Compliance is the Conscience

I’ve been struggling to consider what might be helpful, applicable information to apply during this health crisis. The questions abound: Should we still do credentialing? Do I need to send written appeal responses? When will program audits start up again? How long do waivers last?

After weeks of reading updates, guidance, the new law signed on Friday, and emails from just about every retail store I’ve patronized, I’ve returned to the foundation to offer advice for my buried audience. It is the first principle as outlined in the Code of Ethics for Health Care Compliance Professionals published by the Health Care Compliance Association

Principle I, Obligations to the Public: “Health care compliance professionals should embrace the spirit and the letter of the law governing their employing organization’s conduct and exemplify the highest ethical standards in their conduct in order to contribute to the public good.”

It is incredibly difficult for even the most astute to read through the CMS Current Emergencies guidance. Who is keeping track of the changes and business decisions your organization and vendors are considering? As CMS said on a recent industry call for PACE and states, they understand the desire for everyone to get more guidance for every specific scenario, but this is a rapidly evolving circumstance. The bottom line: you need to evaluate how to meet your obligations with consideration to health and safety needs. 

The compliance officer is the conscience of the organization. And right now, public health is paramount like I’ve never seen, and like our parents have never seen. Therefore, when reviewing memos, waivers, and fact sheets, please let your obligations to the public, now more than ever, drive your decision-making. The public includes not only your members, but also your employees, contractors, and your surrounding community. Document any modifications and rationale with start and end dates. This is not the time to stop the presses: CMS reminded us on March 10 that business continuity plan requirements are codified. This is the time to get creative. 

Proposed Rule CMS-4190-P: Past Performance

Today I want to focus on another aspect of the Centers for Medicare & Medicaid Services (CMS) proposed rule 4190-P, which deals with the review of past performance. This is covered in Title 42 of the Code of Federal Regulations, in Section 422.502 for Medicare Advantage (MA) and 423.503 for Part D. 

In 2005, CMS established that they may deny an application submitted by an organization seeking an MA or Part D contract if the organization had failed to comply with the requirements of a previous MA or Part D contract – meaning, their past performance could influence the decision of CMS to approve a submission, including new applications and expansion requests. About nine years ago, CMS established a rule to place a limit on the time period CMS would review, which ended up being a 14-month window.

2011 was quite a busy year for the agency (when is it not busy!); they released some plans from intermediate sanctions, they provided detailed trainings and clarification on marketing guidelines and expectations, and as a boon for enrollees and well-performing organizations, it was the first year a beneficiary could use a special election to join a 5-star plan. How far we have come!

More recently, CMS reduced the look-back period for past performance to 12 months. The most recent review methodology published on January 25, 2019 for the 2020 application cycle consists of 11 performance categories: compliance letters; star ratings; multiple ad-hoc corrective action plans (CAPs); ad hoc CAPs with beneficiary impact; failure to maintain a fiscally sound operation; one-third financial audits; program audits; exclusions; enforcement actions, terminations and non-renewals, and documented significant compliance issues awaiting formal CMS clearance. 

In the proposed rule, CMS suggests adopting three categories: imposition of Civil Money Penalties (CMPs); low star ratings scores, and the failure to maintain a fiscally sound operation. If finalized, they propose to add these three items to their already codified authority. (They state they “decline to consider” an application from an organization still covered by the 2-year prohibition period they agreed to as part of a mutual termination agreement entered into CMS, though the 2021 MA application still includes a waiver request an applicant may complete.)

What would this finalized provision mean for a beneficiary? Medicare beneficiaries should arguably not feel the impact of this change should it be finalized as written. CMS may be narrowing down the categories but the spirit of the past performance review remains the same. As a former colleague once told me about plan expansions, “if you don’t treat your current members right, you do not deserve to grow.” The agency has talked about the importance of beneficiary choice in conferences, and this change, in theory, should only eliminate the possibility of a beneficiary choosing a plan that still needs to get its house in order.

What would this finalized provision mean for a plan? New applicants and existing contract-holders take note: application reviewers are looking at corporate structure and ownership. They ask if any covered person (defined in regulations) served as a covered person for an entity that non-renewed or terminated within the past 2 years. They request organizational charts of the legal entity’s parent organization, affiliates, subsidiaries, and related entities. This is not anticipated to change, and past performance will be applied to applicants that have ties to plans with performance issues.

If finalized with no modifications, I still expect sub-regulatory guidance to be published to provide the industry clarification on whose past performance may be evaluated as part of the application review. Current guidance makes it clear the agency is not intending to be punitive in this process, allowing legal entities with good performance to continue to expand even if the parent organization holds another poor performing contract. 

CMS Enforcement: Recent CMP Notices

Like clockwork, the civil money penalty (CMP) notices issued as a result of 2019 Program Audits are out. CMPs are issued by the Centers for Medicare & Medicaid Services (CMS) when conditions of non-compliance adversely affect or have a substantial likelihood of adversely affecting enrollees. These conditions can be identified in Program Audits, through complaints to CMS, through self-disclosure, and through other means. This year, beneficiaries from Hawaii to Maine are enrolled in plans that received an enforcement notice from the Centers for Medicare & Medicaid Services. 

