Department of health & human services

DEPARTMENT OF HEALTH & HUMAN SERVICES
Centers for Medicare & Medicaid Services
7500 Security Boulevard
Baltimore, Maryland 21244-1850
PROGRAM COMPLIANCE AND OVERSIGHT GROUP

October 9, 2012
VIA:
EMAIL
AND FACSIMILE (787-620-0939)

Susan Rawlings
Chief Executive Officer
Triple-S Salud, Inc.
1441 Franklin D. Roosevelt Avenue
San Juan, PR 00920
Phone: 787-600-9101
Re:
Notice of Imposition of Civil Money Penalty for Medicare Advantage-Prescription Drug Plan and/or Prescription Drug Plan Contract Numbers: Triple-S Salud (H4005, H4012, H5732, S5907)
Dear Ms. Rawlings:
Pursuant to 42 C.F.R. §§ 422.752(c)(1) and 423.752(c)(1), the Centers for Medicare & Medicaid
Services (CMS) is providing notice to Triple-S Salud, Inc. (Triple-S) that CMS has made a
determination to impose a civil money penalty (CMP) in the amount of $350,000 for the
following Medicare Advantage-Prescription Drug Plan (MA-PD) and Prescription Drug Plan
(PDP) Contracts: Triple-S Salud H4005, H4012, H5732, S5907.
CMS has determined that Triple-S failed to provide its enrollees with services and benefits in
accordance with CMS requirements. A Part D sponsor’s central mission is to provide Medicare
enrollees with prescription medications within a framework of Medicare requirements that
provide enrollees with a number of protections.

Summary of Noncompliance
CMS conducted an audit at Triple-S’s San Juan, Puerto Rico offices from April 30, 2012 through May 4, 2012. During the audit, CMS conducted reviews of Triple-S’s operational areas to determine if Triple-S is following CMS rules, regulations and guidelines. CMS reviewed Triple-S’s prescription drug claims, data systems, and operations and determined that Triple-S inappropriately rejected claims for its enrollees. These inappropriate claim rejections resulted in Ms. Susan Rawlings
October 9, 2012
Page 2 of 6
enrollees experiencing either a delay in obtaining their prescription drugs, or not receiving their
drugs at all. After conducting an extensive review of Triple-S’s rejected claims data, the CMS
auditors concluded that Triple-S failed to provide its enrollee’s prescription drug coverage as
required by its CMS approved formularies and enrollee plan benefit packages. Triple-S’s
failures violate the Medicare Part D program requirements contained at § 1860D-4(b)(3)(G) of
the Social Security Act and 42 C. F. R. §§ 423.104(a); 423.120(a); 423.120(b)(2)(iv);
423.120(b)(3); and 423.505(b)(17). Each violation has directly adversely affected (or had the
substantial likelihood of adversely affecting) Triple-S’s enrollees across the four (4) contracts to
which the penalty applies, by delaying or denying enrollee access to vital and sometimes life-
sustaining medications.

