Medicare on the Move: Why a Medicare Prescription Payment Plan (MPPP) Program Audit is Critical

Mitigate Risk with a Smart MPPP Program Audit

The world of Medicare Part D underwent a significant transformation with the introduction of the Medicare Prescription Payment Plan (MPPP or M3P). This program, a product of the Inflation Reduction Act of 2022, changes the way enrollees may handle their drug costs. Instead of traditional copays or coinsurance at the pharmacy, eligible Medicare participants who enroll in MPPP  make one predictable monthly payment to their health plan for prescription drugs. This monthly payment is calculated to spread the $2000 annual out-of-pocket limit over the year. Plans began accepting MPPP elections in October 2024, with the program officially launching on January 1, 2025.

Implementing the MPPP is no small feat. It demands the integration of a complex array of financial, operational, and technical requirements. Areas such as billing, claims processing, correspondence, digital services, enrollment, member services, and pharmacy payment functions are all involved. Medicare plans have had to develop new workflows and data integrations with their pharmacy benefit managers (PBMs) and PBMs’ subcontractors to operationalize the program. PSG found that nearly all health plans delegated the MPPP program services to their PBMs. PBMs have either built their own end-to-end services or partnered with solution providers, subcontracting services that are not in the PBM wheelhouse (e.g., collections). Many of these MPPP solution providers are new to the intricate worlds of pharmacy and Medicare.

Given the program’s novelty and complexity, an audit is the best way to know how well the program works end-to-end. There are numerous stakeholder handoffs involved, and new processes tied directly to federal statutes, inherently increasing risk. Pharmacy and compliance professionals can use audits to determine the program’s compliance level and ensure that participants are truly receiving the benefits they have chosen.

Why is Conducting an MPPP Program Audit so Important?

Let’s examine several key reasons:

• Identifying Errors: An audit can reveal errors that implementation testing might not have caught. No implementation is perfect, and companies often don’t test as extensively as they might wish.
• Preparation for CMS Audits: It provides invaluable practice for staff ahead of actual CMS audits. This process helps build muscle memory for handling case files and responding to auditor inquiries, serving as a crucial training opportunity for navigating this entirely new benefit. The audit also aids in universe development, essential for CMS audits.
• Early Warning System: An audit acts as an early warning system, identifying potential issues before they escalate. CMS is actively developing and revising its audit procedures to incorporate MPPP.
• Mitigating Finance Risks: Audits can uncover waste and errors that could expose plans to significant penalties, including civil money penalties and MIPPA prompt pay penalties.
• Assessing Ownership and Process: The audit helps determine if the program’s ownership structure is functioning effectively and whether opportunities exist to optimize or “right-size” the processes involved.
• Improving Member Satisfaction: Addressing program issues is crucial for preventing dissatisfied enrollees, which can negatively impact CAHPS scores and overall member satisfaction. Enhancing the member experience by addressing frustrations and ensuring accurate information is a direct benefit of the audit process.
• Vendor Oversight: Audits underscore the critical responsibility of vendor oversight, especially since some solution providers or PBMs may be new to Medicare and not accustomed to CMS oversight standards. An external audit exposes vendors to audit rigor early on.

Important Considerations for MPPP Program Audits

PSG designed its MPPP Program Audit  to mimic other CMS Program Audit areas, incorporating CMS audit phases, sampling, field work, and scoring, adapted to MPPP rules. This approach includes proprietary universes to identify samples with the highest non-compliance potential and emphasizes member journeys through the program’s more than 300 Medicare requirements. The methodology also considers different contractual arrangements, like traditional plan/PBM setups versus modular Pharmacy Benefit Administration (PBA) models with multiple vendors.

Key areas examined during such an audit include critical components of the MPPP program:

• Member Satisfaction and Call Center Performance
• MPPP Elections
• Likely to Benefit (LTB) Notice Distribution
• MPPP Claims Adjudication
• Pharmacy Prompt payment
• CMS model materials and other correspondence
• MPPP Billing
• MPPP portal and digital services
• Voluntary and involuntary disenrollment
• Compliance program effectiveness tracer

An MPPP program audit can reveal critical information previously unknown to senior leadership. The findings can be presented with a quantifiable risk profile, action plan, and recommendations. Contributing factors might be assessed using CMS’s condition classification, such as invalid data submission (IDS), corrective action required (ICAR/CAR), observations requiring corrective action (ORCA), and other observations. Findings can be risk-assessed against CMS’s aggravating factors for civil money penalties, with monitoring recommendations provided for ongoing early warning protection. The audit may also assess vendor oversight effectiveness and identify strengths, weaknesses, opportunities, and threats.

In our experience, conducting MPPP program audits, many solution providers new to Medicare and pharmacy servicing may not be accustomed to CMS oversight standards, highlighting the value of early exposure to audit rigor. The audit process itself can enhance future implementation testing by uncovering scenarios that were missed during initial testing. Significant issues observed early in the program included network pharmacies struggling with technical problems or a lack of program knowledge, causing MPPP participants to incorrectly charge a copay at the pharmacy point of sale.

Additionally, PSG reviews MPPP call recordings, which CMS requires plans to retain. These recordings and transcripts are invaluable tools for monitoring call center performance and the member experience. Plans should anticipate that CMS may request these calls during audits and investigations. Comparing agent notes against recordings can also pinpoint areas for training and system improvements for accurate documentation of enrollee interactions. Beyond call center performance, the audit value extends to identifying gaps between organizational promises and frontline execution, technical gaps and handoff issues, assessing accountability and the need for role changes, enhancing the member experience, and potentially impacting Star ratings, adherence, and satisfaction.

Conclusion

Given the MPPP’s complexity, its reliance on new processes and potentially new vendors, and the direct link to federal statutes and enrollee experience, a proactive and thorough audit is an essential step for Medicare plans, PBMs, and solution providers to ensure compliance, mitigate risks, identify issues early, and ultimately enhance the participant experience.

Curious about optimizing your MPPP program? Reach out to one of our government program experts to set up a complimentary discovery call.

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