Audit Tips: Areas of Focus on Recent CMS 1/3 Financial Audits – Part 2

The 1/3 Part D Financial Audits constantly change as CMS directs its auditors to focus on different areas of compliance risk for PACE organizations. In the last issue of Pharmastar News, we presented five areas on which auditors have been focusing attention. Here are a few more specific areas we have observed auditors verifying in CY 2018 and 2019 audits:

  • Participants receiving “hospice” drugs were enrolled in PACE on the date of service and not enrolled in the Medicare hospice benefit
  • Services received from the PACE sponsor or other related party are clearly itemized, and payments from PACE are documented in the general ledger
  • Process changes due to corrective action plans (CAPs) and observations from prior audits are internally audited and monitored to ensure that they continue to be effective; monitoring and auditing activities and any findings are recorded and on file, available to auditors
  • Verification of Direct and Indirect Remuneration (DIR) payments received: check/transaction number and date, amount received for each plan benefit package (pbp) or eligibility level (001, 002, 003) broken down by National Drug Code (NDC).

If you realize your plan is out of compliance or your policies and procedures are out of date in any of these areas, you should start working to correct the deficiencies as soon as possible. If your plan is selected for audit during the next round, it is good practice to disclose the areas of non-compliance you found and provide the status of your CAP. It is better to disclose this information and show the auditors that you are working to correct the deficiency than to let the auditors find the problem and create a finding on your audit report.