Medicare Part D: Complaint Rates Are Declining, but Operational and Oversight Challenges Remain
Published: 2008-06-27T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: Medicare Part D coverage is provided through plan sponsors that contract with the Centers for Medicare & Medicaid Services (CMS). As of April 2008, about 26 million beneficiaries were enrolled in Part D. When beneficiaries encounter problems with Part D, they can either file a complaint with CMS or a grievance with their plan sponsors. CMS centrally tracks complaints data and plan sponsors must report summary data on grievances for each of their contracts. GAO provided information on (1) complaints and what they indicate about beneficiaries' experiences with Part D, (2) whether grievances data provide additional insight about beneficiaries' experiences, and (3) CMS's oversight of the complaints and grievances processes. To conduct its work, GAO reviewed CMS's complaints and grievances data and interviewed the plan sponsors of eight, judgmentally selected contracts, which accounted for 40 percent of 2006 enrollment.
section_title: What GAO Found
paragraphs: While the number of complaints filed with CMS and the time needed to resolve them has diminished as the Part D program has matured, complaints data indicate that ongoing challenges pose problems for some beneficiaries. From May 1, 2006, through October 31, 2007, about 630,000 complaints were filed; most complaints were related to problems in processing beneficiaries' enrollment and disenrollment requests. The monthly complaint rate declined by 74 percent over the period, and the average time needed to resolve complaints decreased from a peak of 33 days to 9 days. However, trends in the complaints data also indicate ongoing implementation issues, such as information-processing issues related to beneficiaries' requests for enrollment changes and automatic premium withholds from Social Security payments. In addition, CMS and plan sponsors did not resolve a significant proportion of complaints related to beneficiaries at risk of depleting their medications in accordance with applicable time frames. Due to limitations and anomalies, the grievances data that plan sponsors reported for their contracts did not provide sufficient insight into beneficiaries' experiences with Part D. Specifically, these data did not include information about whether beneficiaries who filed grievances were at risk of depleting their medications or whether plan sponsors were resolving grievances in a timely manner. In addition, GAO identified a number of anomalies in the grievances data, raising questions about whether plan sponsors were reporting these data consistently and accurately. For example, reported grievances were concentrated in a small number of plan sponsors' contracts and at a rate that was significantly disproportionate to their respective enrollment levels; varied considerably among contracts with similar levels of enrollment; and increased from 2006 to 2007, in contrast to patterns in complaints data. CMS's oversight efforts thus far have focused almost exclusively on resolving complaints with little attention devoted to plan sponsors' grievances processes. CMS routinely monitors the status of complaints and has taken actions against plan sponsors who failed to comply with requirements for the complaints process. In contrast, CMS oversight of plan sponsor grievances processes has been more limited. CMS provided plan sponsors with general guidance for classifying grievances and periodically reviewed these data. However, several plan sponsors indicated that the guidance was insufficient, increasing the likelihood that plan sponsors report erroneous and inconsistent information to CMS and that they rely on the wrong processes to address beneficiaries' concerns. Further, CMS could not explain many of the anomalies in the grievances data that GAO identified.

section_title: Letter
paragraphs: The Medicare Prescription Drug, Improvement and Modernization Act of  2003 (MMA) established a voluntary outpatient prescription drug benefit,  known as Medicare Part D. Considered the largest change to the Medicare  program since 1965, the new benefit was intended to provide affordable  prescription drug coverage to Medicare beneficiaries. Under the program,  which began providing benefits on January 1, 2006, the Centers for  Medicare & Medicaid Services (CMS)—the agency that administers  Medicare—contracts with private companies called plan sponsors to  provide this benefit. Through these contracts, plan sponsors offer  prescription drug plans which may have different beneficiary cost-sharing  arrangements (such as copayments and deductibles) and charge different  monthly premiums. In addition, while each plan may vary in the specific  drugs it covers, all must provide coverage for drugs within certain  categories.
To obtain the Medicare drug benefit, eligible beneficiaries enroll in a  specific Part D plan offered by a plan sponsor. Approximately 21 million  people enrolled in a Medicare Part D plan during the program’s initial  enrollment period, which ran from November 15, 2005, through May 15,  2006. Subsequent to the initial enrollment period, beneficiaries can enroll  in a plan during the same time period when they become eligible for  Medicare or change plans during the annual coordinated election period,  which runs from November 15 through December 31 of each year. As of  April 2008, nearly 26 million beneficiaries were enrolled in a Medicare   Part D plan. As part of the enrollment process, beneficiaries can choose to  pay for their share of premiums by having the Social Security  Administration (SSA) automatically deduct them from their social security  payments. CMS and SSA coordinate to ensure that this deduction occurs,  and millions of beneficiaries have chosen this option.
Soon after the implementation of Part D in January 2006, the Secretary of  Health and Human Services (HHS), as well as beneficiary advocacy groups  and states, reported various difficulties beneficiaries experienced when  obtaining and utilizing their Part D benefits. For example, there were  reports that beneficiaries experienced problems enrolling in plans and  being charged incorrect copayments at the pharmacy. As the primary  federal oversight body for Medicare Part D, CMS is responsible for  ensuring that plan sponsors meet applicable requirements, which include  resolving these and other problems that could affect a beneficiary’s ability  to obtain Part D benefits.
