CMS lifts Capital Blue Cross Medicare Advantage and Medicare Part D Marketing and Enrollment Sanctions

On February 25, 2015, the Centers for Medicare and Medicaid Services (CMS) lifted the Intermediate Sanctions on Capital Blue Cross (CBC) Medicare Advantage Plans and stand-alone Medicare Part D Prescription Drug Plans (contracts H3923, H3962, and S8067) that had suspended the CBC marketing and enrollment activities for these contracts.

According to the February 25, 2015 CMS letter:

"Based on the results of the validation audit, CMS has determined that CBC’s deficiencies have been sufficiently corrected. Therefore, effective February 25, 2015, the intermediate sanctions are released from contracts H3923, H3962, and S8067. Additionally, the limited enrollment period has ended and CBC will return to normal marketing and enrollment status."

The May 28, 2014 CBC sanctions were imposed based on compliance failures that included:

Medicare Part D:

Failure to properly effectuate prior authorization or exception requests.
Failure to properly administer its CMS - approved formulary by applying unapproved utilization management practices.
Failure to process redetermination requests.
Inappropriate denials of medications when processing coverage determinations.
Failure to conduct sufficient outreach to the prescriber or beneficiary to obtain additional information necessary to make appropriate clinical decisions.
Failure to implement a favorable decision by the Independent Review Entity (IRE) or other appeal entity for the beneficiary within CMS required time-frames.
Denial letters do not include an adequate rationale and/or contain incorrect information specific to the denial.
Approval letters do not accurately or fully explain the conditions of approval.
Misclassifying coverage determinations and appeals as grievances.
Failure to take appropriate action, including a full investigation and/or appropriately addressing all issues identified in the grievance.
Failure to resolve the grievances within CMS required time-frames.
Failure to provide the beneficiary with written notice of his/her right to file with, and the contact information for, the Quality Improvement Organization (QIO).
Failure to properly oversee CBC’s delegated entity regarding guidance in Grievances, Coverage Determinations, Redeterminations, and Reconsiderations.

In addition to the above violations related to the Part D coverage determination, appeal and grievance requirements, CMS auditors discovered an additional failure while reviewing CBC’s grievance logs. CBC failed to perform timely retroactive claims adjustments. As a result of this failure, over 3,000 enrollees were overcharged a total of $27,667 for their medications.

Medicare Part C:

Failure to hold the enrollee harmless when services were provided by a contracted plan provider or a provider referred by a contracted plan provider.
Inappropriate denials of payment for emergency medical services.
Failure to state the specific reason for denial or provide a description of the appeal process in the remittance advice/notice when denying a request for payment from a non-contracted provider.
Denial letters do not include an adequate rationale, contain incorrect information specific to the denial, and/or are written in a manner not easily understandable to the beneficiary.
Failure to conduct sufficient outreach to the provider or beneficiary to obtain additional information necessary to make an appropriate clinical decision.
Misclassifying organization determinations or reconsiderations as grievances.
Failure to take appropriate action, including a full investigation and/or appropriately addressing all issues identified in the grievance.
Failure to recognize, investigate and appropriately act on, quality of care grievances contained within beneficiary complaints.
Failure to provide the beneficiary with written notice of his/her right to file with, and the contact information for, the Quality Improvement Organization.

Violations Related to Formulary & Benefit Administration CMS identified serious violations of Part D formulary and benefit administration requirements that resulted in CBC’s enrollees experiencing inappropriate denials or delays of medications at the point of sale and receiving incorrect transition notification letters.

CBC’s violations include:

Failed to properly administer its CMS - approved formulary by applying unapproved step therapy edits and/or criteria.
Failure to properly administer the CMS transition policy by providing incorrect text in beneficiary transition notification letters for prior authorization instead of step therapy criteria.

For more details, see the CMS "Notice of Release of Intermediate Sanctions (Suspension of Marketing and Enrollment) for Medicare Advantage-Prescription Drug and Prescription Drug Plan Contract Numbers: H3923, H3962, and S8067" found here:
https://www.cms.gov/Medicare/Compliance-and-Audits/Part-C-and-Part-D-Compliance-and-Audits/Enforcement-Letters-Items/CBCSanctionRelease02_25_15.html