(This story was updated at 2 p.m.)
The CMS plans to fine WellCare $1.17 million for violating Medicare requirements by inadequately operating several of its Medicare prescription drug plans.
WellCare violated Medicare requirements by failing to provide beneficiaries with plans for receiving drugs not covered by their Medicare plans or to work with providers to determine patient needs before denying coverage, the CMS said in a Feb. 23 notice.
That operational negligence potentially put Medicare beneficiaries at risk by delaying or denying their access to covered benefits and increasing out-of-pocket costs, the notice said.
The agency did not state how many enrollees were affected by WellCare's actions.
A WellCare spokeswoman said the company is reviewing the notice and its findings and will work to fully comply with all federal requirements.
Transition policies for drug coverage are particularly important for Medicare enrollees who are eligible for both Medicare and Medicaid, as they tend to be auto-enrolled in plans, the CMS said. Transition policies are necessary as they allow plan enrollees to access a temporary supply of noncovered drugs while they work with their prescribers to find formulary alternatives or gain the necessary prior authorization if the plan doesn't cover an alternative treatment.
WellCare also violated a CMS policy requiring it to reach out to prescribers or enrollees for additional information before denying drug coverage that may be medically necessary. Without that safety net, enrollees lost out or received delayed access to medications, or had to pay out-of-pocket to obtain their medications, the agency said.
The CMS said it would also lower the affected plans' star ratings. The agency may impose additional remedies or fines, including ending WellCare's Medicare contracts, if the company does not address the violations.
The penalty judgment will be finalized if WellCare does not request an appeal by April 25, the notice said.
WellCare's Medicare Advantage membership dropped by 9,000 between 2015 and the end of 2016 to 345,000, down 2.5%.
Medicare Advantage currently represents about 27% of WellCare's annual revenue. Overall, thanks largely to Medicaid expansion, The Tampa, Fla.-based insurer had a net income in the quarter ended Dec. 31 of $44.9 million, up 245.4% from the same quarter a year ago. For the full year, profit more than doubled to $242.1 million compared with 2015.
The proposed CMS fine is $1.17 million. An earlier version of the story had an incorrect number.