Medicare beneficiaries who experience problems, such as difficulties in  trying to enroll in a Part D plan, or cases when they were charged too  much for their prescriptions, have two distinct processes through which  they can pursue resolution. CMS has established a process through which  a Medicare beneficiary can file a complaint directly with CMS, which will  generally forward it to the appropriate plan sponsor for resolution, or a  beneficiary has the right to file a complaint directly with the plan sponsor,  in which case it is known as a grievance. Complaints are tracked and  resolved through CMS’s centralized complaints system, while grievances  are tracked and resolved by each plan sponsor using its own systems.  Through its outreach efforts, CMS encourages individuals to file  grievances with their plan sponsors before pursuing a complaint with  CMS; however, individuals can simultaneously file a complaint and  grievance on the same issue. CMS’s time frames for resolving complaints  vary and depend on whether the complaint relates to a beneficiary’s  medication supply, that is, whether the beneficiary is at risk of exhausting  his current medication supply unless the complaint is resolved. For  example, CMS defines complaints as immediate need when a beneficiary  has between 0-2 days of medication remaining, and according to its policy,  plan sponsors must resolve such complaints within 2 calendar days of  receiving them. In addition, it defines complaints as urgent when a  beneficiary has between 3 and 14 days of medication remaining, and CMS  officials encourage plan sponsors to resolve these complaints within   10 calendar days. Part D regulations generally require that plan sponsors  resolve grievances within 30 days. Additionally, if beneficiaries  experience problems obtaining coverage from their Part D plan sponsor  for a drug that has been prescribed for them, they must pursue resolution  through a separate process known as a coverage determination. Under this  process, beneficiaries make a formal request to their plan for coverage,  and if they receive an unfavorable coverage determination, they may  appeal the decision.
You expressed interest in the extent to which beneficiaries may have  experienced problems obtaining and utilizing their benefits under Part D,  and the extent to which CMS has assured the resolution of such problems.  This report provides information on (1) complaints filed with CMS and  what they indicate about beneficiaries’ experiences with Part D, (2) the  extent to which plan sponsor-reported grievances data provide insight  about beneficiaries’ experiences with Part D, and (3) CMS’s oversight of  the complaints and grievances processes.
To identify and analyze the Part D complaints reported to CMS, we  obtained and analyzed data from CMS’s Complaint Tracking Module  (CTM) database on all complaints filed for the 18-month period from   May 1, 2006, the point at which CMS first began centrally tracking  complaints, through October 31, 2007, the date for which CMS had the  most complete complaints data for our purposes at the time of our  request. For this same time period, we also obtained from CMS  information on the number of beneficiaries enrolled under the plans of  each Part D contract. Based on the information which CMS collected for  each complaint, including its category, or type of issue, and its filing and  resolution dates, we conducted a series of analyses which allowed us to  determine aggregate monthly complaint rates and summary statistics on  the types of issues which generated the complaints. Through these  analyses, we also determined the extent to which complaints were related  to beneficiaries’ medication supplies, the proportion of complaints that  were resolved and their resolution times, and various trends over the   18-month period. We also interviewed CMS officials to obtain a more  thorough understanding of the complaints data and to obtain their views  regarding the trends our analyses identified. To assess the reliability of the  complaints data, we reviewed CMS manuals and other policies for  collecting, categorizing, and analyzing complaints, interviewed CMS  officials responsible for collecting and analyzing the data, and conducted a  series of electronic tests on the data file CMS provided. We determined  that the data were sufficiently reliable for the purposes of this report.
To determine whether plan sponsor-reported grievances data provided  insight about beneficiaries’ experiences with Part D, we obtained plan  sponsor-reported grievances data from CMS for each quarter of calendar  year 2006 and for the first 3 quarters of calendar year 2007. As of  December 2007, these data represented the universe of grievances  reported to CMS by plan sponsors. These grievances data, which plan  sponsors are contractually required to report to CMS, contained summary  statistics on the number and type of grievances reported for each Part D  contract. Based on these reported grievances and CMS enrollment data  described above, we conducted a series of analyses to determine the  number and grievance rates by quarter and the types of issues which  generated the grievances. However, while conducting our analyses we  identified a number of limitations and anomalies, and thus we determined  that the grievances data were too limited and not sufficiently reliable for  us to draw conclusions regarding beneficiaries’ experiences with Part D.
To determine how CMS oversees the complaints and grievances processes,  we reviewed relevant federal statutes and regulations, as well as available  CMS guidance, including standard operating procedures, for tracking,  monitoring, and resolving complaints and grievances. We reviewed other  CMS data, including information on compliance actions taken by the  agency against certain plan sponsors and the reasons for these actions,  and separately reviewed CMS’s audit findings pertaining to grievances. In  addition, we interviewed officials from CMS’s central office responsible  for collecting and monitoring CTM data and for reviewing plan sponsor- reported grievances data. We also interviewed CMS officials in each of its  10 regional offices responsible for ensuring that complaints were entered  into the CTM and were appropriately resolved. Finally, to identify plan  sponsors’ views on the extent to which CMS provided guidance and  oversight for their grievances processes, we interviewed officials from  eight plan sponsors. We selected these plan sponsors based on a number  of factors, including variation in enrollment levels and grievance rates for  some of their specific contracts. The information we obtained from these  plan sponsor interviews was not generalized to all plan sponsors.
