According to a Reed Smith client alert article posted on Dec. 12 (and brought to our attention by Ron Iverson at NAMSMAP, who called it “probably the most significant item” he has ever come across), a recently announced CMS proposed rule would “mark the end of a heavily criticized and frequently revised compliance training requirement currently imposed on Medicare Advantage Organizations (MAOs), Medicare Part D Drug Plan Sponsors (Part D Sponsors), and their first-tier, downstream and related entities (FDRs)” – which include producers who sell plans to consumers.
The Reed Smith client alert says the change could offer widespread relief for FDRs. Here are a few pertinent excerpts from the article:
- Among many other changes, the Proposed Rule eliminates the requirement that MAOs and Part D Sponsors ensure that their FDRs complete training as part of the MAOs’ and Part D Sponsors’ compliance program requirements. CMS defines FDRs to include all persons or entities that contract, directly or through one or more intermediaries, to provide health care or administrative services under a Medicare Advantage or Part D plan.2 Under the Proposed Rule, the current regulation would be amended to simply require that each MAO and Part D Sponsor establish and implement effective training and education for its own compliance officer and organization employees; the chief executive; and other senior administrators, managers and governing body members.3 CMS estimates that this change could reduce the overall compliance training burden by millions of hours annually.
- The Proposed Rule would rewind the clock to pre-2007 by eliminating the requirement that FDRs complete CMS’ general compliance and FWA training requirements.15 Notwithstanding the removal of the FDR training requirements, MAOs and Part D Plan Sponsors must still contractually require their FDRs to comply with all applicable federal laws, regulations and CMS instructions pursuant to 42 C.F.R. sections 422.504(b)(4)(vi) and 423.504(b)(4)(vi), as well as sections 422.504(i) and 423.505(i); and MAOs and Part D Plan Sponsors are still ultimately held responsible by CMS for any failures of their FDRs to comply with Medicare program requirements…
- While CMS acknowledges in the Proposed Rule that it has no way to determine exactly how many FDRs there are, or exactly how many staff would be expected to take the training under the current requirements, it estimates that the burden reduction by removing the training requirement for FDRs will likely equate to an astonishing 6 million to 8 million hours each year (each of the CMS training modules is estimated to require one hour to complete).17
- CMS asserts that eliminating the training requirements would not hinder overall compliance because MAOs and Part D Plan Sponsors must still monitor FDRs and implement corrective actions when mistakes are found, which CMS believes is being done adequately.18 The revision within the Proposed Rule, however, appears to alleviate a tremendous strain for plans and FDRs alike.
- CMS will accept comments on the Proposed Rule through January 16, 2018.