Health Care Communiqué: 1Q - 2010

CMS Audit -- Part 3 of Our Continuing Series

CMS uses sampling and case review as a method of evaluation in as many as 40 subject areas in a full MAPD audit. The statistical model employed by CMS (hyper geometric distribution) depends on relatively small sample sizes, but a high level of accuracy. Depending on subject area, sample selection ranges from 10 to 20 cases.

The compliance threshold is 95% so depending on universe size, just one to three problem cases will usually result in a "not met" finding by CMS and the MAO will need to prepare a corrective action plan (CAP).  

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FCA + FERA Amendments = Effective Compliance Program

Approximately  On May 20, 2009, President Obama signed the Fraud Enforcement and Recovery Act (FERA) into law. FERA was primarily intended to give the government an opportunity to investigate and prosecute financial fraud, especially any misuse of government stimulus and Troubled Asset Relief Program (TARP) funds.

However, FERA also amended the False Claims Act (FCA) which imposes liability on those who make false claims for reimbursement to the government. FERA now makes it a violation of the FCA to "improperly" avoid repaying money owed to the U.S. government, even if the overpayment was not based on a false claim. The FCA states that any person who "knowingly conceals or knowingly and improperly avoids or decreases an obligation to pay or transmit money or property to the government" is liable to the government for a civil penalty. FERA expanded the definition of "obligation" to now include "retention of an overpayment."

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New Course: Specialty Pharmacy

Specialty drugs are the fastest growing component of prescription drug expenditures, primarily because of enormous increases in availability and use, coupled with drug cost inflation.

Yet, when these expensive therapies are used appropriately, they can significantly improve Part D enrollee health or employee health and prevent costly medical claims.

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