Insights for Remaining Audit Ready: CMS Releases 2021 Audit Enforcement Report

On June 7, 2022, the Centers for Medicare and Medicaid Services (CMS) released the 2021 Part C and Part D Program Audit and Enforcement Report, providing details of the 2021 audit cycle.[1] The enforcement report provides analyses and information that sponsors and stakeholders can use for continuous improvement efforts within their organizations. Sponsors and stakeholders are wise to use the information to prevent noncompliance by accessing risks and operational vulnerabilities and conducting the necessary monitoring and auditing to maintain program audit readiness.

The Difference a Year Makes

CMS audited 27 plans in 2021, significantly more than what was audited in 2020, as the COVID-19 public health emergency (PHE) limited their ability to audit as many plans. The CMS 2021 audit strategy does not contain any year-to-year comparisons between audits, as the 2020 audit strategy had many challenges due to the PHE. Therefore, CMS cautioned against using the enforcement report to draw broad conclusions about the significance of deficiencies or performance across Medicare Advantage (MA), Part D or Medicare-Medicaid Plan (MMP) programs.

Audit Insights

CMS provided sponsors with insights to help prepare for a CMS program audit. The following are some audit insights and tips, as well as observations made during the 2021 enforcement referrals to strengthen overall compliance programs:

• Conduct Mock Audits - CMS suggests using audit protocols to conduct mock audits, including generating and validating universes. Mock audits may assist in identifying vulnerabilities or areas of noncompliance before the program audit. Examples of vulnerabilities may include:
  • Transitioning to a new system or updates made to legacy systems
  • A breakdown in communication between existing systems or interfaces that impact benefit eligibility, enrollment or claims history
  • Incomplete, incorrect or non-existent processes and policies
  • Denial notices not populating applicable appeals rights
  • A breakdown in Medicare Advantage Prescription Drug plan (MA-PD) coverage or care coordination, such as Part B versus Part D, coverage coordination, or transitions in care settings
• Do Not Use Previous Guidance - Plan sponsors should not rely on guidance received during previous audits, as it may no longer apply to current protocols.
• Monitor for Enrollee Overcharges - CMS recommends that sponsors improve their internal processes for monitoring and refunding (when appropriate) overcharges to enrollees by contracted and non-contracted providers. Improved monitoring and analysis of claims denials, copays/co-insurance coding, and provider payments (both contracted and non-contracted) could advance the ability to identify overcharges that require correction. Enrollees should not be overcharged; however, refunds must be issued for any incorrectly collected amounts if an overcharge occurs. CMS may impose Civil Monetary Penalties (CMP) on sponsors when enrollees are overcharged or there is a substantial likelihood they were overcharged.
• Ensure Financial Solvency and Contracting Requirements - Sponsors must be prepared financially to operate an MA-PD or PDP. Federal requirements do not preempt state authority for licensure or fiscal solvency. When sponsors are out of compliance with these requirements and subject to state actions that limit their ability to accept new enrollees, they are also out of compliance with CMS' requirement for contracted sponsors to accept new enrollments.

CMS hosted a training series in August 2021 to clarify operational and technical changes and promote a uniform understanding of the audit scope and objective. The training session is available at https://www.cms.gov/Outreach-and-Education/Training/CTEO/Event_Archives

Your Partner in Audit Support

Elixir participated in three program audits in 2021 that resulted in only one observation for an Elixir delegated service. We did not receive any findings that resulted in immediate corrective action (ICAR) or corrective action (CAR). Our Clinical Audit, Government Programs, Formulary, and Coverage Determinations, Appeals and Grievances (CDAG) teams actively support clients before, during and after CMS audits, including program, financial and operational audits, to ensure an efficient and effective audit experience.