CMS AUDITS

The State of New Hampshire (November 16, 2009)

The Office of the Inspector General (OIG) audited the plan sponsor "State of New Hampshire" for the plan year ending June 30, 2006.  During this audit the OIG stated four seperate objectives regarding thier investigation: 1) Meeting requirements to be a plan sponsor, 2) ensured that drug subsidy costs were reported on behalf of covered retirees, 3) established correct administrative access to the RDS secure website and, 4) ensured the accuracy of the costs reported.

After an exhaustive investigation, the OIG concluded that the State of New Hampshire met the first three objectives, however failed on the fourth objective to accurately report costs.  The State of New Hampshire collected $164,070 more than they should have by incorrectly reporting interim costs.  The resulting overpayment had to be remitted to the CMS.  To read the full text of the audit report click here.

City of Boston, MA (January 15th, 2009)

The Office of the Inspector General (OIG) has begun audits of RDS plan sponsors!  While there have been preliminary audits in the past, this is the first complete audit to take place bearing with it penalties for failure and very real risks for the plan sponsor involved.  The OIG chose to audit the City of Boston, Massachusetts (Boston) and their applications for 2006 and 2007.  The OIG audit was incredibly thorough and lasted five months.  During that time the auditor reviewed Boston’s entire subsidy recovery process including a third party who was hired to report costs to the RDS on behalf of the city.  As this was the first complete OIG audit of an RDS plan sponsor, the time table, structure, and scope set a very high bar for any and all future audits.
(read the official OIG report here.)

Union Bank of California, N.A. (February 2nd, 2009)

The Union Bank of California, N.A. (Union Bank) was the second plan sponsor to be tested by a complete audit from the OIG.  The audit was conducted from June 2008 through January 2009, and covered every aspect of the Union Bank's applications from actuarial attestation to final reconciliation.  Now in hindsight, with two plan sponsor's audits to compare, it has become clear just how much detail the auditor will be seeking as they assess every aspect of a plan sponsor's subsidy recovery process.  In a specific effort to audit Medicare eligibilty, the OIG drew a random sample of 50 retirees from Union Bank's plan and reviewed the Medicare Beneficiary Database to determine if they were indeed eligible for Medicare Part D and not enrolled in a Part D prescription drug plan.  Like the first plan sponsor audit, the audit of the Union Bank showed the OIG's determination to leave no stone unturned in their effort to enforce compliance with the current regulations.
(read the official OIG report here.)

Be Prepared With Part D Advisors, Inc.

While the thought of your RDS application being the target of an audit may seem daunting, time consuming, or just terrifying, those plan sponsors who have signed with Part D Advisors, Inc. need not worry!  Part D Advisors, Inc. has planned ahead in the event that any of our clients are audited and will stand shoulder to shoulder with them throughout the entire audit process. In addition to providing all the necessary documentation to show that costs were reported accurately and that eligibility was determined with precise attention to detail, Part D Advisors, Inc. maintains all client records for six years and retains a dedicated legal team whose expertise add an extra layer of protection to our clients that is unrivaled in the realm of subsidy recovery services. 

Groups who are not clients of Part D Advisors, Inc., should be sure to maintain all relevant records and/or confirm that any third party reporting on their behalf does the same, as OIG audits carry serious penalties including loss of all subsidy dollars collected on the affected application in addition to fees and penalties.