Time runs short for plans to weigh in on new civil money penalties

“This memo clearly puts plans on notice.” OLGA WALTHER Senior legislative and policy adviser, Gorman Health Group

Comments are due Thursday on how the CMS will calculate 2017 civil money penalties for rule violations by Medicare Advantage and prescription drug plans.

The agency in September published interim final rules updating civil money penalties that would account for inflation and include a “catch-up” adjustment that would apply to penalties assessed after Aug. 1, 2016, for violations after Nov. 2, 2015. The memo was released after industry stakeholders said they didn’t know how the CMS calculated the penalties and what exactly organizations must do to comply.

Last year, Medicare Advantage and Part D plans were slapped with more than $13 million worth of fines, compared with $4.9 million in civil money penalties in 2014. The largest individual fine, $3.1 million, was levied on Humana for various violations including enrollees experiencing delays or being denied access to medical services or drugs.

The proposed methodology document comes while federal agencies are increasing civil money penalty maximums across the board to comply with the Federal Civil Penalties Inflation Adjustment Act of 2015.

Gorman Health Group, a Washington-based consulting firm, analyzed the document and found penalties among health plans for common infractions will increase.

“This memo clearly puts plans on notice,” said Olga Walther, senior legislative and policy adviser at Gorman.

Under the law, the CMS has the authority to issue a penalty of up to $25,000 for each affected enrollee.