CMS Part D Audit Report Lists Noncompliance Activities and Recommends Actions for Improvement

On July 18, 2023, the Center for Medicare and Medicare Services (CMS) released the “2022 Part C and Part D Program Audit and Enforcement Report,” providing the details of the 2022 audit cycle.[1] Elixir’s Compliance Team summarized the report, which provides analysis and information for plan sponsors and stakeholders to review in their continuous improvement efforts within their organizations.

2022 CMS Audit and Report Details

Audits: 26 program audits across 25 separate parent organizations

Beneficiaries: ≈ 33.6 million (63%) Part C and Part D enrolled beneficiaries

Contracts: 291 (29% of total) Part C and Part D contracts

  • Including 263 Medicare Advantage Prescription Drug (MAPD) contracts:
    • 146 offer special needs plans
    • 16 PDP-only contracts
    • 1 Medicare Cost plan
    • 11 MMP contracts

The 2022 report:

  • Provides detail of the plan sponsors that were under sanction
  • Includes analysis in the Lessons Learned section of enforcement referrals related to:
    • Inappropriate cost sharing for Part D medications
    • Provider payment issues
    • Beneficiary reimbursements
  • Replaces the previous plan-specific audit scores with the types of noncompliance found during the program audits and, according to the plan sponsors, the reasons why they happened.
Note: This report change was made by CMS based on stakeholder feedback.

Audit Insights and Recommended Corrective Actions

The CMS report outlines general 2022 noncompliance activities and recommends actions for improvement. CMS also restates the general expectation that plan sponsors carefully and routinely assess all risks to their organizations and monitor and audit their operations to ensure compliance with CMS requirements. CMS cautions against using the 2022 enforcement report to draw broad conclusions about the significance of deficiencies, noncompliance or overall industry performance across the Medicare Advantage, Part D, or Medicare Medicaid Plan (MMP) programs. Below is a high-level summary of audit insight related to Part D plans.

Audit Area: Compliance Program Effectiveness (CPE)

  • Compliance issues not addressed and corrected in a timely manner.
  • Systems for monitoring, auditing and identifying compliance risks were not comprehensive or current.

CMS recommendation for improvement: Plan sponsors should evaluate work instructions for clarity, make updates as necessary, and enhance training related to prevention, detection and correction of noncompliance. Plan sponsors should also update auditing and monitoring plans to align with updated CMS regulations.

Audit Area: Formulary Administration (FA)

  • Plan sponsors applied utilization management (UM) edits that were not part of their CMS-approved formulary.
  • Approved prior authorization requests were inappropriately effectuated in plan sponsors’ systems.
  • Enrollees were denied their full transition benefit under Medicare Part D.

CMS recommendation for improvement: Plan sponsors should tailor their monitoring of rejected claims to identify patterns and reveal errors in system edit configuration. 

Audit Area: Coverage Determinations, Appeals, and Grievances (CDAG)

  • Plan sponsors did not meet the timeframes for making redetermination decisions.
  • Approved exception requests were not effectuated through the end of the plan year.

CMS recommendation for improvement: Plan sponsors should refer to the compliance standards in CMS audit protocols to understand how CMS assesses timeliness requirements during program audits.

To support an efficient and effective audit experience, Elixir's Compliance, Clinical Audit, Government Programs, Formulary, and CDAG teams actively engage our clients before, during and after CMS audits, including program, financial and operational audits. This collaboration between a plan and the PBM is critical to the success of a program and is a cornerstone of how Elixir works with our clients.


Download Your Guide to an Effective Compliance Program for more information on how a PBM should support your plan


[1] Centers for Medicare and Medicaid Services (2023). 2022 Part C and Part D Program Audit and Enforcement Report

Topics: Industry Updates