In 2019, CMS released a memo regarding the posted notices, indicating five parent organizations were issued CMPs for Program Audits at that time. This year’s memo notes six parent organizations were issued CMPs on February 28: five relative to 2019 Program Audits and one as for 2018 Program Audit results. Almost 19% of currently enrolled beneficiaries are in affected Medicare Advantage or Part D contracts in receipt of a CMP. Here is additional information by the numbers:

6 parent organizations issued CMP

82 affected contracts 

$1,190,370 total CMP dollars (ranging from $28,302 to $381,272)

9,435,133 members in affected contracts (February 2020)

Ask any conference presenter for their slide decks and there is bound to be a statistic or chart showing how quickly enrollment is growing in Medicare Advantage. According to the Congressional Budget Office, it is expected by 2029, 47% of all Medicare beneficiaries will be enrolled in the program. 

What to expect

While over the past few years, the agency has issued proposed rules and guidance to refine program administration, and President Trump has issued his Executive Order focused on protecting and improving Medicare, do not expect to rest on laurels when it comes to quality or adherence to regulations. Furthermore, expect continued oversight from the Medicare Parts C and D Oversight and Enforcement Group, or MOEG. In fact, the division is revising audit protocols and is seeking to memorialize the approach to increase minimum penalty amounts in regulation, consistent with the 3-year audit cycle. In addition, expect more to come regarding the 2019 audit results and the future of CMP methodology.

Medicare Pricing & Contracting Conference

This week, Informa Connect – CBI held their Medicare Pricing & Contracting conference in Alexandria. One of the best things about this conference was the variety of the speakers who shared different perspectives from pharma, think tanks, advocacy organizations, and pharmacy benefit managers. I shared some resonating sound bites on Twitter, but every speaker came very prepared with relevant, timely content.

Much of the discussion surrounded the future for Part D, with a number of redesign proposals on the table in Congress. We also heard about physician payment policy, including some 2021 changes in documentation requirements and increased payments for certain office/outpatient evaluation and management visits.

From the beneficiary perspective, we heard some statistics on Part D prescription use, income, and general savings. With unarguable growth of Medicare Advantage (MA), so grow the expenditures. Audience members were keen on understanding how to best control costs for long term stability.

We are in the dawn of benefit design which can impact social determinants of health, or SDOH. Factors such as physical environment, level of family support, diet and exercise, and availability of community offerings should all be considered by MA plans. How to pay for these items was another discussion in itself.

On a personal note, it was fantastic to learn from people representing different industries. I shared with attendees that joining the board of a federally-qualified health center gave me an appreciation and an education on how payer decisions and legislation affects a provider. Attending this conference which was geared heavily towards pharma was an equally beneficial learning experience, so I am looking forward to the next one.

Proposed Rule CMS-4190-P: Appeal Escalation

Today the Centers for Medicare & Medicaid Services (CMS) published their proposed rule CMS-4190-P. This post focuses on the automatic appeal escalation to external review for Medicare Part D drugs under the Drug Management Program, or DMP.

Background: Under DMPs, a plan engages in case management by contacting prescribers to determine whether a beneficiary is at-risk for misuse or abuse of frequently abused drugs. If a determination is made that the beneficiary is at-risk, the beneficiary is notified in writing and the plan may limit their access to coverage of opioids and/or benzodiazepines to a certain prescriber and/or certain pharmacies. (CMS is proposing to make DMPs mandatory effective January 1, 2022, noting the majority of Part D sponsors have already voluntarily implemented DMPs.)

CMS is also proposing to require the automatic forwarding of redeterminations of a DMP appeal to the independent review entity (IRE) responsible for conducting Part D reconsiderations (Part D level 2 appeals). Medicare Advantage plans have been familiar with the auto-forward requirement for years, as affirmed reconsiderations (Part C level 1 appeals) must be forwarded by the expiration of the adjudication timeframe. However, this process would be new for Part D-only plans such as standalone Prescription Drug Plans, or PDPs, as today only untimely decisions are auto-forwarded to the IRE.

What would this finalized provision mean for a beneficiary? For members who receive an affirmed denial of a DMP appeal, this means their appeal will automatically be forwarded to the IRE. Currently, other affirmed Part D redeterminations are not auto-forwarded. The appellant must make an additional request for an independent review. If this proposal moves forward, those who have been denied their medications due to a DMP decision will be guaranteed that “outside look” to either affirm or overturn the plan’s decision. This streamlines the steps the appellant has to take in this special circumstance. 

What would this finalized provision mean for a plan? If this moves forward, the plan will need to ensure procedures are changed and training is conducted, not only for the appeals department, but also for member services and the case management team working on the DMP decisions. It would be anticipated that member notices would change should this proposed rule become final. Plan and delegate parties to the process must understand how the member’s rights will change. 

Is the volume going to be high? CMS thinks not. The agency expects there will be approximately 28,600 appeals per year, of which 0.08 percent (or 23 cases) will be subject to this auto-forward. Based on this estimate, some plans might never process one of these appeals. However, even if one is received and denied, it is going to be important to auto-forward the case correctly and timely. CMS has been reviewing appeals in their program audit protocol for years, and if this provision is finalized, it could be anticipated DMP appeals may be targeted for sample selection to ensure adherence to the new rule.