Brenda J. Tranchida, Esq. · 2015-01-27 · • Part D bid administrative costs, coverage gap discount payments, duals formularies, P&T committee conflict of interest ... applicable

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© 2008 Venable LLP - www.Venable.com 1

© 2008 Venable LLP

The Changing Landscape of Government Managed Care Operational Compliance Requirements:

Information from the Front Lines

Brenda J. Tranchida, Esq.HCCA Managed Care Conference

February 17, 2015

Brenda J. Tranchida, Esq.

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Today’s Presentation

• Government managed care oversight and enforcement focus areas

• Key managed care operational compliance areas and risks

• Managed care compliance convergence trends and implications

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http://www.amcp.org/WorkArea/DownloadAsset.aspx?id=12729

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Managed Care (MC) Program Numbers

Medicare managed care –

• 15.5M (~30% of total Medicare enrollees)

• 21M enrollees by 2023*

• $145B in expenditures (excluding Part D drug benefit – another $64B)

• $250B in projected expenditures by 2023*

*April 2014 CBO estimates

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Medicaid managed care –

• 69M Medicaid enrollees (1 in 5 Americans)

• 93M enrollees by 2024 (1 in 4 Americans)*

• 9.6M additional enrollees since ACA initial marketplace enrollment period (October 2013)

• FY13 expenditures: $469B

• $563B in projected expenditures by 2024*

*April 2014 CBO estimates

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Medicaid managed care –

• Substantial enrollment increases due to:

• State Medicaid expansions

• Simplified “no wrong door” enrollment processes

• increased outreach and enrollment efforts

• Over ½ receiving care through comprehensive MC organizations

• More states moving to MC delivery options

• CMS ACA funding available for testing new delivery/payment models in MC (State Innovation Model Initiative, duals, recent CMS CMMI request for information (RFI) targeted to managed care plans, etc.)

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Government MC Oversight Focus

FY15 OIG Work Plan: Medicare/Medicaid MC:

• Risk adjustment/encounter claims data (Medicare/Medicaid)

• Part D bid administrative costs, coverage gap discount payments, duals formularies, P&T committee conflict of interest (Medicare)

• Medical Loss Ratio (Medicaid)

• Payments for ineligibles, network adequacy and provider access, grievances/appeals, marketing practices (Medicaid)

• FWA identification (Medicaid) (also OIG “Top Challenges” – “Protecting an expanding program from FWA”)

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HIPAA Privacy and Security Violations

• Office of Civil Rights (OCR) MC Settlements:

• BCBS TN – $1.5M (unencrypted drives)

• WellPoint – $1.7M (unsecured databases)

• Affinity Health Plan - $1.2 M (PHI on copiers)

• Concentra Health Services – $1.2M and QCA Health Plan - $250K (unencrypted laptops)

• Typically larger fines with MC plans (# enrollees affected)

• OCR must investigate all complaints filed and health plans required to self-disclose breaches

• OCR using fines for future enforcement efforts

• State Attorneys General and FTC enforcement actions

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CMS Medicare MC Enforcement Actions

• Access to prescription drugs

• Appeals and grievances

• Marketing materials – accurate and timely ANOCs, SBs, etc. (penalties)

• Performance audit results (penalties based on number, seriousness of violations, need for immediate correction)

• Termination of contracts with less than 3 stars on Part C or D 3 years in a row

• Enhanced focus on program integrity, effective compliance programs and FWA detection

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DOJ/OIG False Claims Act Cases

• Various cases focused on MC:

• Medicare: Janke, Scan Health Plan, Mobile Medical Examination Services, Humana, Aveta, United

• Medicaid: Scan Health Plan, WellCare, CareSource

• Bases: risk scores, MLR calculations, improper marketing kickbacks or inducements to providers/enrollees, etc.

