On January 31, 2020, the Centers for Medicare and Medicaid Services (CMS) gave notice to Delaware Life Insurance Company (DLIC) that CMS has made a determination to impose immediate intermediate sanctions on the following Medicare Advantage- Prescription Drug (MA-PD) and Prescription Drug Plan (PDP) Contract Numbers: H2020, H2334, H3071, H5454, H6379, H6672, H8293, H9403, H9589, and S6946.
CMS noted that "[s]ince January 1, 2020, DLIC has experienced widespread system failures with its enrollment operations, which have resulted in a disruption to its beneficiaries’ access to prescription medications. CMS has determined that these operational deficiencies have resulted in the substantial failure to comply with DLIC’s MA-PD and PDP contracts and warrant the imposition of intermediate sanctions."
The sanctions will consist of the suspension of enrollment of Medicare beneficiaries into DLIC’s contract and the suspension of all marketing activities to Medicare beneficiaries. These intermediate sanctions went into effect on January 31, 2020.
From the CMS notification letter:
"On January 3, 2020, DLIC informed CMS that it had identified several issues with its MA-PD and PDP contracts which included:
(1) failing to process enrollment transactions on time,
(2) failing to send member identification (ID) cards and other enrollment documents to enrollees, and
(3) call center wait times exceeding CMS standard time-frames.
At the same time, CMS began to see an influx of complaints through its complaints tracking module (CTM) from enrollees who were complaining that DLIC had no record of their enrollment transactions and they were in need of medications.
Based on these issues, CMS immediately became concerned and contacted DLIC for more information.
Prior to 2020, DLIC operated seven MA-PD contracts to administer Part C and D benefits to approximately 5,300 beneficiaries. For contract year 2020, DLIC decided to offer a new stand-alone prescription drug benefit (i.e. Part D) and added two MA-PD contracts. This new PDP contract provided favorable premium and benefit options for enrollees, which made it eligible to receive low-income subsidy (LIS) enrollees.
At the same time, DLIC’s enrollment processing vendor moved the organization onto a new enrollment platform and understaffed its enrollment department based on understated membership projections. However, by January 1, 2020, DLIC’s enrollment increased by over 1,000% and, at the same time, enrollment processing issues began to arise.
To date, CMS has received over 160 complaints in its CTM from DLIC beneficiaries. CMS analysis of these CTMs show numerous complaints where beneficiaries are being told that they are not enrolled in DLIC even though they have confirmation numbers showing that they should be enrolled in the plan. In some cases, beneficiaries are being informed by the pharmacy that they are not enrolled in the plan while trying to pick up their medications.
In other cases, beneficiaries are complaining that they have not received ID cards and have had to pay out of pocket for medications. In addition, DLIC disclosed over 400 grievances have not been addressed. DLIC has not fully analyzed and provided details about the nature of these grievances to CMS. In addition, when beneficiaries call into DLIC to try to resolve the enrollment or other issues, they are being placed on hold for significant periods of time.1
DLIC has offered several reasons for why there were breakdowns in processing thousands of enrollments. However, DLIC has yet to provide CMS with comprehensive explanations for why some of these errors occurred and whether the issues have been resolved.
These errors have caused DLIC’s pharmacy network to have inaccurate membership status information for enrollees. As a result, DLIC is seeing rejected claims at the point of service that are related to eligibility and enrollment issues. In addition, there were a number of data errors that caused ID cards and welcome kits not to be mailed to beneficiaries timely. As of January 20, 2020 there were still hundreds of ID cards and welcome kits that were not mailed.2
Of greatest concern is that CMS is not confident that DLIC has fully reconciled its enrollment with its vendors to determine which members should be enrolled in DLIC and/or whether the member is enrolled in the correct plan. DLIC has admitted that it is not fully aware of all of the root causes that contributed to the enrollment system failures. Therefore, CMS concludes that DLIC has not yet fully diagnosed the extent of its current failures or all of the enrollees that require remediation, which is critical to the development and execution of an effective corrective action plan.
In addition to the above enrollment issues, DLIC also admitted that its Pharmacy Benefit Manager uploaded a file containing errors with its pharmacy network which were visible to its enrollees and prospective enrollees on Medicare Plan Finder during the Annual Election Period. As a result, beneficiaries enrolled into DLIC with the expectation that their pharmacy was in the network. These beneficiaries are now attempting to fill prescriptions at their pharmacies and are being turned away because their pharmacy is not in the DLIC network." [formatting added]
Hold times appear to be decreasing, however, DLIC stated it anticipates that it will not meet CMS call center requirements until February.
DLIC has not provided clear details on the number of ID cards and welcome kits that remain outstanding.
Read the CMS notice:
"Notice of Imposition of Immediate Intermediate Sanctions (Suspension of Enrollment and Marketing) for Medicare Advantage-Prescription Drug and Prescription Drug Plan contract numbers: H2020, H2334, H3071, H5454, H6379,
H6672, H8293, H9403, H9589, and S6946"
Related FAQs about Sanctioned Medicare plans: