Medicare plans may face wave of network adequacy fines

The Centers for Medicare & Medicaid Services (CMS) is preparing to crack down on Medicare Advantage plans that have skimpy provider networks and inaccurate provider directories.

CMS officials talk about enforcement efforts in the 2017 advance notice and 2017 draft call letter for the Medicare Part C Medicare Advantage plan program and the Medicare Part D prescription drug plan program.

Medicare program payments to Medicare Advantage plan issuers could rise an average of about 1.35 percent in 2017, and underlying growth in costs per capita could increase about 2.92 percent, officials say.

The actual amounts the Medicare program pays insurers, and the amounts enrollees pay for coverage, will depend on issuer negotiations and bidding strategies.

CMS officials note that average Medicare Advantage premiums fell about 10 percent between 2010 and 2016.

In addition to talking about payment parameters, officials talk about possible changes in Medicare programs, rules and administration procedures.

In a section on Medicare Advantage and Medicare Part D audits, officials say they are conducting wide-scale efforts to monitor network adequacy and provider directory accuracy that are separate from the normal audit process.

Enforcement group officials will use the monitoring results to audit and validate correction of any problems found, officials say.

"Those organizations who fail to correct and come into compliance with these requirements may be subject to possible enforcement action, including civil penalties or enrollment sanctions," officials say.

Officials say they have received many questions about how CMS calculates "civil money penalties," or fines. CMS plans to post a memo on how it interprets the penalty calculation rules by 2017, officials say.

The Medicare Advantage program gives private insurers a chance to use cash from Medicare to offer alternatives to the traditional Medicare program. The Medicare Part D programs gives private insurers a chance to provide prescription drug benefits for Medicare enrollees.

About 17 million of the 55 million people who had Medicare in 2015 had Medicare Advantage plan coverage, and about 37 million had some kind of Medicare-related drug coverage, according to the Henry J. Kaiser Family Foundation.

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