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Key ACA Program Integrity Provisions

• §6402(a) – mandated CMS “Integrated Data Repository” (IDR)

• All Medicare and Medicaid data and all other federal health care program data for identifying FWA

• §4241 of the Small Jobs Act (September 2010) further required HHS to use predictive analytics in Medicare program (mandatory use in Medicaid program by April 2015)

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Key ACA Program Integrity Provisions

• §6402(d)

• Overpayments must be reported and returned by the later of 60 days after the date overpayment was identified or date any cost report is due

• Failure to timely report/return creates potential liability under the FCA

• “Overpayment” means “any funds that a person receives or retains under [the Medicare or Medicaid programs], to which the person, after applicable reconciliation, is not entitled”

• Proposed rule (77 Fed. Reg. 9179, 2/16/12)

• Applied to providers/suppliers, not MC entities

• Significant industry concerns, including 10-year proposed “look-back” period

• CMS has not issued final regulations (§6402(d) self-implementing)

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CMS 60-Day Overpayment MC Requirements

• CMS regulations implementing §6402 for MA/Part D plans (79 Fed. Reg. 29844, 5/23/14; 42 CFR §§422.326,423.360)

• Must return “identified overpayments”

• “Overpayment” – funds received or retained to which entity is not entitled to after applicable reconciliation

• “Applicable reconciliation” –

• annual final deadline for risk adjustment (MA)

• later of: annual PDE and DIR deadline (Part D)

• “Funds” – any payment based on data entity “controls and submits” to CMS for payment purposes

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• “Identified overpayment” – when entity has determined or “should have determined, through the exercise of reasonable diligence,” that it received overpayment (e.g., risk adjustment and HEDIS data)

• Must be reported and returned NLT 60 days after identification date

• Act of submitting corrected data fulfills requirement to report/return

• Enforcement – any retained overpayment is an “obligation” under FCA

• Look-back period – the 6 most recent completed payment years

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• “[R]easonable diligence might require an investigation conducted in good faith and in a timely manner by qualified individuals in response to credible information of a potential overpayment.” 79 Fed. Reg. at 29923-94.

• “MA/Part D sponsor’s obligation to investigate and identify false and fraudulent claims is outside the scope of this rule.” 79 Fed. Reg. at 29925

• Certification of accuracy of payments –CEO, CFO or COO must certify information provided for purposes of reporting/returning overpayments accurate, complete, truthful

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CMS MA/Part D Regulatory and Contractual Payment Certification Language

• 42 CFR §422.504(l), §423.505(k) – “as a condition of receiving a monthly payment” must request payment under the contract and certify to accuracy of data (or if contractor, subcontractor, related entity generates, must similarly certify)

• CMS Contract provisions –

• MA: Attachments A and B – monthly required attestations for enrollment and periodic risk adjustment/encounter data as a condition of receiving payments; Attachment C – bid and benefit data

• Part D: “must provide certifications in accordance with 42 CFR §423.505(k)”

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Other CMS MA/Part D Managed Care Payment Data Certification Requirements

• Enrollment data (MA/Part D)

• Bid data (MA/Part D)

• Risk adjustment/encounter data (MA)

• Drug claims (Part D)

• Reinsurance, risk-sharing, risk adjustment (Part D)

• Allowable costs, including direct and indirect remuneration, for risk corridors and reinsurance (Part D)

• Drug prices (Part D)

• Medical Loss Ratio data (MA/Part D)

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Key MC Compliance Operational Risks

Accuracy of Payment Data Submissions

• Risk adjustment data (Medicare MC and those states that use data to adjust capitated payments in Medicaid MC)

• Includes encounter data

• See GAO report (GAO-14-571), July 2014 (“Medicare Advantage: CMS Should Fully Develop Plans for Encounter Data and Assess Data Quality Before Use”)

• Nonprofit Center for Public Integrity suing HHS to obtain risk adjustment records to support claims CMS made improper payments to Medicare plans based on inflated risk scores

• Recently unsealed FCA whistleblower cases

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Accuracy of Payment Data Submissions:

• Medical Loss Ratio (MLR) data

• Any other data used for government payment:• enrollment data, Stars quality data, Rx drug event

(PDE) data, bid data, Part C/D reporting requirements, quality bonuses, risk corridors, reinsurance, ACA exchange subsidies and “3 Rs,” etc.