In conducting our work we were unable to definitively determine the  number of complaints and grievances filed since the inception of the   Part D program, and thus assess the full range of implementation problems  beneficiaries may have faced. CMS did not begin centrally collecting  complaints until May 2006, and thus no information was readily available  on complaints filed between January and April 2006. Further, because  beneficiaries could have filed both a complaint and grievance on the same  issue or filed more than one complaint or grievance on the same issue,  complaints and grievances may be duplicative. In addition, for a variety of  reasons, including the newness and uniqueness of the Part D program, we  were unable to determine what an appropriate complaint rate should be.  For example, CMS officials cautioned us about comparing the Part D  complaint rate to that of the Medicare Part C program—which is designed  to provide comprehensive medical coverage—because the Part D data  reflect early implementation challenges, and because the goals of the two  programs and thus, the nature of issues facing beneficiaries, differ.
We conducted this performance audit from December 2006 to June 2008 in  accordance with generally accepted government auditing standards. Those  standards require that we plan and perform the audit to obtain sufficient,  appropriate evidence to provide a reasonable basis for our findings and  conclusions based on our audit objectives. We believe that the evidence  obtained provides a reasonable basis for our findings and conclusions  based on our audit objectives.
subsections: section_title: Background
paragraphs: The Medicare Part D program offers beneficiaries an outpatient  prescription drug benefit through various plan sponsors who offer  coverage through drug plans, which may vary in terms of their benefits  and costs. Enrollment in Part D consists of several steps and requires  coordination among various organizations, such as CMS, plan sponsors,  and SSA. If beneficiaries are not satisfied with certain aspects of the   Part D program, they may file a complaint with CMS, a grievance with  their respective plan sponsors, or they can file with both. CMS oversees  the complaints and grievances processes and may rely on complaints and  grievances data to undertake compliance actions against specific plan  sponsors.
subsections: section_title: The Medicare Part D Program
paragraphs: The Medicare Part D benefit is provided through private organizations— such as health insurance companies—that offer one or more drug plans  with different levels of premiums, deductibles, and cost sharing. Part D  plan sponsors offer outpatient prescription drug coverage either through  stand-alone prescription drug plans (PDPs) for those in traditional fee-for- service Medicare, or through Medicare Advantage prescription drug   (MA-PD) plans for beneficiaries enrolled in Medicare’s managed care  program, known as Medicare Advantage. In 2007, CMS entered into more  than 600 individual contracts with about 250 plan sponsors to provide   Part D benefits. Under these contracts, PDP sponsors offered about 1,900  individual plan benefit packages and sponsors of MA-PDs offered about  1,700. The majority of Part D enrollees, about 70 percent, were enrolled  in PDPs during this time. Enrollment across contracts varies widely, and is  highly concentrated—the 4 largest contracts accounted for nearly   40 percent of total Part D enrollment in 2007.
Beneficiaries enroll in the Part D program when they first become eligible  for Medicare or during an annual coordinated election period and, once  enrolled in a drug plan, typically have one opportunity each year to change  their plan selection. Processing a Part D enrollment involves multiple,  timely, and accurate electronic data exchanges among federal agencies,  private health plans, and pharmacies. For instance, data exchanges occur  between plan sponsors and CMS to verify benefit eligibility. Pharmacies  rely on this information to ensure that payments for beneficiaries filling  their prescriptions are processed appropriately. During the enrollment  process, beneficiaries choose one of three options for paying their share of  their Part D premiums—direct billing, automated withdrawal from  financial accounts, or automatic deductions from social security  payments, called premium withholds. As of January 2008 about 20 percent  of Part D enrollees—4.8 million beneficiaries—opted to have premiums  withheld from their social security payments, which requires coordination  among plan sponsors, CMS, and SSA. When a beneficiary elects this  option, CMS provides enrollment and payment information it receives  from plan sponsors to SSA for processing. SSA then deducts premium  amounts from beneficiaries’ monthly social security payments and  provides CMS with information on the amount of premiums it deducted in  order for CMS to pay the appropriate plan sponsors.
section_title: Part D Complaints and Grievances Processes
paragraphs: Beneficiaries can express dissatisfaction with any aspect of the Part D  program, other than coverage determinations, by filing a complaint with  CMS or filing a grievance directly with their respective plan sponsors (see  fig. 1). The processes for resolving complaints and grievances are  independent of one another and the status of individual complaints and  grievances is tracked separately. Although CMS encourages beneficiaries  to first file a grievance with their respective plan sponsors, a beneficiary  can choose to seek resolution by directly contacting CMS first to file a  complaint or by filing a complaint and grievance simultaneously.
Beneficiaries typically file complaints by calling CMS’s 1-800-Medicare   toll-free number or by contacting one of CMS’s 10 regional offices through  telephone, fax, mail, or e-mail. For complaints filed through the toll-free  number, customer service representatives (CSRs) enter details about the  complaints into the 1-800-Medicare database, and assign the complaint to  specific contracts administered by plan sponsors. CSRs also categorize the  complaint in several ways, including by (a) the nature of the complaint  using 20 categories and over 180 subcategories, such as whether the  complaint relates to enrollment, pricing, or customer service; and (b) the  complaint’s issue level or level of urgency, which corresponds to one of  three issue levels-—immediate need, urgent, or routine—depending on the  beneficiary’s risk of exhausting his or her medication supply while  resolution of the complaint is pending.
The information included in the 1-800-Medicare database is uploaded each  day into the CTM—CMS’s centralized database of complaints  information. For complaints filed with the CMS regional offices, regional  staff similarly categorize complaints by their nature and issue level and  input them directly into the CTM. Most complaints in the CTM are  assigned to specific contracts administered by plan sponsors who utilize  their own staff to resolve beneficiaries’ concerns. For complaints beyond  the control of plan sponsors, such as those involving premium withholding  and certain enrollment issues, plan sponsors request, through the CTM,  that CMS resolve the complaint. Once complaints are resolved, the  resolution date must be entered into the CTM. CMS requires that  immediate need complaints be resolved within 2 calendar days, and  encourages that urgent and routine complaints be resolved within 10 and  30 calendar days respectively. According to CMS policy, beneficiaries  should be notified once their complaints are resolved.
