Compliance

Latest Audit Report Highlights Enforcement Activity Outside Program Audits

In CMS’s latest audit report, the agency confirms what an earlier AIS Health analysis of compliance notices indicated: the agency imposed approximately $1 million in civil money penalties (CMPs) based on 2021 referrals, and nearly half of that stemmed from one-third financial audit findings. CMS, meanwhile, cautioned the industry not to read too much into the latest audit results as they relate to 2020, when CMS audited a relatively small number of plans due to the COVID-19 public health emergency (PHE).

In the 2021 Part C and Part D Program Audit and Enforcement Report, published on June 7, CMS said it imposed 16 CMPs amounting to $1,043,953, or an average of $65,247 per CMP. Sponsors audited in 2021 covered 26% of enrollment.

OIG Report on Prior Authorization Denials Puts Pressure on CMS

As Medicare Advantage insurers face increasing scrutiny from lawmakers over coding practices and a pending pay boost of 8.5% next year, a new HHS Office of Inspector General report on rates of prior authorization and payment denials in MA doesn’t do much to help their case. Although it was based on just a weeklong sample of denial cases, the report adds to a growing body of evidence that the prior authorization process in MA is ripe for improvement and in need of either more guidance from CMS and/or stronger oversight.

Receiving widespread coverage at press time, starting with a New York Times article summarizing it as “saying that insurers deny tens of thousands of authorization requests annually,” OIG on April 28 released a report titled, “Some Medicare Advantage Organization Denials of Prior Authorization Requests Raise Concerns About Beneficiary Access to Medically Necessary Care.” The report immediately drew praise from providers, such as the American Medical Association (AMA), which issued a statement agreeing with federal investigators’ recommendations on reining in inappropriate denials. But AMA argued that more needs to be done, such as passing a bipartisan bill that aims to establish new electronic prior authorization (PA) requirements on MA insurers.

News Briefs: New CMS Report Finds Non-White Medicare Advantage Enrollees Continue to Receive Worse Care

A new report looking at disparities in care for Medicare Advantage beneficiaries by race, ethnicity and sex found that non-white MA enrollees generally received worse care in 2020 than their white counterparts. Racial and ethnic differences were more glaring for clinical care measures than for patient experience measures, with scores for Black MA enrollees falling below the national average for 14 out of 36 clinical care measures, according to the April report, which was prepared by The RAND Corp. for the CMS Office of Minority Health. Researchers relied on Consumer Assessment of Healthcare Providers and Systems (CAHPS) data collected from March to May 2021 and the Healthcare Effectiveness Data and Information Set reflecting care received from January to December 2020. White enrollees reported care that was in line with the national average on all patient experience measures from the CAHPS survey, while their scores were similar to the national average on 31 clinical care measures and above average on five measures. Scores for American Indian and Alaska Native MA enrollees were also below the national average on 14 clinical care measures, and scores for Hispanic MA beneficiaries were worse than average on 11 such measures.

Enforcement Actions Show Mounting CMPs from Financial Audits (with table: CMP Amounts Imposed on Medicare Advantage Insurers From February to April 2022)

Between February and April of this year, CMS imposed a total of nearly $1 million in civil monetary penalties (CMPs) on Medicare Advantage and Part D organizations for program violations uncovered during routine audits, including so-called “one-third financial audits.” While CMS has yet to release its annual report that provides a fuller picture of plan noncompliance, the latest round of CMP notices offers some important lessons for sponsors and flags a few potential areas of risk that they should be monitoring in their own operations, according to compliance experts.

Of the 15 CMP notices recently posted to the CMS Part C and Part D Enforcements Actions webpage, six resulted from 2021 program audits and eight were related to 2020 financial audits. Additionally, CMS imposed a fine on Anthem, Inc. for a Part D appeals violation stemming from a previously detected system migration issue that occurred in 2020.

News Briefs: CMS Will Now Cover and Pay for Over-the-Counter COVID-19 tests for Medicare Enrollees

Effective April 4 and through the end of the COVID-19 public health emergency, Medicare will cover and pay for over-the-counter COVID-19 tests at no cost to people with Medicare Part B, including those enrolled in Medicare Advantage plans. Through the new initiative, beneficiaries can obtain up to eight tests per month from participating pharmacies and health care providers, CMS said on April 4. The agency noted that this is the first time that Medicare has covered an over-the-counter self-administered test at no cost to beneficiaries.

UnitedHealth Group on March 29 said it will spend approximately $6 billion in cash to acquire LHC Group, Inc., a home health care company. If the deal goes as planned, LHC will be folded into UnitedHealth’s Optum division; the companies expect to complete the transaction in the second half of the year. The move will make UnitedHealth a major player in home care and hospice care, positioning it alongside rival Humana Inc., which purchased Kindred at Home last year.

