Medicare issues $2 million in penalties on Medicare Advantage plans.
Since the beginning of 2015 through April 17th, the Centers for Medicare and Medicaid Services (CMS) have issued over $2 million in penalties on Medicare Advantage plans across the United States. Of the twelve Medicare Advantage plans cited for non-compliance, one had their enrollment activities suspended while the rest were issued civil money penalty. All of the penalties were failures the Medicare Advantage plans had administering their Part D Prescription drug benefits to the members.
Medicare Advantage Plans penalized by CMS
Click on the plan name to see the CMS Notice of Civil Money Penalty letter.
| Medicare Health Plan | Date | Penalty | Reason |
| Providence Health Plan | 01/07/2015 | $164,000 | Delayed or denied access to medications |
| New West Health Services | 01/29/2015 | $349,800 | Delayed or denied access to medications |
| Senior Whole Health Holdings, Inc. | 01/29/2015 | $229,350 | Delayed access to prescribed medications at point of sale |
| Soundpath Health, Inc. | 01/29/2015 | $250,100 | Delayed or denied access to prescription drugs |
| Health Plan of the Ohio Upper Valley | 01/29/2015 | $194,950 | Delays or denials of drugs at point of sale |
| Inland Empire Health Plan | 01/29/2015 | $256,950 | Delayed and/or denied drugs at point of sale |
| PacificSource Community Health Plans, Inc | 02/25/2015 | $90,000 | Delayed or denied drugs at point of sale |
| AlohaCare | 02/25/2015 | $32,700 | Delay or denial of access to medications |
| Citizens Choice Health Plan | 02/25/2015 | $689,600 | Denial of drugs at point of sale |
| Southwest Catholic Health Network | 02/25/2015 | $202,200 | Delays and denial of medications at point of sale |
| HealthPlus of Michigan | 3/12/2015 | Suspension | Insufficient capital and surplus |
| Health First Health Plans, Inc. | 4/8/2015 | $420,600 | Delayed or denied access to medications. |
Drug formulary administration
A common paragraph within the notice of imposition of civil money penalty is a summary description of the non-compliance violation of the plan.
Violations Related to Formulary & Benefit Administration
CMS identified serious violations of Part D formulary and benefit administration requirements that resulted in Health First’s enrollees being inappropriately delayed or denied access to medications. Health First’s violations include…
Penalties and sanctions
CMS can take various actions from issuing monetary penalties to sanctions when they determine that a Medicare Advantage plan is not in compliance with the terms and conditions of its contract. Many of the enforcement actions levied by CMS are initiated by member complaints about the Medicare Advantage plans. Member access to prescription medications covered by the Medicare Advantage plan is a common problem for sponsors of the MA-PD plan.
Pharmacy failures
In general, the Medicare Advantage plan sponsor has contracted with a pharmacy benefits manager to actually administer the point of sale portion of the Part D Prescription drug benefits contained within the plan. Most of the complaints revolved around the members not being able to get the prescribed medication at the pharmacy and/or at the right coinsurance amount that is outlined in their Medicare Advantage plan. The root cause can be problems with coordination between the sponsor of the Medicare Advantage plan and the pharmacy benefits manager which leads to the members having their prescription delayed or denied by the pharmacy.
Enrollment suspension
Regardless of why the pharmacy can’t sell the prescription drugs to the member, CMS recognizes that any delay or denial of prescription medications can have life threatening consequences for the individual. Consequently, CMS will issue penalties to the Medicare Advantage plan sponsors. If the non-compliance issues continue, CMS can also put the MA-PD on sanction which prevents them from marketing their plans or enrolling new members. HealthPlus of Michigan was put on intermediate sanction because the Michigan Department of Insurance and Financial Services determined the plan did not have adequate capital or surpluses for the companies’ size and risk profile. It was determined that continued operation of HealthPlus of Michigan to enroll new members posed a hazard to the public and policy holders.
Who is the watchdog for individual and family plans?
I have seen health plans and insurance companies in California with failures equal to or greater than these MA-PD plans. Some of the problems of denying and delaying prescriptions and actual health care were initiated by poor communication from Covered California to the member selected health plan. Yet, none of the health plans offered through Covered California have been penalized like Medicare Advantage plans. Medicare beneficiaries should feel fortunate that CMS is watching the industry for violations.