June 19 Issue of AIS Newsletter Examines Sanctions Levied by CMS Against Pennsylvania MA Plan

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Industry consultants tell Atlantic Information Services’ Medicare Advantage News that the issues identified by CMS demonstrate the importance the agency places on drug-access and grievance-handling issues.

Last month, the Centers for Medicare and Medicaid Services (CMS) suspended immediately and indefinitely Capital BlueCross marketing to and enrollment of new members in its Medicare Advantage (MA) and stand-along Prescription Drug Plan (PDP) products. The June 19 issue of Atlantic Information Services, Inc.’s Medicare Advantage News (MAN) takes a look at the impact the sanctions could have on the industry.

In a letter to Capital posted on the Part C and Part D Enforcement Actions page of CMS's website, the agency said it identified “multiple serious violations” that “pose a serious threat to the health and safety of enrollees. Many of these issues stem from a complete ineffective monitoring and oversight” of the plan’s pharmacy benefit manager (PBM), which “is responsible for Capital’s coverage determinations.” The letter added that the plan’s “lack of internal controls and of consistent procedures resulted in a breakdown in other processes with Part D redeterminations, Part C organization determinations, Part C reconsiderations and grievances.”

Industry consultants tell MAN that the Capital sanctions demonstrate the importance CMS places on drug-access and grievance-handling issues. And “for every plan sanctioned or fined with a CMP [i.e., civil monetary penalty], there are numerous plans that have immediate corrective actions required and other corrective actions required resulting from CMS audits that simply didn’t rise to the level of magnitude of the sanction or audit,” Steve Arbaugh, managing principal and CEO of ATTAC Consulting, tells MAN. “This still costs plans enormous work effort and resource commitments to correct situations that they should have identified beforehand.”

Wendy Weingart, a pharmacist who is senior vice president, managed care services at consulting firm Visante, Inc. tells MAN that “incorrect text in beneficiary transition notification letters as well as untimely retroactive claims adjustments can result from problems with internal process controls, set-up, procedural inconsistences, or staff training or resources. Disconnects between the plan and PBM and/or interdepartmentally for handoffs and communications can also result in incomplete or untimely issue resolution.”

“Managing Part D, because of the level of delegation to PBMs, requires rigorous monitoring and auditing as well as effective and strong service-level agreements and penalties within the PBM contract itself,” asserts Arbaugh. “Inappropriate application of step-therapy edits and PA [i.e., prior authorization] edits to certain drugs has impacted a number of plans and a number of PBMs. Addressing this takes routine (daily, weekly) review of denied claims from the PBM to catch it timely and correct it.”

He adds that “PBMs have a huge task to set all these formularies up and also maintain all the drugs or changes in packages that happen routinely, and the only way to catch it is to monitor it. You can’t simply leave it up to your PBM.”

Capital, which operates in Pennsylvania and is based in Harrisburg, declined to comment on the specific alleged violations, instead emphasizing its intent to satisfy CMS and members. Spokesperson Jason Kirsch tells MAN the company “is committed to administering Medicare plans that meet or exceed all requirements and expectations, and we are working diligently to resolve the identified issues as quickly as possible. As part of our remediation, we will be contacting every affected customer and all discrepancies will be addressed.”

Visit http://aishealth.com/archive/nman061914-01 to read the article in its entirety, including more on the specific violations identified by CMS.

About Medicare Advantage News
Medicare Advantage News is the health care industry’s #1 source of timely news and business strategies about Medicare Advantage plans, product design, marketing, enrollment, market expansions, CMS audits, and countless federal initiatives in this hotly contested area of health insurance. Published biweekly since 1994 (when it was Medicare+Choice), the newsletter exists to help plans boost revenues, increase enrollees, cut costs and improve outcomes in Medicare Advantage and Medicaid managed care. Visit http://aishealth.com/marketplace/medicare-advantage-news for more information.

About AIS
Atlantic Information Services, Inc. (AIS) is a publishing and information company that has been serving the health care industry for more than 25 years. It develops highly targeted news, data and strategic information for managers in hospitals, health plans, medical group practices, pharmaceutical companies and other health care organizations. AIS products include print and electronic newsletters, websites, looseleafs, books, strategic reports, databases, webinars and conferences. Learn more at http://AISHealth.com.

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