CMS Audits – Be Prepared to Avoid These Common Findings

As the 2022 Program Audit Cycle winds up with the last of the routine audit engagement letters issued in July, we are starting to see the audit results. This year saw new audit protocols, and some plans struggled with the new universe layouts. In addition, CMS added a new observation classification – ORCAs (Observation Requiring Corrective Action). The Audit reports have shown ORCAs issued on many observations, even when there is limited enrollee impact unless the issue has been determined to be fixed (e.g. when the plan is able to submit a correct universe on the third attempt). While ORCAs do not count in the overall audit score, a corrective action plan must be submitted to CMS for approval and will be reviewed during the validation process. This of course, is in addition to corrective action plans required for Corrective Action Required (CARs) and Immediate Corrective Action Required (ICARs).

In addition to increased corrective action plan requests, plans continue to be subject to Civil Monetary Penalties. Failures leading to a Civil Money Penalty (CMP) are those that were systemic and adversely affected or had the substantial likelihood of adversely affecting enrollees (e.g., delayed or denied access to covered benefits, increased out-of-pocket costs, untimely appeal rights).

Program AuditSome common findings identified in recent audits:

  • CPE – Failure to maintain oversight of FDRs
  • FA – Failure to properly administer transition policy
  • CDAG – Improper classification of cases, failure to issue appeal rights timely, and failure to consider clinical information for Part D decisions on medical necessity
  • ODAG – Failure to make decisions within required timeframes, failure to hold harmless services from non-contracted providers when referred by a contracted provider (plan directed care), and improper classification of cases
  • SNPCC – Failure to implement plan of care through interdisciplinary care teams (ICT) and failure to update individualized care plan (ICP) as enrollee needs change

It’s time to start preparing the 2023 Program Audit Cycle NOW. As in past years, we expect CMS to start issuing engagement letters in February 2023. To be prepared, you should ensure that your organization and your FDRs are ready and able to adhere to the current universe layouts and methods of evaluation and are prepared to participate in data integrity testing and case review. If you need an external auditor to perform a mock CMS Program audit or test your universes, CODY® can help.

An effective compliance program is an essential component of a successful audit and program.  Effective compliance programs result in better audit scores and valuable audit administration and leadership. In addition to performing the required annual CPE audit, CODY’s seasoned compliance professionals also work with plans to design and implement programs that align with the organization’s culture, structure, and resources. The benefits of a strong compliance infrastructure and culture will support success throughout the organization.

Cody Consulting helps Medicare health plans mitigate risk and ensure compliance—from organizational and structural design and oversight to audit readiness. CODY® conducts mock audits in the same manner and rigor as CMS. We are here to support you, or we can do it for you:

  • CMS Mock Audits
  • Support Operational & FDR oversight
  • Conduct pre-delegation Audits
  • Perform your annual CPE audit

We understand the complexity of working with government healthcare programs. Our team has led the industry for decades—and we have the tools and resources to serve you. To learn more, contact us today for a consultation.

About us: CODY® has worked with over 70 government-funded, commercial, and ACA health plans across 50 states and Puerto Rico. We help align internal operations with CMS guidelines to improve regulatory compliance, maximize performance, and streamline member/provider communications across the enterprise. CodySoft® and Membership Suite™, our proprietary suites of software, are designed specifically for health plans.