Policy Author: Author Title: Author Department: Reporting

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1 a link to this policy.-> Print this page.-> National Policy Library Document Policy Name: Medicare Compliance Corrective Action Procedures Policy No.: EJ Policy Author: Author Title: Author Department: Sheryl Pessah Manager, Compliance & 4002-Medicare Compliance Reporting and C Phone: Cost Center: Functional Owner: Nancy Starts Executive Owner: Gay Ann Williams This Policy is applicable to the following: Department(s): All Departments Business Unit(s): HN Life, HNAZ, HNCA, HNI, HNNE, HNOR, HNPS Regions: N/A Products/LOB's: Medicare Advantage, Medicare Part D Date Created: Effective Date: Version: 04/04/ Policy Statement: The Center for Medicare & Medicaid Services (CMS) requires that Medicare Advantage Organizations and Part D Sponsors operate plans in compliance with Parts 422 and 423 of Title 42 of the Code of Federal Regulations (CFR), the Medicare Managed Care Manual, the Prescription Drug Benefit Manual and other applicable guidance. Compliance with these rules is necessary for contract renewal consideration and maintenance of federally qualified status. Non-compliance with Medicare Advantage (MA) and/or Part D regulations or guidance Page 1 of 5

2 may be determined through various means including, but not limited to: audits or monitoring conducted by the Health Net Medicare Compliance department, Internal Audit, or the Special Investigations Unit (SIU); Business Unit, First Tier, Downstream or Related Entity self-monitoring; or communication from CMS or other regulatory agency. The Health Net Medicare Compliance department requires that Business Units submit a Corrective Action Plans (CAP) when deficiencies with CMS rules are identified. Failure to cooperate with the CAP process is subject to disciplinary action, up to termination of employment. Corrective Action Requests (CAR) issued by Medicare Compliance are documented in the Medicare Quality Management System (MQMS). Health Net requires all delegates to submit a Corrective Action Plan (CAP) when deficiencies are identified through compliance audits, ongoing monitoring or selfreporting. Health Net will take administrative action, which may include termination of the contract, if a First Tier, Downstream or Related Entity does not comply with a CAP or does not meet its regulatory obligations as outlined in the Medicare Advantage or Part D contract. CAPs typically include, but may not be limited to: Review and revision, as applicable, of policies, procedures, desktop work instructions, workflows, member materials, etc., to ensure compliance with CMS regulation and guidelines; Training of applicable internal and/or delegated staff on policies, procedures, desktop work instructions, workflows, member materials, etc.; Periodic self auditing/monitoring by the applicable Business Unit to ensure compliance is achieved and maintained; and Reporting of self audit/monitoring results to Medicare Compliance or other Business Unit with oversight authority Identified deficiencies that have a direct effect upon MA and/or Part D members or that require CMS intervention to resolve are reported to CMS. Identified deficiencies that involve potential fraud or other misconduct are referred to the MEDIC, the Office of the Inspector General (OIG) and/or law enforcement as appropriate. Policy Purpose: To ensure a process is in place to respond to detected offenses, to initiate corrective action to prevent similar offenses, and to report to Government authorities when appropriate. Scope/Limitations: This policy and related procedures apply to all individuals employed, contracted, or otherwise representing Health Net and its subsidiaries. Related Policies: Delegation Oversight - Corrective Action Plan (GS ) Medicare Compliance: Comprehensive Fraud, Waste and Abuse Plan (HR ) Medicare Compliance: Monitoring and Auditing (HR ) Page 2 of 5

