The Past, Present and Future of CMS Audits

On May 14, 2021, the Centers for Medicare and Medicaid Services (CMS) released the “2020 Part C and Part D Program Audit and Enforcement Report,” which provides the results from the 2020 audit cycle.[1] There were fewer audits than in past years because CMS offered flexibilities to allow plan sponsors to address COVID-19 concerns.

They also shifted their oversight away from routine audit activities, prioritizing instances of noncompliance that put the health and safety of beneficiaries at serious risk, as well as complaints alleging infection control concerns (including, but not limited to, COVID-19). This led to a number of smaller audits related to prescription drug events (PDEs), focused on specific claim scenarios. Examples include:

Elixir’s Clinical Audit, Government Programs, Formulary, and Coverage Determinations, Appeals and Grievances (CDAG) teams continue to combine efforts to fully address these requests in a timely manner as we receive them from our Medicare clients.

As in the previous two years’ reports, CMS did not include the common conditions section this year. In last year’s report, CMS acknowledged requests to include information on conditions commonly cited during program audits, as well as additional information on common causes of noncompliance, stating that they, “are continuing to explore how best to analyze and present this information in a manner that is useful for sponsors, but does not provide a misleading representation of sponsors’ overall performance or that widespread or significant issues exist in the program when they do not.” However, they did not address the matter specifically in this year’s report.

The following table provides a “by-the-numbers” review of audit results from the past three years.

Sponsors Audited
Beneficiaries Covered
2% or 1.03M
71% or 35.07M
1.4% or 0.71M
Average Audit Score
Average Compliance Program Effectiveness (CPE) Score
Average Formulary and Benefit Administration (FA) Score
Average CDAG Score
Total Enforcement Actions
Total Civil Money Penalties (CMPs) Issued
Total CMPs in Dollars
Total Intermediate Sanctions
Overall Audit Score by Enrollment Size
<50K = 1.01
50-250K = 1.02
>250K= 1.76
<50K = 0.32
50-250K = 1.41
>250K = 0.65
<50K = 0.13
50-250K = 0.08
>250K = 0.42
FA/CDAG Scores by Number of Formularies
In both FA and CDAG, sponsors with only one formulary fared better than sponsors with more than one formulary
In both FA and CDAG, sponsors with only one formulary performed better than sponsors with more than one formulary
Sponsors with 10 or fewer formularies performed better than sponsors with more than 10 formularies

Despite fewer program audits, the report does contain valuable information that plan sponsors and their partners can adopt to continue improving performance, as well as worthwhile insight into the CMS audit process. Additionally, CMS cautions sponsors to avoid drawing conclusions about the overall assessment versus prior years.

The Look Ahead: 2021 and 2022 Audits

CMS had planned to use the updated audit protocols that were proposed under CMS-10717 for its 2021 program audits.[2] However, they are still awaiting Office of Management and Budget (OMB) approval, so CMS is using the 2020 audit protocols for 2021 program audits.[3] To date, the 2021 program audit experience has seen CMS devoting some focus to how sponsors implemented the COVID-19 flexibilities offered during 2020.

CMS released the 2022 program audit protocols on May 26, 2021, and solicited questions from sponsors and other stakeholders in advance of a CMS-led training tentatively scheduled for August 2021.

Elixir submitted questions related to the audit protocols and will join the training in order to be fully versed in the changes and best prepared for the 2022 audit cycle. Our CMS audit support team actively participates and supports clients before, during and after CMS program, financial and operational audits, ensuring an efficient and effective audit experience with optimal results.