Beneficiaries also have the right to express dissatisfaction by filing a  grievance directly with their plan sponsors via telephone, fax, mail, or   e-mail. Plan sponsors enter information about the grievances in their  internal tracking systems and assign individual grievances to their staff,  who work to resolve them. Plan sponsors are required to resolve  grievances within 30 days, but can allow for a 14-day extension in some  cases. Plan sponsors must inform beneficiaries of the outcome of the  grievances process, and beneficiaries who are dissatisfied may choose to  file a complaint with CMS on the same issue.
section_title: CMS Oversight of the Part D Complaints and Grievances Processes
paragraphs: CMS is responsible for overseeing the Part D program, which includes  overseeing the complaints and grievances processes and ensuring that  beneficiaries’ problems are addressed. To oversee the complaints process,  CMS staff monitor data within the CTM, including calculating complaint  rates and resolution times for each Part D contract administered by a plan  sponsor. Specifically, CMS monitors resolution time frames to determine  whether plan sponsors resolve complaints assigned to their contracts  within applicable time frames. To aid its oversight of the grievances  process, CMS requires plan sponsors to categorize grievances into 1 of 11  categories, which differ from CTM categories, and submit quarterly  reports for each of their contracts on the number of grievances by  category (see app. I). CMS uses these data to calculate grievance rates to  identify plan sponsors with outlier contracts.
According to CMS officials, the agency can initiate a range of actions  against plan sponsors it determines have noncompliant processes (see   fig. 2). For example, CMS can make a formal compliance call to plan  sponsors to discuss identified issues. However, if CMS’s monitoring  indicates that plan sponsors are not taking corrective actions in response  to the compliance call, CMS may pursue more stringent compliance  actions. For example, the agency may send formal written notices of  noncompliance, which notify plan sponsors of their noncompliance and  explicitly inform them that they must address the problems. For plan  sponsors that remain noncompliant, CMS can send warning letters that  notify plan sponsors that their performance is unacceptable; request that  plan sponsors submit written corrective action plans that show formal  plans to come into compliance; or audit the plan sponsors. In the most  extreme cases of noncompliance, CMS can impose intermediate sanctions,  which include suspension of enrollment, payment, or marketing activities.  CMS can also impose a civil monetary penalty or terminate or decline to  renew a Part D contract.
section_title: Complaints Data Highlight Beneficiaries’ Enrollment Problems, Decline in Complaint Rates, and Ongoing Challenges
paragraphs: Most complaints related to enrollment issues and while both the number  of complaints and the time needed to resolve them decreased as the Part D  program matured, ongoing challenges continued to pose problems for  some beneficiaries. The majority of complaints were related to delays and  errors in processing beneficiaries’ enrollment and disenrollment requests  and were resolved. In addition, a small proportion of complaints involved  cases where beneficiaries were at risk of depleting their medication  supplies. Further, trends in complaints data suggest that beneficiaries  reported fewer complaints over time and their problems were resolved  more quickly as they, plan sponsors, and CMS gained experience with the  Part D benefit. However, the complaints data also revealed some ongoing  challenges facing the program, including problems related to data system  coordination between CMS and plan sponsors and between CMS and SSA,  which continued to present difficulties for some beneficiaries.
subsections: section_title: Most Complaints Were Related to Enrollment Issues and Were Resolved
paragraphs: During the 18-month period from May 1, 2006, through October 31, 2007,  629,792 complaints were filed with CMS—an average monthly complaint  rate of 1.5 complaints per 1,000 beneficiaries. The majority of  complaints—about 63 percent—were related to problems beneficiaries  experienced when trying to enroll in or disenroll from a plan, and about   21 percent were related to pricing and coinsurance issues. The remaining  15 percent of complaints were spread among the other 18 CTM categories,  and included complaints related to customer service and marketing of  plans (see fig. 3).
The vast majority—about 73 percent of the enrollment and disenrollment  complaints, or 290,000 complaints—were assigned to five CTM  subcategories and were related to delays and errors in processing  beneficiaries’ enrollment or disenrollment requests. According to CMS  officials, such problems occurred when enrollment records between CMS  and plan sponsors differed or contained errors, and thus extra time was  needed for CMS and plan sponsors to identify and correct the errors and  ensure beneficiaries were enrolled in their plans of choice.
Approximately 47,000 (or more than 35 percent) of the complaints that  were categorized as pricing and coinsurance issues were related to  beneficiaries who experienced problems having their premiums  automatically deducted from their social security payments. Specifically,  these complaints included cases in which the wrong amounts were  deducted from beneficiaries’ social security payments, the correct  amounts were being deducted but were not forwarded to the appropriate  plan sponsor for payment, or premiums had not yet been deducted when  beneficiaries expected otherwise. According to CMS officials, many of  the complaints related to accurately deducting premiums and forwarding  payments to plan sponsors were due to problems with data exchanges  between CMS and SSA. In addition, CMS officials indicated that  beneficiaries are not always aware that it can take several months for SSA  to process a request for premium deductions; therefore, they may file  complaints when premiums are not immediately deducted from their  social security payments. Many of the remaining pricing and coinsurance  complaints were filed because some beneficiaries complained they were  charged too high of a coinsurance amount for their prescriptions.