Prescription Drug Program Requirements
Medicare Part D Prescription Drug Program requirements apply both to stand-alone Prescription Drug Plan sponsors and to Part C Medicare Advantage sponsors that offer prescription drug benefits. Sponsors of these plans (Part D Sponsors) are required to enter into a contract with CMS by which the sponsor agrees to comply with a number of requirements based upon statute, regulations and program instructions. Formulary 42 C.F.R. §§ 423.120(b)(2)(iv) and423.120(b)(4)-(6); and Internet Only Manual (IOM) Pub.100-18 Medicare Prescription Drug Benefit Manual, Chapter 6, section 30.3. Each Part D Sponsor maintains a drug formulary, or list of prescription medications, covered by the PDP. A number of Medicare requirements govern how Part D Sponsors create and manage their formularies. Each Part D Sponsor is required to submit its formulary for review and approval by CMS on an annual basis. A Part D Sponsor can change its formulary mid-year, but must obtain prior CMS approval and must notify its enrollees of any changes, including any changes in cost-sharing amounts for formulary drugs. CMS’ formulary review and approval process includes a review of the MA-PD/PDP’s proposed use of drug utilization management processes to adjudicate Medicare prescription drug claims (Part D claims), including the use of prior authorization or step therapy requirements. Utilization Management Techniques 42 C.F.R. § 423.272(b)(2) and IOM Pub.100-18 Medicare Prescription Drug Benefit Manual, Chapter 6, section 30.2. Prior authorization is a utilization management technique used by Part D Sponsors (as well as commercial and other health insurers) that requires enrollees to obtain prior approval from the plan for coverage of certain prescriptions prior to being prescribed the medication. Part D enrollees can find out if prior authorization is required for a prescription by asking their physician or checking their plan’s formulary (which is available online). Prior authorization guidelines are determined on a drug-by-drug basis and may be based on FDA and manufacturer guidelines, medical literature, safety, appropriate use and benefit design. Ms. Susan Rawlings
October 9, 2012
Page 3 of 6
Step therapy is another utilization management technique used by Part D Sponsors (as well as
commercial and other health insurers) to ensure that when enrollees begin drug therapy for a
medical condition, the first drug chosen is the most cost-effective and safest drug, and other
more costly or risky drugs are only prescribed if they prove to be clinically necessary. The goal
of step therapy is to control costs and minimize clinical risks.
Protected Class Drugs
§ 1860D-4(b)(3)(G)(i) of the Social Security Act; 42 C.F.R. § 423.120(b)(2)(v) and IOM
Pub.100-18 Medicare Prescription Drug Benefit Manual, Chapter 6, section 30.2.5.
Part D Sponsors are not allowed to require prior authorization or step therapy for enrollees
stabilized on drugs that have been designated as “protected class drugs.” Protected class drugs
are drugs that are typically critical to the health and safety of the population for whom they are
prescribed. There are six classes of drugs for which Medicare enrollees must have
uninterrupted access to all of the drugs in that class. The six protected classes are:
• Anti-depressants (e.g., fluoxetine, venlafaxine, sertraline) used for treating depression; • Antipsychotics (e.g., Risperdal, Zyprexa, Seroquel) used for treating psychiatric • Anticonvulsants (e.g., divalproex, Lyrica, carbamazepine) used for preventing or • Antiretrovirals used for the treatment of HIV and AIDS; • Antineoplastics used for the treatment of cancers; and • Immunosuppressants used to prevent the rejection of transplants. Transition of Coverage
42 C.F.R. § 423.120(b)(3) and IOM Pub.100-18 Medicare Prescription Drug Benefit Manual,
Chapter 6, section 30.4.

Additionally, a Part D sponsor must provide for an appropriate transition process for enrollees
prescribed any Part D drugs that are not on its formulary in certain designated situations. A Part
D Sponsor’s transition process must address situations in which an individual brings a
prescription for a drug that is not on the formulary to a participating pharmacy. This may be
particularly true for full-benefit dual eligible (i.e., Medicare and Medicaid) enrollees who are
auto-enrolled in a plan and do not make an affirmative choice based on review of a plan’s benefit
relative to their existing medication needs. Part D sponsors must have systems capabilities that
allow them to provide a one time, temporary supply of non-formulary Part D drugs (including
Part D drugs that are on a sponsor’s formulary but require prior authorization or step therapy
under a sponsor’s utilization management rules) in order to accommodate the immediate needs
of an enrollee, as well as to allow the sponsor and/or the enrollee sufficient time to work out with
the prescriber an appropriate switch to a therapeutically equivalent medication or the completion
of an exception request to maintain coverage of an existing drug based on medical necessity
reasons.

Deficiencies Related to Formulary and Benefit Administration
Ms. Susan Rawlings
October 9, 2012
Page 4 of 6

CMS identified multiple, serious violations of Part D requirements in Triple-S’s formulary and
benefit administration operations. Triple-S’s violations include:
• Failure to properly administer its CMS approved prescription drug benefit in violation of 42 C.F.R. §§ 423.104(a) and 423.120(b)(2)(iv) rejecting prescriptions for 90 day fills when the CMS approved benefit permitted 90 day fills; • Failure to provide timely and appropriate point-of-service claims adjudication in violation of 42 C.F.R. § 423.505(b)(17). More specifically: • An unresolvable inappropriate rejection of claims at the point-of-sale when valid prescriber identifiers, other than the National Provider Identifier (NPI), were used. see IOM Medicare Prescription Drug Benefit Manual, Pub. 100-18, chapter 5, section 90.2; and • An improper implementation of a high cost dollar edit, which was not resolvable at the point of sale; Specifically, Triple-S utilized a high cost dollar edit that rejected claims for Part D protected class drugs and other vital medications whose cost exceeded $500. • Failure to follow CMS requirements regarding transition supplies of prescription drugs in violation of 42 C.F.R. § 423.120(b)(3), including failing to provide for the appropriate transition of new and existing enrollees prescribed Part D drugs that are not on Triple-S’s formulary; • Failure to properly administer its CMS approved formulary by applying unapproved step therapy, prior authorization, and quantity limits (including those for protected class drugs) in violation of 42 C.F.R. §§ 423.104(a) and 423.120(b)(2); see also IOM Pub.100-18 Medicare Prescription Drug Benefit Manual, chapter 6, section 30.2.; chapter 7, section 60.6; • Failure to maintain a network for limited access drugs in violation of 42 C.F.R. § 423.120(a); see also IOM Pub.100-18 Medicare Prescription Drug Benefit Manual, chapter 5, section 50.3; and • Failure to provide coverage for protected class drugs in violation of § 1860D-4(b)(3)(G)
Violation of Disenrollment Requirements
In addition to the penalties based on violations found during the audit, CMS is imposing a
penalty on Triple-S for violations of Medicare disenrollment requirements at 42 C.F.R. §§
422.74 and 423.44. In March 2012, CMS noticed a spike in enrollee complaints related to non-
payment of premiums for two Triple-S plans, including contract number H4005. CMS initiated
an investigation where it discovered that Triple-S moved enrollees in plan H4005-004 who failed
to pay their premium to H4005-001, a MA only plan that did not have a premium without the
enrollees’ request or permission. Part D sponsors are required notify its members of possible
disenrollment due to non-payment and, if payment is not made in full by the end of the grace
period, to disenroll an individual who fails to timely pay his/her monthly premium. Instead of
Ms. Susan Rawlings
October 9, 2012
Page 5 of 6
disenrolling members, Triple-S moved the affected members from plans H4005-004, which
covered Part D benefits, to a plan with no Part D coverage. When questioned about this practice,
Triple-S indicated that it had been “downgrading” its enrollees for several years. Downgrading,
however, is a practice permitted for supplemental benefits only and it does not apply to Part D
coverage, since the prescription drug coverage included under a MA-PD plan is not a
supplemental benefit. Triple-S, therefore, could not “downgrade” the enrollees’ coverage for
non-payment of their Part D premium. Triple-S was required by Medicare rules to disenroll the
member and provide them proper notice. This violation denied enrollees access to critical
Prescription Drug coverage which resulted in enrollees incurring out of pocket costs and
experiencing denials of access to vital medications.

