Update on Part D Issues

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1 Update on Part D Issues Stephanie Blaydes Kaisler CMS Program Integrity Group Health Care Compliance Association December 11, 2007

2 Update on Part D Issues Overview I. MEDICs II. Coordination with Law Enforcement, State Insurance Commissioners and Part D Sponsors III. Regulation Changes 2

3 MEDIC Regional Map The 3 MEDIC Regions: Effective 12/1/06 WA MT OR ID WY NV UT CO CA #1: SAIC (West) AZ NM ND MN WI SD #2: EDS (North) NE IA IL KS MO OK AR VT NY MI PA NJ IN OH WV VA KY TN NC SC ME NH MA CT RI DE MD AK TX LA MS AL GA #3: Delmarva/ Health Integrity (Southeast) FL PR Mariana Islands HI Guam American Samoa USVI 3

4 MEDIC Contact Information RO #1 West: Science Applications International Corporation (SAIC) By phone: 877-7SAFERX ( ) By fax: *In writing: SAIC- MEDIC West 450 N. Brand Boulevard, Suite 410 Glendale, CA RO #2 North: Electronic Data Systems (EDS) Corporation By phone: 877-7SAFERX ( ) By fax: *In writing: EDS MEDIC-North 225 Grandview Avenue Mail-stop F10 Camp Hill, PA RO#3 Southeast: Delmarva/Health Integrity By phone: 877-7SAFERX ( ) By fax: *In writing: Health Integrity Attention: MEDIC 9240 Centreville Road Easton, MD *Note: All Regional MEDICs can be reached by the same number:

5 Fundamental MEDIC Activities Conduct complaint investigations Perform data analysis efficiently and proactively to evaluate inappropriate activity Develop and refer cases to the appropriate law enforcement (LE) agency or take administrative action as appropriate Support ongoing LE investigations Conduct audits as necessary Review PDP and MA-PD fraud and abuse compliance programs based on Chapter 9 of the Part D Manual Part D Program to Control Fraud, Waste, and Abuse 5

6 MEDIC Coordination and Education Requirements MEDICs must coordinate with other entities to ensure efforts are coordinated to stop fraud. Sponsors Other MEDICS Other Medicare Contractors (FI, Carriers, etc ) OIG DOJ FBI State Agencies (MFCU, etc ) Law Enforcement Task Forces Quality Improvement Organizations Medicare Managed Care Organizations Private Health Insurers Other Specialty Contractors Other Federal and State Agencies Kickoff Meeting and Transition Activities 6

7 Recent MEDIC Successes Saved Medicare Trust Fund dollars from going to a fraudulent pharmacy Joint audit of a pharmacy Assisted with the termination of an MA-PD 7

8 Current examples of Part D Fraud, Waste and Abuse Agent/Broker activities Pharmacy activities Drug Seeking Beneficiaries 8

9 Coordination with Law Enforcement and State Insurance Commissioners CMS MOUs with Law Enforcement CMS MOU with State Insurance Commissioners 9

10 Coordination with Part D Sponsors Potential cases of illegal drug activity, including drug diversion should be referred to the MEDIC and/or law enforcement. 10

11 Coordination with Part D Sponsors Where the Sponsor cannot determine whether or not the conduct has risen to the level of potential fraud due to limited resources, the Sponsor should refer the activity to the MEDIC for investigation. 11

12 Chapter Compliance Officer and Committee Part D Sponsors required to implement a comprehensive fraud and abuse program that addresses Part D Compliance officer should be the chief overseer of the Part D compliance program and efforts. Compliance officer and compliance committee must be accountable to senior management and functions may not be delegated to other entities. 12

13 Coordination with Part D Sponsors Chapter The Part D sponsor should ensure that SIU and Compliance Officer / Compliance Committee work closely together to ensure that the Medicare Prescription Drug benefit is reasonable protected from fraudulent, abusive and wasteful schemes throughout the administration and delivery of prescription drugs at the sponsor level and at the first tier, downstream and related entity levels. 13

14 Chapter Special Investigation Units (SIUs) Part D sponsor not required to have SIU May exist under a different unit but perform the same functions Is often separate from the Compliance office Usually staffed by former LE personnel Conducts surveillance, interviews and other methods of investigation 14

15 Chapter Special Investigation Units (SIUs) Goals typically include: Utilizing real-time systems to ensure accurate eligibility, benefits, refills and pricing at POS and identifying potential adverse drug interactions Identifying members w/drug addiction problems Identifying and recommending provider for exclusion 15

16 Chapter Special Investigation Units (SIUs) Coordination with MEDICs and LE Referring potential cases of illegal activity Conducting case development to support MEDIC and/or LE investigations 16

