targeted drugs that are “always” considered to be ESRD-related when furnished to an ESRD patient, and therefore included in the ESRD base rate and not separately payable under Part D.


  • On May 24, 2021, on behalf of CMS, Acumen notified plans that have been selected to participate in the Transition Requirement Audit (TRA, formerly Transition Monitoring Program Analysis) for CY 2021. Selected plans are given a month to submit responses.

Responding to CMS audit requests is a lot of work. But the benefits are aplenty - the required data and documentation provide an opportunity for plans to identify gaps in their processes which can potentially hurt their profitability. For instance:

  1. Many plans have established processes to monitor denied claims but few are also reviewing paid claims. If drug plans are paying for claims that they should not have (IPM, nebulized drugs and always ESRD medications), and when the improper payments are identified by CMS, one way or another, the PDE records have to be deleted. This not only diminishes the plan’s profitability but also subjects the plan to non-compliance risks with Medicare rules;

  2. If the Call Center inadequately addresses callers’ concerns, whether the callers are current or prospective enrollees, the failure becomes a turn-off for enrollment rather than an invitation; some of the callers may be future CAHPS[1] survey participants. Memories of bad experiences with a plan linger.

  3. TRA should remind drug plans that monitoring paid claims for transition fills is as essential as reviewing denied claims for transition. Paying for non-transition eligible claims may not be considered non-compliant but definitely does not benefit the bottom line.

  4. In fourth quarter 2020, many drug plans underwent the one-third financial audits, some of which have continued into 2021 because of the details required for responses and amount of supporting documentation requested by the auditors. Inappropriate payments will have financial consequences beginning in 2021 (there were none in the past except for corrective action requirements).

Integritas Medicare has supported MAPD sponsors in preparing for and reviewing responses to CMS auditors. Monitoring payment for drugs for compliance is not only a best practice but also nips any financial leakage in the bud – the Little Dutch Boy[2] saved an entire town from flooding by doing just that.



[1] Consumer Assessment of Healthcare Providers and Systems [2] The Silver Skates: A Story of Life in Holland by Hans Brinker

140 views0 comments