3 Special Investigation Unit (SIU) National Policy & Procedure Manual References: Title 42 Code of Federal Regulations (CFR) 42 C.F.R (b)(4)(vi)(G) 42 C.F.R (b)(4)(vi)(G) CMS Medicare Managed Care Manual Chapter 11 - Medicare Advantage Application Procedures and Contract Requirements Section 20.1 Prescription Drug Benefit Manual Chapter 9 Part D Program to Control Fraud, Waste and Abuse (Sections 20 and ). Medicare Advantage Audit Guide (Version 6.1): CN09 - Adequate Compliance Plan MA-PD Sponsor Part D Audit Guide V 3.0 CP07 - Response to Detected Offenses and Corrective Action Plan PDP Sponsor Part D Audit Guide V 3.0 CP07 - Response to Detected Offenses and Corrective Action Plan Health Net Medicare Compliance Plan 2010 Definitions: Business Unit Health Net plans, entities or departments with specific business functionality. Corrective Action Request (CAR) Request for corrective action to address an adverse finding. Corrective Action Plan (CAP) A description of the actions to be taken to correct deficiencies identified during an audit, ongoing monitoring or self-reporting and ensures future compliance with the applicable requirements. A CAP usually contains accountabilities and sets timelines. Centers for Medicare & Medicaid Services (CMS) The federal agency within the Department of Health and Human Services that administers the Medicare program. First Tier Entity Any party that enters into a written arrangement with a Medicare Advantage Organization or Part D Sponsor to provide administrative services, health care benefits or pharmacy services an MA or Part D Plan. Internal Audit Page 3 of 5

4 A department within Health Net that provides independent, objective and comprehensive reviews designed to evaluate and assess the adequacy and effectiveness of various areas of the company. Medicare The federal health insurance program for people 65 years of age or older, certain younger people with disabilities, and people with End Stage Renal Disease (ESRD). Medicare Advantage (MA) Also referred to as Medicare Part C, is a program offered to Medicare beneficiaries by private companies which work in conjunction with Medicare and cover the full range of hospital and doctor services covered in Original Medicare. Medicare Advantage Organization (MAO) An organization that is a public or private entity organized and licensed by a State as a risk-bearing entity that is certified by CMS as meeting the requirements to offer an MA plan. Office of the Inspector General (OIG) The OIG conducts and supervises audits and investigations relating to programs and operations of the DHHS. Part D Also referred to as Medicare prescription drug coverage, is a voluntary program offered to Medicare beneficiaries by private companies to subsidize the cost of prescription drugs. Part D Sponsor An entity that has a contract with the Federal Government to offer Medicare prescription drug coverage. Special Investigations Unit (SIU) A department within Health Net that responsible for detecting, investigating and deterring issues of possible Fraud, Waste and/or Abuse (FWA) in compliance with the laws, rules and regulations applicable to healthcare. Procedure: Upon identification by, or referral to, the Medicare Compliance department of a MA or Part D compliance deficiency not related to possible fraud or other misconduct: 1. The Medicare Compliance department issues a CAR to the applicable business area(s) via MQMS 2. If applicable, within 48 hours of identification of the deficiency the Medicare Compliance Officer or her designee reports the deficiency to CMS using the CMS Issues Write-Up template (Attachment 1) 3. Within 10 business days of receipt of a CAR, the business process owner or his/her designee submits a CAP via MQMS detailing the actions that will be taken to resolve the deficiency, including the timeframes for completing such actions. Page 4 of 5

5 4. Within 5 business days of receipt of the CAP, a Medicare Compliance associate reviews the CAP to determine if it will ensure compliance is met once all tasks are completed. a. If no, the CAR is returned to the business process owner for revision and steps 2 4 are repeated until the CAP is deemed satisfactory 5. The business process owner or his/her designee provides periodic updates regarding the CAP tasks to Medicare Compliance via MQMS. 6. Once all CAP tasks are completed, Medicare Compliance determines what monitoring steps will be taken to ensure the deficiency has been effectively resolved and that on-going compliance is maintained. Upon identification of a MA or Part D compliance deficiency related to possible fraud or other misconduct: 1. The Medicare Compliance department or other Business Unit routes the issue to the SIU for investigation and possible referral to the MEDIC, OIG and/or other law agency in accordance with applicable SIU policies and procedures. Disclaimer: Deviations: Additional Information: Approvers: Functional Owner: Nancy A Starts - Approved on 07/30/2010 Executive Owner: Gay Ann Williams - Approved on 07/30/2010 Active Policy Disclaimer Please note: This copy of this policy is current as of the date printed. To be assured that you are viewing the currently active policy, please refer to Health Net's National Policy Library site. Date Printed: 07/30/2010 Attachment 1: H:\ MedicareCompliance\C Page 5 of 5