17 Regulatory Changes 42 CFR Parts 422 and 423 Outline of the presentation: I. Regulatory changes that may impact industry operations (42 CFR Parts 422 and 423) Key issues related to: - Program Operations - Program Accountability and Compliance - Program Integrity - Fraud, Waste and Abuse II. OIG Report: CMS Part D Safeguards - OIG Findings and CMS Responses 17

18 42 CFR Parts 422 and 423 Part 422 Medicare Advantage Program Part 423 Voluntary Medicare Prescription Drug Benefit 18

19 42 CFR Parts 422 and 423 Plans affected by the regulation: - Medicare Advantage Plans - Medicare Advantage Prescription Drug Plans - Stand-alone Prescription Drug Plans 19

20 Regulatory Changes and Program Operations Program Operations: 1. Contract Determinations Eliminating the reconsideration process for review of contract determinations 2. Appeal Rights 1. Applicable for all contract determinations 2. Same appeal rights 20

21 Regulatory Changes and Program Accountability Program Accountability and Compliance: Intermediate sanctions and civil monetary penalties: Clarifying the intermediate sanctions and civil money penalty s provisions that apply to MA organizations and Part D prescription drug plan sponsors The current reconsideration step has been moved for intermediate sanctions, permitting a plan to go to a hearing concerning an intermediate sanction. 21

22 Regulatory Changes and Program Integrity Program Integrity- Fraud, Waste and Abuse Training and Education Definitions (clarification of key terms) Access to books and records Self-reporting 22

23 Regulatory Changes and Program Integrity TRAINING and EDUCATION Issue: Are Part D sponsors required to provide training and education directly to all contracted entities? Response: CMS does not require Part D sponsors to directly provide training and education to its first tier, downstream and related entities. However, sponsors need to ensure that these entities are adhering to the requirement either through their own or the sponsors training and education program. 23

24 Program Integrity Training and Education TRAINING and EDUCATION Issue: How might a Part D sponsor fulfill the training and education requirement? Response: Guidance on providing training and education are provided in Chapter 9 of the Prescription Drug Benefit manual (General Compliance Training): Inform staff of the Compliance officer, compliance committee, work plan of the organization, etc (Specialized Compliance Training): Training in the particular aspects of Part D and their responsibilities in limiting compliance risks (Methods of Training): Various onsite and offsite methods discussed. 24

25 Program Integrity Definitions DEFINITIONS Issue: Clarify who is considered a subcontractor? Response: The term subcontractor has been replaced by First Tier, Downstream, and Related Entity to provide further clarity. These terms indicate entities such as Pharmacy Benefit Managers, Pharmacies, etc. (further examples are provided in the regulation) 25

26 Program Integrity - Definitions DEFINITIONS (Sections and 423.4) First Tier Entity means any party that enters into a written arrangement acceptable to CMS, with a Part D sponsor or an MA organization or applicant to provide administrative or health care services for a Medicare eligible individual under the Part D or MA program. 26

27 Program Integrity - Definitions DEFINITIONS (Sections and 423.4) Downstream Entity means any party that enters into a written arrangement acceptable to CMS, with persons or entities involved with the Part D benefit, below the level of the arrangement between a Part D sponsor or an MA organization (or applicant) and a first tier entity. These written arrangements continue down to the level of the ultimate provider of both health and administrative services. 27

28 Program Integrity Definitions DEFINITIONS (Sections and 423.4) Related Entity means any entity that is related to the Part D sponsor or MA organization by common ownership or control and (1) Performs some of the Part D sponsor or MA organization s management functions under contract or delegation; (2) Furnishes services to Medicare Enrollees under an oral or written agreement; or (3) Leases real property or sells materials to the Part D sponsor or MA organization at a cost of more than $2,500 during a contract period. 28

29 Program Integrity - Access to Books and Records ACCESS TO BOOKS AND RECORDS CMS has existing legal authority to access books and records of first tier, downstream and related entities under section 1860D- 12 (b)(3)(c ) of the Medicare Modernization Act and (e)(2) and (e) (2) of the regulation. 29

30 Program Integrity - Access to Books and Records ACCESS TO BOOKS AND RECORDS Issue: How should information requested from first tier, downstream and related entities be submitted to CMS? Response: First tier, downstream and related entities are given the option of either submitting the requested information directly to the Part D sponsor or to CMS or its designee. This decision should be made through the contractual negotiation process. 30

31 Program Integrity - Access to Books and Records Access to Books and Records Issue: What is the standardized format to submit information? Response: The information requested may vary depending on the circumstances and as a result it may not be possible to develop a single standardized format. The format will be determined based upon the specific request. 31

32 Program Integrity Self Reporting Self Reporting Issue: Should self reporting be mandatory? Response: Further comment solicited as CMS explores the benefits and challenges to requiring mandatory self reporting. 32

33 Questions Contact Information Stephanie Blaydes Kaisler Deputy Director, Div. of MMA Integrity Program Integrity Group Centers for Medicare & Medicaid Services (410)

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