• Managed care payment certifications:• Basis for potential FCA liability

• Emerging FCA cases - whistleblowers increasingly targeting Medicare and Medicaid managed care programs

• Also allegations re: failure to meet specific compliance program requirements (monitor, audit, oversee vendors) related to this data

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Accuracy of Payment Data Submissions – Risk Adjustment:

• Medicare risk adjustment (42 CFR §422.310):

• 2 formats: comprehensive detailed data equivalent to Medicare fee-for-service claims data (“encounter data”); and data in abbreviated formats (often referred to as RAPS data).

• Since 2012 - MC plans required to submit encounter data to CMS

• CMS phasing in using more detailed encounter data in risk adjustment calculations (vs. RAPs data)

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• CMS revised risk adjustment regulations (79 Fed. Reg. 49854, 50324, 8/22/14)

• Broadened uses and release to strengthen program management/increase transparency

• Added 4 new authorized purposes for use/release of encounter data:

1. conduct evaluations/analysis to support the Medicare program (including demonstrations), support public health initiatives/research;

2. support Medicare program administration;

3. support program integrity; and

4. for purposes authorized by other laws.

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Preamble language - (79 Fed. Reg. 50325-26):• data supports Medicare program integrity

activities and other programs funded by Federal funds (e.g., Medicaid, ACA insurance exchanges, etc.)

• activities include audits and investigations (by OIG and CMS), efforts to combat FWA, etc.

• supports Medicare administrative activities (review of MA bid and MLR expenditures, development of quality measures, etc.)

• compare MA and FFS billing to identify aberrant patterns for FWA

• use by States, in conducting program integrity activities for Medicaid programs or in the administration of duals demonstrations

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Accuracy of Payment Data Submissions –Risk Adjustment:• Government sending strong signals about future

direction (see also 11/21/14 HPMS Memo: Requests for Comments on Enhancements to the Star Ratings for 2016 and Beyond – “CMS is particularly interested in comments on measures that could be developed using MA encounter data”)

• Armed with massive amounts of data (over 700M encounters as of July 2014) that can be compared across health care programs and MC entities

• CMS collaborating with law enforcement, state agencies in using this data for various purposes

• Oversight entities (GAO, OIG) will be tracking CMS actions and measuring results

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Accuracy of Payment Data Submissions –Risk Adjustment:

• Take proactive actions and heed signals:

• Institute controls to ensure RA data submitted is accurate and complete (you also may be leaving $ on the table – see GAO report, p. 23)

• Use to validate other payment-related data submitted to CMS and/or the states (MLR data, bid data, quality data, etc.)

• Use for FWA identification purposes

• Use sophisticated, intelligent analytics

• Best resource you have is your data

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Accuracy of Payment Data Submissions –Medical Loss Ratio:

• Medicare Advantage and Part D plans required to meet ACA statutory requirement to have MLR of at least 85% (effective 2014)

• CMS final regulations – 78 Fed. Reg. 31284 (May 23, 2013) (added 42 CFR 422, Subpart X and 42 CFR 423, Subpart X)

• MLR computed at the contract level vs. plan level as with bid submission

• Expenses related to multiple MA/Part D contracts or other commercial insurance allocated on a pro rata basis

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Accuracy of Payment Data Submissions –Medical Loss Ratio:

• Same revenue and expense definition as CMS uses in ACA exchanges

• Quality improvement expenses included with medical expenses (FWA activities considered administrative expenses)

• Record retention requirements – 10 years from the CMS reporting date (vs. “from the termination of the contract” under other CMS record retention requirement)

• Enforcement: enrollment suspension (failure to meet - 3 consecutive years) and contract termination (failure to meet - 5 consecutive years)

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Accuracy of Payment Data Submissions –Medical Loss Ratio:• Potential new FCA violation risk

• Also potentially implicates ACA 60-day overpayment requirements for identifying and returning overpayments – failure to fulfill obligation can be a FCA violation

• New opportunity for FCA whistleblower actions

• Key actions:

• Incorporate internal controls and periodic audits to validate data and processes used for computing

• Oversee vendors that provide data, update vendor agreements with applicable record retention requirements

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Network Accuracy/Adequacy and Access to Providers• MC entities taking actions to narrow networks

and terminate certain providers

• United Health Care – provider terminations in certain states (CT) engendered provider lawsuits and concerns by advocates

• CMS recently strengthened requirements –signaled it is developing related audit strategy

• CMS intends to revise Medicaid MC regulations in 2015 – including network adequacy provisions

• Ongoing concern with ACA exchanges -12/19/14 CMS draft letter to issuers signals future rule-making

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Network Accuracy/Adequacy and Access to Providers

Focus of OIG Medicaid MC reports –

• Access to Care: Provider Availability in Medicaid Managed Care (OEI-02-13-00670) (Dec. 2014)

• State Standards for Access to Care in Medicaid

Managed Care (OEI-02-11-00320) (Sept. 2014)

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Rehabilitation Act of 1973 - Section 504

• Requires entities receiving federal funds to provide equal access to program benefits and services to individuals with disabilities

• CMS April 2014 call letter

• OCR compliant settlement (August 2014)

• requires CMS to take certain actions to ensure its contractors are compliant with these requirements, including notifying beneficiaries of rights to request auxiliary aids and services, provide alternate format materials, etc.

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Rehabilitation Act of 1973 - Section 504

• CMS HPMS notice (9/9/14): All plan materials and information must be made available in alternate format, customer service reps properly trained to handle requests

• Includes materials and information produced or distributed by contracted providers

• Expect CMS focused oversight and enforcement of these standards to ensure compliance with settlement agreement obligations

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Protecting Confidentiality of Beneficiary Information

• HIPAA privacy and security requirements applicable to health plans (“covered entities”) – OCR audits and investigations and associated substantial penalties

• CMS specific Medicare MC off-shore vendor access and breach notification procedures

• Medicaid or other State-based confidentiality requirements

• Growing number of private actions in state courts alleging violations of other state laws

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Convergence Across Government Health Care Sectors

• Integrated databases for all federal health care data, uniform CMS program integrity contracting strategy (UPICs), full claims encounter data being collected and mined with predictive analytics for all federally funded health care programs

• Growing alignment of operational compliance and program integrity requirements across federal and state sponsored health care and federally funded ACA exchanges

• Increasingly similar requirements (e.g., payment certifications, encounter data submissions, exclusion screening, vendor oversight, operational processes, etc.)

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Convergence Across Government Health Care Sectors

• Increasingly similar oversight and administrative enforcement mechanisms in Medicare, Medicaid and exchange MC plans

• More active CMS role in Medicaid managed care:

• New MC regulations to be proposed in 2015 after a period of 12 years

• One of its stated aims - to drive greater alignment with other public programs such as Medicare MC, dual eligible demonstrations and exchange plans

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Contact Information

[email protected]

410-244-7537

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TRENDS IN MEDICAID COMPLIANCEHEIDI ARNDT

COMPLIANCE OFFICER

COMMUNITY HEALTH

GROUP

FEBRUARY 2015

HEIDI ARNDT

SENIOR VICE PRESIDENT,

MEDICAID

GORMAN HEALTH GROUP

Copyright © 2015 Gorman Health Group, LLC

Government ProgramsLeading enterprise of national consulting services and software solutionsfor payers and providers.

Our Mission Our mission, as the industry’s most active professional services consultancy and provider of technology-based solutions, is to empower health plans and providers to deliver higher quality care to beneficiaries at lower costs, while serving as valued, trusted partners to government health agencies.

Washington, DCHeadquartered in Washington, DC with more than 200 staff and contractors nationwide with over 2,000 combined years of Government Programs experience.

LeadershipDeep payer and provider knowledge coupled with Centers for Medicare & Medicaid Services (CMS) regulatory expertise.

Privately OwnedFounded in 1996

Gorman Health Group is the leading solutions and consulting firmfor government-sponsored health programs.

WHO IS GORMAN HEALTH GROUP?

