Update:  Torchmark released from CMS imposed sanctions on 4/7/2016. Read more: United American Insurance Company (S5755) and First United Life Insurance Company (S5580) released from CMS imposed sanctions. Plan and formulary data will be available on Q1Medicare.com with the next CMS data release at the end of April, 2016.

The Centers for Medicare & Medicaid Services (CMS) has informed First United Life Insurance Company and United American Insurance Company, both owned by parent organization Torchmark Corporation (Torchmark), that CMS has made a determination to impose intermediate sanctions on the following Prescription Drug Plan Contract Numbers: S5580, S5755, effective August 1, 2015.

These intermediate sanctions will consist of the suspension of the enrollment of Medicare beneficiaries and the suspension of all marketing activities to Medicare beneficiaries.  The sanction will remain in effect until CMS is satisfied that the deficiencies upon which the determination was based have been corrected and are not likely to recur.

Summary of Noncompliance
Torchmark has demonstrated a history of non-compliance over the past several years with the processing of its Part D coverage determinations, appeals and grievances, in violation of 42 C.F.R. 423, Subpart M. Torchmark’s failures in these areas were first discovered in late 2012, CMS Logo; Centers for Medicare & Medicaid Services, Center when CMS conducted a program audit of Torchmark’s Medicare operations and reported substantial failures with numerous Part D requirements. As a result of those failures, CMS imposed a $150,000 civil money penalty in April 2013. Subsequently, CMS conducted a validation audit to test whether Torchmark corrected the failures identified in the 2012 audit. CMS found a number of recurring issues as well as additional failures with the processing of Torchmark’s Part D coverage determinations, appeals and grievances. CMS imposed an additional $40,000 civil money penalty in September 2014 as a result of these failures.

In 2015, CMS conducted another audit of Torchmark’s Medicare operations from May 18, 2015 through May 29, 2015. During the audit, CMS conducted reviews of numerous operational areas to determine if Torchmark is following CMS rules, regulations, and guidelines. CMS auditors again concluded that Torchmark substantially failed to comply with CMS requirements regarding Part D coverage determinations, appeals and grievances. CMS found that Torchmark’s failures in these areas were widespread and systemic, and have remained uncorrected for more than two years despite numerous warnings and opportunities to correct. These violations resulted in enrollees experiencing delays in receiving coverage decisions, improper reviews of their coverage requests, and inappropriate and untimely resolution of their grievances.

The official CMS letter