Basis for Civil Money Penalty

Pursuant to 42 C.F.R. §§ 422.752(c) and 423.752(c), CMS has determined that Triple-S’s
violations of Part D requirements are significant enough to warrant the imposition of a civil
money penalty. In violating multiple Part D requirements, Triple-S failed substantially to carry
out the terms of its MA-PD and PDP contracts with CMS, and failed to carry out its contracts
with CMS in a manner consistent with the effective and efficient implementation of the program.
42 C.F.R §§ 422.510 (a)(1) and (2) and 423.509(a)(1) and (2).

Right to Request a Hearing
Triple-S may request a hearing to appeal a CMS determination in accordance with the
procedures outlined in 42 C.F.R. Parts 422 and 423, Subpart T. Triple-S must send a written
request for a hearing to the Departmental Appeals Board office listed below within 60 calendar
days from receipt of this notice, or by December 10, 2012. 42 C.F.R. §§ 422.1006, 423.1006,
422.1020, and 423.1020. The request for hearing must identify the specific issues and the
findings of fact and conclusions of law with which Triple-S disagrees. Triple-S must also
specify the basis for each contention that the finding or conclusion of law is incorrect. The
request should be sent to:
Civil Remedies Division
Department of Health and Human Services
Departmental Appeals Board
Medicare Appeals Council, MS 6132
330 Independence Ave., S.W.
Cohen Building Room G-644
Washington, D.C., 20201
Ms. Susan Rawlings October 9, 2012 Page 6 of 6 A copy of the hearing request should also be sent to CMS at the following address: Patricia Axt Director, Division of Compliance Enforcement Centers for Medicare & Medicaid Services 7500 Security Boulevard MAIL STOP: C1-22-06 Baltimore, MD 21244 Email: [email protected] FAX: 410-786-6301 If Triple-S does not request an appeal in the manner and timeframe described above, the initial determination by CMS to impose a CMP will become final and due on December 11, 2012. Triple-S may choose to have the penalty deducted from its monthly payment, transfer the funds electronically, or mail a check to CMS. Please note that any further failures by Triple-S to comply with these or any other CMS requirements may subject your organization to other applicable remedies available under law, including the imposition of intermediate sanctions, penalties, or other enforcement actions as described in 42 C.F.R. Parts 422 and 423, Subparts K and O. If Triple-S has any questions about this notice, please call or email the enforcement contact provided in the email notification. Sincerely, /s/ Gerard J. Mulcahy Acting Director Program Compliance and Oversight Group cc: Mr. Jonathan Blum, CMS/CM Mr. Timothy Love, CMS/CM Mr. Paul Collura, CMS/CMHPO Mr. Reginald Slaten, CMS/CMHPO/Region II Ms. Rachel Walker, CMS/CMHPO/Region II Mr. Mitchell Croll, CMS/CMHPO/Region II Ms. Militza Flores, CMS/CMHPO/Region II

Source: http://dev.noticel.com/uploads/gallery/documents/Triple-S-CMP-10_09_12.pdf