The CMS has fined New West Health Services, a Medicare Advantage plan, for the second time this year after the Helena, Mont.-based not-for-profit failed to correct previously cited Medicare violations.
The action furthers the federal government's goal of increasing oversight of private Medicare plans and ensuring Medicare beneficiaries have access to services and drugs. So far in 2015, the CMS has doled out $4.1 million in so-called civil monetary penalties.
New West was penalized $204,200 last week after the CMS tagged the provider-owned insurer with a $349,800 fine in January. A government audit found New West fell out of compliance with several Medicare rules and still hadn't rectified its practices.
For example, New West didn't pay claims quickly enough for out-of-network providers. The government requires Medicare Advantage plans to pay out-of-network providers, or deny the claims, within 60 days.
“The deficiencies cited in this notice remained uncorrected at the time of the validation audit and adversely affected (or had the substantial likelihood of adversely affecting) enrollees by causing inappropriate delays or denials in receiving covered benefits or increased out-of-pocket costs,” wrote Gerard Mulcahy, CMS' Medicare Parts C and D oversight director, in a July 9 letter (PDF).
New West, which has 18,000 Medicare beneficiaries, has until Sept. 9 to appeal the CMS' decision or pay the fine. The insurer could face enrollment sanctions or a full termination from the Medicare Advantage program if it doesn't get its act in order, the CMS said.
New West executives did not respond to requests for comment.
Medicare Advantage plans have faced tougher scrutiny from the CMS, although some critics say the civil money penalties are not enough to change the behaviors of the major insurers. Aetna was penalized $1 million earlier this year because the government said its Advantage and Part D drug plans had faulty information on in-network pharmacies.
Medical and drug benefits are not the only items under the microscope. Federal investigators are also probing more into the risk-scoring methods of Medicare Advantage plans. Risk scores indicate how sick seniors are, and health insurers are paid more if their members' risk scores are higher. Some investigations and whistle-blower lawsuits say insurers are manipulating those scores to obtain higher payments.