HHS Budget Seeks to Give Feds More Power Over Medicaid MCOs

Tucked into the 174-page Fiscal Year 2023 Budget in Brief document recently issued by HHS is a proposal seemingly aimed at giving the federal government more flexibility and power to sanction out-of-compliance Medicaid managed care plans.

“Currently, CMS has inadequate financial oversight and compliance tools in Medicaid managed care, lacking maximum flexibility to disallow and defer individual payments or partial payments associated with contracts with managed care organizations, prepaid inpatient health plans, and prepaid ambulatory health plans,” stated HHS in its budget proposal released on March 28.

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Judge Refuses to Toss Shareholder Suit Against Clover Health

Roughly a year after a highly critical report from an activist short seller cast a pall over Clover Health Investments Corp.’s debut as a publicly traded company, a federal judge has denied a motion to dismiss a key shareholder lawsuit that accuses the Medicare Advantage startup of hiding critical information from investors.

While the Feb. 28 ruling does not make any judgment about the merits of the allegations brought by shareholders Timothy Bond and Jean-Nicolas Tremblay, it is still noteworthy, one legal expert tells AIS Health, a division of MMIT.

“Often these cases are filed but then they’re disposed of early on,” says David Kaufman, an attorney with Laurus Law Group LLC. “This case was not disposed of, so getting beyond the motion to dismiss is pretty significant, and it’s going to require substantial litigation from this point forward before it reaches any kind of decision.”

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With AEP Switching Low, MAOs Must Monitor Member Experience

Medicare beneficiaries have more plan choices than ever before, in addition to a dizzying array of supplemental benefits and increased PPO options, but plan switching has stalled, according to a new study from Deft Research. That leaves Medicare Advantage plans to consider whether low switching is largely due to members feeling satisfied with their current coverage or overwhelmed with the sheer amount of information being presented to them, observed industry experts during a recent webinar hosted by Rebellis Group LLC. As a result, members’ experience during the Annual Election Period may warrant a closer look as plans think about their strategy for the next AEP.

In its 2022 Medicare Shopping and Switching Study, Deft observed an overall switching rate of 11% during the most recent AEP. That’s compared with 12% seen in 2021 and 23% in 2015, reported George Dippel, executive vice president with Deft, during the March 10 webinar, “With more choices than ever, how will your Medicare Advantage plan stand out in 2023?” The annual survey featured responses from 3,389 Medicare enrollees, including 1,846 seniors who were enrolled in a Medicare Advantage plan in 2021 and 1,183 seniors with Medicare Supplemental (MedSupp) coverage. The remaining 360 respondents had Original Medicare only (OMO).

Ongoing DOJ Lawsuits Heighten MA Risk Adjustment Scrutiny

Health care fraud was the largest driver of False Claims Act recoveries last year, the Dept. of Justice (DOJ) recently reported. Of the more than $5.6 billion in settlements and judgments from civil cases involving fraud and false claims against the government for the fiscal year ending Sept. 30, 2021, more than $5 billion related to matters involving the health care industry, including drug and medical device manufacturers, managed care providers and hospitals, the DOJ estimated. Medicare Advantage-related recoveries included a $90 million settlement with Sutter Health to resolve allegations that it submitted unsupported diagnosis codes that led to inflated payments to MA plans and the health system and a $6.3 million settlement with Kaiser Foundation Health Plan of Washington (formerly Group Health Cooperative) over similar allegations.

News Briefs: City of New York Appeals Court Decision on Retiree Switch to Group Medicare Advantage

New York City is appealing a recent ruling by the New York Supreme Court that bars the city from imposing a premium on public sector retirees who opt out of group Medicare Advantage coverage that starts April 1. Anthem, Inc. was initially contracted to provide MA coverage to an estimated 200,000 retirees and dependents for a Jan. 1 effective date. Manhattan Supreme Court Justice Lyle Frank on March 3 ruled that automatic enrollment of beneficiaries cannot start until April 1, retirees must be able to opt out of the new coverage up to three months after the effective date, and they do not have to pay a fee to retain their traditional Medicare coverage. The city’s attempt to charge $191 monthly is in violation of New York City law, which requires the municipal employer to “pay the entire cost of health insurance coverage for city employees, city retirees and their dependents,” Frank ruled. The city’s Office of Labor Relations on March 4 filed an appeal; the NYC Organization of Public Service Retirees at press time had filed a cross-appeal and was gathering signatures for a petition urging Mayor Eric Adams (D) not to pursue the appeal.