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CMS ramps up enforcement of Part C, Part D Medicare plan violations

Through audit program, agency fined insurers in 2015 more than twice what it did in 2014

A recently released list of financial penalties imposed on Medicare Part C and Part D plan sponsors shows that the government is increasingly coming down hard on health plans that violate federal regulations.

In a letter announcing the release of civil monetary penalties (CMPs) tied to its 2015 audit program, the Centers for Medicare & Medicaid Services (CMS) says the violations "adversely affected, or had the substantial likelihood to adversely affect, enrollees" in Medicare Advantage plans and Medicare prescription drug plans.

CMS imposed more than $9.1 million in CMPs tied to 2015 program audits--the highest amount to date for a single audit program. By comparison, the total amount of CMPs relating to 2014 audit violations was a little less than $3.75 million. Total CMPs in 2015 added up to about $13 million, compared to about $4.9 million in 2014.

Plans hit with penalties failed to comply with one or more Medicare requirements, including Part D formulary benefit administration, Part C and Part D organization/coverage determinations, appeals, grievances and invalid data submissions, CMS says.

In its letter, CMS says "release of these actions furthers CMS' goal of improving industry standards and providing continued transparency in CMS oversight activities." For 2016 program audit violations, all CMP notices will be posted publicly in the first quarter of 2017, it adds.

So far this year, five plans have been hit by CMPs ranging from $30,000 (imposed against Trinity Health) to $458,250 (imposed against Health Net).

CMS imposed the largest audit-related fine in 2015--$3,100,900--against Humana, a dominant insurer in the Medicare Advantage space. Among other infractions, Humana violated rules that resulted in enrollees being inappropriately delayed or denied access to medical services and/or drugs, CMS wrote.

Cigna, meanwhile, was banned in January from selling or marketing new Medicare products due to what CMS called substantial Part C and Part D plan administration failures. The agency said these lapses, which it attributed in part to Cigna's acquisition of HealthSpring in 2012, posed a serious threat to enrollees' health and safety.

Like Cigna, Ultimate Health Plans in January also received an "immediate suspension of enrollment and marketing" sanction from CMS, and back in 2010, Aetna faced a similar sanction.

To learn more:
- here's CMS' letter
- view the list of CMPs and other sanctions

Related Articles:
CMS sanctions Cigna over 'substantial failures' in Medicare plans
CMS to sanction Aetna for Part D drug mishaps
WellPoint gets Medicare Advantage, Part D back
Aetna fined $1 million for Medicare Part D in-network mishap
CMS drafts new Medicare integrity regulations