In addition to complaint categories, the CTM also contains information on  the “issue level” of complaints (immediate need, urgent, routine), and the  dates complaints were filed and resolved. We found that about 73 percent  of complaints were unrelated to beneficiaries at risk of depleting their  supplies of medication and were considered routine. About 20 percent of  complaints were considered immediate need, meaning beneficiaries had  between 0 and 2 days of medication remaining, and about 7 percent of  complaints were considered urgent, meaning beneficiaries had 3 to   14 days of medication remaining. Further, using CTM dates, we found that  99 percent of all complaints filed between May 2006 and October 2007  were resolved, on average, in 25 days. Although immediate need and  urgent complaints were resolved, on average, much more quickly—12 days  for immediate need complaints and 16 days for urgent complaints—these  average resolution times still exceeded CMS’s resolution time frames.
Finally, we found that 44 percent of all complaints involved issues, such as  those related to premium deductions from social security payments, which  were beyond the control of plan sponsors, and thus required CMS  intervention for resolution. When compared to complaints that plan  sponsors could resolve independently, these complaints took, on average,  twice as long—34 days compared to 17 days-—-to resolve. According to  CMS officials, the lengthier resolution times for complaints requiring CMS  intervention reflected the fact that these complaints were often related to  delays associated with reconciling data between the agency and plan  sponsors or SSA.
section_title: Trends in Complaints Data Indicate Beneficiaries Reported Fewer Problems, but Highlight Ongoing Challenges
paragraphs: Trends in the complaints data indicate that beneficiaries reported fewer  problems and their problems were resolved more quickly. For example,  while the average monthly complaint rate was 1.5 per 1,000 beneficiaries  during the period, the monthly complaint rate declined by   74 percent from its peak of 2.86 complaints per 1,000 beneficiaries in May  2006 to .73 in October 2007 (see fig. 4).
In addition, the average time needed to resolve beneficiaries’ complaints  declined by 73 percent, from a peak of 33 days in July 2006 to 9 days in  October 2007 (see fig. 5). The decline in average resolution time for  complaints CMS resolved during this period was even more pronounced,  falling from 51 days to 11 days. According to CMS officials, the decline in  monthly complaint rates and average resolution times reflected improved  implementation of the Part D program since the initial election period, and  improved familiarity of the program among beneficiaries, plan sponsors,  and CMS itself.
While trends in the complaints data highlighted declines in the monthly  complaint rate and average resolution times, they also revealed some  ongoing challenges facing the program. Specifically, the data confirmed  information-processing issues related to beneficiaries’ requests for  enrollment changes and automatic premium withholds from their Social  Security payments remained. For example, despite the trend in the overall  complaint rate discussed earlier and as shown in figure 4, the complaint  rate nearly doubled, from .72 in December 2006 to 1.40 in January 2007.  This was due largely to a spike in the number of complaints related to  delays or errors when CMS and plan sponsors processed beneficiaries’  enrollment and disenrollment requests following the end of the 2007  annual coordinated election period. More specifically, according to CMS  officials this increased complaint rate was due largely to the sheer volume  of transactions processed during this time each year. The officials told us  that while they expect to continue to see an increase in complaints each  year following the annual coordinated election period, they expect the  magnitude of such increases to diminish as the program matures.
In addition, the general trend of increasing complaint rates from January  2007 through May 2007 reflected increasing numbers of complaints related  to beneficiaries’ requests for automatic withholding of premiums that can  occur when beneficiaries elect to change plans. According to CMS  officials, the timing of when SSA processes the premium withhold request  may affect the accuracy of the deduction, and result in complaints. For  example, as required by law, SSA must process cost-of-living adjustments  for beneficiaries’ social security payments on an annual basis, and  according to SSA, they begin this processing in November of each year. To  process these adjustments for recipients who are also enrolled in Part D  and have chosen the premium withholding option, SSA must rely on CMS  enrollment information to determine the amount to deduct for Part D  premiums. However, because beneficiaries may have elected to change  plans during the Part D annual coordinated election period, which runs  from November 15 through December 31 of each year, SSA’s calculations  may not account for premium differences related to beneficiaries’  subsequent enrollment changes. CMS officials indicated that there is no  easy solution to the data coordination and timing issues between CMS and  SSA at the root of this problem. However, CMS and SSA have formed  several work groups to identify improvements, including improved data  system exchanges, which could help reduce complaints related to this  issue. In the interim, CMS has undertaken outreach efforts to plan  sponsors and beneficiaries to inform them of potential delays related to  requests for automatic premium withholds, letting them know that such  requests may take several months to process.
Finally, while we found that CMS and plan sponsors resolved complaints,  including immediate need and urgent complaints, more quickly as the   Part D program matured, a substantial percentage of such complaints  were not resolved within CMS’s time frames. Specifically, during the  period from May 2006 through October 2007, 53 percent of immediate need  complaints (66,001) and 27 percent of urgent need complaints (10,476)  were not resolved within the applicable time frames. Further, progress in  meeting the time frames, particularly for immediate need cases, largely  stagnated from March 2007 to October 2007, as the proportion of cases not  meeting the time frame hovered around 30 percent each month (see fig. 6).
section_title: Limitations in Grievances Data Reported by Plan Sponsors for Their Contracts Prevent Reliable Assessment of Beneficiaries’ Experiences with Part D
paragraphs: Grievances data reported by plan sponsors for their contracts contained  limitations and anomalies and did not yield sufficient insight into  beneficiaries’ experiences with Part D. In contrast to the data CMS collects  on complaints, CMS only requires plan sponsors to submit quarterly  reports on the total number of grievances they received in 11 CMS-defined  categories for each of their Part D contracts. Therefore, CMS does not  have information about whether a grievance is related to a beneficiary’s  medication supply or whether it was ultimately resolved. As a result, we  were unable to determine the extent to which beneficiaries’ grievances  related to medication supply issues, the extent to which plan sponsors  were resolving grievances, or whether they were resolving them in a timely  manner.
In addition to their limited nature, we identified a number of anomalies in  the grievances data that raise questions about their accuracy and  usefulness in drawing conclusions about beneficiaries’ experiences with  Part D. Among these anomalies, we found that grievances were  concentrated in a small number of contracts, and at a rate that was  significantly disproportionate to their respective enrollments, raising  questions about whether plan sponsors were reporting grievances data for  their contracts in a comprehensive and consistent manner. For example,  in 2006 plan sponsors reported grievances data for 522 contracts, 19 of  which accounted for 80 percent of all grievances but only 49 percent of  enrollment. The concentration was more pronounced in 2007, when 11 of  the 604 contracts for which grievances data were reported accounted for  90 percent of all grievances but only 42 percent of enrollment.
We also found significant variations in the number of grievances reported  for contracts with similar levels of enrollment, and in the number of  grievances filed between 2006 and 2007. For example, in 2006, while the  two largest contracts each averaged about 3 million enrollees, one  contract had more than 140,000 grievances, for an average monthly  grievance rate of 4.22 per 1,000 beneficiaries, while the other contract had  fewer than 4,000 grievances, for a grievance rate of .11 per 1,000  beneficiaries. In addition, in contrast to the decline in the monthly  complaint rate that we identified, available data show an increase in the  average monthly grievance rate between 2006 and 2007. Specifically, while  a total of 310,215 grievances were reported in 2006, for an average monthly  grievance rate of 1.23 per 1,000 beneficiaries, there were a total of 726,440  grievances reported for the first 3 quarters of 2007 alone, for a rate of 3.38  per 1,000 beneficiaries. We found that this variation was predominately  due to differences in the number of grievances reported for three  contracts, which had a total of 70 grievances for 2006, and 495,961 for the  first 3 quarters of 2007, despite having nearly identical levels of total  enrollment in each year.
Finally, the proportion of grievances assigned to categories varied  significantly between 2006 and 2007, a change that is inconsistent with  trends in the complaints data. For example, while over 60 percent of the  2006 grievances were assigned to the enrollment and disenrollment  category—a percentage generally similar to the complaints data filed with  CMS—they assigned approximately 5 percent of the 2007 grievances to  this category. In commenting on a draft of this report, CMS indicated that  the variation between the two years was likely due to data collection  issues that existed during the early implementation of Part D. For  example, CMS suggested that the grievances data reported by plan  sponsors in 2006 included nongrievances or erroneously categorized  grievances in the enrollment and disenrollment category.
section_title: CMS’s Oversight Focused on Complaints and Not Grievances, Leaving Oversight Gaps
paragraphs: While CMS has a systematic oversight process for complaints, it lacks a  similar oversight framework for plan sponsor-reported grievance  processes. To oversee the complaints process, CMS has established a  framework consisting of several key elements, which include standard  operating policies and procedures and a centralized repository of  complaints data, and staff that routinely review and assess the complaints  data and take actions against plan sponsors it determines have  noncompliant processes. In contrast to complaints, CMS’s oversight of  plan sponsors’ grievances processes has been more limited. CMS  developed guidance for classifying grievances, required plan sponsors to  report summary grievances data for each of their Part D contracts, and  periodically reviewed these data. However, limitations in these oversight  elements have resulted in plan sponsors reporting incomplete and  inconsistent data to CMS, and there is little assurance that beneficiaries’  grievances are resolved or that they are resolved in a consistent fashion.
To ensure a level of consistency in how complaints are tracked and  resolved, CMS developed standard operating procedures for both its  caseworkers and plan sponsors. These procedures provide guidance on  how complaints should be entered into the CTM as well as how  caseworkers and plan sponsors should resolve them. For example, CMS’s  guidance includes requirements to enter key dates for each complaint,  such as the dates complaints were filed and resolved, and information  about how individual complaints should be categorized by their nature and  issue level. Specifically, CMS’s guidance to plan sponsors provides  information about how they can utilize the CTM to access, review, and  document case resolution, or request CMS assistance in the event they are  unable to achieve resolution. Through its guidance, CMS has been able to  ensure consistency in terms of the information the CTM contains about  each complaint. Further, it has allowed the agency to create, through the  CTM, a reliable source of data from which it can monitor the complaints  process.
CMS also dedicated significant resources to ensure that beneficiaries’  complaints are addressed. Specifically, CMS officials estimated that  several hundred staff members throughout the agency have some  responsibility for the oversight of the complaints process. For example,  some regional staff members are responsible for reviewing plan sponsors’  case notes included in the CTM to verify their resolution of complaints or  for directly resolving complaints beyond the control of plan sponsors. In  addition, other CMS staff members routinely analyze CTM data to identify  trends in complaint rates and track issues related to the performance of  individual plan sponsors, such as resolution times. For example, on a  quarterly basis, CMS staff members analyze complaint rates for individual  contracts both by overall complaints and by three CTM categories, and  then compare complaint rates among contracts. Based on this  comparison, CMS staff assign a star rating to each contract. Further, CMS  has dedicated staff in the Office of the Medicare Beneficiary Ombudsman  (OMO) who utilize complaints data to identify systemic problems affecting  the implementation of Part D. When OMO staff identify problems, such as  those related to delays in processing enrollment requests and withholding  premiums from Social Security payments, they alert high-level CMS  managers, who in turn are responsible for initiating corrective actions.
