UPDATE: On February 25, 2015,  the Centers for Medicare and Medicaid Services (CMS) lifted the Intermediate Sanctions on Capital Blue Cross (CBC) H3923, H3962, and S8067.  CBC will return to normal marketing and enrollment status.


On May 28, 2014, the Centers for Medicare and Medicaid Services (CMS) issued a notice of immediate imposition of intermediate sanctions (suspension of enrollment and marketing activities) for Medicare Advantage-Prescription Drug (MAPD) and Prescription Drug Plan (PDP) contract number H3923, H3962, and S8067.  These plans are offered by Capital Blue Cross (CBC) in select counties in Pennsylvania for their SeniorBlue MAPD plans and statewide in Pennsylvania and West Virginia for their SecureRx PDP plans.

The SeniorBlue MAPD plans have a 4.00 star quality rating and the SecureRx PDP plans have a 3.50 star quality rating.

The plan formularies will remain online and available through our formulary browser (links below in chart). Current plan membership is as follows:



Per CMS, in a letter to Gary St. Hilaire president and CEO of Capital Blue Cross, "CBC’s deficiencies create a serious threat to enrollee health and safety." Highlights of the CMS letter follow:

CBC has experienced widespread and systemic failures impacting CBC’s enrollees’ ability to access prescription medications. Enrollee access to services and prescribed medications is the most fundamental aspect of the Part C and Part D programs because it most directly affects clinical care. CBC is denying enrollees access to drugs at the point of sale and within their appeals and coverage determinations process. The ineffective oversight of CBC’s PBM, coupled with serious deficiencies with CBC’s administration of its Part D coverage determinations, appeals, and grievances and Part D formulary, resulted in enrollees being denied access to the drugs that they are entitled to receive.

The nature of CBC’s noncompliance provides sufficient basis for CMS to find the presence of a serious threat to enrollees’ health and safety, supporting the immediate suspension of CBC’s enrollment and marketing activities. Consequently, these sanctions are effective on May 28, 2014.

CMS auditors concluded that CBC substantially failed to comply with CMS requirements regarding Part C and Part D appeals and grievances, organization/coverage determinations, and Part D formulary and benefit administration.

CMS identified multiple, serious violations of Part C and Part D organization/coverage determination, appeal, and grievance requirements that resulted in CBC’s enrollees experiencing inappropriate denials or delays of medications at the point of sale and within enrollees’ coverage determinations or appeals. Additionally, enrollees experienced inappropriate out of pocket cost for covered Medicare services and medications. These failures pose a serious threat to the health and safety of enrollees. Many of these issues stem from a complete ineffective monitoring and oversight of CBC’s Pharmacy Benefit Manager (PBM), which is responsible for CBC’s coverage determinations. Additionally, CBC’s lack of internal controls and of consistent procedures resulted in a breakdown in other processes with Part D redeterminations, Part C organization determinations, Part C reconsiderations and grievances.

Violations Related to Part C and Part D Organization/Coverage Determinations, Appeals, and Grievances

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 timeframes.
• 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 timeframes.
• 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.

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.

Current members of one of the Capital Blue Cross plans who wish to switch to a different Medicare Part D plan can contact Medicare at 1-800-633-4227 and select the prescription drug option; then choose to speak to a representative.  A Special Enrollment Period (SEP) due to "CMS sanction" may be granted.  The determination is made by CMS on a case-by-case basis.