• Careers
  • Contact Us
  • Blog

MedHOK Strategic Insights Blog

2017 Program Audit Results Show Continued CMS Enforcement Regime and Rigor

Marc Ryan | June 6, 2018


A few blogs ago we told you about major Centers for Medicare and Medicaid Services (CMS) Civil Monetary Penalty (CMP) activity in 2017. Recently, CMS released its annual Program Audit Report for the prior year and, as we told you then, it shows enforcement and rigor are not slowing down.

Because we are hosting the MedHOK Users Conference this week in St. Petersburg, Florida and will be covering many of these issues there, we will keep this blog short and rely on CMS’ graphics to give you some insight into the 2017 program audit findings.

The highlights:

  • Depending on the type of plan, sponsors are audited in three (PDPs), four (MA non-Special Needs Plans and MA-Only), or five (MA SNPs) areas.
  • The 2017 audits covered 38 sponsors and 16% of total MA, MA related, and PDP membership.
  • This audit cycle began in 2015 and now 93% of all enrollees were covered by plans that were audited. In 2018, that number will reach 96%. In terms of contracts, by 2017, 43% of contracts had been audited and that will reach 59% by the end of 2018. Thus, each year, the chances that a plan is audited increases markedly. Good news: the average audit score dropped from 1.22 in 2016 to 1.10 for 2017. The lower audit scores are the better. Scores dropped in all areas except the Compliance regime. The worst performing areas were: ODAG, followed by CDAG and then SNP-MOC.


 *Audit scores are analyzed at the sponsor (parent organization) level. The average audit score is an unweighted score across all audited sponsors within each group. A lower audit score represents better audit performance.

  • High Star scoring plans (4.5 or better) had an average score of 0.85, which is lower than the all-plan average, but still high when measured against the highest performing plans. At the same time, for the first time, there appears to be a direct correlation between Star achievement and program audit outcomes.

blog2      *Audit and Star Rating scores are analyzed at the sponsor (parent organization) level. A lower audit score represents better audit performance. One sponsor audited in 2017 did not have any contract with an associated Star Rating and is therefore excluded from this chart.

  • Experience in the Medicare Advantage program, as well as, the sponsors’ overall membership size may be predictors of how well you will do on an audit. The more years of experience, the lower the score was in 2017, and sponsors with larger membership enrollment, also fared better in 2017.

blog3            *Audit scores are analyzed at the sponsor (parent organization) level. The length of time a sponsor has offered Medicare contracts is based on the contract a sponsor has with the earliest effective date. The average audit score is an unweighted score across all audited sponsors within each group. A lower audit score represents better audit performance.  


*Audit scores are analyzed at the sponsor (parent organization) level. The average audit score is an unweighted score across all audited sponsors within each group. A lower score represents better audit performance.

  • Here are the results by plan. A shout out to MedHOK client, InnovaCare and its plans: MMM of Puerto Rico, PMC of Puerto Rico and First Plus. The plans scored the best in 2017 with just a 0.13 overall score. InnovaCare received no ICARs, or CMPs and received a perfect 0.00 on the CPE, CDAG and SNP-MOC components. The plans also have 4.5 Star status! Just amazing!

blog5*A lower audit score represents better audit performance. The average audit score is an unweighted score across all sponsors audited in 2017.

  • The imposition of Immediate Correction Action Required (ICARs) and Corrective Action Required (CAR) remain extremely high. In total, 28 ICARs were cited in Formulary Administration, 32 ICARs were cited in CDAG, and 35 ICARs were cited in ODAG.


  • When compared with 2016 program audits, the number of conditions, as well as, enforcement CMP actions are lower, but still had extremely high levels.


  • See this link to the program audit report for 2017. Here are the key major conditions found in the program audits that plans need to be aware of:
    • For CPE: Failure to implement key aspects of a compliance program, including overseeing downstream providers.
    • For FA: Lack of effectuation, not following approved UM edits, and not following quantity limits filed with the formulary.
    • For CDAG: Inappropriate classification of cases or inquiries, lack of thorough investigation of grievances, lack of appropriate auto-forwards, and inadequate denial rationales in letters.
    • For ODAG: Lack of appropriate denial rationales, lack of full investigation of grievances, misclassification of cases, failure to timely pay reimbursements, and untimely processing of expedited cases.
    • For SNP-MOC: Did not conduct required initial and annual assessments, lack of both individualize care plans and interdisciplinary care team activities, and did not conduct necessary activities, including care plan updates when health status changed or consistent with the model of care.

In summary, CARs, and ICARS remain at very high levels. As we noted when we covered the CMPs for 2017 some of the timeliness, misclassification, required templates and appeal rights, denial rationale, and outreach findings have tailed off a bit, but they remain a concern.

audit, CMS, compliance, Program Audit Protocols, Health Care study

About The Author

Marc Ryan

Marc S. Ryan serves as MedHOK’s Chief Strategy and Compliance Officer. During his career, Marc has served a number of health plans in executive-level regulatory, compliance, business development, and operations roles. He has launched and operated plans with Medicare, Medicaid, commercial and Exchange lines of business. Marc was the Secretary of Policy and Management and State Budget Director of Connecticut, where he oversaw all aspects of state budgeting and management. In this role, Marc created the state’s Medicaid and SCHIP managed care programs, and oversaw its state employee and retiree health plans. He also created the state’s long-term care continuum program. Marc was nominated by then HHS Secretary Tommy Thompson to serve on a panel of state program experts to advise CMS on aspects of Medicare Part D implementation. He also was nominated by Florida’s Medicaid Secretary to serve on the state’s Medicaid Reform advisory panel. Marc graduated cum laude from the Edmund A. Walsh School of Foreign Service at Georgetown University with a Bachelor of Science in Foreign Service. He received a Master of Public Administration, specializing in local government management and managed healthcare, from the University of New Haven. He was inducted into Sigma Beta Delta, a national honor society for business, management and administration.


Subscribe to MedHOK's Blog

Subscribe to Email Updates

Recent Posts