The 2016 Civil Monetary Penalties List

By UL Compliance to Performance 

 

Recently, CMS announced the 17 Medicare Advantage (MA) plans subject to civil monetary penalties (CMPs) based on their 2016 audit findings. Until this year, the months of February and March in the MA space meant the application season. Now, based on CMS’ March 1 memo on CMPs, it is the application and-enforcement actions season. Unlike past years, when CMS posted audit-based enforcement actions on a rolling basis throughout the year, they are now holding public notification of audit-based CMPs until the first quarter of the following year. (Although the CMS memo didn’t explicitly address timing of intermediate sanctions—e.g., freezing of enrollment and marketing—one should presume those actions will be imposed and announced on a more immediate basis.) This change in process allows CMS to evaluate all audits simultaneously and that can’t happen until the end of audit season, typically November or early December. Add a couple of months for decision-making by CMS and the twenty layers of review required to issue just about anything, and that brings us to deep into the first quarter of the next year.

 

So what does this mean for MA plans scheduled for a 2017 audit, or the many MA plans who suspect they’re on the 2017 audit hit-list? For one, it means that audited MA plans may not know until well after the audit closes whether they will be sanctioned. For plans audited by CMS, there is often a fair amount of conjecture shared amongst senior management regarding whether the audit findings are significant enough to result in sanctions or enforcement actions. It’s not a fun exercise, and will be more protracted now that sanctions are announced in one fell swoop in the first quarter of the following year. For all MA plans, it means that there won’t be a clear window on CMS’ approach to enforcement during the current year. And with a new and unpredictable administration in place, we will all be looking for clues. The March 1 memo stated that sanctions and enforcement actions for regulatory violations identified through sources other than audits would continue to be posted to the CMS website “within the normal timeframe after notification to the sponsor,” which typically has been within a few days or so. But non-audit related sanctions and enforcement actions are few and far between (or at least they have been up until now).

 

Are there any clues in the audit and enforcement action trends over the last few years? Yes and no. CMS has not released an analysis of 2014-2016 audit and enforcement data, but here is a rough analysis, based on information in the March 1 CMP memo, the 2015 Part C and Part D Program Audit and Enforcement Report, the Part C and Part D Enforcement Actions page on the CMS website, and the Program Audits Results page of the CMS website:

 

Looking at 2016 compared to 2015, CMS audited significantly more plans in 2016 (37) than 2015 (22). The average audit score fell from 1.76 in 2015 to 1.22 in 2016, about a 30% decrease. But the percentage of audited plans that were issued by CMS fell only 9%. CMS has stated that enforcement actions are not based on a plan’s overall audit score, but on the impact the conditions have on members’ access to medical care and prescription drugs. So we can assume that, at least to some degree, plans are generally faring better in the audits with fewer conditions, but within that smaller number of conditions there are some that directly and significantly impact (or are likely to impact) access to care and drugs. This points to the fact that plans are doing a better job overall with compliance, but still not enough to stay off the CMS enforcement action list.

 

The dollar amounts of CMPs are based on formulas that CMS described in its Civil Money Penalty Methodology policy, released in final form on December 15, 2016. Because the methodology takes into account a number of factors (type of member harm, number of members and/or contracts affected, and aggravating and mitigating factors), and includes limits based on size of the plan, it is more difficult to draw conclusions from the CMP amounts, both overall and average, imposed for 2016 audits.  We do know that the CMP methodology increases the per enrollee and per determination amounts used to calculate a CMP from the amounts used by CMS in previous years, in order to encourage greater compliance with CMS requirements. We can assume that approach will continue for the 2017 audits.


For the full article from our Health Care Communiqué, click here.


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