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Our clients have one-stop access to expert advice, guidance, and support,in every strategic and operational area for government-sponsored programs, across seven verticals.

CLINICALChanging how you approach Medical Management, Quality and Stars

HEALTHCARE INNOVATIONSSupporting network design and medical cost control implementation

OPERATIONSBringing excellence to every aspect of your implementation from enrollment to claims payment

COMPLIANCEOffering guidance and support in every strategic and operational area to ensure alignment with CMS

PHARMACYLeading experts in Part D, PBM, formulary and pharmacy programs

RISK ADJUSTMENTEvaluating the efficiency and strategic value of risk adjustment programs to ensure accurate data flow

STRATEGY & GROWTHLeading experts in Marketing, Sales and Strategy development that create short and long-term profitable growth

BROAD SERVICES

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• Most Common Deficiencies

• Medicaid Compliance Today and Tomorrow

• Audit Methods

• Be Prepared

OVERVIEW

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• Oversight of delegates/vendors

• Involvement of Physician in Decision Making

• QIP Follow Up

• Network Management and Training

• FWA and Privacy Research and Reporting

MOST COMMON DEFICIENCIES

2014 Audits – Across 20 Plans

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HOW CMS REVIEWS COMPLIANCE

Working backwards like peeling the onion

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• Operations Outcomes (CDAG, ODAG, MOC)

• Management Oversight

• Training

• Staffing

• Policies and Procedures

• Audits and monitoring (internal and external)

• Risks

• Regulatory Guidance

• Senior Leadership Visibility

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• Failing to oversee delegated entities

• Failing to provide proof of activities

• Lack of visibility of compliance officer as well as compliance structure

• Medicare is a small part of the business and lacks the type of operations oversight needed

• Lack of evidence that the compliance plan has been implemented

• Compliance Officer is not knowledgeable or equipped to handle the work

• Compliance officer does not have the staff resources to do the job

• No evaluation of compliance program effectiveness

• No ongoing monitoring and auditing

MOST COMMON FINDINGS

Compliance Audit Findings

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• I have only been in the role for a short period of time

• We have contracted out for that service – it isn’t our responsibility

• Its operations responsibility to monitor

• We do not have enough staff to complete all that is expected

• CMS only expects that we have a FWA program in place

MYTHS

What CMS believes and agrees with.

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Today

• FWA

• Quality / Member Outcomes

• State Contract Standards

• Oversight of Delegates

• Process Documentation

• Appeals and Grievance Oversight

• Network Management

Tomorrow

• Intense internal monitoring and auditing

• Member Engagement

• Operations Outcomes

• Leadership Engagement

• Training

• Communication

• Provider Engagement

• Federal Mandate for More State Involvement

COMPLIANCE TODAY AND TOMORROW

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• More audits

• More auditors

• Intense scrutiny

• More frequent fines

AUDIT METHODS

Some states have changed their methods.

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1. Engaged Senior Leadership

2. Compliance staff with appropriate skillsets, knowledge base and experience

3. Functional Operations

4. Flexible Systems

5. Clear Robust Documented Processes

6. Open and Frequent Communication Channels

7. Plan of Action

KEY COMPONENTS OF AN EFFECTIVE PROGRAM

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• Understands the importance of compliance activities

• Demonstrates the understanding and makes it a part of ongoing/regular communications

• Seeks opportunities to enhance the culture

• Takes action

• Does not ignore the facts – when life gets hard

ENGAGED SENIOR LEADERSHIP

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• A Compliance Officer with industry experience – preferably some operations

• Staff with knowledge and a brain for compliance

• Individuals interested in compliance not focused on elevation

• “Must be willing to be a one term president…”

• Diligent and persistent

COMPLIANCE STAFF

Staff with appropriate skillsets, knowledge base and experience

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FUNCTIONAL OPERATIONS

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• Appropriate leadership and staff – understand Medicare

• Processes that are effective and compliant

• Management controls and methods to evaluate outcomes

• Continuous, ongoing training

• Data and Systems that are accessible, consistent and clean

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• Ability to track and report information easily