CMS officials informed us that the agency may rely on a variety of actions,  ranging from formal compliance calls to the termination of a plan  sponsor’s Part D contract when it identifies a plan sponsor that is  noncompliant with requirements for the complaints process. CMS officials  indicated that their use of such actions has been limited because informal  conference calls with plan sponsors have frequently been sufficient to  correct problems identified through complaints. For example, although  CMS officials said that they would require plan sponsors with contracts  that received a one or two star rating for 2 consecutive quarters to submit  a business plan describing how they would improve their performance,  they have never had to do so because their informal calls to such plan  sponsors have thus far been sufficient to correct problems. However, in  some cases, CMS has taken more stringent actions. For example, as of  February 2008, CMS had issued 144 notices of noncompliance and 22  warning letters, and initiated 3 audits against plan sponsors that did not  meet their contractual performance requirement to resolve 95 percent of  immediate need complaints within 2 days.45, 46 Additionally, CMS had not  terminated any plan sponsors’ Part D contract or levied civil monetary  penalties in response to issues related to compliance with the complaints  process.
To determine compliance with the performance requirement, CMS measures the number  of days that have elapsed between the date the complaint was assigned to the contract and  when it was resolved.
CMS officials noted that they will consider developing additional performance  requirements, such as a requirement related to complaint rates, in the future. However, the  officials noted that they would want to examine data trends from at least a 3-year period  before doing so. medication. CMS also does not have a mechanism to verify that plan  sponsors have effectively resolved complaints. While CMS caseworkers  review plan sponsors’ notes in the CTM, they do not routinely take a  sample of complaints and follow up with beneficiaries to validate the plan  sponsors’ resolution actions. CMS officials indicated that the agency does  not have the resources to perform such a comprehensive check and stated  that beneficiaries who are dissatisfied with their plan sponsor’s resolution  could file another complaint directly with CMS.
In contrast to complaints, CMS’s oversight of plan sponsor grievances  processes has been more limited. CMS provided plan sponsors with  general guidance for determining whether beneficiaries’ problems were  grievances or coverage determinations, which are addressed through a  separate process. CMS also provided plan sponsors with time frames for  resolving grievances, periodically reviewed plan sponsor grievances data,  and began auditing plan sponsors’ grievances processes in 2007.  However, although CMS’s guidance to plan sponsors included examples of  how they could classify beneficiaries’ problems, several plan sponsors we  interviewed said that this guidance was not detailed enough and raised  concerns about whether plan sponsors were accurately differentiating  among inquiries (i.e., general questions about the Part D program),  grievances, or coverage determinations. CMS officials acknowledged that  some plan sponsors have incorrectly classified inquiries as grievances.  Further, in its 2007 audits of plan sponsors’ grievances processes, CMS  found numerous cases where plan sponsors did not correctly differentiate  between grievances and coverage determinations, supporting plan  sponsors’ concerns about the adequacy of the existing guidance. Such  confusion about how to classify grievances increases the likelihood that  plan sponsors report erroneous or inconsistent information to CMS and  that they rely on the wrong processes to address beneficiaries’ concerns.
CMS does not require plan sponsors to report certain information on  grievances for each of their Part D contracts, such as resolution dates, that  is essential for determining whether beneficiaries’ grievances are being  resolved, and devotes few resources to reviewing what plan sponsors have  reported for their contracts. Instead, on a quarterly basis, each plan  sponsor reports the total number of grievances for 11 categories for each  of its contracts. CMS officials also could not explain many of the  anomalies we identified in the grievances data, such as substantial  variation in the enrollment category from 2006 to 2007 and considerable  variation in the grievance rates between contracts with similar levels of  enrollment. Further, they acknowledged that they had not undertaken  efforts to review the data in detail or to assess their overall reliability. In  fact, more than a year into the program, CMS officials were still uncertain  as to whether grievances had been reported for all contracts, and as of  May 2008, agency analysis was limited to calculating annual grievance  rates for each contract that did report grievances.
CMS officials recognized that their efforts to oversee the grievances  process have been limited, as they have chosen to focus their attention on  other oversight issues such as appeals and coverage determinations and  have devoted resources to program implementation issues, such as  enrollment of dual-eligible beneficiaries. In the event that plan sponsors  are not properly responding to beneficiaries’ grievances, CMS officials  stated that the issues could be resolved through the complaints process.  Therefore, by focusing its attention largely on complaints, the agency  expressed confidence that plan sponsors are addressing beneficiaries’  issues. While the agency strongly believes in providing plan sponsors the  latitude to implement their individual grievances processes, CMS expects  to devote more resources to the oversight of grievances processes as the  program matures.
section_title: Conclusions
paragraphs: January 1, 2006, marked a new era in the Medicare program as the federal  government began offering outpatient prescription drug coverage to  eligible Medicare beneficiaries. The program is currently in its third year  of operation, and millions of individuals have chosen to enroll. While  trends in complaints data suggest that CMS and plan sponsors have  improved program operations over time, lingering operational issues  continue to pose challenges to some beneficiaries. This has hindered their  ability to enroll in their plans of choice, have their premiums accurately  deducted from their social security payments, or ensure that their  problems related to critical medication supply issues are resolved in a  timely manner. While CMS is taking action to address some of these  operational issues related to complaints, its continued effort to address  these operational challenges will be key to achieving further improvement.  Furthermore, CMS does not have reliable grievances data to identify  problems and needed improvements and ultimately ensure that  beneficiaries’ concerns are addressed. This is particularly important given  that CMS encourages beneficiaries to utilize the grievances process as  their first line of redress when trying to resolve problems. Without reliable  grievances data, CMS cannot ensure that plan sponsors are fulfilling their  obligations and provide a full assessment of beneficiaries’ experiences  with the program.
