Report on 2024 Review and Implementation of Compliance Measures by CMS
The Centers for Medicare & Medicaid Services (CMS) has released its annual Audit and Enforcement Report, summarizing the findings of its audits and enforcement actions for Medicare Advantage (Part C) and Prescription Drug (Part D) programs in 2024.
In the report, CMS did not identify any significant non-compliance with the new utilization management requirements in its audits. However, common areas of non-compliance were found in several program areas, including:
- Improper Handling of Coverage Requests: Plans were found to inappropriately delay or deny medication requests, limiting access to covered drugs.
- Substandard Compliance Programs: Insurers were found to have inadequate internal compliance programs, essential for monitoring and ensuring adherence to federal requirements.
- Maximum Out-of-Pocket (MOOP) Limitations: Non-compliance included failing to track MOOP limits correctly, leading to beneficiaries paying more than allowed in cost-sharing.
- Insufficient Health Risk Assessments: Audits revealed that some plans did not complete and incorporate timely health risk assessments into individualized care plans for enrollees.
- Non-Compliance with Medical Necessity Criteria: There were instances where MA plans denied medically necessary covered services at a concerning rate.
CMS conducted 39 program audits of 36 parent organizations, referred to as "sponsors," in 2024. The audits covered 494 contracts that served 87.6% of Medicare Part C enrollees and 68.8% of enrollees in Medicare Parts C and D together.
CMS imposed civil money penalties (CMP) on 14 sponsors for 18 different violations in 2024. The majority of the CMPs were for inappropriate cost sharing for Part C services and Part D medications. The largest penalty was $2 million for allegedly failing to comply with Part C's maximum out-of-pocket requirement.
In addition to the audits, CMS also evaluated compliance in seven total program areas based on the contract types offered by the audited sponsors. CMS requires sponsors to maintain effective oversight of their claims processing systems and ensure adequate compliance with CMS regulations.
Where a beneficiary is overcharged, sponsors should have effective systems in place to ensure that these beneficiaries are refunded. CMS emphasized the need for effective compliance systems and adherence to federal rules to ensure quality care and protection for beneficiaries.
WilmerHale, a law firm with significant experience representing Medicare Advantage organizations in CMS audits and investigations, emphasized the importance of sponsors putting in place robust compliance and oversight systems and updating them periodically to avoid enforcement actions and substantial penalties.
In conclusion, the 2024 CMS audits of Medicare Advantage, Prescription Drug, and Medicare Medicaid plans have highlighted several areas of non-compliance. CMS has emphasized the need for sponsors to prioritize compliance and oversight to ensure quality care and protection for beneficiaries.
- To address the recurring non-compliance issues in medical-conditions coverage, it would be beneficial for Medicare Advantage organizations to invest in improving their health-and-wellness related services, particularly in the areas of proper handling of coverage requests, timely health risk assessments, and medical necessity criteria.
- Given the significance of financial implications for Medicare beneficiaries, Medicare Advantage organizations should also strengthen their financial compliance, focusing on correct tracking of Maximum Out-of-Pocket limits and appropriate cost sharing for Part C services and Part D medications, to ensure the well-being of their enrollees and to avoid heavy civil money penalties.
