UnitedHealthCare Medicare Advantage Plans Fined $2.4 million

Notice of Imposition of Civil Money Penalty for Medicare Advantage-Prescription Drug and Prescription Drug Plan Contracts

November 22, 2016

Civil Money Penalty ($2,498,850)

Medicare Compliance Enforcement Actions UHC

Excerpts From Medicare Notice of Penalty

Summary of Noncompliance

CMS conducted an audit of UnitedHealth’s Medicare operations from May 2, 2016 through May 13, 2016. In a program audit report issued on October 31, 2016, CMS auditors stated that UnitedHealth failed to comply with Medicare requirements related to Part D formulary, benefit administration, and coverage determinations, appeals, and grievances in violation of 42 C.F.R. Part 423, Subparts C and M. UnitedHealth’s failures in these areas were systemic and resulted in enrollees inappropriately experiencing delayed or denied access to benefits and/or increased out-of-pocket costs.

Part D Formulary and Benefit Administration Relevant Requirements

Medicare Part D Prescription Drug Program requirements apply to stand-alone Prescription Drug Plan sponsors and to Medicare Advantage organizations that offer Part D prescription drug benefits. Sponsors that offer these plans are required to enter into agreements with CMS by which the sponsors agree to comply with a number of statutory, regulatory, and sub-regulatory requirements.

Violations Related to Formulary & Benefit Administration

CMS identified violations of Part D formulary and benefit administration requirements that resulted in UnitedHealth’s enrollees experiencing inappropriate denials of and/or delayed access to Part D prescription drugs at the point of sale. UnitedHealth’s violations include:

1. Failure to properly administer the CMS transition policy. Enrollees experienced inappropriate denials of coverage for drugs at the point of sale and were delayed access to medications, never received the medications, or incurred increased out-of-pocket costs in order to receive the medications. Some of the denials were for prescription drugs that are used to treat acute conditions that require immediate treatment. The failure violates 42 C.F.R. § 423.120(b)(3) and Chapter 6, Section 30.4.4.1 of the Medicare Prescription Drug Benefit Manual (IOM Pub. 100-18).
2. Failure to properly administer its CMS-approved formulary by applying unapproved utilization management requirements. Enrollees experienced inappropriate denials of coverage for drugs at the point of sale and were delayed access to medications, never received the medications, or incurred increased out-of-pocket costs in order to receive the medications. Some of the denials were for prescription drugs that are used to treat acute conditions that require immediate treatment. This failure violates 42 C.F.R. § 423.120(b)(2) and Chapter 6, Section 30.2.2.1 of the Medicare Prescription Drug Benefit Manual (IOM Pub. 100-18).
3. Failure to properly administer its CMS-approved formulary by applying unapproved prior authorization edits for protected-class medications during the transition phase. Enrollees experienced inappropriate denials of coverage for drugs at the point of sale and were delayed access to medications, never received the medications, or incurred increased out-of-pocket costs in order to receive the medications. Some of the denials were for prescription drugs that are used to treat acute conditions that require immediate treatment. This failure violations 42 C.F.R. § 423.120(b)(2) and Chapter 6, Section 30.2.5 of the Medicare Prescription Drug Benefit Manual (IOM Pub. 100-18).
4. Failure to effectuate exception approvals through the end of the plan year. Enrollees would receive inappropriate denials at the point of sale when refills were requested, which would result in delayed access to medications, never receiving the medications, or incurring increased out-of pockets costs in order to receive the medications. The failure violates 42 C.F.R. §§ 423.578(c)(3) and 423.578(c)(4), and Chapter 18, Sections 30.2 and 130 of the Medicare Prescription Drug Benefit Manual (IOM Pub. 100-18).

Full Text Of Letter Notifying UnitedHealthCare of Civil Monetary Penalty