section_title: Recommendations
paragraphs: To improve oversight of the Medicare Part D grievances process, and  provide added assurance that beneficiaries’ grievances are being resolved,  we recommend that CMS undertake efforts to improve the consistency,  reliability, and usefulness of grievances data reported by plan sponsors for  each of their contracts. Such efforts include enhancing its existing  guidance for determining whether beneficiaries’ problems are grievances,  requiring plan sponsors to report information regarding the status and  issue level of grievances, and conducting systematic oversight of these  data.
section_title: Agency Comments
paragraphs: We provided a draft of this report for comment to the Administrator of  CMS. In its written comments (see app. II.), CMS remarked that our report  did an “impressive job” describing the complex processes employed to  monitor complaints and grievances regarding Medicare Part D. The agency  concurred with the report’s recommendation to undertake efforts to  improve the consistency, reliability, and usefulness of grievances data  reported by plan sponsors for each of their contracts, and highlighted  steps it already has taken to implement it. CMS took issue with the report’s  conclusion that its oversight activities were focused almost exclusively on  resolving complaints with little attention devoted to plan sponsors’  grievances processes, and noted that it felt some information, such as  details concerning attestations made as part of sponsors’ Part D  applications, had been omitted from our report. In addition to these  comments, CMS provided detailed, technical comments that we  incorporated as appropriate.
Consistent with the recommendation to improve the consistency,  reliability, and usefulness of grievances data, CMS noted that it has been  working to provide Part D sponsors with more comprehensive guidance,  enhance its oversight activities, and undertake corrective actions as  needed. CMS stated that it recently provided guidance to plan sponsors  regarding statutory definitions of grievances, coverage determinations,  and appeals to facilitate accurate reporting of these data to CMS. For  example, CMS cited its 2008 Reporting Requirements Technical  Specifications, released this spring, as part of its efforts to further educate  plan sponsors about the differences between coverage determinations and  grievances. CMS further stated that it would consider adding data  elements related to plan sponsors’ timeliness and quality of grievances  resolution to its calendar year 2010 Reporting Requirements.
CMS took issue with the report’s conclusion that its oversight activities  were focused almost exclusively on resolving complaints with little  attention devoted to plan sponsors’ grievances processes. The agency  noted that it considered this conclusion misleading and felt it did not  appropriately weigh all components of CMS’s oversight of plan sponsors’  grievances processes, such as plan sponsor audits, which include a review  of grievances processes. In addition, CMS noted that the report did not  consider a component of the Part D application, in which sponsors must  attest that they will establish and maintain grievances processes in  accordance with federal regulations. Finally, while agreeing with the  report’s statement that the average resolution time for immediate need and  urgent complaints exceeded CMS’s required time frames, CMS noted that  its analysis of more recent complaints data demonstrated that case  resolution time frames had improved and were trending towards CMS’s  standard time frames.
We recognize that CMS has audited the grievances processes of some plan  sponsors, and the report highlighted key findings from these audits. While  we believe CMS can rely on such audits to improve its oversight in the  future, the agency did not begin auditing plan sponsors until 2007, and has  yet to audit a number of plan sponsors. Further, while we recognize the  attestation component of the application requirement, we believe that  such attestations provide only limited assurance that beneficiaries’  grievances are being resolved appropriately. We do not believe CMS will  be able to ensure that plan sponsors are abiding by their statements until  CMS audits the grievances processes of all plan sponsors. Finally, we did  not evaluate CMS’s findings on resolution time frames from its more  recent data, because the data CMS used to conduct their analyses of  resolution time frames were from a time frame beyond the scope of our  work.
As agreed with your office, unless you publicly announce its contents  earlier, we plan no further distribution of this report until 30 days after its  issue date. At that time, we will send copies to the Secretary of Health and  Human Services and other interested parties. We will also make copies  available to others upon request. In addition, this report will be available  at no charge on GAO’s Web site at http://www.gao.gov.
If you or your staff have any questions about this report, please contact  Kathleen King at (202) 512-7114 or kingk@gao.gov. Contact points for our  Offices of Congressional Relations and Public Affairs may be found on the  last page of this report. Susan Anthony, Assistant Director; Jennie Apter;  Shirin Hormozi; David Lichtenfeld; and Jennifer Whitworth made key  contributions to this report.
section_title: Appendix I: CMS Medicare Part D Complaint and Grievance Categories
paragraphs: Beneficiaries and providers (including pharmacies and physicians) can file  complaints with the Centers for Medicare and Medicaid Services (CMS)  regarding Medicare Part D. Within the Complaint Tracking Module (CTM),  beneficiary complaints are assigned to 14 categories and provider  complaints to 6 categories, which are further delineated into 186  subcategories. CMS requires that plan sponsors report grievances based  on 11 CMS-defined categories, which are somewhat similar to the CTM  categories, but do not include subcategories. A description of the  complaints and grievances categories is listed below.
section_title: Appendix II: Comments from the Centers for Medicare & Medicaid Services