• Exchangeability, that is, reuse in a different system or context

• Portability; different hard- and software platforms on which software entities can run

• Scalability

• Extendibility or upgradeability,

• Integration of similar components and subsystems

• Interconnectivity reuse of the system through coupling with other

• Reversibility

• Downgradeability

FLEXIBLE SYSTEMS

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• Process Objective Identified

• Process Owner (and executive) Identified;

• Process Inputs Identified

• Process Suppliers Identified and Involved

• Identification of interdependencies

• Process Outputs Identified

• Process is Described by a Sound Business Model

• 10. Process Hierarchy is Understood Execution is Enforceable

• Designed to Provide Recorded and Analyzed Service and Process Metrics

• Documentation is Thorough, Accurate, and Easily Understood

• Process Contains All Required Value-Added Steps

• Process Guarantees Accountability and Provides Incentives for Compliance

• Process is Standardized Across All Appropriate Departments and Remote Sites

• Process is Streamlined and Automated As Much As Possible and Practical

• Process Integrates With All Other Appropriate Processes

CLEAR, ROBUST, DOCUMENTED PROCESSES

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• Non verbal

• Oral

• Written

• Web Based

• Electronic (e-mail)

• Electronic Conferencing

OPEN AND FREQUENT COMMUNICATION CHANNELS

Successful communication is tailored towards the audience.

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Senior Leadership

Internal Staff

Members / Stakeholders

Vendors


PLAN OF ACTION

Formula for success – one size does not fit all

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• This is not a legal document –operations manual

• What is the structure of the compliance department

• How does the Compliance Officer interact with the CEO and the Board

• How will issues be identified, researched, corrected and later tested

• How will regulatory guidance be identified, shared, implemented and tested

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• Understand what you are dealing with

• Identify the risk areas – review PBM oversight, grievance processes, policies and procedures and

• Establish the rules of the road

• Audit critical Part D areas

• Audit model of care implementation

• Develop plan of action – Compliance Plan

• Develop the monitoring plan

30 DAY COMPLIANCE BOOT CAMP

Things that must be completed quickly the first month.

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• If someone asked you where are your risks – can you tell them; can you prove it and provide examples

• Are your processes consistent – can anyone walk in and pick up where you left off

• Can you produce evidence of monitoring and auditing

• If you were to receive the audit letter tomorrow could you easily produce reports, meeting minutes, demonstration of conversations and follow up

EVALUATION

Now that you are in the middle of current program what’s next?

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• Conduct risk assessments no less than quarterly

• Develop tools focused on contract and oversight standards

• Audit frequently

• Review all member communications/ interactions

• Develop systems and process that lend themselves to flexibility and consistency

• Toughen up on vendors

BE PREPARED

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Gorman Health Group, LLC (GHG) is a leading consulting and software solutions firm specializing in government health programs, including Medicare managed care, Medicaid and Health Insurance Exchange opportunities. For nearly 20 years, our unparalleled teams of subject-matter experts, former health plan executives and seasoned health care regulators have been providing strategic, operational, financial, and clinical services to the industry, across a full spectrum of business needs. Further, our software solutions have continued to place efficient and compliant operations within our client’s reach.

GHG offers software to solve problems not addressed by enterprise systems. Our Valencia™ software reconciles the capitation payment of more than six million Medicare beneficiaries and continues to support customers participating in the Health Insurance Exchanges. Nearly 3,000 compliance professionals use the Online Monitoring Tool™ (OMT), our complete Medicare Advantage and Part D compliance toolkit, while more than 45,000 brokers and sales agents are certified and credentialed using Sales Sentinel™. In addition, hundreds of health care professionals are trained each year using Gorman University™ training courses.

We are your partner in government-sponsored health programs

T

E

HEIDI ARNDT

Senior Vice President, Medicaid

302-535-9045

[email protected]

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Documents

Brenda J. Tranchida, Esq. · 2015-01-27 · • Part D bid administrative costs, coverage gap discount payments, duals formularies, P&T committee conflict of interest ... applicable